UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

        [ X ]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1998

                                       OR

        [   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934

              For the transition period from          to
                                             ---------   ---------

                         Commission File Number: 0-23952

                                   AVERT, INC.
        (Exact name of small business issuer as specified in its charter)

          Colorado                                        84-1028716
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization

                      301 Remington, Fort Collins, CO 80524
                    (Address of principal executive offices)

                                  970/484-7722
              (Registrant's telephone number, including area code)

                                    No Change
              (Former name, former address and former fiscal year,
                         if changed from last report).

     Check whether the registrant (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the issuer was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                                [ X ] Yes [ ] No

     As of May 12, 1998 the issuer had 3,485,125  shares of Common Stock, no par
value, outstanding.

                 Transitional Small Business Disclosure Format.
                                [ ] Yes [ X ] No

<PAGE>


Form 10-QSB
Quarter Ended March 31, 1998


                                      INDEX


                                                                            PAGE

PART I - FINANCIAL INFORMATION

     ITEM 1.  Financial statements

              Unaudited balance sheets...................................      3

              Unaudited statements of income.............................      4

              Unaudited statements of cash flows.........................      5

              Notes to unaudited financial statements....................      6

     ITEM 2.  Management's Discussion and Analysis or
              Plan of Operations.........................................      7


PART II - OTHER INFORMATION

     ITEMS 1, 2, 3, 4, 5 and 6    Not applicable.........................


     Signatures..........................................................     11












                                       2
<PAGE>

<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION
                                   AVERT, INC.
                                 BALANCE SHEETS

                                     ASSETS

                                                                                   MARCH 31,             DECEMBER 31,
                                                                                     1998                    1997
                                                                                 -----------             -----------
                                                                                 (unaudited)
<S>                                                                              <C>                     <C> 
Current assets:
         Cash and cash equivalents .................................             $   410,000             $   580,000
         Marketable securities .....................................               6,193,000               6,113,000
         Accounts receivable, net of allowance .....................               1,047,000               1,135,000
         Prepaid expenses and other ................................                 287,000                 304,000
                                                                                 -----------             -----------
                  Total current assets .............................             $ 7,937,000             $ 8,132,000

Property and equipment, net ........................................               3,503,000               3,399,000
Other assets .......................................................                       0                       0
                                                                                 -----------             -----------
Total assets .......................................................             $11,440,000             $11,531,000
                                                                                 ===========             ===========
                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
         Accounts payable ..........................................             $   550,000             $   388,000
         Accrued expenses ..........................................                 106,000                 201,000
         Deferred revenue ..........................................                  48,000                       0
                                                                                 -----------             -----------
                  Total current liabilities ........................                 704,000                 589,000
         Deferred Taxes ............................................                 507,000                 507,000
                                                                                 -----------             -----------
                  Total liabilities ................................             $ 1,211,000             $ 1,096,000

Shareholders' equity:
         Preferred shares, no par value; authorized
           1,000,000 shares; none outstanding ......................                  --                       --
                                                                                 -----------             -----------
         Common stock, no par value; authorized
           9,000,000 shares; 3,446,988 shares issued
           and outstanding .........................................               5,253,000               5,276,000
         Retained earnings .........................................               4,976,000               5,159,000
                                                                                 -----------             -----------
                  Total shareholders' equity .......................             $10,229,000             $10,435,000
                                                                                 -----------             -----------

Total liabilities and shareholders' equity .........................             $11,440,000             $11,531,000
                                                                                 ===========             ===========
</TABLE>

               See accompanying notes to the financial statements.



                                       3
<PAGE>

<TABLE>
<CAPTION>

                                   AVERT, INC.
                              STATEMENTS OF INCOME
                                   (unaudited)

                                                                                         Three Months Ended
                                                                                              March 31,
                                                                             -----------------------------------------
                                                                                 1998                         1997
                                                                                 ----                         ----
<S>                                                                          <C>                          <C>        
Net revenues:
         Search and product fees ...................................         $ 2,147,000                  $ 2,018,000
         Interest and other income .................................              86,000                       78,000
                                                                             -----------                  -----------
                                                                               2,233,000                    2,096,000
Expenses:
         Search and product costs ..................................           1,042,000                      895,000
         Marketing .................................................             379,000                      331,000
         General and administrative ................................             353,000                      329,000
         Software development ......................................              73,000                      103,000
         Depreciation and amortization .............................             111,000                       29,000
                                                                             -----------                  -----------
                                                                               1,958,000                    1,687,000
                                                                             -----------                  -----------

Income before income taxes .........................................             275,000                      409,000

         Income tax expense ........................................            (108,000)                    (160,000)
                                                                             -----------                  -----------
Net income .........................................................         $   167,000                  $   249,000
                                                                             ===========                  ===========
Net income per common share ........................................         $       .05                  $       .07
                                                                             ===========                  ===========
Weighted average common
         shares outstanding ........................................           3,546,124                    3,417,855
                                                                             ===========                  ===========

</TABLE>






               See accompanying notes to the financial statements.



                                       4
<PAGE>

<TABLE>
<CAPTION>
                                   AVERT, INC.
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                                                                           THREE MONTHS ENDED
                                                                                                MARCH 31,
                                                                                    -----------------------------
                                                                                      1998                1997
                                                                                      ----                ----

<S>                                                                                 <C>                <C>      
Cash Flows From Operating Activities:
    Net income ............................................................         $ 167,000          $ 249,000
    Adjustments to reconcile net income to net cash
     provided by operating
      activities:
         Depreciation and amortization ....................................           111,000             65,000
         Bad debt expense .................................................            16,000              3,000
         Increase/(decrease) in marketable securities and
                  other gains .............................................           (80,000)           (75,000)
         Changes in operating assets and liabilities:
              Accounts receivable .........................................            73,000           (202,000)
              Prepaid expenses and other current assets ...................          (116,000)           (70,000)
              Accounts payable ............................................           210,000             45,000
              Accrued expenses ............................................           (70,000)           (48,000)
              Income taxes payable ........................................           108,000               --
              Deferred revenue and deposits ...............................            (1,000)             5,000
                                                                                    ---------          ---------
         Net cash provided by operating activities ........................         $ 418,000          $ (28,000)

Cash Flows from Investing Activities:
     Additions to furniture and equipment .................................          (215,000)          (438,000)
     Proceeds from sale of furniture and equipment ........................              --                 --
                                                                                    ---------          ---------

           Net cash provided by investing activities ......................          (215,000)          (438,000)
                                                                                    ---------          ---------

Cash Flows from Financing Activities:
         Purchase of Treasury Stock .......................................           (23,000)              --
Dividends declared ........................................................          (350,000)            31,000
                                                                                    ---------          ---------

           Net cash provided by financing activities ......................          (373,000)            31,000

Increase/(Decrease) in Cash and Cash Equivalents ..........................          (170,000)          (435,000)

Cash and Cash Equivalents, beginning of period ............................           580,000            360,000
                                                                                    ---------          ---------
Cash and Cash Equivalents, end of period ..................................         $ 410,000          $ (75,000)
                                                                                    =========          =========
</TABLE>


               See accompanying notes to the financial statements.


                                       5
<PAGE>


                                   AVERT, INC.
                          NOTES TO FINANCIAL STATEMENTS


     The financial information  contained herein is unaudited,  but includes all
adjustments (consisting of only normal recurring accruals) which, in the opinion
of management,  are necessary to present fairly the information  set forth.  The
financial  statements  should be read in conjunction with the Notes to Financial
Statements which are included in the Annual Report on Form 10-KSB of the Company
for the year ended December 31, 1997.

     The results for interim periods are not  necessarily  indicative of results
to be expected for the fiscal year of the Company ending  December 31, 1998. The
Company   believes  that  the  three  month  report  filed  on  Form  10-QSB  is
representative of its financial position, its results of operations and its cash
flows as of and for the periods ended March 31, 1998 and 1997 covered thereby.

Impact  of  recently  issued  accounting   standards.   Statement  of  Financial
Accounting  Standards  128,  "Earnings  per Share" and  Statement  of  Financial
Accounting  Standards 129 "Disclosure of Information  About an Entity's  Capital
Structure".  Statement 128 provides a different  method of calculating  earnings
per share than is currently used in accordance with Accounting  Principles Board
Opinion 15 "Earnings per Share".  Statement 128 provides for the  calculation of
"basic" and "diluted"  earnings per share.  Basic earnings per share includes no
dilution and is computed by dividing income available to common  shareholders by
the weighted average number of common shares outstanding for the period. Diluted
earnings per share  reflects the  potential  dilution of  securities  that could
share in the earnings of an entity, similar to fully diluted earnings per share.
Statement 129 establishes standards for disclosing information about an entity's
capital structure. Statements 128 and 129 are effective for financial statements
issued for periods ending after December 15, 1997. Their  implementation  is not
expected to have a material effect on the financial statements.

     Statement of Financial Accounting  Standards 130. "Reporting  Comprehensive
Income" and Statement of Financial  Accounting  Standards 131 "Disclosures About
Segments of an Enterprise and Related  Information".  Statement 130  establishes
standards for reporting and display of comprehensive  income, its components and
accumulated balances.  Comprehensive income is defined to include all changes in
equity except those resulting from  investments by owners and  distributions  to
owners. Among other disclosures,  Statement 130 requires that all items that are
required to be recognized  under current  accounting  standards as components of
comprehensive income be reported in a financial statement that displays with the
same  prominence  as  other  financial  statements.   Statement  131  supersedes
Statement of Financial Accounting Standards 14 "Financial Reporting for Segments
of a Business  Enterprise".  Statement 131 establishes standards on the way that
public companies report financial information about operating segments in annual
financial  statements  and  requires  reporting  of selected  information  about
operating segments in interim financial statements issued to the public. It also
establishes   standards  for  disclosures   regarding   products  and  services,
geographic areas and major customers.  Statement 131 defines operating  segments
as  components  of a company  about  which  separate  financial  information  is
available that is evaluated  regularly by the chief operating  decision maker in
deciding how to allocate resources and in assessing performance.

     Statements  130 and 131 are effective for financial  statements for periods
beginning  after  December  15, 1997 and  require  comparative  information  for
earlier years to be restated. Because of the recent issuance of these standards,
management has been unable to fully  evaluate the impact,  if any, the standards
may have on the future financial  statement  disclosures.  Results of operations
and financial position,  however,  will be unaffected by implementation of these
standards.




                                       6
<PAGE>


ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


Results of Operations

Comparison of quarters ended March 31, 1998 and March 31, 1997

     Total net revenues  increased  from  $2,096,000  for the three month period
ended March 31, 1997 to $2,233,000 for the comparable three month period in 1998
or approximately  6.5%. The Company believes that the decrease in revenue growth
is at least  partially  due to the  record low  unemployment  rate in the United
States.  There were 4,574  customers that actually used Avert services the first
three  months of 1998,  as  compared  to 3,937 the first  three  months of 1997,
representing  approximately  a 16.2%  increase.  However,  the dollars spent per
customer  in the first  quarter  1998 was $456 as  compared to $502 in the first
quarter 1997,  representing a 9.2% decrease. The Company believes this disparity
to  be  related  to  a  low  unemployment   rate  job  market  where  there  are
substantially  fewer job applicants to screen than in a higher unemployment rate
job market.  The sales  categories that  experienced  the largest  increases had
quick turnaround, and addressed employers' need to fill positions quickly in the
current job market.

     Another key element in first quarter  revenue  growth was that focus on new
product  growth and  development  shifted  toward  activities  such as preparing
literature,  converting data, and communicating features and enhancements of the
new computer  system  implemented  in April,  1998.  See  "Liquidity and Capital
Resources"  in this item below.  The  breakdown  of net  revenues,  exclusive of
product discounts and other miscellaneous income items, is as follows:

<TABLE>
<CAPTION>

                                          Three Months Ended       Three Months Ended
                                            March 31, 1998           March 31, 1997      Percent of
                                        ---------------------    ----------------------   Increase
                                         Revenues     % total     Revenues      % total  (Decrease)
                                         --------     -------     --------      -------  ----------
<S>                                    <C>              <C>     <C>              <C>       <C>
Products:
  Workers compensation histories ....  $  242,000       10.8%   $  297,000       14.2%     (18.5)%
  Criminal history reports .........   $1,115,000       50.0%   $1,012,000       48.3%      10.2%
  Previous employment reports/ .....   $  268,000       12.0%   $  230,000       11.0%      16.5%
     credit reports
  Motor vehicle driving records ....   $  251,000       11.2%   $  261,000       12.5%      (3.8)%
  Other products ...................   $  146,000        6.5%   $  106,000        5.1%      37.7%
Services: ..........................   $  125,000        5.6%   $  114,000        5.4%       9.6%

Interest income ....................   $   84,000        3.8%   $   77,000        3.7%       9.1%

         NET REVENUES ..............   $2,233,000               $2,096,000                   6.5%
</TABLE>

     The  largest  product  growth of  approximately  37.7%  occurred  in "Other
Products".  The product  contributing the most revenue in this category was Name
Link, a product linking names, addresses and social security numbers,  increased
from $45,000 in 1997, to $56,000 in 1998, or  approximately  24.4% increase.  In
addition, there was approximately 48% growth for revenues generated in the areas
of education/credential verification,  employment applications, first check, and
alliance  products which increased from $61,000 in first quarter 1997 to $90,000
in first quarter 1998.



                                       7
<PAGE>


     Moderate  product  growth of  approximately  16.5%  occurred in the area of
Previous Employment/Credit.  This product represented $268,300 and approximately
12.0% of total net revenues in the first quarter  1998,  compared to $229,600 in
the  first  quarter  1997 and  approximately  11.0% of total net  revenues.  The
Company believes growth in these product lines to be attributable to their quick
turnaround  time. In addition,  the Company  continued to customize the Previous
Employment product to enhance attractiveness of the product.

     Moderate sales growth occurred in criminal history reports in first quarter
1998 as compared to first  quarter  1997.  In total  dollars,  criminal  history
reports  contributed  the  most net  revenues,  representing  $1,115,000  in net
revenues in the period ended March 31, 1998,  as compared to  $1,012,000  in the
period ended March 31, 1997. The criminal history reports product line accounted
for  approximately  50.0% of total net revenues in the first quarter  1998,  and
approximately 48.3% of total net revenues in the first quarter 1997. The Company
believes  there  continues  to  be  a  trend  nationwide  to  check  prospective
employees' criminal records and it continues to focus on obtaining the quickest,
most accurate data available.

     Workers' compensation histories continued to decline as a percentage of net
revenues as previously  predicted.  In first quarter, 1998 workers' compensation
reports,  represented $242,000 or approximately 10.8% of total net revenues,  as
compared to $297,000 for the first three months of 1997, or approximately  14.2%
of total net  revenues.  The Company  believes it will continue to decrease as a
percentage of total net revenues.

     Service sales experienced  approximately  9.6% revenue growth from $114,000
in first  quarter  1997 to $125,000 in first  quarter  1998.  This is  primarily
attributable  to growth of the customer base  membership in the Avert  Advantage
program,  which increased from $33,000 in revenues for the three month period in
1997, to $57,000 in revenues for the three month period in 1998.

     Income before income taxes decreased from $409,000 in first quarter 1997 to
$275,000  in  first  quarter  1998,  or  approximately   32.7%  and  represented
approximately  19.5% of total net  revenues in 1997  compared  to  approximately
12.3% in 1997, resulting from increases in several expense categories.

     Total expenses  increased from  $1,687,000 for the three month period ended
March 31, 1997 to $1,958,000 for the comparable  period in 1998 or approximately
16.1%. A breakdown in expenses is as follows:

<TABLE>
<CAPTION>

                                               Three Months Ended          Three Months Ended      Increase (Decrease)
                                                 March 31, 1998               March 31, 1997          % of Revenues
                                            ------------------------     -------------------------   --------------
                                            Expenses    % of Revenue     Expenses     % of Revenue   1997 over 1996
                                            --------    ------------     --------     ------------   --------------

<S>                                       <C>               <C>         <C>              <C>          <C> 
Search and product ....................   $1,042,000        46.7%       $  895,000        42.7%        4.0%
Marketing .............................      379,000        17.0           331,000        15.8         1.2
General and administration ............      353,000        15.8           329,000        15.7          .1
Software development ..................       73,000         3.3           103,000         4.9        (1.6)
Depreciation and amortization .........      111,000         5.0            29,000         1.4         3.6
                                          ----------        ----        ----------        ----         ---
         Expenses .....................   $1,958,000        87.8%       $1,687,000        80.5%        7.3%
                                          ==========        ====        ==========        ====         ===
</TABLE>

     Search and product fees increased  approximately  4% as a percentage of net
revenues in the first quarter 1998 over the first quarter 1997.  The majority of
the increase was  attributable  to the  increasing  costs of obtaining  criminal
history information from sources, as well as the criminal history product is the
one most heavily discounted for larger,  corporate accounts. The other main area
of increased  expenses in this category resulted from increased  personnel costs



                                       8
<PAGE>


associated  with  staffing an expanded  customer  service  department to improve
customer coverage,  and increased staffing for the labor intensive products such
as  reference  checks  and  education  verifications.  There was a  decrease  in
expenses  when  expressed as a percentage  of total net revenues in the areas of
motor  vehicle  records,  workers'  compensation  reports,  credit  reports  and
telephone.

     There  was an  approximate  1.2%  increase  as a  percentage  of total  net
revenues in marketing expenses, in the first three months of 1998 as compared to
the first three months of 1997. There is an on-going marketing campaign designed
to target lead generation,  marketing  communication and market  development for
both current customers and new customers,  via in-house marketing  personnel and
outside  resellers.  Specifically,  the lead generation costs as a percentage of
total net revenues in the first  quarter  1998 as compared to the first  quarter
1997  represent the increase in the  marketing  expense  category.  In addition,
there was a separate  marketing campaign targeted toward current Avert customers
that occurred in the first quarter 1998 and into the second  quarter 1998.  This
campaign  communicated  the  implementation  of the  new  computer  system,  its
features and benefits.  See "Liquidity and Capital Resources" below in this item
for further discussion.

     General and  Administrative  expenses  remained  relatively stable in first
quarter  1998,  representing  approximately  15.8% of  total  net  revenues,  as
compared to first quarter 1997  representing  15.7% of total net  revenues.  The
decrease in software  development expenses as a percentage of total net revenues
in the three  month  period  ended March 31, 1998 as compared to the three month
period  ended  March 31,  1997,  resulted  from the  capitalization  of expenses
related to the development of new software and upgrade of existing software. See
"Liquidity and Capital Resources" below in this Item for further discussion. The
depreciation and  amortization  expenses have increased as a percentage of total
net revenues due to the fact that a portion of the software previously developed
had been put into  actual  use.  Capitalization  has  occurred  in the  software
development activities as well as additional computer hardware purchases.

     Income taxes remained  stable for the combined  federal and state statutory
rate of  approximately  39% in both first  quarter 1998 and first  quarter 1997,
resulting  in net income of $248,700 or $.07 per share on  3,417,855  shares for
the first  three  months  ended  March 31,  1997,  as  compared to net income of
$167,000 or $.05 per share on 3,546,124  shares for the first three months ended
March 31, 1998.


Liquidity and Capital Resources

     The Company's  financial  position at March 31, 1998  remained  strong with
working  capital at that date of  $7,233,000  compared to $7,543,000 at December
31,1997.  Cash and cash equivalents and marketable  securities at March 31, 1998
were  $6,603,000  and decreased  from  $6,693,000 at December 31, 1997. Net cash
provided  from  operations  for the three month  period ended March 31, 1998 was
$418,000  and  consisted  primarily  of net income of  $167,000  plus a $210,000
increase in accounts payable, a $73,000 decrease in accounts  receivable,  and a
$116,000 decrease in prepaid expenses and other current assets.  The Company had
capital expenditures of $215,000 for the three month period ended March 31, 1998
as compared to $438,000 for the three months ended March 31, 1997.  The majority
of the capital  expenditures  during the three  months  ended March 31, 1998 was
attributable to the development of new software and upgrade of existing hardware
and software.  The Company expects to spend over $1.5 million in connection with
this project.  The majority of these are costs paid to independent  consultants.
The Company  expects the new software  and upgrade of its  existing  software to
allow the  Company  to:  (1)  manage  its  higher  volume  with a lower cost per
transaction; (2) introduce new products and services at a much quicker pace; (3)
directly integrate the Company's  information  technology systems with strategic
partners,  suppliers,  and  large  customers;  and (4)  maintain  the  Company's
competitive  position and provide leading edge, but safe and proven,  technology
for its customers.  Development  and upgrade of the software will be financed by
available cash derived from past or continued operations.  Implementation of the
new software will be April, 1998 with ongoing  enhancements and upgrades through
1998.  Net cash used in  financing  activities  for the three month period ended
March 31, 1998 was  $373,000 and  consisted  primarily of $350,000 for a special
cash dividend of $.10 per common share payable on March 23, 1998 to shareholders
of record on March 16, 1998.


                                       9
<PAGE>



                           PART II - OTHER INFORMATION


ITEM 1.   Legal Proceedings

               NONE


ITEM 6.   Exhibits and Reports on Form 8-K

               (a)     NONE

               (b)     NONE









































                                       10
<PAGE>



                                   SIGNATURES


In accordance with the requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                       AVERT, INC.


DATE:   May 13, 1998                   BY: /s/ Dean A. Suposs
                                          --------------------------------------
                                          Dean A. Suposs, President



DATE:   May 13, 1998                   BY: /s/ Jamie M. Burgat
                                          --------------------------------------
                                          Jamie M. Burgat, Vice President of
                                          Operations and Chief Financial Officer













                                       11