SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[  ]  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934 [No Fee Required] For the fiscal year ended _______________

[x]   Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
      Exchange Act of 1934 [No Fee Required]

For the transition period from APRIL 1, 1999 to DECEMBER 31, 1999

Commission file number: 33-61888-FW

                               COMPRESSCO, INC.
                    (FORMERLY EMERGING ALPHA CORPORATION)
             (Exact name of small business issuer in its charter)

                    DELAWARE                                72-1235449
         (State or other jurisdiction of                 (I.R.S. Employer
         incorporation or organization)                Identification No.)

     220 CAMP STREET, NEW ORLEANS, LOUISIANA                  70130
    (Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:   (504) 524-1801

Securities registered pursuant to Section 12(b) of the Act:       NONE

Securities registered pursuant to Section 12(g) of the Act:       NONE

      Indicate by check mark whether the registrant (1) has 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
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

             YES  / X / NO    /   /

      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

      State issuer's revenues for its most recent fiscal year: None

      The aggregate market value of the voting stock held by non-affiliates of
the registrant as of December 31, 1999 was $313,450.

      The number of shares outstanding of the issuer's classes of Common Stock
as of December 31, 1999:

      Common Stock, $1.00 Par Value - 83,233 shares

                  DOCUMENTS INCORPORATED BY REFERENCE: NONE


<PAGE>


                                     PART I

ITEM 1.     DESCRIPTION OF BUSINESS

HISTORY AND ORGANIZATION

Compressco, Inc., formerly Emerging Alpha Corporation (together with its
subsidiaries unless the context indicates otherwise, the "Company"), was
incorporated in the State of Delaware on February 10, 1993 for the purpose of
creating a corporate vehicle to seek, investigate and, if the results of such
investigation warrants, acquire a business opportunity presented to it by
persons or firms who or which desire to employ the Company's funds in their
business or to seek the perceived advantages of a publicly held corporation.
Prior to October 1999, the primary activity of the Company has been devoted to
organizational activities and obtaining initial funding. After careful
investigation and analysis, the Company decided in 1999 to enter into the
natural gas compression business.

COMPANY OVERVIEW AND STRATEGY

The Company has two wholly owned operating subsidiaries engaged in compressor
manufacturing and services. In October 1999, the Company purchased a privately
held natural gas compressor manufacturing and service company, Gas Jack, Inc.,
("Gas Jack") for $2.7 million in cash. Gas Jack was established in 1990 for the
purpose of developing a low cost method of producing pressure depleted gas
reservoirs. In October 1999, the Company also purchased GJ Measurement, L.L.C.
("GJ Measurement"), a natural gas, measurement, testing and service company, for
33,333 shares of the Company's common stock.

Gas Jack manufactures, sells and rents low cost well head compressors for use on
low volume, low pressure gas wells. The technology extends the production and
life of pressure depleted reserves. Gas Jack has a proven product in the field
that has provided production improvements equaling more than twice the
production before installation of the compressor. Gas Jack has focused on
developing relationships, which has resulted in customer confidence and
satisfaction. The Company has a stable and motivated work force that is
committed to the success of the Company. Gas Jack has manufactured a total of
417 compressors of which 206 are currently owned by Gas Jack and utilized in its
leasing operation. In addition the Company recently purchased 190 Ford
industrial 460 cubic inch V-8 engines from Ford Power Products, which the
Company intends to convert to compressors for future leasing or sale.

INDUSTRY OVERVIEW

Since 1981, the North American rig count has dropped from over 4,300 active
drilling rigs to approximately 950 as of December 1999. As a result of this, one
of the ways the natural gas industry has been able to increase available gas
reserves has been through the lowering of line pressures. Many of the gas
pipelines have gone through massive capital investments in compression to lower
pressures from 800-1000 PSIG to 50-400 PSIG.

The lowering of pipeline pressure has in fact greatly increased the market
potential for Gas Jack's compressor units. The Company believes that lower
manufacturing and operational costs coupled with a more efficient design makes
these units superior to the high discharge pressure compressor used in the past.
The Gas Jack units also use less fuel for increased efficiency as compared with
units used in the past.

Many natural gas wells today are of a low-pressure marginal nature. In fact, all
natural gas wells at some point in their life will require compression.

                                       2
<PAGE>

Compression will be needed for getting the gas produced into the pipeline
collection system or needed to create enough gas velocity in the production
tubing string to lift fluid off the formation.

COMPETITION

Primary competition for the compression manufacturing and service end of the
Company is from various local and regional packagers that generally use a screw
compressor with a separate engine driver or a reciprocating compressor with a
separate engine driver. The existing Gas Jack business competes with these
packagers by making use of the engine for both compression and drive thereby
eliminating a significant amount of the cost associated with the competitor
offerings. The Company believes that its patented technology helps it to
maintain a competitive position in the marginal well application of compressor
technology. The gas compression industry is highly competitive but Gas Jack is
positioned well because it has focused its products and efforts on low volume,
low pressure oil and gas wells.

EMPLOYEES AND CONSULTANTS

As of December 31, 1999 the Company and its subsidiaries had a total of 27
employees.

CUSTOMERS AND SUPPLIERS

During the nine months ended December 31, 1999, the Company had sales to one
customer comprising approximately 11% of revenues. The Company purchases a
substantial portion of its equipment, specifically, compressor engines and
related items, from one supplier, Ford Motor Company.

ITEM 2.     DESCRIPTION OF PROPERTY

The Company has manufactured a total of 417 compressors. As of the end of 1999,
Gas Jack has a compressor fleet of 206 units; of these units, 201 are currently
under lease contract. The Company's leases are for monthly and annual terms.
These units, as well as contracted maintenance on another 42 sold units, are
maintained by company personnel and contracted third parties. Since the
inception of Gas Jack in 1990, an aggregate of 211 units have been sold to
customers in the United States, Canada, Indonesia and Argentina.

The Gas Jack compressor utilizes an integral design as the frame for the
compressor. A Ford industrial 460 cubic inch V-8 is modified so that one bank of
four cylinders uses natural gas from the well to power the other bank of four
cylinders that provide compression. This configuration is capable of handling
suction pressures from vacuum conditions of up to -12 inches vacuum and
discharge pressures of up to 250 PSIG. This configuration allows the Company to
provide a moderately priced, reliable well head compressor that is easy to
maintain and does not require special parts, tools, fluids or training to
operate. The design also allows for a compact unit that is easily transported
and requires minimal site preparation, which assists the producer in testing and
evaluating subject properties.

As well as increasing reserve recovery from older, marginal gas wells producing
from permeable, porous formations, the compressor has proven to be an excellent
production tool for traditional compressor applications (i.e., augmenting the
well's pressure to overcome a higher sales line pressure), increasing fluid
production, and as first stage compression on pipeline gathering systems.

                                       3
<PAGE>


Gas Jack currently holds three active patents. These patents cover the combined
compressor/engine design, specific designs for natural gas applications and
special instrumentation for measuring engine oil viscosity declines below an
acceptable level.

Since the introduction of the Gas Jack compressor, many design improvements have
been implemented which have resulted in improved performance and reduced
maintenance. Some of the design improvements are: custom pistons for the
compressor side utilizing an extra oil ring, single piece power take off shaft
for driving the after cooler fan, repositioning the radiator for increased
cooling efficiency and limiting damage when a water pump fails, a custom,
balanced, single piece compressor piston used in the higher discharge units (in
excess 125 PSIG), numerous ignition and instrumentation improvements, etc.

The current manufacturing staff and facility at Gas Jack is capable of producing
six new units per month, as well as the required reconditioning of units that
are returned from leases. Over the last few years, the Company has improved its
shop and suppliers scheduling, implemented shop and supplier's quality control,
maximized the use of its existing facility and personnel. This has resulted in
cost reductions, minimized rework, improved inventory control and increased
production efficiency.


ITEM 3.     LEGAL PROCEEDINGS

      None.

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

      No matters were submitted to a vote of security holders during the last
quarter of the fiscal period ended December 31, 1999.

                                     PART II

ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock is not and has not been traded on a stock exchange or
national quotation system. As of December 31, 1999, there were 338 stockholders
of record. No dividends have been paid and none are expected to be paid in the
foreseeable future.

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

OVERVIEW

Prior to October 1999, the Company had no business operations; its only revenue
since its inception in 1993 was from interest income and its only expenses
related to administrative expenses. In October 1999, the Company purchased a
privately held natural gas compressor manufacturing and service company, Gas
Jack, for $2.7 million in cash, and also purchase GJ Measurement for 33,333
shares of common stock. These acquisitions were accounted for under the purchase
method of accounting.

In connection with the acquisitions, the Company's fiscal year end was changed
from March 31 to December 31. The following sets forth selected financial
information for the fiscal years ended and as of March 31, 1999 and for the nine
months ended December 31, 1998 and 1999 and as of December 31, 1999 and is
qualified in its entirety by the financial statements appearing elsewhere in
this Form 10-KSB.


                                       4
<PAGE>

RESULTS OF OPERATIONS
<TABLE>
<CAPTION>

              SELECTED CONSOLIDATED FINANCIAL DATA FOR COMPRESSO

STATEMENT OF OPERATIONS DATA:

                                           FISCAL YEAR       NINE MONTHS ENDED
                                             ENDED             DECEMBER 31,
                                            MARCH 31,    --------------------------
                                              1999           1998          1999
                                              ----           ----          ----

<S>                                        <C>            <C>            <C>
Operating Revenues ...................           --             --       $  786,159
Cost of Sales and Expenses ...........           --             --          715,022
Operating Income (Expense) ...........     $    1,377     $    2,406         71,137
Net Income (Loss) ....................          1,377          2,406         (5,395)

BALANCE SHEET DATA (AT END OF PERIOD):
Cash .................................     $  291,678                    $   96,256
Total Assets .........................        291,678                     4,439,554
Total Liabilities ....................          1,800                     3,733,241
Stockholders' Equity .................        289,878                       706,313
</TABLE>

The following discussion regarding the consolidated financial statements of the
Company should be read in conjunction with the financial statements and notes
thereto.

COMPRESSCO, INC.
NINE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO FISCAL YEAR ENDED MARCH 31,
1999 AND NINE MONTHS ENDED DECEMBER 31, 1998

The Company's results of operations for the nine months ended December 31, 1999
reflect the acquisition of Gas Jack on October 29, 1999. Prior to the
acquisition, Compressco had no business operations. For all periods prior to
1999, Compressco's only revenue was from interest income from equity invested in
the Compressco and expenses related to administration of Compressco's assets.

For this approximate two month period in 1999 following the acquisition, the
Company had revenues of $786,159, cost of sales and administrative expenses of
$715,022 and operating income of $71,137. There were no comparable results for
fiscal 1999 or the nine months ended December 31, 1998.

For the nine months ended December 31, 1999, the Company had interest income of
$16,097 compared to interest income of $15,633 and $12,057 for the fiscal year
ended March 31, 1999 ("fiscal 1999") and the nine months ended December 31,
1998, respectively. The change in results reflect slightly different return on
invested assets.

For the nine months ended December 31, 1999, the Company had interest expense of
$46,823, which primarily related to the outstanding borrowing under the credit
facilities entered into in connection with the Gas Jack acquisition.

For the nine months ended December 31, 1999, the Company had other expenses of
$45,806 compared to other expenses of $14,256 and $9,651 for fiscal 1999 and the
nine months ended December 31, 1998, respectively. The change in results
primarily reflects the higher level of miscellaneous expenses following the
acquisition of Gas Jack in October 1999.


                                       5
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA FOR GAS JACK

STATEMENT OF OPERATIONS DATA:
                                                                  PERIOD FROM
                                                YEAR ENDED         JANUARY 1
                                               DECEMBER 31,     TO OCTOBER 29,
                                                   1998              1999
                                                   ----              ----

Operating Revenues ....................          $3,252,570        $3,006,623
Cost of Sales and Expenses ............           2,711,080         2,662,221
Operating Income ......................             541,490           344,402
Net Income ............................             317,881           188,279

The following discussions regarding the financial statements of Gas Jack should
be read in conjunction with the Gas Jack financial statements and the notes
thereto.

GAS JACK, INC.
PERIOD FROM JANUARY 1, 1999 TO OCTOBER 29, 1999 COMPARED TO YEAR ENDED
DECEMBER 31, 1998

Gas Jack was acquired by Compressco on October 29, 1999 and therefore did not
report separate results after this date.

Revenues for the 1999 period were $3,006,623 compared to the 1998 year of
$3,252,570; an overall decrease but an increase of approximately 11% after
taking into consideration the shorter 1999 period prior to the acquisition by
Compressco. The increase was primarily due to the sales of compressors which
aggregated $734,394 for the 1999 period compared to $645,635 for the year 1998.

The cost of sales and expenses for the 1999 period were 89% of revenues compared
to 83% in the 1998 year. Operating expenses for the 1999 period were $1,733,372,
or 58% of revenues, compared to $1,801,647, or 55% of revenues, for the year
1998. The increase in operating expenses was due primarily to the manufacture of
fewer compressors in 1999 resulting in a lower amount of costs being capitalized
as a cost of compressor manufacturing. Gas Jack manufactured 11 compressors in
the 1999 period compared to 47 in the year 1998. The decrease in the number of
compressors was due to lower demand in the first half of 1999 as a result of
lower natural gas prices.

Depreciation expense increased in the 1999 period to $1,801,647 compared to
$1,733,772 for the 1998 year due to more compressors being in service in 1999.

Net income was $188,279, or 6% of revenues, for the 1999 period compared to
$317,881, or 10% of revenues, for the 1998 year. The decrease in net income was
primarily due to higher operating expenses and depreciation expense in 1999.

LIQUIDITY AND CAPITAL RESOURCES

On October 29, 1999, the Company borrowed $2,800,000 under a term loan agreement
with Hibernia National Bank. The related note bears interest at a fixed rate of
8.8%. Principal payments of $46,667, plus accrued interest, are due monthly
until maturity on September 30, 2004. The loan is secured with the assets and
compressor leases of Gas Jack, an investment account owned by the Company's
Chairman, and a personal guarantee of the Company's President.

On October 29, 1999, the Company and Gas Jack entered into a revolving line of
credit agreement with Hibernia. Under the agreement, the Company may borrow up

                                       6
<PAGE>

to the lesser of (i) $1,000,000 or (ii) the sum of 80% of the aggregate amount
of eligible receivables, plus 50% of the aggregate amount of eligible inventory.
The line of credit bears interest at Wall Street Journal Prime Rate (8.5% at
December 31, 1999). Interest is due monthly with all outstanding borrowings due
at maturity on October 29, 2001. The loan is secured with the assets and
compressor leases of Gas Jack, an investment account owned by the Company's
Chairman, and a personal guarantee of the Company's President.

In connection with the acquisition of an additional company in October 1999, the
Company assumed two outstanding notes payable to banks. The notes bear interest
ranging from a fixed rate of 8.75% to Wall Street Journal Prime Rate plus 2.0%
(10.5% at December 31, 1999). Principal and interest payments totaling $327 is
due on the fixed rate note until its maturity in May 2000. Interest on the
variable rate note was due monthly with all principal due at maturity. The
entire outstanding balance of the variable rate note at December 31, 1999 of
$18,385 was paid in full in February 2000.

The Company believes that cash flow from operations and funds available under
its credit facilities will provide the necessary working capital to fund the
Company's requirements for current operations through 2000. However, in
connection with any expansion of operations or acquisition activities, it is
likely that the Company will need additional sources of debt or equity
financing. The Company cannot provide assurance that these funds will be
available or if available will be available on satisfactory terms.

IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS

In connection with forward-looking statements contained in this Form 10-KSB and
those that may be made in the future by or on behalf of the Company which are
identified as forward-looking by such words as "believes," "intends" or words of
a similar nature, the Company notes that there are various factors that could
cause actual results to differ materially from those set forth in any such
forward-looking statements. The forward-looking statements contained in this
Form 10-KSB were prepared by management and are qualified by, and subject to,
significant business, economic, competitive, regulatory and other uncertainties
and contingencies, all of which are difficult or impossible to predict and many
of which are beyond the control of the Company. Accordingly, there can be no
assurance that the forward-looking statements contained in this Form 10-KSB will
be realized or the actual results will not be significantly higher or lower.
These forward-looking statements have not been audited by, examined by, compiled
by or subjected to agreed-upon procedures by independent accountants, and no
third-party has independently verified or reviewed such statements. Readers of
this Form 10-KSB should consider these facts in evaluating the information
contained herein. In addition, the business and operations of the Company are
subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements contained in this Form 10-KSB. The inclusion for the
forward-looking statements contained in this Form 10-KSB should not be regarded
as a representation by the Company or any other person that the forward-looking
statements contained in this Form 10-KSB will be achieved. In light of the
foregoing, readers of this Form 10-KSB are cautioned not to place undue reliance
on the forward-looking statements contained herein.

ITEM 7.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The consolidated financial statements of the Company required to be
included in Item 7 are set forth in the Financial Statements beginning on page
F-1.

ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

      Not Applicable.


                                       7
<PAGE>

                                    PART III

ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
            COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

DIRECTORS AND EXECUTIVE OFFICERS

      Directors are elected to serve until the annual meeting of shareholders
and until their successors have been elected and have qualified. Officers are
appointed to serve, subject to the discretion of the Board of Directors, until
the meeting of the Board following the annual meeting of shareholders and until
their successors have been elected and have qualified.

                                      YEAR               OFFICE WITH
         NAME              AGE       ELECTED               COMPANY
         ----              ---       -------               -------

Burt H. Keenan             60         1993     Chairman of the Board

Brooks Mims Talton         33         1999     Chief Executive Officer and
                                               Director

Jerry W. Jarrell           58         1994     Chief Financial Officer and
                                               Director

D. B. H. Chaffe III        66         1993     Director

Jack Rettig                46         1999     Director

Daniel B. Killeen          66         1993     Director

Jeffrey Henderson          50         1999     Director and President of Gas
                                               Jack


Each officer and director will devote only such time to the business affairs of
the Company as he deems appropriate, as discussed under the caption "Executive
Compensation".

BURT H. KEENAN is a Director and Founder of Independent Energy Holdings PLC,
a U.K. public company trading on the London Stock Exchange and the Nasdaq
National Markets.  Previously, Mr. Keenan was the Chairman and Chief
Executive Officer of Independent Energy.  Since 1987 he has been associated
with Chaffe & Associates, Inc., an investment banking firm located in New
Orleans, Louisiana, where he specializes in capital formation for emerging
and middle market companies.  From 1969 to 1986, Mr. Keenan was the Founder,
Chairman and CEO of Offshore Logistics, Inc., a public oil and gas service
company operating a fleet of marine service vessels and helicopters
worldwide.  Mr. Keenan was a member of the National Advisory Council on
Oceans and Atmosphere, a United States Presidential Commission, and of
various industry associations.  Mr. Keenan received Bachelors and Masters
degrees in business administration from Tulane University.  He is also a
Director of Telescan Incorporated, a Nasdaq traded technology company, and
several private companies in the United States and Canada.

BROOKS MIMS TALTON is the Founder and President of Master Meter, L.L.C.,
operating since 1994 as a natural gas measurement, monitoring and control

                                       8
<PAGE>

systems company. Customers range from small independents to major oil and gas
companies. From 1991 to 1994 he was Founder and Co-owner of Well Link
Corporation. From 1989 to 1991 he operated as a sole proprietor, Mims Oil Tools
specializing in automated plunger lift production systems. Results in many cases
increased natural gas production four fold. Prior to 1989 Mr. Talton worked for
two highly successful oil and gas exploration and production companies
performing prospect research and development. Mr. Talton holds a B.A., in
Political Science with an emphasis on Energy/Public Policy from the University
of Oklahoma.

JERRY JARRELL is a Director and Founder of Independent Energy Holdings PLC.
Previously Mr. Jarrell was Director of Finance with Independent Energy. He was
Chief Financial Officer for the Woodson Companies, an oilfield construction
company, from 1977 to 1990. From 1971 to 1977, he was Secretary-Controller for
Offshore Logistics. From 1966 to 1971, he was a Certified Public Accountant with
Arthur Andersen and Company, and holds a B.S. degree in accounting from
Louisiana Tech University.

D.B.H. CHAFFE III has been President and CEO of Chaffe & Associates, Inc., an
investment banking firm located in New Orleans, Louisiana, since 1982.  From
1981 to 1985, Mr. Chaffe was President, CEO and Treasurer of Becker &
Associates, Inc., a marine contracting firm, following a leveraged buy-out by
Mr. Chaffe and two other individuals.  From 1969 to 1981, he was Executive
Vice President and Director and head of corporate finance at Howard, Weil,
Labouisse, Friedrichs, Inc.,  Prior to 1969, Mr. Chaffe was a registered
representative and principal of investment banking firms. He has served on
advisory committees and has been a member of National Securities Associations
and stock exchanges.  Mr. Chaffe received a Bachelors degree in engineering
from Tulane University.

JACK RETTIG was president of Moores Wireline, a oilfield service company, from
1993 to 1998 and currently is an independent consultant. During 1978 to 1993 he
worked with various exploration and production companies including Exxon, Tee
Operating, Pacific Enterprises and Walter International. He graduated from
Louisiana State University in 1978 with a BS in mechanical engineering.

DANIEL B. KILLEEN was an associate professor in information systems in the A.
B. Freeman School of Business at Tulane University from 1983 until retiring
in 1994.  From 1967 to 1983 he was Director of Computing at Tulane
University, responsible for all computing activities and a staff of fifty.
Mr. Killeen performs consulting work for business and industry throughout the
Gulf South.  Mr. Killeen has received degrees in Physics and a Ph.D in
Engineering, and is affiliated with several honorary business and scientific
societies.  He is a registered Louisiana professional engineer.

JEFFREY HENDERSON has been President of Gas Jack, Inc. since 1994.  Mr.
Henderson is a certified public accountant.

INDEMNIFICATION

      The Delaware Supreme Court has held that directors' duty of care to a
corporation and its stockholders requires the exercise of an informed business
judgment. Having become informed of all material information reasonably
available to them, directors must act with requisite care in the discharge of
their duties. The Delaware General Corporation Law permits a corporation through
its certificate of incorporation to exonerate or indemnify its directors from
personal liability to the corporation or its stockholders for monetary damages
for breach of fiduciary duty of care as a director, with certain exceptions. The

                                       9
<PAGE>

Companies have adopted these exoneration and indemnification provisions in the
Delaware General Corporation Law in their respective certificates of
incorporation and bylaws. The exceptions include a breach of the director's duty
of loyalty, acts or omissions not in good faith or which involve intentional
misconduct or knowing violations of law, improper declarations of dividends, and
transaction from which the directors derived an improper personal benefit. The
Company's Certificate of Incorporation exonerates its directors, acting in such
capacity, from monetary liability to the extent permitted by this statutory
provision. The limitation of liability provision does not eliminate a
stockholder's right to seek non-monetary, equitable remedies such as an
injunction or recision to redress an action taken by directors. However, as a
practical matter, equitable remedies may not be available in all situations, and
there may be instances in which no effective remedy is available.

      The extent to which the indemnification provisions of the Delaware General
Corporation Law and the Companies' certificates of incorporation and bylaws
provide indemnification to officers and directors for violations of the federal
securities laws has not been settled by court precedent. The Companies
understand that, in the position of the Securities and Exchange Commission, such
indemnification is against public policy and is unenforceable.

ITEM 10.    EXECUTIVE COMPENSATION

      The following table sets forth the cash compensation of the Company's
executive officers during each of the last three fiscal periods. The
remuneration described in the table does not include the cost to the Company of
benefits furnished to the named executive officers, including premiums for
health insurance and other benefits provided to such individual that are
extended in connection with the conduct of the Company's business. The value of
such benefits cannot be precisely determined, but the executive officers named
below did not receive other compensation in excess of the lesser of $25,000 or
10% of such officer's cash compensation.

BOARD COMMITTEES

AUDIT COMMITTEE

Our audit committee consists of Jerry Jarrell, Burt H. Keenan and Brooks Mims
Talton. The audit committee makes recommendations to the board of directors
regarding the selection of independent auditors, reviews the results and scope
of the audit and other services provided by our independent auditors and
evaluates our internal accounting procedures.
COMPENSATION COMMITTEE

Our compensation committee consists of Burt H. Keenan and Jerry W. Jarrell. The
compensation committee reviews and approves compensation and benefits for our
executive officers. The compensation committee also administers our compensation
and stock plans and makes recommendations to the board of directors regarding
such matters.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Until October 1999, the Company had no employees and no compensation committee.
No member of the compensation committee is or has been an employee of the
Company at any time. None of our executive officers serves as a member of the
board of directors or compensation committee of any other company that has one
or more executive officers serving as a member of our board of directors or
compensation committee.

                                       10
<PAGE>


DIRECTOR COMPENSATION

Other than reimbursing directors for customary and reasonable expenses incurred
in attending board of directors and committee meetings, we do not currently
compensate our directors.

EXECUTIVE COMPENSATION

The following table sets forth all compensation awarded to, earned by or paid to
Mr. Keenan and Mr. Talton, who each served as our chief executive officer for a
portion of the nine months ended December 31, 1999.
<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE


                                           ANNUAL            LONG-TERM
                                        COMPENSATION        COMPENSATION
                                     -------------------     SECURITIES
                                                             UNDERLYING        ALL OTHER
NAME AND PRINCIPAL POSITION          SALARY       BONUS        OPTIONS       COMPENSATION
---------------------------          ------       -----        -------       ------------
<S>               <C>                <C>         <C>        <C>              <C>

Burt H. Keenan President (1)....       --          --           5,000             --
Brooks Mims Talton(2)...........     $13,333     $20,000         --               --
------------------
(1)   Mr. Keenan served as President until the date of the Gas Jack
      acquisition on October 29, 1999.
(2)   Mr. Talton became CEO in connection with the Gas Jack acquisition on
      October 29, 1999.

</TABLE>


                                       11
<PAGE>



OPTION GRANTS

The following table sets forth information regarding options granted to the
named executive officer during nine months ended December 31, 1999.

<TABLE>
<CAPTION>
                                                                              POTENTIAL
                                                                             REALIZABLE
                                                                              VALUE AT
                                                                            ASSUMED ANNUAL
                                    PERCENT OF                             RATES OF STOCK
                                      TOTAL                                      PRICE
                         NUMBER      OPTIONS                                APPRECIATION FOR
                           OF       GRANTED TO   EXERCISE                     OPTION TERM
                         OPTIONS    EMPLOYEES      PRICE     EXPIRATION   -------------------
NAME                     GRANTED     IN 1999     ($/SHARE)      DATE          5%        10%
----                     -------     -------     ---------      ----      ---------   -------
<S>                       <C>         <C>          <C>         <C>   <C>    <C>       <C>
Burt H. Keenan ......     5,000       26.38%       $15.00      12-21-05     $25,507   $57,867
Brooks Mims Talton...       --          --           --          --           --        --
</TABLE>

      The percent of total options granted to employees in the above table is
based on 19,000 options granted to employees in this period.

      Options were granted at an exercise price equal to the fair market value
of our common stock, as determined by our board of directors on the date of
grant. In making this determination, the board of directors considered a number
of factors, including:

o     our historical and prospective future revenue and profitability;
o     our cash balance and rate of cash consumption;
o     the development and size of the market for our services;
o     the status of our financing activities;
o     the stability of our management team; and o the breadth of our service
      offerings.

   The amounts reflected in the "Potential Realizable Value" column of the
foregoing table are calculated assuming that the fair market value of the common
stock on the date of the grant as determined by the board of directors
appreciates at the indicated annual rate compounded annually for the entire term
of the option, and that the option is exercised and the common stock received
therefor is sold on the last day of the term of the option for the appreciated
price. The 5% and 10% rates of appreciation are mandated by the rules of the
Securities and Exchange Commission and do not represent our estimate or
projection of future increases in the price of the common stock.

1999 OPTION EXERCISES AND YEAR-END OPTION VALUES

      The following table sets forth information concerning the value realized
upon exercise of options during 1999 and the number and value of unexercised
options held by the named executive officers at December 31, 1999. The value of
the unexercised in-the-money options is based on the fair market value of our
common stock as of December 31, 1999, determined by the board of directors in
the manner discussed above to be $10.00 per share, minus the per share exercise
price, multiplied by the number of shares underlying the option.

                                       12
<PAGE>


<TABLE>
<CAPTION>

                                                                                  VALUE OF UNEXERCISED IN-
                          SHARES                                                    THE-MONEY OPTIONS AT
                          ACQUIRED                   NUMBER OF UNEXERCISED            DECEMBER 31, 1999
                            ON         VALUE     OPTIONS AT DECEMBER 31, 1999    ---------------------------
NAME                     EXERCISE    REALIZED    EXERCISABLE    UNEXERCISABLE    EXERCISABLE   UNEXERCISABLE
----                     --------    --------    -----------    -------------    -----------   -------------
<S>                        <C>       <C>         <C>                <C>          <C>           <C>
Burt H. Keenan.........    2,200        --           --             5,000            --             --
Brooks Mims Talton.....     --          --           --              --              --             --

</TABLE>

ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth, as of December 31, 1999, the stock
ownership of all persons known to own beneficially five percent or more of the
Company's Common Stock and all directors and officers of the Company,
individually and as a group. Each person has sole voting and investment power
over the shares indicated, except as noted.

                                              NUMBER OF SHARES OF
                                                 COMMON STOCK
NAME                                          BENEFICIALLY OWNED       PERCENT
----                                          ------------------       -------

Burt H. Keenan                                      11,350               13.6
Brooks Mims Talton                                  33,333               40.0
Jerry W. Jarrell                                     2,125                2.6
D. B. H. Chaffe III                                  4,320                5.2
Jack Rettig                                             --                 --
Daniel B. Killeen                                      760                 .9
Jeffrey Henderson                                       --                 --
All officers and
directors as a group (7 persons)                    51,888               62.3

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The Company has an oral agreement with Jerry W. Jarrell, a director, to
provide consulting services to the Company. The agreement, which commenced on
January 1, 1995, is for a term of 24 months and provides for $1,250 compensation
per month, plus a one-time grant of options to purchase 2,000 shares of Common
Stock at $12.00 per share. On January 1, 1997 the agreement was renewed for $750
per month. The agreement was renewed for $2,000 per month effective November 1,
1999. See "Stock Option Plan" below.

      All shares of Common Stock presently issued and outstanding are
"restricted securities" as that term is defined under the Securities Act and may
not be sold in the absence of registration or exemption under the Securities
Act. Under current law, the shares cannot be sold for one year from the date
they are purchased, and then only under limited circumstances.
See "Description of Securities."

STOCK OPTION PLAN

      The Company, by resolution of its Board of Directors and stockholders,
adopted a 1993 Stock Option Plan (the "Plan") on February 16, 1993. The Plan
enables each Company to offer an incentive based compensation system to

                                       13
<PAGE>

employees, officers and directors and to employees of companies who do business
with the Company.

      In the discretion of a committee comprised of non-employee directors (the
"Committee"), directors, officers, and key employees of the Company and its
subsidiaries or employees of companies with which the Company does business
become participants in the Plan upon receiving grants in the form of stock
options or restricted stock. A total of 2,000,000 shares are authorized for
issuance under the Plan, of which 19,000 shares are issuable under options
granted to officers, directors and key employees at $15.00 per share; all of
these options become exercisable on December 21, 2002 and expire December 21,
2005. The Company may increase the number of shares authorized for issuance
under the Plan or may make other material modifications to the Plan without
shareholder approval. However, no amendment may change the existing rights of
any option holder. Currently, the Company's Certificate of Incorporation
authorizes the issuance of only 200,000 shares of Common Stock, but the
shareholders and Board of Directors have approved an increase to up to
20,000,000 shares of Common Stock.

      Any shares which are subject to an award but are not used because the
terms and conditions of the award are not met, or any shares which are used by
participants to pay all or part of the purchase price of any option may again be
used for awards under the Plan. However, shares with respect to which a stock
appreciation right has been exercised may not again be made subject to an award.

      Stock options may be granted as non-qualified stock options or incentive
stock options, but incentive stock options may not be granted at a price less
than 110% of the fair market value of the stock as of the date of grant;
non-qualified stock options may not be granted at a price less than 85% of fair
market value of the stock as of the date of grant. Restricted stock may not be
granted under the Plan in connection with incentive stock options.

      Stock options may be exercised during a period of time fixed by the
Committee except that no stock option may be exercised more than ten years after
the date of grant or three years after death or disability, whichever is later.
In the discretion of the Committee, payment of the purchase price for the shares
of stock acquired through the exercise of a stock option may be made in cash,
shares of the Company's Common Stock or by delivery of recourse promissory notes
or a combination of notes, cash and shares of the Company's Common Stock or a
combination thereof. Incentive stock options may only be issued to directors,
officers and employees of the Company.

      Stock options granted under the Plan may include the right to acquire an
Accelerated Ownership Non-Qualified Stock Option ("AO"). If an option grant
contains the AO feature and if a participant pays all or part of the purchase
price of the option with shares of the Company's Common Stock, then upon
exercise of the option the participant is granted an AO to purchase, at the fair
market value as of the date of the AO grant, the number of shares of common
stock of the Company equal to the sum of the number of whole shares used by the
participant in payment of the purchase price and the number of whole shares, if
any, withheld by the Company as payment for withholding taxes. An AO may be
exercised between the date of grant and the date of expiration, which will be
the same as the date of expiration of the option to which the AO is related.

      Stock appreciation rights and/or restricted stock may be granted in
conjunction with, or may be unrelated to stock options. A stock appreciation
right entitles a participant to receive a payment, in cash or common stock or a
combination thereof, in an amount equal to the excess of the fair market value
of the stock at the time of exercise over the fair market value as of the date
of grant. Stock appreciation rights may be exercised during a period of time

                                       14
<PAGE>

fixed by the Committee not to exceed ten years after the date of grant or three
years after death or disability, whichever is later. Restricted stock requires
the recipient to continue in service as an officer, director, employee or
consultant for a fixed period of time for ownership of the shares to vest. If
restricted shares or stock appreciation rights are issued in tandem with
options, the restricted stock or stock appreciation right is canceled upon
exercise of the option and the option will likewise terminate upon vesting of
the restricted shares.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits.  The following exhibits of the Company are included
herein.

      3.    Certificate of Incorporation and Bylaws

            *3.1        Restated Certificate of Incorporation
            *3.2        Bylaws
            *3.3        Proposed Certificate of Amendment to the Restated
Certificate of Incorporation

      10.   Material Contracts

            *10.1       1993 Stock Option Plan
            *10.2       Form of Stock Option Agreements with Messrs. Keenan,
                        Killeen, Jarrell and Chaffe with Schedule of Details
            **10.3      Stock Purchase Agreement, dated as of October 29, 1999,
                        by and among Emerging Alpha Corporation and the
                        Stockholders of Gas Jack, Inc.
            **10.4      Loan Agreement, dated as of October 29, 1999, by and
                        between Hibernia National Bank and Emerging Alpha
                        Corporation.
            **10.5      Loan Agreement, dated as of October 29, 1999, by and
                        among Hibernia National Bank, Emerging Alpha
                        Corporation and Gas Jack, Inc.

      (b)   Reports of Form 8-K.

            October 29, 1999


------------------
*     Filed with Registration Statement on Form SB-2, File No. 33-61888-FW
      and incorporated by reference herein.

**    Filed with Current Report on Form 8-K (October 29, 1999) and incorporated
      by reference herein.



                                       15
<PAGE>



                          INDEX TO FINANCIAL STATEMENTS


COMPRESSCO, INC.:

      Report of Independent Public Accountants............................F-2
      Balance Sheet as of December 31, 1999...............................F-3
      Statement of Operations for the Year Ended March 31, 1999 and the
         Nine Months Ended December 31, 1999 and 1998 (Unaudited).........F-4
      Consolidated Statement of Stockholders' Equity for the Year Ended
         March 31, 1999 and the Nine Months Ended December 31, 1999
         and 1998 (Unaudited) ............................................F-5
      Consolidated Statement of Cash Flows for the Year Ended March 31,
         1999 and the Nine Months Ended December 31, 1999 and 1998
         (Unaudited)..... ................................................F-6
      Notes to Consolidated Financial Statements .........................F-8

GAS JACK, INC.:

      Report of Independent Public Accountants...........................F-15
      Report of Independent Public Accountants...........................F-16
      Statements of Income for the Year Ended December 31, 1998, and the
         Period From January 1, 1999 Through October 29, 1999............F-17
      Statements of Stockholder's Equity for the Year Ended December 31,
         1998, and the Period From January 1, 1999 Through October 29,
         1999............ ...............................................F-18
      Statements of Cash Flows for the Year Ended December 31, 1998,
         and the Period From January 1, 1999 Through October 29, 1999....F-19
      Notes to Financial Statements......................................F-20


                                      F-1
<PAGE>



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders of
Compressco, Inc.:

We have audited the accompanying consolidated balance sheet of Compressco, Inc.
as of December 31, 1999, and the related statements of operations, stockholders'
equity and cash flows for the nine months ended December 31, 1999, and the year
ended March 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Compressco, Inc. as
of December 31, 1999, and the results of its and its cash flows for the nine
months ended December 31, 1999, and the year ended March 31, 1999, in conformity
with accounting principles generally accepted in the United States.




Oklahoma City, Oklahoma,                                   Arthur Andersen LLP
February 11, 2000




                                      F-2
<PAGE>





                               COMPRESSCO, INC.

                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1999

                     ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                      $    96,256
   Accounts receivable, net of allowance of $27,000                   495,072
   Inventories                                                        803,411
   Other                                                               61,034
   Deferred income tax asset                                           13,385
                                                                  -----------

      Total current assets                                          1,469,158
                                                                  -----------

COMPRESSORS:
   Gas Jack Compressors                                             2,765,443
   Less- Accumulated depreciation                                    (100,190)
                                                                  -----------

      Total compressors, net                                        2,665,253
                                                                  -----------

VEHICLES AND EQUIPMENT:
   Vehicles                                                           160,733
   Equipment and other                                                145,225
                                                                  -----------

                                                                     305,958
   Less- Accumulated depreciation                                    (15,159)
                                                                  ----------

      Total vehicles and equipment, net                               290,799
                                                                  -----------

OTHER ASSETS                                                           14,344
                                                                  -----------

      Total assets                                                $ 4,439,554
                                                                  ===========

      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                               $   537,567
   Accrued liabilities                                                 96,721
   Current portion of long-term debt                                  627,971
   Other                                                                8,273
                                                                  -----------

      Total current liabilities                                     1,270,532

LONG-TERM DEBT, net of current portion                              2,246,418

DEFERRED INCOME TAXES                                                 216,291
                                                                  -----------

      Total liabilities                                             3,733,241
                                                                  -----------

COMMITMENTS (Note 9)

STOCKHOLDERS' EQUITY:
   Preferred stock, $1 par value; 2,000,000 shares authorized;
      no shares issued or outstanding                                   -
   Common stock, $1 par value; 20,000,000 shares authorized;
      83,233 shares issued and outstanding                             83,233
   Additional paid-in capital                                         633,657
   Retained deficit                                                  (10,577)
                                                                  ----------

      Total stockholders' equity                                      706,313
                                                                  -----------

      Total liabilities and stockholders' equity                  $ 4,439,554
                                                                  ===========


The accompanying notes are an integral part of this consolidated balance sheet.



                                      F-3
<PAGE>






                               COMPRESSCO, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE YEAR ENDED MARCH 31, 1999 AND
         THE NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998 (UNAUDITED)




                                                          NINE MONTHS ENDED
                                       YEAR ENDED           DECEMBER 31,
                                        MARCH 31,           ------------
                                          1999            1999        1998
                                          ----            ----        ----
                                                                   (Unaudited)
REVENUES:
   Leasing revenue                     $   -          $ 463,269     $  -
   Sales - Gas Jack Compressors and
       parts                               -            277,207        -
   Service and other                       -             45,683        -
                                       ---------      ---------     --------

         Total revenues                    -            786,159        -
                                       ---------      ---------     --------

COST OF SALES AND EXPENSES:
   Cost of sales                           -            172,879        -
   Operating expenses                      -            429,793        -
   Depreciation expense                    -            112,350        -
                                       ---------      ---------     --------

         Total cost of sales and
            expenses                       -             715,022       -
                                       ---------      ---------     --------

OPERATING INCOME                               -         71,137        -

OPERATING INCOME (EXPENSE):
   Interest income                        15,633         16,097       12,057
   Interest expense                        -            (46,823)       -
   Other expenses                        (14,256)       (45,806)      (9,651)
                                       ---------      ---------     --------

         Total other income (expense)      1,377        (76,532)       2,406
                                       ---------      ---------     --------

INCOME (LOSS) BEFORE PROVISION
   FOR INCOME TAXES                        1,377         (5,395)       2,406

PROVISION FOR INCOME TAXES                 -              -            -
                                       ---------      ---------     --------

NET INCOME (LOSS)                      $   1,377      $  (5,395)    $  2,406
                                       =========      =========     ========

BASIC EARNINGS PER COMMON SHARE        $    0.03      $   (0.11)    $   0.06
                                       =========      =========     ========


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      F-4
<PAGE>








<TABLE>

                               COMPRESSCO, INC.

               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    FOR THE YEAR ENDED MARCH 31, 1999 AND
                   THE NINE MONTHS ENDED DECEMBER 31, 1999

<CAPTION>


                                        COMMON STOCK                  RETAINED
                                    -------------------     PAID-IN   EARNINGS
                                    SHARES    PAR VALUE     CAPITAL   (DEFICIT)    TOTAL
                                    ------    ---------     -------   ---------    -----

<S>                                  <C>       <C>         <C>         <C>       <C>
BALANCE, March 31, 1998              43,600    $43,600     $251,460    $(6,559)  $288,501

Net income                             -          -            -         1,377      1,377
                                     ------    -------     --------    -------   --------

BALANCE, March 31, 1999              43,600     43,600      251,460     (5,182)   289,878

Issuance of common stock             33,333     33,333      299,997       -       333,330

Exercise of common stock options      6,300      6,300       82,200       -        88,500

Net loss                               -          -            -        (5,395)    (5,395)
                                     ------    -------     --------   --------   --------

BALANCE, December 31, 1999           83,233    $83,233     $633,657   $(10,577)  $706,313
                                     ======    =======     ========   ========   ========



              The accompanying notes are an integral part of these
                       consolidated financial statements.

</TABLE>



                                      F-5
<PAGE>






                               COMPRESSCO, INC.
<TABLE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE YEAR ENDED MARCH 31, 1999 AND
         THE NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998 (UNAUDITED)

<CAPTION>

                                                                                   NINE MONTHS ENDED
                                                            YEAR ENDED                 DECEMBER 31,
                                                             MARCH 31           ------------------------
                                                               1999            1999             1998
                                                               ----            ----             ----
                                                                                             (Unaudited)
<S>                                                         <C>             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                        $     1,377     $    (5,395)     $     2,406
   Adjustments to reconcile net income (loss) to net
      cash provided by (used in) operating activities-
         Depreciation and amortization                              280         112,350              210
         Gain on sales of leased units                             --           (92,346)            --
         Other assets                                              --            12,972             --
         Changes in current assets and liabilities:
            Accounts receivable                                    --           194,880             --
            Inventories                                            --           (10,772)            --
            Other current assets                                   --           (39,115)          (2,103)
            Accounts payable                                        453         226,661             (907)
            Accrued liabilities                                    --           (12,773)            --
            Other current liabilities                              --             1,262             --
                                                            -----------     -----------      -----------

               Net cash provided by (used in)
                  operating activities                            2,110         387,724             (394)
                                                            -----------     -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to leased units                                       --          (351,528)            --
   Additions to vehicles and equipment                             --           (30,309)            --
   Proceeds from sales of leased units                             --           172,400             --
   Acquisition of business                                         --        (2,700,000)            --
   Cash acquired in acquisition of business                        --            40,254             --
                                                            -----------     -----------      -----------

               Net cash used in investing activities               --        (2,869,183)            --
                                                            -----------     -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from notes payable                                     --         2,800,000             --
   Principal payments on notes payable                             --          (652,957)            --
   Proceeds from line of credit                                    --            97,161             --
   Principal payments on line of credit                            --           (46,667)            --
   Proceeds from issuance of common stock from
   exercise of stock options                                       --            88,500             --
                                                            -----------     -----------      -----------

               Net cash provided by financing
                  activities                                       --         2,286,037             --
                                                            -----------     -----------      -----------

NET INCREASE (DECREASE) IN CASH AND
   CASH  EQUIVALENTS                                              2,110        (195,422)            (394)

CASH AND CASH EQUIVALENTS, BEGINNING
   OF PERIOD                                                    289,568         291,678          289,568
                                                            -----------     -----------      -----------

CASH AND CASH EQUIVALENTS, END OF
   PERIOD                                                   $   291,678     $    96,256      $   289,174
                                                            ===========     ===========      ===========

</TABLE>

                                      F-6
<PAGE>





                               COMPRESSCO, INC.


                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE YEAR ENDED MARCH 31, 1999 AND
         THE NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998 (UNAUDITED)

                                       YEAR ENDED         NINE MONTHS ENDED
                                        MARCH 31,           DECEMBER 31,
                                                            ------------
                                          1999            1999        1998
                                          ----            ----        ----
                                                                   (Unaudited)
SUPPLEMENTAL DISCLOSURES OF
   CASH FLOW INFORMATION:
      Cash paid during the period for-
         Interest                      $   -          $  24,163     $  -
         Income taxes                  $   -          $  29,050     $  -

SUPPLEMENTAL DISCLOSURES OF
   NONCASH INVESTING AND
   FINANCING ACTIVITIES:
      Long-term debt assumed in
         acquisition of subsidiaries   $   -          $ 877,681     $  -

      Current liabilities assumed in
         acquisition of subsidiaries   $   -          $ 425,611     $  -

      Issuance of common stock in
         acquisition of subsidiaries   $   -          $ 333,330     $  -




              The accompanying notes are an integral part of these
                       consolidated financial statements.




                                      F-7
<PAGE>






                               COMPRESSCO, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    ORGANIZATION:

Compressco, Inc, formerly Emerging Alpha Corporation (the "Company") was
incorporated in the State of Delaware on February 10, 1993, for the purpose of
creating a corporate vehicle to seek, investigate and, if the results of such
investigations warrant, acquire business opportunities. Since its inception, the
primary activity of the Company has been devoted to organizational activities
and obtaining initial funding. Upon investigation and analysis by the Company's
management, the Company decided to enter certain segments of the natural gas
industry including equipment manufacturing, compression services and production
of natural gas reserves.

On October 29, 1999, the Company purchased all outstanding shares of the capital
stock of Gas Jack Inc. ("Gas Jack"), an Oklahoma corporation, for $2.7 million
and all outstanding units of GJ Measurement, L.L.C. ("GJ Measurement") in
exchange for 33,333 shares of the Company's common stock. Both acquisitions,
which are discussed in more detail in Note 4, were accounted for using the
purchase method of accounting. Subsequent to the acquisition, both Gas Jack and
GJ Measurement are wholly-owned subsidiaries of the Company. In connection with
the acquisitions, the Company changed its fiscal year-end from March 31 to
December 31.

The Company, through Gas Jack, is engaged primarily in the manufacture, leasing
and service of natural gas compressors that provide economical well head
compression to mature, low pressure natural gas wells. The Company's compressors
are currently sold and leased to natural gas producers located primarily in
Oklahoma, Kansas, Texas, Arkansas and New Mexico. GJ Measurement, an Oklahoma
L.L.C, is a natural gas measurement, testing and service company, based in
Oklahoma City, that began operations in September 1999.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts and
operations of the Company as of and for the nine months ending December 31, 1999
and the year ended March 31, 1999, and the accounts and operations as of and for
the period from October 29, 1999 to December 31,1999, for Gas Jack and GJ
Measurement. All significant intercompany accounts and transactions have been
eliminated in the consolidated financial statements. Certain prior period
information has been reclassified to conform to the December 31, 1999,
presentation.

INTERIM FINANCIAL INFORMATION

The interim consolidated financial statements for the nine months ended December
31, 1998, are unaudited, and certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been omitted. In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary to fairly present the results of operations and cash
flows with respect to the consolidated interim financial statements have been
included.


                                      F-8
<PAGE>


CASH FLOWS

The Company considers all highly liquid investments with initial maturities of
three months or less to be cash equivalents.

INVENTORIES

Inventories consist primarily of compressor components and parts, and
work-in-progress, and are stated at the lower of cost or market using the
first-in, first-out method.

COMPRESSORS, VEHICLES AND EQUIPMENT

Leased units include those compressors currently being leased and available for
lease. Leased units, vehicles and equipment are recorded at cost. Depreciation
is computed using the straight-line method based on the following estimated
useful lives:

      Compressors                   7 years

      Vehicles                      5 years

      Equipment and other           7 years

REVENUE RECOGNITION

Sales revenue is recorded upon shipment of sold compressors. Revenues from lease
and service agreements are recorded as earned over the lives of the respective
contracts.

INCOME TAXES

Deferred income taxes are provided to reflect the future tax consequences of
differences between the tax bases of assets and liabilities and their reported
amounts in the financial statements. Deferred income tax assets and liabilities
are computed using the currently enacted tax laws and rates that apply to the
periods in which they are expected to affect taxable income. Income tax expense
is the current tax payable or refundable for the period plus or minus the net
change in the deferred tax assets and liabilities.

Deferred taxes are classified as current or noncurrent, depending on the
classification of the assets and liabilities to which they relate. Deferred tax
arising from temporary differences that are not related to an asset or liability
are classified as current or noncurrent depending on the period in which the
temporary differences are expected to be used. A valuation allowance is
established when it is more likely than not that some portion or all of the
deferred tax assets will not be realized.

EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share includes no dilution and is computed by
dividing income available to common stockholders by the weighted-average number
of shares outstanding for the period. The weighted-average number of shares used
to compute earnings (loss) per common share was 43,600 for the year ending March
31, 1999 and 49,526 for the nine months ended December 31, 1999. Although
options on 6,300 shares of common stock were outstanding from April 1, 1998
through December 21, 1999, and options on 22,500 shares of common stock were
outstanding from December 21, 1999 through December 31, 1999, no diluted
earnings per share is presented, as their effects were anti-dilutive.

                                      F-9
<PAGE>

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

3.    INVENTORIES:

Inventories consist of the following at December 31, 1999:

      Components and parts                         $ 664,549
      Work-in-progress                               138,862
                                                   ---------

                                                   $ 803,411
                                                   =========

4.    ACQUISITIONS:

On October 29, 1999, the Company purchased all outstanding shares of the capital
stock of Gas Jack for $2.7 million in cash. In addition, on October 29, 1999,
the Company acquired all outstanding units ("GJ Measurement") in exchange for
33,333 shares of the Company's common stock. Both acquisitions were accounted
for using the purchase method of accounting. The Company did not recognize any
goodwill as a result of these acquisitions.

A summary of the values assigned to the assets acquired, liabilities assumed,
and equity securities issued in connection with these acquisitions, is as
follows:

     Current assets                                $ 1,544,764
     Compressors, vehicles and equipment             2,764,542
     Other noncurrent assets                            27,316
     Current liabilities                              (425,611)
     Long-term liabilities                            (877,681)
                                                   -----------

           Net assets acquired                     $ 3,033,330
                                                   ===========

     Purchase price consisting of:
        Common stock issued                        $   333,330
        Cash paid for common stock of Gas Jack       2,700,000
                                                   -----------

           Total purchase price                    $ 3,033,330
                                                   ===========

The liabilities assumed and common stock issued in connection with these
acquisitions are noncash financing activities and are not included on the
accompanying consolidated statements of cash flows for the nine months ended
December 31, 1999.

The following unaudited pro forma financial information presents total operating
revenues, net income and net income per share of the Company after giving effect
to the acquisitions. The unaudited pro forma financial information for the nine

                                      F-10
<PAGE>

months ended December 31, 1999, gives effect to the acquisition as if it had
occurred at April 1, 1999. The unaudited pro forma financial information for the
year ended March 31, 1999, gives effect to the acquisition as if it had occurred
at April 1, 1998.

The following information is not necessarily indicative of the operating results
that would have occurred had the transaction been consummated at the beginning
of the periods for which the transaction is being given effect, nor is it
necessarily indicative of future operating results.


                                        YEAR ENDED          NINE MONTHS ENDED
                                      MARCH 31 , 1999       DECEMBER 31, 1999
                                      ---------------       -----------------
                                                (Unaudited, pro forma)

      Operating revenues                $3,283,495             $3,006,623
      Net income                           171,209                 18,798

      Basic earnings per common share         2.23                  0.24

5.    LONG-TERM DEBT:

Long-term debt consists of the following at December 31, 1999:

      Term loan (a)                                $2,753,332
      Revolving line of credit (b)                     97,161
      Notes payable (c)                                23,896
                                                   ----------

         Outstanding debt                           2,874,389

         Less- Current portion                        627,971
                                                   ----------

            Total long-term debt                   $2,246,419
                                                   ==========

(a)  On October 29,  1999,  the Company  borrowed  $2,800,000  under a term loan
     agreement  with a bank.  The note bears  interest  at a fixed rate of 8.8%.
     Principal  payments of $46,667 plus accrued  interest are due monthly until
     maturity on  September  30,  2004.  The loan is secured with the assets and
     compressor leases of Gas Jack, an investment account owned by the Company's
     Chairman, and a personal guarantee of the Company's President.

(b)  On October 29, 1999,  the Company  entered into a revolving  line of credit
     agreement  with a bank.  Under the  agreement  the  Company  can borrow the
     lessor of $1,000,000 or the sum of 80% of the aggregate  amount of eligible
     receivables,  plus 50% of the aggregate amount of eligible  inventory.  The
     line of credit bears  interest at Wall Street  Journal  Prime Rate (8.5% at
     December 31, 1999). Interest is due monthly with all outstanding borrowings
     due at maturity on October 29,  2001.  The loan is secured  with the assets
     and  compressor  leases of Gas Jack,  an  investment  account  owned by the
     Company' Chairman, and a personal guarantee of the Company's President.

(c)  In connection with the  acquisition of GJ Measurement,  the Company assumed
     two outstanding  notes payable with banks.  The notes bear interest ranging
     from a fixed  rate of 8.75% to Wall  Street  Journal  Prime  Rate plus 2.0%
     (10.5% at December 31, 1999). Principal and interest payments totaling $327


                                      F-11
<PAGE>

     are due on the fixed rate note until its maturity in May 2000.  Interest on
     the variable  rate note is due monthly with all  principal due at maturity.
     The entire  outstanding  balance of the variable  rate note at December 31,
     1999, of $18,385 was paid in full in February 2000.

The annual maturities of long-term debt subsequent to December 31, 1999, are as
follows:

      2000                                         $  627,971
      2001                                            659,753
      2002                                            560,000
      2003                                            560,000
      2004 and thereafter                             466,665
                                                   ----------

      Total                                        $2,874,389
                                                   ==========

6.    INCOME TAXES:

The components of income taxes are set forth as follows:

                                        YEAR ENDED          NINE MONTHS ENDED
                                      MARCH 31 , 1999       DECEMBER 31, 1999
                                      ---------------       -----------------
      Current provision (benefit)         $    -                 $   -
      Deferred provision (benefit)             -                     -
                                          ------                 -----

      Income taxes                        $    -                 $   -
                                          ======                 =====

The differences between the provision for income taxes at the expected Federal
statutory rates and the provision for income taxes recorded in the consolidated
statements of operations are summarized as follows:


                                        YEAR ENDED          NINE MONTHS ENDED
                                      MARCH 31 , 1999       DECEMBER 31, 1999
                                      ---------------       -----------------
      Federal income tax at statutory
        rates                            $     468             $   1,834
      State income taxes, net of Federal
         income tax benefit                     60                   236
      Nondeductible expenses                 -                    (2,115)
      Other                                  -                        45
      Change in valuation allowance           (528)                 -
                                         ---------              --------

         Provision for income taxes      $    -                 $   -
                                         =========              ========


                                      F-12
<PAGE>




 The significant components of the Company's deferred tax assets and liabilities
are as follows at December 31, 1999:

      Deferred tax assets:
         Net operating losses                      $  28,563
         Accounts receivable                          10,363
         Other                                         3,022
                                                   ---------

            Gross deferred tax assets                 41,948

      Deferred tax liabilities:
         Depreciation                              (244,854)
                                                   --------
            Net deferred tax liabilities           $(202,906)
                                                   =========

In connection with the acquisition of Gas Jack and GJ Measurement, the Company
recorded a net deferred tax liability associated with Gas Jack's cumulative
temporary differences of approximately $203,000. In addition, as a result of the
acquisitions the Company eliminated its previously recorded valuation allowance
of $2,945 as part of the purchase accounting.

At December 31, 1999, the Company has cumulative net operating loss
carryforwards of approximately $74,000 which will begin to expire in 2010.

7.    STOCK OWNERSHIP AND INCENTIVE STOCK OPTION PLANS:

The Company's 1993 Stock Option Plan ("the Plan") provides for the issuance of
up to 2 million shares of common stock at no less than 85% of market value at
the time of grant (for non-qualified options) and no less than 110% of market
value for incentive stock options. During 1993, the Company granted options to
current stockholders to purchase 4,300 shares of common stock at $15 per share.
During 1994, the Company granted options to a director to purchase 2,000 shares
of common stock at $12 per share. On December 21, 1999, all outstanding options
were exercised. In addition, on December 21, 1999, the Company authorized the
issuance of 22,500 options to purchase common stock of which the Company granted
options to purchase 19,000 shares of common stock at $15 per share to certain
directors, officers and employees.

In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation," effective for the Company at March 31, 1997. Under SFAS 123,
companies can either record expense based on the fair value of stock-based
compensation upon issuance or elect to remain under the current APB Opinion No.
25 method whereby no compensation cost is recognized upon grant. The Company
accounts for its stock-based compensation plan under APB Opinion No. 25.
Entities electing to remain with the accounting in APB Opinion No. 25 must make
disclosures as if SFAS 123 had been applied. The disclosure requirements of this
Statement are effective for options granted in fiscal 1996 and later. As a
result, SFAS 123 is not applicable to the Company's stock options granted in
1993 and 1994. The impact of accounting for the 1999 grants under SFAS 123 would
not be material.

8.    RELATED PARTIES:

Included in other current assets are advances made to employees for travel and
entertainment costs. At December 31, 1999, employee advances totaled
approximately $8,600.

                                      F-13
<PAGE>


Certain officers and directors are compensated based on actual time and expenses
devoted to the Company's business. During the nine months ended December 31,
1999 and the year ended March 31, 1999, a consulting fee of $750 per month
was paid to the Company's Treasurer.  This consulting fee was increased to
$2,000 per month effective November 1, 1999.

9.    LEASE AGREEMENTS:

FACILITIES LEASES

The Company has a month-to-month lease for its manufacturing facilities.

VEHICLE LEASES

The Company leases certain vehicles with terms ranging up to two years. As of
December 31, 1999, future annual minimum lease payments under noncancellable
operating leases were approximately $52,600 for 2000 and $28,500 for 2001.

Rent expense under all operating leases was approximately $84,000 and $0 for the
nine months ended December 31, 1999 and the year ended March 31, 1999,
respectively.

10.   MAJOR CUSTOMERS:

During the period ended December 31, 1999, the Company had sales to one customer
which amounted to approximately 11% of the Company's total 1999 revenue. During
the year ended March 31, 1999, the Company had sales to one customer which
amounted to approximately 11% of the Company's total 1998 revenue.

11.   GAS JACK COMPRESSOR LEASES:

The Company leases Gas Jack Compressors to customers on terms ranging from two
weeks to one year. As of December 31, 1999, future minimum lease payments
receivable under noncancellable operating leases were approximately $506,000 for
2000.




                                      F-14
<PAGE>





 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders of
Gas Jack, Inc.:

We have audited the accompanying statements of income, stockholder's equity and
cash flows of Gas Jack, Inc. for the period from January 1, 1999 through October
29, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, Gas Jack, Inc.'s results of operations and its cash flows
for the period from January 1, 1999 through October 29, 1999, in conformity with
accounting principles generally accepted in the United States.




Oklahoma City, Oklahoma,                                     Arthur Andersen LLP
February 11, 2000




                                      F-15
<PAGE>






 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholder of
Gas Jack, Inc.:

We have audited the balance sheet (not presented herein) and the related
statements of income, stockholders' equity and cash flows of Gas Jack, Inc. for
the year ended December 31, 1998. These financial statements are the
responsibility of the Gas Jack's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, Gas Jack, Inc.'s financial position, results of
operations and its cash flows for the year ended December 31, 1998, in
conformity with accounting principles generally accepted in the United States of
America.




Oklahoma City, Oklahoma,                                   Deloitte & Touche LLP
April 26, 1999




                                      F-16
<PAGE>






                                GAS JACK, INC.

                             STATEMENTS OF INCOME
             FOR THE YEAR ENDED DECEMBER 31, 1998, AND THE PERIOD
                FROM JANUARY 1, 1999, THROUGH OCTOBER 29, 1999




                                                  YEAR ENDED      PERIOD ENDED
                                                 DECEMBER 31,      OCTOBER 29,
                                                     1998             1999
                                                     ----             ----
REVENUES:
   Leasing revenue                                $2,406,501      $ 2,122,734
   Sales - Gas Jack Compressors and parts            645,635          734,394
   Service and other                                 200,434          149,495
                                                  ----------      -----------

         Total revenues                            3,252,570        3,006,623
                                                  ----------      -----------

COST OF SALES AND EXPENSES:
   Cost of sales                                     382,946          417,684
   Operating expenses                              1,801,647        1,733,772
   Depreciation expense                              526,487          510,765
                                                  ----------      -----------

         Total cost of sales and expenses          2,711,080        2,662,221
                                                  ----------      -----------

OPERATING INCOME                                     541,490          344,402

OTHER INCOME (EXPENSES):
   Interest income                                    12,676            7,130
   Interest expense                                  (26,651)         (33,611)
   Other income                                        2,616            2,110
                                                  ----------      -----------

         Total other expenses                        (11,359)         (24,371)
                                                  ----------      -----------

INCOME BEFORE PROVISION FOR INCOME TAXES             530,131          320,031

PROVISION FOR INCOME TAXES                           212,250          131,752
                                                  ----------      -----------

NET INCOME                                        $  317,881      $   188,279
                                                  ==========      ===========



  The accompanying notes are an integral part of these financial statements.


                                      F-17
<PAGE>




<TABLE>

                                GAS JACK, INC.

                      STATEMENTS OF STOCKHOLDER'S EQUITY
             FOR THE YEAR ENDED DECEMBER 31, 1998, AND THE PERIOD
                FROM JANUARY 1, 1999, THROUGH OCTOBER 29, 1999


<CAPTION>


                            COMMON STOCK                                                                 NOTES
                        ---------------------                                                         RECEIVABLE
                                         PAR          PAID-IN         RETAINED        TREASURY            FROM
                        SHARES          VALUE         CAPITAL         EARNINGS          STOCK         STOCKHOLDERS
                        ------          -----         -------         --------          -----         ------------
<S>                    <C>           <C>             <C>             <C>             <C>              <C>

BALANCE,
   December 31, 1997   2,364,753     $   236,475     $ 2,093,657     $   624,365     $  (506,204)     $   (48,000)

   Net income               --              --              --           317,881             --              --
                       ---------     -----------     -----------     -----------     -----------      -----------

BALANCE,
   December 31, 1998   2,364,753         236,475       2,093,657         942,246        (506,204)         (48,000)

   Net income               --              --              --           188,279             --              --
                       ---------     -----------     -----------     -----------     -----------      -----------

BALANCE,
   October 29, 1999    2,364,753     $   236,475     $ 2,093,657     $ 1,130,525      $  (506,204)    $   (48,000)
                       =========     ===========     ===========     ===========      ===========     ===========



The accompanying notes are an integral part of these financial statements.

</TABLE>

                                      F-18
<PAGE>




<TABLE>
<CAPTION>


                                GAS JACK, INC.

                           STATEMENTS OF CASH FLOWS
             FOR THE YEAR ENDED DECEMBER 31, 1998, AND THE PERIOD
                FROM JANUARY 1, 1999, THROUGH OCTOBER 29, 1999


                                                             YEAR ENDED      PERIOD ENDED
                                                            DECEMBER 31,      OCTOBER 29,
                                                                1998             1999
                                                                ----             ----
<S>                                                         <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                               $   317,881      $   188,279
   Adjustments to reconcile net income to net cash
      provided by (used in) operating activities-
         Depreciation                                           526,487          510,765
         Deferred income taxes                                   68,851           39,097
         Gain on sales of leased units                         (223,653)        (181,913)
         Loss on sales of vehicles and equipment                  1,847
                                                                                   1,860
         Changes in current assets and liabilities:
            Accounts receivable                                 (29,186)        (291,698)
            Inventories                                         (94,429)        (402,988)
            Other current assets                                 20,450            6,377
            Other assets                                         17,392            1,592
            Accounts payable and accrued liabilities            (81,318)
                                                                                 (25,863)
            Other current liabilities                           (88,516)          60,901
                                                            -----------      -----------

               Net cash provided by (used in) operating
                  activities                                    435,806          (93,591)

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to leased units                                 (1,194,669)        (374,782)
   Additions to vehicles and equipment                          (20,022)         (69,402)
   Proceeds from sales of leased units                          422,400          368,550
   Proceeds from sales of vehicles and equipment                 36,244            3,000
                                                            -----------      -----------

               Net cash used in investing activities           (756,047)         (72,634)
                                                            -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from notes payable                                  375,000          308,000
   Principal payments on notes payable                         (105,132)        (130,686)
                                                            -----------      -----------

         Net cash provided by financing activities              269,868          177,314

NET (DECREASE) INCREASE IN CASH AND CASH
   EQUIVALENTS                                                  (50,373)          11,089

CASH AND CASH EQUIVALENTS, BEGINNING OF
   PERIOD                                                        79,538           29,165
                                                            -----------      -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                    $    29,165      $    40,254
                                                            ===========      ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
   INFORMATION:
   Cash paid during the period for-
      Interest                                              $    23,686      $    33,611
      Income taxes                                          $   143,399      $    96,290



  The accompanying notes are an integral part of these financial statements.


</TABLE>


                                      F-19
<PAGE>







1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

NATURE OF BUSINESS

Gas Jack Inc. (the "Company"), an Oklahoma corporation, is engaged in the
manufacturing of the Gas Jack Compressor that provides economical well head
compression to mature, low pressure natural gas wells. The compressors are
currently sold and leased to natural gas producers primarily in Oklahoma,
Kansas, Texas, Arkansas and New Mexico.

On October 29, 1999, pursuant to the terms of the Stock Purchase Agreement by
and among Emerging Alpha Corporation ("Emerging Alpha") and the stockholders of
the Company, Emerging Alpha acquired all of the outstanding capital stock of the
Company.

BASIS OF PRESENTATION

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CASH FLOWS

For purposes of the statements of cash flows, the Company considers all
short-term investments with initial maturities of three months or less to be
cash equivalents.

COMPRESSORS, VEHICLES AND EQUIPMENT

Leased units include those compressors currently being leased and available for
lease. Leased units, vehicles and equipment are recorded at cost. Depreciation
is computed using the straight-line method based on the following estimated
useful lives:

      Gas Jack Compressors          7 years

      Vehicles                      5 years

      Other Equipment               7 years

REVENUE RECOGNITION

Sales revenue is recorded upon shipment of sold compressors. Revenues from lease
and service agreements are recorded as earned over the lives of the respective
contracts.

INCOME TAXES

The Company accounts for income taxes in accordance with the provisions of SFAS
No. 109, "Accounting for Income Taxes," which requires an asset and liability
approach to accounting for income taxes. Under SFAS No. 109, deferred tax assets
or liabilities are computed based on the difference between the financial
statement and income tax bases of assets and liabilities ("temporary
differences") using the enacted marginal tax rate. Deferred income tax provision
or benefit is based on the changes in the deferred tax asset or liability from
period to period.

                                      F-20
<PAGE>


2.    INCOME TAXES:

The components of income taxes are set forth as follows:

                                                  YEAR ENDED      PERIOD ENDED
                                                 DECEMBER 31,      OCTOBER 29,
                                                     1998             1999
                                                     ----             ----

      Current                                     $  143,399      $    92,655
      Deferred                                        68,851           39,097
                                                  ----------      -----------

         Income taxes                             $  212,250      $   131,752
                                                  ==========      ===========

The differences between the provision for income taxes at the expected Federal
statutory rates and the provision for income taxes recorded in the statements of
operations are summarized as follows:

                                                  YEAR ENDED      PERIOD ENDED
                                                 DECEMBER 31,      OCTOBER 29,
                                                     1998             1999
                                                     ----             ----

      Federal income tax at statutory rates       $  180,245      $   108,811
      State income taxes, net of Federal income
         tax benefit                                  23,196           15,036
      Nondeductible expenses                           8,809            7,905
                                                  ----------      -----------

         Provision for income taxes               $  212,250      $   131,752
                                                  ==========      ===========

The significant components of the Company's deferred tax assets and liabilities
are as follows:

                                                 DECEMBER 31,      OCTOBER 29,
                                                     1998             1999
                                                     ----             ----
      Deferred tax assets:
         Alternative minimum taxes                $   17,349      $     -
         Accounts receivable                           -               10,363
         Current liabilities                           -               15,736
         Other                                        26,329           17,372

            Gross deferred tax assets                 43,678           43,471
                                                  ----------      -----------

      Deferred tax liabilities:
         Depreciation                               (209,385)        (248,275)
                                                  ----------      -----------

            Net deferred tax liabilities          $ (165,707)     $  (204,804)
                                                  ==========      ===========


                                      F-21
<PAGE>

3.    STOCK OWNERSHIP AND INCENTIVE STOCK OPTION PLANS:

During 1992, the Company implemented a Stock Ownership Plan (the "Ownership
Plan") to reward employees for their service to the Company. Under the Ownership
Plan, 80,000 shares of $0.10 par value common stock were awarded to the
employees on July 1, 1992, by the Board of Directors, with a four-year vesting
period. As of October 29, 1999 and December 31, 1998, 80,000 shares were vested
under the Ownership Plan. According to the Ownership Plan, all shares vested
were callable or putable within one year after the employee's termination, based
on the book value per share, as determined by the quarter ended immediately
preceding the exercise of the call or put.

 The Company has an Incentive Stock Option Plan (the "Option Plan") and has
reserved 250,000 shares of the Company's common stock $.10 par value for
issuance under the Option Plan. The Option Plan limits participation to
employees, and the option exercise price is established by the Board of
Directors at a price not less than 100% of the fair value of the stock on the
date of grant for employees who own less than 10% of the total combined voting
power of all classes of stock of the Company. The option exercise price for
options granted to employees who own more than 10% of the total combined voting
power of all classes of stock of the Company is established by the Board of
Directors at a price not less than 110% of the fair value of the stock on the
date of grant, and such granted options expire five years from the date of
grant. The maximum aggregate fair value of common stock for which any employee
may be granted options which are exercisable for the first time in any one
calendar year shall not exceed $100,000. Options granted under the Option Plan
are exercisable at such times as the Board of Directors shall determine, and the
option period shall not be for more than ten years from the date of grant. No
options shall be granted after 2002.

The Company applies Accounting Principles Board Opinion 25, "Accounting for
Stock Issued to Employees," and related interpretations in accounting for its
stock ownership and option plans, as permitted by Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 requires disclosure of pro forma net income as if
the Company had adopted the fair value provisions of SFAS No. 123. No such
disclosure has been provided as there were no options nor shares granted under
the Ownership Plan or Option Plan for the period and year ended October 29, 1999
and December 31, 1998, respectively.

4.    RELATED PARTIES:

The Company sold and leased certain units to another company affiliated through
common ownership and management. The total revenue from this affiliate for the
period ended October 29, 1999 and the year ended December 31, 1998, was
approximately $41,000 and $97,000, respectively.

5.    LEASE AGREEMENTS:

The Company leases certain vehicles with terms ranging up to two years. As of
October 29, 1999, future annual minimum lease payments under noncancelable
operating leases are approximately $53,000 and $43,000 for the years ending
October 29, 2000 and 2001, respectively. The Company leases its manufacturing
facilities under a month-to-month lease.

Rent expense under all operating leases was approximately $69,000 and $110,000
for the period ended October 29, 1999 and the year ended December 31, 1998,
respectively.


                                      F-22
<PAGE>

6.    MAJOR CUSTOMERS:

The Company had sales to one customer which amounted to approximately 11% of the
Company's total revenues for 1998 and the period ended October 29, 1999.

7.    GAS JACK COMPRESSOR LEASES:

The Company leases Gas Jack Compressors to customers on terms ranging from two
weeks to one year. As of October 29, 1999, future minimum lease payments
receivable under noncancellable operating leases were approximately $506,000 for
2000 and none thereafter.







                                      F-23
<PAGE>




                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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 on March 30, 2000.


                                          COMPRESSCO, INC.

                                          By:   /S/ JERRY W. JARRELL
                                                ------------------------------
                                                Jerry W. Jarrell
                                                Chief Financial Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities on March 30, 2000.


By:   /S/ BURT H. KEENAN                  Chairman of Board and Director
      -------------------------------
      Burt H. Keenan


By:   /S/ BROOKS MIMS TALTON              Chief Executive Officer, President
      -------------------------------     and Director
      Brooks Mims Talton



By:   /S/ JERRY W. JARRELL                Chief Financial Officer, Secretary
      -------------------------------     and Director
      Jerry W. Jarrell




                                      S-1
<PAGE>