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

FORM 10-Q

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

For the quarterly period ended September 30, 1998

Commission file number: 0-25620

A.S.V., Inc.
(Exact name of registrant as specified in its charter)

Minnesota 41-1459569
State or other jurisdiction of I.R.S. Employer Identification No.
incorporation of organization

840 Lily Lane
P.O. Box 5160
Grand Rapids, MN 55744 (218) 327-3434
Address of principal executive offices Registrant's telephone number

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 past 12
months (or for such shorter period that the registrant 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 November 4, 1998, 7,895,988 shares of registrant's $.01 par value
Common Stock were outstanding.

Page 1

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

A.S.V., INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

September 30, December 31,
1998 1997
------------- ------------
ASSETS (Unaudited)

CURRENT ASSETS
Cash and cash equivalents.............................. $ 744,495 $ 316,599
Short-term investments................................. 491,806 1,255,160
Accounts receivable, net............................... 3,103,581 1,989,906
Inventories............................................ 16,216,241 11,674,027
Other current assets................................... 751,060 342,896
----------- -----------
Total current assets 21,307,183 15,578,588

Property and equipment, net............................... 4,432,394 3,636,091
----------- -----------

Total Assets $25,739,577 $19,214,679
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Current portion of long-term liabilities............... $ 219,348 $ -
Accounts payable....................................... 3,424,920 1,474,701
Accrued liabilities
Compensation......................................... 259,310 180,349
Interest............................................. 95,422 81,250
Warranties........................................... 400,000 200,000
Other................................................ 157,026 98,998
Income taxes payable................................... - 201,674
----------- -----------
Total current liabilities 4,556,026 2,236,972
----------- -----------

LONG-TERM LIABILITIES, less current portion............... 7,438,519 7,020,608
----------- -----------

COMMITMENTS AND CONTINGENCIES............................. - -

SHAREHOLDERS' EQUITY
Capital stock, $.01 par value:
Preferred stock, 11,250,000 shares authorized;
no shares outstanding.............................. - -
Common stock, 33,750,000 shares authorized;
7,895,988 shares issued and outstanding in 1998;
7,518,310 shares issued and outstanding in 1997.... 78,960 75,183
Additional paid-in capital............................. 7,463,192 6,520,371
Retained earnings...................................... 6,202,880 3,361,545
----------- -----------
13,745,032 9,957,099
----------- -----------

Total Liabilities and Shareholders' Equity $25,739,577 $19,214,679
=========== ===========

See notes to consolidated financial statements.

A.S.V., INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)

Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ -------------------------
1998 1997 1998 1997
----------- ---------- ----------- -----------

Net sales................................... $11,397,903 $6,228,812 $30,911,020 $16,287,812

Cost of goods sold.......................... 8,593,602 4,656,783 23,287,612 12,354,266
----------- ---------- ----------- -----------

Gross profit....................... 2,804,301 1,572,029 7,623,408 3,933,546

Operating expenses:
Selling, general and administrative 832,962 601,365 2,583,860 1,620,770
Research and development 77,412 55,830 280,949 163,485
----------- ---------- ----------- -----------
Operating income................... 1,893,927 914,834 4,758,599 2,149,291
Other income (expense)
Interest expense (128,085) (93,029) (383,610) (278,969)
Other, net 31,576 50,227 171,346 261,145
----------- ---------- ----------- -----------
Income before income taxes......... 1,797,418 872,032 4,546,335 2,131,467
Provision for income taxes.................. 675,000 331,000 1,705,000 810,000
----------- ---------- ----------- -----------
NET INCOME............................. $ 1,122,418 $ 541,032 $ 2,841,335 $ 1,321,467
=========== ========== =========== ===========

Net income per common share

Basic.................................. $ .14 $ .07 $ .37 $ .18
=========== ========== =========== ===========

Diluted *.............................. $ .13 $ .07 $ .33 $ .17
=========== ========== =========== ===========

Weighted average number of common
shares outstanding

Basic.................................. 7,781,726 7,463,470 7,616,228 7,316,906
=========== ========== =========== ===========

Diluted *.............................. 9,084,640 9,008,023 9,011,689 8,857,408
=========== ========== =========== ===========

* Includes add back of after-tax effect of interest expense for convertible
debentures.

See notes to consolidated financial statements.

A.S.V., INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

Nine months ended September 30, 1998 and 1997

1998 1997
----------- -----------

Cash flows from operating activities:
Net income................................................. $ 2,841,335 $ 1,321,467
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation........................................... 250,000 127,000
Interest accrued on capital lease obligation........... 34,542 34,542
Deferred income taxes.................................. (140,000) (123,000)
Effect of warrant earned............................... 113,400 113,400
Changes in assets and liabilities:
Accounts receivable.................................. (1,113,675) (78,330)
Inventories.......................................... (4,542,214) (3,960,412)
Prepaid expenses and other........................... (268,164) (239,485)
Accounts payable..................................... 1,950,219 603,076
Accrued expenses..................................... 351,161 140,720
Income taxes payable................................. (201,674) (198,954)
----------- -----------

Net cash used in operating activities......................... (725,070) (2,259,976)
----------- -----------

Cash flows from investing activities:
Purchase of property and equipment......................... (398,509) (987,502)
Purchase of short-term investments......................... - (1,497,087)
Redemption of short-term investments....................... 763,354 1,006,170
----------- -----------

Net cash provided by (used in) investing activities........... 364,845 (1,478,419)
----------- -----------

Cash flows from financing activities:
Principal payments on long-term liabilities................ (45,077) (15,791)
Exercise of stock options.................................. 173,198 177,208
Tax benefit related to exercise of stock options........... 660,000 933,000
----------- -----------

Net cash provided by financing activities..................... 788,121 1,094,417
----------- -----------

Net increase (decrease) in cash and cash equivalents.......... 427,896 (2,643,978)

Cash and cash equivalents at beginning of period.............. 316,599 3,042,494
----------- -----------

Cash and cash equivalents at end of period.................... $ 744,495 $ 398,516
=========== ===========

Supplemental disclosure of cash flow information:
Cash paid for interest..................................... $ 369,438 $ 241,962
Cash paid for income taxes................................. 1,728,750 431,500

Supplemental disclosure of non-cash investing and financing activity:
Assets acquired by incurring long-term liabilities......... $ 647,794 $ -

See notes to consolidated financial statements.

A.S.V., INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 1998

(Unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL INFORMATION

The accompanying unaudited, consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal,
recurring adjustments) considered necessary for a fair presentation have been
included. Results for the interim periods are not necessarily indicative of the
results for an entire year.

NOTE 2. SUBSEQUENT EVENT

On October 14, 1998, the Company entered into a Securities Purchase
Agreement (the Agreement) with Caterpillar Inc. (Caterpillar). Under the terms
of the Agreement, Caterpillar will acquire, for an aggregate purchase price of
$18,000,000, one million newly issued shares of the Company's common stock and a
warrant to purchase an additional 10,267,127 newly-issued shares of the
Company's common stock at a price of $21.00 per share. The Agreement provides
that, upon closing, the Company's board of directors will be increased from
eight to ten and the Company's board of directors will appoint two members
designated by Caterpillar. The consummation of the transactions contemplated by
the Agreement is contingent upon receiving Company shareholder and regulatory
approvals.

In connection with entering into the Agreement, the Company, Caterpillar
and certain shareholders of the Company have entered into several ancillary
agreements. First, the Company and Caterpillar have entered into an Option
Agreement pursuant to which Caterpillar has the option to purchase 1,579,000
shares of the Company's common stock, through a private issuance from the
Company, at a price of $18.00 per share, exercisable in whole or in part at any
time until October 14, 1999 or the closing of the transactions contemplated by
the Agreement, whichever is sooner.

Second, certain of the shareholders (the Shareholders) of the Company and
Caterpillar have entered into a Voting Agreement pursuant to which the
Shareholders have agreed (i) that the Shareholders will not sell, transfer,
pledge, grant a security interest in or lien on or otherwise dispose of or
encumber any of their shares in the Company prior to the closing of the
transactions contemplated by the Agreement and (ii) that the Shareholders will
vote each of their shares at every annual, special or adjourned meeting of the
shareholders of the Company (a) in favor of approval of the Agreement, (b)
against any Competing Transaction (as defined in the Agreement) and (c) in favor
of any other matter relating to the closing of the transactions contemplated by
the Agreement.

Finally, the Company and Caterpillar have entered into a Commercial
Alliance Agreement pursuant to which Caterpillar will provide the Company with
access to its dealer network and will make various management, financial and
engineering resources available to the Company following the closing.

Following the closing, Caterpillar will own approximately 8.8% of the
Company's outstanding common stock (assuming exercise or conversion of all
outstanding options, warrants and convertible debentures) and will have the
right to own up to approximately 52% of the Company's outstanding common stock
(assuming exercise or conversion of all outstanding options, warrants and
convertible debentures) upon exercise of the warrant.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth certain Statement of Earnings data as a
percentage of net sales:

Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
----- ----- ----- ------
Net sales............. 100.0% 100.0% 100.0% 100.0%
Cost of goods sold.... 75.4 74.8 75.3 75.8
Gross profit.......... 24.6 25.2 24.7 24.2
Selling, general and
administrative..... 7.3 9.7 8.4 10.0
Operating income...... 16.6 14.7 15.4 13.2
Interest expense...... (1.1) (1.5) (1.2) (1.7)
Net income............ 9.8 8.7 9.2 8.1

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997.

NET SALES. Net sales increased 83%, to approximately $11,398,000, for the
three months ended September 30, 1998 compared with the same period in 1997. The
increase was due primarily to sales of the Company's Posi-Track vehicles and
related accessories increasing 84% over 1997. The growth in Posi-Track sales was
due to continued demand for the Company's HD series Posi-Track which was
introduced in the fourth quarter of 1997 and sales of the Company's new MD
series Posi-Track, which began shipping in the third quarter of 1998. The MD
series Posi-Track incorporates the same maintenance-free suspension found on the
Company's HD series, but in a lighter weight, lower priced machine. Also
included in the Posi-Track sales increase were sales of the Company's DX series
Posi-Track, which was introduced in the fourth quarter of 1997. Sales of parts,
used equipment and other items increased 112% for the three month period ended
September 30, 1998 compared with the same period in 1997. This increase was
primarily due to parts sales more than doubling as the number of vehicles in the
field continues to increase. In addition, the sale of used equipment more than
tripled due to more concentrated sales efforts and a greater offering of used
equipment.

GROSS PROFIT. Gross profit for the three months ended September 30, 1998
increased to approximately $2,804,000, or 24.6% of net sales, compared with
$1,572,000, or 25.2% of net sales, in 1997. The increased gross profit was
attributable to increased sales volume in 1998 while the decreased gross profit
percentage was attributable to the initial start-up of production of the
Company's MD series Posi-Track, which went into production in the third quarter
of 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased to approximately $833,000 in third quarter
1998 from approximately $601,000 in third quarter 1997. As a percentage of net
sales, however, selling, general and administrative expenses decreased from 9.7%
in third quarter 1997 to 7.3% in third quarter 1998. The increased dollar volume
was due to increased advertising costs including costs to promote the Company's
MD series Posi-Track as well as increased compensation costs as sales and
administrative personnel have been added to support expanded sales and customer
service roles. The decreased percentage of selling, general and administrative
expenses was due to the Company closely managing its costs.

RESEARCH AND DEVELOPMENT. Research and development expenses increased
from approximately $56,000 in third quarter 1997 to approximately $77,000 in
1998. The increase was due mainly to the development of the Company's new model
Posi-Track, the MD series, continuing improvements to the Company's existing
models and exploration of future product alternatives.

INTEREST EXPENSE. Interest expense increased from approximately $93,000 for
the third quarter of 1997 to approximately $128,000 for the third quarter of
1998. The increase was due to the additional debt related to the completion of
the Company's facility expansion and the additional debt incurred in January
1998 for the acquisition of land and buildings for storage and to house the
Company's research and development activities.

NET INCOME. Net income for the third quarter of 1998 was approximately
$1,122,000, compared with approximately $541,000 for the third quarter of 1997.
The increase in 1998 resulted primarily from greater gross profit on increased
sales, offset in part by increased operating costs and interest expense.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997.

NET SALES. Net sales for the nine months ended September 30, 1998 increased
90%, or approximately $14,623,000, to $30,911,000. The increase was due to the
increased sales of the Company's Posi-Track vehicle, primarily the HD series
Posi-Track, which was introduced in fourth quarter 1997and, to a lesser degree,
the new MD series Posi-Track, which was introduced in third quarter 1998.
Posi-Track related sales increased 94% due to the increased demand, sales of
three new Posi-Track models in 1998 and new dealers added in the past twelve
months. Sales of parts, used equipment and other items increased approximately
83% due primarily to an increase in the sale of parts as a greater number of
machines are in service in 1998.

GROSS PROFIT. Gross profit increased for the nine months ended September
30, 1998 to approximately $7,623,000, or 24.7% of net sales, from $3,934,000, or
24.2% of net sales, for the nine months ended September 30, 1997. The increased
gross profit was due to increased sales while the increased gross profit
percentage was due to the increased efficiencies obtained from the Company's
increased production volume and additional margin obtained from the sale of
higher priced products.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. For the nine months ended
September 30, 1998, selling, general and administrative expenses increased to
approximately $2,584,000 compared with approximately $1,621,000 for the same
period in 1997. As a percentage of net sales, however, selling, general and
administrative expenses decreased from 10.0% for the nine months ended September
30, 1997 to 8.4% for the nine months ended September 30, 1998. The increased
dollar amount of approximately $963,000 was due to increased sales and marketing
costs and increased costs for administrative personnel hired to support
increased sales volumes. The decreased percentage of selling, general and
administrative expenses was due to the Company closely managing its costs.

RESEARCH AND DEVELOPMENT. Research and development expenses increased from
approximately $163,000 in 1997 to approximately $281,000 in 1998. The increase
was due mainly to the development of the Company's new model Posi-Track, the MD
series, in 1998, continuing improvements to the Company's existing models and
exploration of additional models.

INTEREST EXPENSE. Interest expense increased from approximately $279,000
for the nine months ended September 30, 1997 to approximately $384,000 for the
same period in 1998. The increase was due to the additional debt related to the
completion of the Company's facility expansion and the additional debt incurred
in January 1998 for the acquisition of land and buildings for storage and to
house the Company's research and development activities.

NET INCOME. Net income for the nine months ended September 30, 1998
increased to approximately $2,841,000 from approximately $1,321,000 for 1997.
The increase is due to increased sales and gross profit, offset in part by
increased operating expenses and interest expense.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1998, the Company had working capital of approximately
$16,751,000 compared with working capital of approximately $12,213,000 at
September 30, 1997, an increase of approximately $4,538,000. The major
components of this increase are as follows: inventories increased approximately
$7,095,000 due to the introduction of two new Posi-Track models in 1997 and one
new Posi-Track model in 1998; accounts receivable increased approximately
$1,764,000 due to increased sales; cash and short-term investments decreased
approximately $1,923,000 as the Company built inventory levels and equipped its
expanded manufacturing facility; current liabilities increased approximately
$2,585,000 due to the overall increase in the Company's volume and
profitability.

The Company's working capital position at September 30, 1998 increased
approximately $3,409,000 when compared with December 31, 1997. Major components
of this increase are as follows: inventories increased approximately $4,542,000
and accounts payable increased approximately $1,950,000 due to the increase in
the Company's production levels and additional parts needed to manufacture new
models; accounts receivables increased approximately $1,114,000

due to increased sales volume; cash and short-term investments decreased
approximately $335,000 due to internal funding of growth. Due to the exercise of
certain stock options in September 1998, the Company had no liability for income
taxes at September 30, 1998. In addition, the current portion of long-term
liabilities increased approximately $219,000 due to the additional debt incurred
for the Company's facility expansion and the acquisition of land and buildings
for storage and to house the Company's research and development activities.

Second, certain of the shareholders (the Shareholders) of the Company and
Caterpillar have entered into a Voting Agreement pursuant to which the
Shareholders have agreed (I) that the Shareholders will not sell, transfer,
pledge, grant a security interest in or lien on or otherwise dispose of or
encumber any of their shares in the Company prior to the closing of the
transactions contemplated by the Agreement and (ii) that the Shareholders will
vote each of their shares at every annual, special or adjourned meeting of the
shareholders of the Company (a) in favor of approval of the Agreement, (b)
against any Competing Transaction (as defined in the Agreement) and (c) in favor
of any other matter relating to the closing of the transactions contemplated by
the Agreement.

Finally, the Company and Caterpillar have entered into a Commercial
Alliance Agreement pursuant to which Caterpillar will provide the Company access
to its dealer network and will make various management, financial and
engineering resources available to the Company following the closing. Included
in the Commercial Alliance Agreement is a Marketing Agreement which provides,
among other things, that the Company will pay Caterpillar a commission equal to
5% of the dealer net price for complete machines and 3% for replacement parts
and Company-branded attachments for all sales made to Caterpillar dealers.
Should the Company manufacture products that are eligible to be sold under the
Caterpillar brand name, the Company will pay Caterpillar a trademark license fee
equal to 3% of the net sales of these products to Caterpillar dealers.

It is the intent of the Company and Caterpillar to introduce the Company's
Posi-Track products to Caterpillar's North American dealers as soon as
practicable. With the signing and announcement of the Agreement with
Caterpillar, certain of the Company's existing, non-Caterpillar dealers have
been hesitant to place orders for the Company's products. Management believes
these dealers are uncertain of their future status as Posi-Track dealers. The
Company has indicated that there are no current plans to terminate any existing
Posi-Track dealers. Since the signing of the Agreement with Caterpillar, two of
the Company's approximately 50 existing Posi-Track dealers have requested to
terminate their dealer status with the Company. Sales to these two dealers
totaled less than one percent of the Company's net sales for the nine months
ended September 30, 1998.

The Company's shipments during the month of October were decreased, the
Company believes, primarily due to three main factors. First, during the time
the Company was negotiating the Agreement with Caterpillar in the third quarter,
the Company was not actively marketing new Posi-Track dealerships to
non-Caterpillar dealers as the Company believed these new dealers would not
choose to remain dealers when the Agreement was announced. Second, the Company
believes

there has been hesitancy on the part of existing Posi-Track dealers to place
orders in light of the Caterpillar Agreement discussed above. Finally, the
Company's largest customer cancelled orders for delivery of approximately $1.4
million of Posi-Track machines which were scheduled for shipment during the
fourth quarter. The Company believes future sales to this Posi-Track dealer
(also a Caterpillar dealer) may be reduced as this dealer is the authorized
Posi-Track dealer for territory that overlaps nine existing Caterpillar dealers'
trade areas. The Company believes the slow-down in orders is temporary and
expects the order level to increase as additional Caterpillar dealers begin
carrying the Posi-Track models. Although the Company has been working closely
with Caterpillar to introduce the Posi-Track products to North American
Caterpillar dealers as quickly as possible, the Company may experience a
decrease in its sales volume while the Company proceeds through this
transitional period with Caterpillar. The Company is currently unable to
determine the potential effect, if any, this transitional situation may present.

For the nine months ended September 30, 1998 the Company has used
approximately $725,000 for operations as is shown on statement of cash flows
included elsewhere in this report. The Company intends to finance its future
operations with the proceeds from the sale of its shares to Caterpillar as
discussed above. In the event this transaction does not close, the Company
believes it may need to obtain additional debt or equity financing within the
next 12 months to meet its projected working capital needs. The Company has not
determined the total amount of additional financing that may be required, nor
can it assure its ability to obtain such financing.

Impact of the Year 2000 Issue. The Company has established a team to assess
and address the possible exposures related to the Year 2000 (Y2K) issue and is
in the initial assessment phase. The areas under investigation include business
computer systems, production equipment, vendor readiness and contingency plans.
The Company does not use internally developed computer software and is therefore
not anticipating major reprogramming efforts. The Company's primary financial
and operational system has been assessed and is certified Y2K compliant. There
are several ancillary applications that may not currently be Y2K compliant for
which the Company expects them to be compliant by mid-calendar 1999. The
majority of the Company's personal computers are currently Y2K compliant. Those
computers that may not currently be Y2K compliant are planned to be replaced as
part of the Company's technology update strategy. None of these replacements
have been accelerated and are not anticipated to have a material effect on the
Company consolidated financial statements. Equipment used for production or
quality control does not use dates to control operations. The costs of this
examination to date have been expensed as incurred and have not been material.

The Company intends to mail questionnaires to each of its significant
vendors during the first quarter of 1999 to determine the extent to which the
Company may be vulnerable to those third parties' failure to remediate their own
Y2K issues. It is anticipated this assessment will be completed by the end of
first quarter 1999. The Company anticipates developing a contingency plan once
it has completed its assessment of significant vendor compliance which it
anticipates to be by the end of second quarter 1999. A contingency plan, if
needed, will be developed during the second half of 1999 to minimize the
Company's exposure to work slowdowns or business disruptions. In the event any
vendors are not Y2K compliant, the Company may seek new vendors to meet its
production needs. Any costs that may be incurred by the Company that are related
to external systems Y2K issues are unknown at this time (other than immaterial
costs of the questionnaire itself). However, management expects that after
reviewing and evaluating the responses to the survey, it will be able to
complete an assessment of its Y2K exposure and estimate the costs associated
with resolving any Y2K issues.

Although the Company does not at this time expect a significant impact on
its consolidated financial position, results of operations and cash flows, the
assessment has not been completed and there can be no assurance that the systems
of other companies will be converted on a timely basis and will not have a
corresponding adverse effect on the Company.

The statements set forth above under "Liquidity and Capital Resources" and
elsewhere in this Form 10-Q which are not historical facts are forward-looking
statements and involve risks and uncertainties, many of which are outside the
Company's control and, accordingly, actual results may differ materially.
Factors that might cause such a difference include, but are not limited to, lack
of market acceptance of new or existing products, inability to attract new
dealers for the Company's products, unexpected delays in obtaining raw
materials, unexpected delays in the manufacturing process, unexpected additional
expenses or operating losses or the activities of competitors. Additional
factors include the Company's ability to obtain the necessary shareholder and
regulatory approvals, consummate the transactions contemplated by the Agreement
with Caterpillar, successfully negotiate various financing, licensing and
service agreements with Caterpillar and realize the anticipated benefits from
the relationship with Caterpillar. Any forward-looking statements provided from
time-to-time by the Company represent only management's then-best current
estimate of future results or trends.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit
Number Description
------- -----------
3.1 Second Restated Articles of Incorporation of the Company (a)

3.1a Amendment to Second Restated Articles of Incorporation of the
Company filed January 6, 1997 (e)

3.1b Amendment to Second Restated Articles of Incorporation of the
Company filed May 4, 1998 (h)

3.2 Bylaws of the Company (a)

4.1 Specimen form of the Company's Common Stock Certificate (a)

4.2 * 1987 Stock Option Plan (a)

4.3 * 1994 Long-Term Incentive and Stock Option Plan (a)

4.4 Form of Warrant issued to Summit Investment Corporation (b)

4.5 Form of Debenture issued October 1996 (d)

4.6 Warrant issued to Leo Partners, Inc. on December 1, 1996 (e)

4.7 * 1996 Incentive and Stock Option Plan (f)

4.8 * 1996 Incentive and Stock Option Plan, as amended (g)

4.9 * 1998 Non-Employee Director Stock Option Plan (g)

4.10 Securities Purchase Agreement dated October 14, 1998 between
Caterpillar Inc. and the Company (i)

4.11 Form of Warrant Certificate to be issued to Caterpillar Inc.
upon closing of the transactions contemplated by the
Securities Purchase Agreement (i)

4.12 Option Certificate dated as of October 14, 1998 between
Caterpillar Inc. and the Company (i)

4.13 Voting Agreement dated as of October 14, 1998 by certain
shareholders of the Company and Caterpillar Inc. (i)

10.1 Development Agreement dated July 14, 1994 among the Iron
Range Resources and Rehabilitation Board ("IRRRB"), the
Grand Rapids Economic Development Agency ("EDA") and the
Company (b)

10.2 Lease and Option Agreement dated July 14, 1994 between the
EDA and the Company (b)

10.3 Option Agreement dated July 14, 1994 between the EDA and the
Company (b)

10.4 Grant Contract dated July 1, 1994 between the Company and the
IRRRB (b)

10.5 Letter Credit Agreement dated September 15, 1994 between the
Security State Bank of Hibbing and the Company (a)

10.6 Supplemental Lease Agreement dated April 18, 1997 between the
EDA and the Company (f)

10.7 Supplemental Development Agreement dated April 18, 1997
between the EDA and the Company (f)

10.8 Line of Credit dated May 22, 1997 between Norwest Bank
Minnesota North, N.A. and the Company (f)

10.9 * Employment Agreement dated October 17, 1994 between the
Company and Thomas R. Karges (c)

10.10 Consulting Agreement between the Company and Leo Partners,
Inc. dated December 1, 1996 (e)

10.11 Extension of Lease Agreement dated May 13, 1998 between the
EDA and the Company (h)

10.12 First Amendment to Credit Agreement dated September 30, 1998
between Norwest Bank Minnesota North, N.A. and the Company (h)

10.13 Commercial Alliance Agreement dated October 14, 1998 between
Caterpillar, Inc. and the Company (i)

11 Statement re: Computation of Per Share Earnings

22 List of Subsidiaries (a)

27 Financial Data Schedule for the nine months ended September
30, 1998

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(a) Incorporated by reference to the Company's Registration
Statement on Form SB-2 (File No. 33-61284C) filed July
7, 1994.

(b) Incorporated by reference to the Company's Post-Effective
Amendment No. 1 to Registration Statement on Form SB-2
(File No. 33-61284C) filed August 3, 1994.

(c) Incorporated by reference to the Company's Quarterly
Report on Form 10-QSB for the quarter ended September 30,
1994 (File No. 33-61284C) filed November 11, 1994.

(d) Incorporated by reference to the Company's Quarterly
Report on Form 10-QSB for the quarter ended September 30,
1996 (File No. 0-25620) filed electronically November 13,
1996.

(e) Incorporated by reference to the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1996
(File No. 0-25620) filed electronically March 28, 1997.

(f) Incorporated by reference to the Company's Quarterly
Report on Form 10-QSB for the quarter ended June 30, 1997
(File No. 0-25620) filed electronically August 13, 1997.

(g) Incorporated by reference to the Company's Definitive
Proxy Statement for the year ended December 31, 1997
(File No. 0-25620) filed electronically April 28, 1998.

(h) Incorporated by reference to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998
(File No. 0-25620) filed electronically August 12, 1998.

(i) Incorporated by reference to the Company's Current Report
on Form 8-K (File No. 0-25620) filed electronically
October 27, 1998.

* Indicates management contract or compensation plan or
arrangement.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended September
30, 1998.

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SIGNATURES

Pursuant to 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.

A.S.V., Inc.

Dated: November 12, 1998 By /s/ Gary Lemke
------------------------------------
Gary Lemke
President

Dated: November 12, 1998 By /s/ Thomas R. Karges
------------------------------------
Thomas R. Karges
Chief Financial Officer
(Principal financial and
accounting officer)

EXHIBIT INDEX

Exhibit Method of Filing
- ------- -----------------------------
11 Statement re: Computation of
Per Share Earnings................... Filed herewith electronically

27 Financial Data Schedule.............. Filed herewith electronically