SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  -------------

                                    FORM 10-Q


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


For the quarterly period ended December 31, 1999
                                       OR


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

For the transition period from ______________ to ______________

                         Commission file number 0-27378

                                   NuCo2 Inc.
             (Exact Name of Registrant as Specified in Its Charter)

           Florida                                   65-0180800
(State or Other Jurisdiction of                   (I.R.S. Employer
Incorporation or Organization)                   Identification No.)

 2800 SE Market Place, Stuart, FL                      34997
(Address of Principal Executive Offices)             (Zip Code)


Registrant's Telephone Number, Including Area Code:    (561) 221-1754

                                       N/A
              Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report.

            Indicate  by check /X/  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 / /

            Indicate  the number of shares  outstanding  of each of the issuer's
classes of common stock, as of the latest practicable date:

                     Class                    Outstanding at December 31, 1999
         Common Stock, $.001 par value               7,216,997 shares



<PAGE>
                                   NuCo2 Inc.

                                   Index                                   Page

PART I.      FINANCIAL INFORMATION

ITEM 1.      CONSOLIDATED FINANCIAL STATEMENTS

             Consolidated Balance Sheets as of December 31, 1999 and         3
                 June 30, 1999

             Consolidated Statements of Operations for the Three Months      4
                 Ended December 31, 1999 and December 31, 1998

             Consolidated Statements of Operations for the Six Months        5
                 Ended December 31, 1999 and December 31, 1998

             Consolidated Statement  of Shareholders' Equity for the Six     6
                 Months Ended December 31, 1999

             Consolidated Statements of Cash Flows for the Six Months        7
                 Ended December 31, 1999 and December 31, 1998

             Notes to Consolidated Financial Statements                      8

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF                        11
               FINANCIAL CONDITION AND RESULTS OF
                     OPERATIONS

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES                       16
                ABOUT MARKET RISK

PART II.     OTHER INFORMATION

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF                             17
                SECURITY HOLDERS

ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K                               17

SIGNATURES                                                                  18


                                       2
<PAGE>
PART I.           FINANCIAL INFORMATION

ITEM 1.           CONSOLIDATED FINANCIAL STATEMENTS

                                   NuCo2 Inc.

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                     ------
<TABLE>
<CAPTION>

                                                                                 December 31, 1999    June 30, 1999
                                                                                 -----------------    -------------
                                                                                   (unaudited)

Current assets:
<S>                                                                                <C>              <C>
   Cash and cash equivalents                                                       $     168,081    $   1,579,191
   Trade accounts receivable; net of allowance for doubtful
      accounts of $710,549 and $557,592, respectively                                  6,435,123        6,767,716
   Inventories                                                                           236,501          213,605
   Prepaid expenses and other current assets                                           1,595,808          593,487
                                                                                   -------------    -------------
        Total current assets                                                           8,435,513        9,153,999
                                                                                   -------------    -------------
Property and equipment, net                                                          104,262,527       99,664,890
                                                                                   -------------    -------------
Other assets:
   Goodwill, net                                                                      21,039,533       21,645,293
   Deferred charges, net                                                               2,572,260        2,915,167
   Customer lists, net                                                                 2,369,947        2,897,638
   Restrictive covenants, net                                                          1,750,604        1,928,700
   Deferred lease acquisition costs, net                                               3,428,452        3,236,919
   Deposits                                                                              307,119          187,595
                                                                                   -------------    -------------
                                                                                      31,467,915       32,811,312
                                                                                   -------------    -------------
                                                                                   $ 144,165,955    $ 141,630,201
                                                                                   =============    =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current maturities of long-term debt                                            $      41,219    $      96,748
   Accounts payable                                                                    8,498,938        6,701,695
   Accrued expenses                                                                      699,324          747,631
   Accrued interest                                                                    1,005,518        1,473,704
   Accrued payroll                                                                       336,698          543,924
   Other current liabilities                                                             281,158           45,570
                                                                                   -------------    -------------
      Total current liabilities                                                       10,862,855        9,609,272

Long-term debt, excluding current maturities                                          49,097,503       43,615,025
Subordinated debt                                                                     38,858,940       38,748,695
Customer deposits                                                                      2,158,066        1,924,528
                                                                                   -------------    -------------
        Total liabilities                                                            100,977,364       93,897,520
                                                                                   -------------    -------------

Commitments and contingencies

Shareholders' equity:
   Preferred Stock; no par value; 5,000,000 shares authorized;
      none issued                                                                           --               --
   Common stock; par value $.001 per share; 30,000,000 authorized;
      issued and outstanding 7,216,997 and 7,216,664, respectively                         7,217            7,217
   Additional paid-in capital                                                         64,833,579       64,831,748
   Accumulated deficit                                                               (21,652,205)     (17,106,284)
                                                                                   -------------    -------------
        Total shareholders' equity                                                    43,188,591       47,732,681
                                                                                   -------------    -------------
                                                                                   $ 144,165,955    $ 141,630,201
                                                                                   =============    =============
</TABLE>

                                       3
<PAGE>
                                   NuCo2 Inc.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                            Three Months Ended
                                                                 December 31, 1999         December 31, 1998
                                                                 -----------------         -----------------

<S>                                                                   <C>                     <C>
Net Sales                                                             $13,694,356             $11,251,659

Costs and expenses:
   Cost of products sold                                                6,744,946               6,070,491
   Selling, general and administrative expenses                         2,859,363               2,452,679
   Depreciation and amortization                                        3,813,056               3,095,290
                                                                     ------------             -----------
                                                                       13,417,365              11,618,460
                                                                     ------------             -----------

   Operating Income (loss)                                                276,991                (366,801)

   Interest expense, net                                                2,442,490               1,822,138
                                                                     ------------             -----------

   Net (loss)                                                          (2,165,499)             (2,188,939)
                                                                     -------------            ------------

Basic and Diluted EPS:

   Net (loss)                                                         $      (.30)            $     (.30)
                                                                      ===========             ===========

   Weighted average number of common and common
       equivalent shares outstanding

      Basic and Diluted                                                 7,216,678                7,216,664
                                                                     ============             ============
</TABLE>


                                       4

<PAGE>
                                   NuCo2 Inc.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                          Six Months Ended
                                                                               December 31, 1999          December 31, 1998
                                                                               -----------------          -----------------


<S>                                                                                 <C>                     <C>
Net Sales                                                                           $27,288,933             $22,115,152

Costs and expenses:
   Cost of products sold                                                             13,741,291              11,822,581
   Selling, general and administrative expenses                                       5,788,621               4,898,471
   Depreciation and amortization                                                      7,427,691               5,941,009
                                                                                   ------------             -----------
                                                                                     26,957,603              22,662,061
                                                                                   ------------             -----------

   Operating Income (loss)                                                              331,330                (546,909)

   Interest expense, net                                                              4,877,251               3,383,121
                                                                                   ------------             -----------

   Net (loss)                                                                       $(4,545,921)            $(3,930,030)
                                                                                   ============             ===========

Basic and Diluted EPS:


   Net (loss)                                                                       $     (.63)             $      (.54)
                                                                                   ============             ============

   Weighted average number of common and common
       equivalent shares outstanding

      Basic and Diluted                                                               7,216,671               7,216,664
                                                                                   ============             ===========
</TABLE>



                                       5
<PAGE>
                                   NuCo2 Inc.


                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                 Additional                              Total
                                                Common Stock       Paid-in      Accumulated         Shareholders'
                                          Shares     Amount        Capital        Deficit              Equity
                                          ------     ------        -------        -------              ------


<S>                                     <C>          <C>        <C>             <C>                   <C>
Balance, June 30, 1999                  7,216,664    $ 7,217    $ 64,831,748    $(17,106,284)         $ 47,732,681

Issuance of 333 shares of Common
Stock - exercise of options                   333         -            1,831           -                     1,831

Net (loss)                                   -            -            -          (4,545,921)           (4,545,921)
                                        ---------    -------    ------------    -------------         -------------

Balance, December 31, 1999              7,216,997    $ 7,217    $ 64,833,579    $(21,652,205)         $ 43,188,591
                                        =========    =======    ============    =============         =============
</TABLE>





                                       6


<PAGE>
                                   NuCo2 Inc.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                          Six Months Ended
                                                                                  December 31, 1999    December 31, 1998*
                                                                                  -----------------    -----------------

<S>                                                                                 <C>                <C>
Net (loss)                                                                          $(4,545,921)       $ (3,930,030)

Cash flows from operating activities:
   Adjustments to  reconcile  net  (loss)  to net cash provided
         by  operating activities:
           Depreciation and amortization of property and equipment                    5,159,216           4,097,039
           Amortization of other assets                                               2,268,475           1,843,970
           Loss on disposal of property and equipment                                   426,294             343,037
           Amortization of original issue discount                                      110,245              21,429
           Changes in operating assets and liabilities:
           Decrease (increase) in:
              Trade accounts receivable                                                 332,593          (2,170,761)
              Inventories                                                               (22,897)            (12,750)
              Prepaid expenses and other current assets                              (1,002,321)           (777,744)
           Increase (decrease) in:
              Accounts payable                                                        1,797,243           3,392,257
              Accrued expenses                                                          (48,308)            165,691
              Accrued payroll                                                          (207,226)           (198,643)
              Accrued interest                                                         (468,185)            110,523
              Other current liabilities                                                 235,589              26,187
              Customer deposits                                                         233,538             425,887
                                                                                  -------------        ------------

              Net cash provided by operating activities                               4,268,335           3,336,092
                                                                                  -------------        ------------

Cash flows from investing activities:
   Proceeds from disposal of property and equipment                                      54,085              65,880
   Purchase of property and equipment                                               (10,187,403)        (13,086,381)
   Acquisition of businesses                                                               -                 30,500
   (Increase) in deposits                                                              (119,523)            (50,613)
   Increase in deferred lease acquisition costs                                        (763,467)           (840,799)
                                                                                 --------------       -------------
        Net cash (used in) investing activities                                     (11,016,308)        (13,881,413)
                                                                                 --------------       -------------

Cash flows from financing activities:
   Repayment of long-term debt                                                          (73,051)            (67,402)
   Proceeds from issuance of long-term debt and subordinated debt                     5,500,000          10,500,000
   Increase in deferred charges                                                         (91,917)            (52,852)
   Exercise of options                                                                    1,831                  -
                                                                                 --------------      --------------
      Net cash provided by financing activities                                       5,336,863          10,379,746
                                                                                  -------------      --------------

Net decrease in cash and cash equivalents                                            (1,411,110)           (165,575)
Cash and cash equivalents at the beginning of period                                  1,579,191             336,510
                                                                                  -------------      --------------
Cash and cash equivalents at the end of period                                    $     168,081      $      170,935
                                                                                  =============      ==============

Supplemental  disclosure of cash flow  information:
   Cash paid during the period for:
      Interest                                                                    $   5,238,507      $    3,283,464
                                                                                  =============      ==============
      Income taxes                                                                $           0      $            0
                                                                                  =============      ==============
</TABLE>

* Restated to conform to current year's classifications.


                                       7
<PAGE>
                                   NuCo2 Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Note 1.  Basis of Presentation

         The accompanying  unaudited consolidated financial statements have been
prepared in  accordance  with the  instructions  to Form 10-Q used for quarterly
reports under Section 13 or 15 (d) of the  Securities  Exchange Act of 1934, and
therefore,  do not include all  information  and footnotes  necessary for a fair
presentation of consolidated financial position,  results of operations and cash
flows  in  conformity  with  generally  accepted  accounting   principles.   The
accompanying unaudited consolidated financial statements include the accounts of
NuCo2 Inc. (the "Company") and its wholly-owned  subsidiary,  NuCo2  Acquisition
Corp.  which was formed during the year ended June 30, 1998 to acquire the stock
of Koch  Compressed  Gases,  Inc. in October  1997.  All  material  intercompany
accounts and transactions have been eliminated.

         The financial  information included in this report has been prepared in
conformity  with  the  accounting  principles  and  methods  of  applying  those
accounting  principles,  reflected in the consolidated  financial statements for
the  fiscal  year  ended  June 30,  1999  included  in Form 10-K  filed with the
Securities and Exchange Commission.

         All  adjustments  necessary for a fair statement of the results for the
interim periods presented have been recorded. This quarterly report on Form 10-Q
should be read in conjunction with the Company's  audited  financial  statements
for the fiscal year ended June 30, 1999. The consolidated  results of operations
for the periods  presented are not  necessarily  indicative of the results to be
expected for the full fiscal year.


Note 2.  Net Income or Loss per Common Share

         In February 1997, the FASB issued Statement 128,  "Earnings Per Share".
Statement 128 supersedes APB Opinion No. 15,  "Earnings Per Share" and specifies
the computation, presentation and disclosure requirements for earnings per share
("EPS") for entities with publicly held Common Stock or potential  Common Stock.
It replaces the  presentation of primary EPS with the  presentation of basic EPS
and  replaces  fully  diluted  EPS  with  diluted  EPS.  It also  requires  dual
presentation of basic and diluted EPS on the face of the statement of operations
for all entities with complex capital  structures and requires a  reconciliation
of the numerator and  denominator of the basic EPS  computation to the numerator
and denominator of the diluted EPS  computation.  Statement 128 is effective for
financial  statements  for both interim and annual periods ending after December
15, 1997.

         Incremental shares for stock options and warrants  calculated  pursuant
to the treasury  stock  method for the three and six months  ended  December 31,
1998 were 31,517 and 27,269,  respectively.  These  shares were not  included in
diluted  EPS  because  they  would  have  been  antidilutive  for such  periods.
Additionally,  options and warrants to purchase 1,073,715 shares, 872,333 shares
and 443,166  shares for  $14.64-$17.00  per share,  $11.25-$12.50  per share and
$7.00-$11.00 per share,  respectively,  were outstanding during all or a portion
of the three and six months ended  December  31, 1998,  but were not included in
the  computation  of diluted EPS because the  exercise  price of the options and
warrants was greater than the average market price of the Common Stock.

         Incremental shares for stock options and warrants  calculated  pursuant
to the treasury  stock  method for the three and six months  ended  December 31,
1999 were 402,737 and 282,475,  respectively.  These shares were not included in
diluted  EPS  because  they  would  have  been  antidilutive  for such  periods.
Additionally,  options and warrants to purchase 1,043,715 shares,  36,000 shares
and 555,671  shares for  $16.40-$17.00  per share,  $12.50-$14.64  per share and
$10.25-$11.28 per share, respectively,  were outstanding during all or a portion
of the three and six months ended  December  31, 1999,  but were not included in
the  computation  of diluted EPS because the  exercise  price of the options and
warrants was greater than the average market price of the Common Stock.

Note 3.  Long-Term Debt

        The Company has a $75.0 million  amended and restated  revolving  credit
facility with a syndicate of banks led by SunTrust  Bank,  South  Florida,  N.A.
("Amended  SunTrust  Facility").  The  Amended  SunTrust  Facility  amended  and
restated the Company's  existing $50.0 million  revolving  credit facility which
had been entered into in October 1997. The Amended  SunTrust  Facility  contains
interest  rates and an unused  facility fee based on a pricing  grid  calculated
quarterly on senior funded debt to annualized EBITDA. The Company is entitled to
select the Base Rate or LIBOR, plus applicable  margin,  for principal  drawings
under the Amended SunTrust Facility. The applicable LIBOR margin pursuant to the
pricing  grid ranges from


                                       8

<PAGE>

1.75% to 3.5%. The applicable  unused  facility fee pursuant to the pricing grid
ranges from 0.375% to 0.50%.  Interest  only is payable  periodically  until the
expiration of the Amended SunTrust Facility on May 4, 2002; there is, however, a
two year renewal option subject to approval.  The Amended  SunTrust  Facility is
collateralized by substantially all of the assets of the Company. The Company is
precluded  from  declaring or paying any cash  dividends and is required to meet
certain  affirmative  and  negative  covenants  including,  but not  limited to,
financial  covenants (See Note 7).  Pursuant to the Amended  SunTrust  Facility,
drawings are limited to availability  under a formula  predicated upon multiples
of EBITDA and gross margin factors.

         A total of $48.75  million  was  outstanding  pursuant  to the  Amended
SunTrust  Facility  with  interest from 9.68% to 10.03% per annum as of December
31, 1999.

         As of December 31, 1999,  the Company  maintained an interest rate swap
transaction  (the "Swap") with SunTrust  Bank,  Atlanta,  in the amount of $10.0
million (the "Notional Amount").  The effective date of the Swap is September 2,
1998 and it terminates on September 5, 2000.  Pursuant to the Swap,  the Company
pays a fixed rate of 6% per annum and receives a LIBOR-based floating rate.


Note 4.  Subordinated Debt

         Represents  unsecured  Senior  Subordinated  Promissory Notes ("Notes")
with  interest  only at 12% per  annum  payable  semi-annually  on  April 30 and
October 31, due October 31, 2004. The Notes were sold with detachable seven year
warrants  to  purchase  an  aggregate  of 655,738  shares of Common  Stock at an
exercise price of $16.40 per stock unit. In July 1998,  the agreement  governing
the Notes was amended to adjust certain financial  covenants as of June 30, 1998
and prospectively. In exchange for the amendment, the exercise price for 612,023
warrants  was  reduced  to $12.40  per  stock  unit.  Additionally,  NationsBanc
Montgomery Securities, Inc., the placement agent, received a warrant to purchase
an aggregate of 30,000 shares of Common Stock at an exercise price of $14.64 per
share which expires on October 31, 2004.

         On May 4, 1999,  the Company sold an  additional  $10.0  million of its
Senior  Subordinated  Promissory Notes  ("Additional  Notes").  Except for their
October 31, 2005 maturity date, the Additional Notes are substantially identical
to the Notes. The Additional Notes were sold with detachable 6-1/2 year warrants
to purchase an aggregate of 372,892  shares of Common Stock at an exercise price
of $6.65 per stock unit. In connection  with the sale of the  Additional  Notes,
certain  financial  covenants  governing the Notes and the Additional Notes were
adjusted  as of March 31,  1999 and  prospectively  and the  exercise  price for
612,023  of the  warrants  issued in  connection  with the sale of the Notes was
reduced to $6.65 per stock  unit (See Note 7).  Additionally,  effective  May 4,
1999, the interest rate on the original $30.0 million of Notes  increased to 14%
per annum until such  quarter  that a certain  financial  ratio was met. For the
quarter ended  December 31, 1999, the ratio was met and the interest rate on the
Notes was 12% per annum.


Note 5.  Stock Option Plan

         In 1995,  the  Company  adopted  the 1995 Stock  Option Plan (the "1995
Plan"). Under the 1995 Plan, the Company has reserved 1,550,000 shares of Common
Stock for  employees of the Company.  Under the terms of the 1995 Plan,  options
granted may be either  incentive stock options or  non-qualified  stock options.
The exercise  price of  incentive  options must be at least equal to 100% of the
fair market value of the Common Stock at the date of the grant, and the exercise
price of non-qualified stock options may not be less than 75% of the fair market
value of the Common  Stock at the date of the grant.  The  maximum  term for all
options is 10 years.  Options granted to date vest in three to five installments
over  periods of three to four and one-half  years.  As of December 31, 1998 and
1999,   options  for  307,360  shares  and  484,344  shares  were   exercisable,
respectively.

         The following table  summarizes the  transactions  pursuant to the 1995
Plan.

<TABLE>
<CAPTION>
                                                                               Weighted-Average
                                            Shares          Exercise Price       Exercise Price
                                            ------          --------------       --------------

<S>                                         <C>                 <C>                 <C>
       Outstanding at June 30, 1998         610,926             $9-$11.28           $10.61
       Granted                              214,500              $5.50-$7            $5.74
       Expired or canceled                   21,200             $9-$11.25           $10.40
                                            -------          ------------           ------
       Outstanding at June 30, 1999         804,226          $5.50-$11.28            $9.32
       Granted                                    0                     0                0
       Expired or canceled                   23,179          $5.50-$11.25           $10.11
       Exercised                                333                 $5.50            $5.50
                                            -------          ------------           ------
       Outstanding at December 31, 1999     780,714          $5.50-$11.28            $9.30
                                            =======          ============           ======
</TABLE>
                                       9

<PAGE>

         In 1995,  the Company  adopted the  Directors'  Stock  Option Plan (the
"Directors'  Plan").  Under the Directors' Plan, the Company has reserved 60,000
shares of Common Stock. Under the terms of the Directors' Plan each non-employee
director receives options for 6,000 shares of Common Stock on the date of his or
her  first  election  to the  board of  directors.  In  addition,  on the  third
anniversary of each  director's  first election to the Board,  and on each three
year anniversary  thereafter,  each non-employee director receives an additional
option to purchase  6,000 shares of Common Stock.  The exercise  price per share
for all  options  granted  under the  Directors'  Plan will be equal to the fair
market value of the Common Stock at the date of grant. All options vest in three
equal  annual  installments  beginning on the first  anniversary  of the date of
grant.  The maximum  term for all options is ten years.  As of December 31, 1998
and 1999,  options to purchase 14,000 shares and 12,000 shares were  exercisable
and options for 32,000 and 36,000 shares, respectively, were outstanding.

Note 6.  Operating Leases

         The  Company  entered  into 20  operating  leases  from  July 1 through
December 31, 1999. One lease was for a warehouse  facility with aggregate annual
rental of approximately $4,000 expiring in 2002. Nineteen leases were for trucks
with aggregate  annual  rentals of  approximately  $217,000  expiring at various
dates through 2005.

Note 7.  Subsequent Events

         In January and February 2000,  the agreements  governing the 12% Senior
Subordinated  Promissory Notes and the Amended SunTrust Facility,  respectively,
were  amended to adjust  certain  financial  covenants  for the  quarter  ending
December 31, 1999 and prospectively.





                                       10
<PAGE>
ITEM 2.

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

         THIS  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND
RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED
IN THESE  FORWARD-LOOKING  STATEMENTS.  FACTORS THAT MAY CAUSE SUCH  DIFFERENCES
INCLUDE,  BUT ARE NOT LIMITED TO, OUR EXPANSION  INTO NEW MARKETS,  COMPETITION,
TECHNOLOGICAL   ADVANCES,  YEAR  2000  ISSUES  AND  AVAILABILITY  OF  MANAGERIAL
PERSONNEL.

Overview

         We are the largest  supplier  in the United  States of bulk CO2 systems
and bulk CO2 for carbonating  and dispensing  fountain  beverages.  We currently
operate a  national  network  of 89  service  locations  in 44 states  servicing
approximately  69,000  bulk and high  pressure  customers.  Over 97% of fountain
beverage users in the  Continental  United States are within our current service
area.

          Growth in our  customer  base has  averaged  78%  annually.  Our rapid
growth  has  been  due  to  a  combination  of  internal   growth  and  over  30
acquisitions.  Today,  the majority of our growth is driven by the conversion of
high  pressure  CO2 users to bulk CO2  systems.  Our success in  conversions  is
demonstrated in the Florida market where we continue to rapidly add new bulk CO2
system installations, even after actively marketing in the state since 1990.

         Substantially  all of our revenues have been derived from the rental of
bulk  CO2  systems  installed  at  customers'  sites,  the  sale of CO2 and high
pressure cylinder revenues.  Revenues have grown from $812,000 in fiscal 1991 to
$47.1  million in fiscal 1999, an average  increase of 68% annually.  We believe
that our revenue base is stable due to the existence of long-term contracts with
our customers which generally  roll-over without a significant  portion expiring
without  renewal in any one year.  In each of fiscal 1997,  1998 and 1999,  less
than 5% of our bulk CO2  systems in  service  experienced  service  termination.
Service termination is typically caused by restaurant closure. Affected bulk CO2
systems are either  removed and  reconditioned,  or left in place when prospects
for a new  restaurant  at the same location  appear  likely.  Revenue  growth is
largely dependent on both (1) the rate of new bulk CO2 system  installations and
(2) the  growth in bulk CO2  sales at (i)  customers  on  rental  plus per pound
charge contracts and (ii) customers that own their own bulk CO2 systems.  During
the second quarter of fiscal 2000, our customer base increased by  approximately
2,000 new accounts.

         Cost of products sold is comprised of purchased CO2 and labor,  vehicle
and service  location costs  associated  with the storage and delivery of CO2 to
customers.  Selling,  general and  administrative  expenses consist of salaries,
dispatch and  communications  costs,  and expenses  associated  with  marketing,
administration,  accounting and employee  training.  Consistent with the capital
intensive  nature  of  our  business,  we  incur  significant  depreciation  and
amortization expenses. These stem from the depreciation of our bulk CO2 systems;
depreciation   and   amortization  of  bulk  CO2  system   installation   costs;
amortization  of sales  commissions;  and  amortization  of  goodwill,  deferred
financing costs and other intangible assets.

         With respect to bulk CO2  systems,  we only  capitalize  costs that are
associated  with specific  successful  placements of such systems with customers
under  noncancelable  contracts  and  which  would  not be  incurred  but  for a
successful placement. All other service,  marketing and administrative costs are
expensed as incurred.

         Since 1990, we have devoted  significant  resources to building a sales
and marketing  organization,  adding  administrative  personnel and developing a
national  infrastructure  to  support  the  rapid  growth  in the  number of our
installed  base  of bulk  CO2  systems.  The  cost  of  this  expansion  and the
significant  depreciation  expense of our  installed  network  have  resulted in
significant operating losses to date and accumulated net losses of $21.7 million
at December 31, 1999.

         We believe that our future  revenue  growth,  gains in gross margin and
profitability  will  be  dependent  upon  increases  in  route  density  and the
expansion and penetration of bulk CO2 system  installations  in existing and new
market regions resulting from successful ongoing marketing.

         Our  experience  has been that gross margins at service  locations have
generally  increased  with the length of time that the  service  location  is in
operation.  Gross margins in our mature  markets are generally in the 55% to 65%
range.  As of December 31, 1999,  51% of our stationary  service  locations were
open over three years,  28% were open two to three



                                       11
<PAGE>

years,  19% were open one to two years and 2% were open under one year.  For the
three  months  ended  December  31, 1999 and 1998,  depots open over three years
averaged a 57% gross margin and a 53% gross  margin,  respectively,  depots open
two  to  three  years  averaged  a 47%  gross  margin  and a 36%  gross  margin,
respectively, and depots open one to two years averaged a 42% gross margin and a
19% gross margin,  respectively.  For the three months ended  December 31, 1999,
the depot open under one year had a 44% gross margin.  Additionally,  we operate
20 mobile  service  locations  with an average 43% gross  margin for the quarter
ended  December 31, 1999  compared to eight  mobile  service  locations  with an
average gross margin of 19% for the quarter ended December 31, 1998.  Same store
sales for depots open one to three years increased by 28%. New service locations
typically  operate at low or  negative  gross  margins  in the early  stages and
detract  from  our  highly  profitable  service  locations  in  mature  markets.
Increases  in gross  margins  at  service  locations  are  generally  related to
increases in the number of customers  serviced.  New accounts are being added to
newer depots for which there is  substantial  excess  capacity,  and  therefore,
relatively  little  additional  cost is incurred to service new  customers.  New
multi-unit placement  agreements combined with single-unit  placements will help
us in achieving  route density.  As our customer base  increases,  we anticipate
that  our  financial  performance  on a  sequential  basis  will  improve  at an
accelerated  rate. Our route density is highest at our oldest depots and is less
developed in the other areas where we presently have operations.

         We believe that optimal  route density is achieved at over 400 accounts
serviced per bulk CO2 truck and we typically  employ  targeted  sales efforts to
build density within an existing  delivery  route. We maintain a "hub and spoke"
route structure and establish  additional  stationary bulk CO2 service locations
as a service area expands through  geographic growth. Our entry into many states
was  accomplished  largely through business  acquisitions  with thinly developed
route networks. We expect to benefit from route efficiencies and other economies
of  scale as we build  our  customer  base in  these  states  through  intensive
marketing  initiatives.  Greater scale may also lead to better vehicle and fixed
asset  utilization  as  well  as the  ability  to  spread  fixed  marketing  and
administrative costs over a broader revenue base.

         We believe that  earnings  before  interest,  taxes,  depreciation  and
amortization ("EBITDA") is the principal financial measure by which we should be
measured as we  continue to achieve  national  market  presence  and build route
density.  Our revolving  credit facility  utilizes EBITDA for its calculation of
financial  leverage,  affecting  the amount of funds  available to us to borrow.
Information  regarding  EBITDA  is  presented  because  of its  use  by  certain
investors  as one  measure of a  corporation's  ability to  generate  cash flow.
EBITDA should not be considered as an alternative to, or more  meaningful  than,
operating  income or cash flows from  operating  activities as an indicator of a
corporation's operating performance.  EBITDA excludes significant costs of doing
business and should not be considered in isolation  from GAAP  measures.  EBITDA
has grown  from  $15,000 in fiscal  1991 to $11.3  million  in fiscal  1999,  an
average  increase of 72% annually from fiscal 1994 to fiscal 1999. For the three
months ended  December  31,  1999,  EBITDA was $4.1  million,  or $16.4  million
annualized, the highest for any quarter in our history.

Results of Operations

         The  following  table  sets  forth,  for  the  periods  indicated,  the
percentage relationship which various items bear to net sales:

<TABLE>
<CAPTION>

                                                                      Three Months Ended         Six Months Ended
                                                                          December 31,             December 31,

                                                                        1999          1998        1999          1998
                                                                        ----          ----        ----          ----
         Income Statement Data:

<S>                                                                     <C>           <C>          <C>           <C>
         Net sales...........................................           100.0%        100.0%       100.0%        100.0%
         Cost of products sold...............................            49.3          54.0         50.4          53.5
         Selling, general and administrative expenses                    20.9          21.8         21.2          22.1
         Depreciation and amortization.......................            27.8          27.5         27.2          26.9
                                                                    ---------      --------     --------     ---------
         Operating income (loss).............................             2.0          (3.3)         1.2          (2.5)
                                                                    ---------      --------     --------     ---------
         Interest expense, net...............................            17.8          16.2         17.9          15.3
                                                                    ---------       -------      -------     ---------

         Net loss............................................           (15.8)        (19.5)       (16.7)        (17.8)
                                                                     ========       ========     =======      =========

         Other Data:
         Operating income before depreciation and amortization
         (EBITDA)............................................            29.9%         24.2%        28.4%         24.4%
                                                                     ========       =======      =======    ==========
</TABLE>


                                       12
<PAGE>

Three Months Ended December 31, 1999 Compared to Three Months Ended December 31,
1998

Net Sales

         Net sales  increased by $2.4 million,  or 21.7%,  from $11.3 million in
the 1998 period to $13.7  million in the 1999 period.  The increase in net sales
was primarily due to internal growth in the number of Company owned and customer
owned bulk CO2 systems serviced.  At December 31, 1999, there were approximately
53,000 Company owned and 9,000  customer  owned bulk CO2 systems in service,  an
increase of 10,000, or 19.3%,  over the  approximately  43,000 Company owned and
9,000 customer owned bulk CO2 systems in service at December 31, 1998.

Costs of Products Sold

         Cost of products sold  increased by $674,000,  from $6.1 million in the
1998 period to $6.7 million in the 1999 period and  decreased as a percentage of
net sales  from 54.0% to 49.3%.  The  dollar  increase  is  attributable  to our
continued growth. The percentage decrease is attributable to a decrease in fully
loaded route drivers. Fully loaded route drivers increased by $206,000 from $2.1
million in the 1998 period to $2.3 million in the 1999 period and decreased as a
percentage of net sales from 18.7% to 16.9%. Overtime, expressed as a percentage
of net  sales,  was 3.0% in the 1998  period  and 1.9% in the 1999  period.  The
overtime percentage decrease is attributable to a proactive approach to overtime
management  enabled  by new  software.  Fully  loaded  auto  and  truck  expense
increased  by $119,000  from $1.0  million in the 1998 period to $1.2 million in
the 1999 period and  decreased as a  percentage  of net sales from 9.3% to 8.5%.
Depot  expenses  decreased  as a  percentage  of net sales from 5.3% in the 1998
period to 4.1% in the 1999  period.  We operated 69 depots at December  31, 1999
and December 31, 1998.  When we open new service  locations  and expand into new
markets,  higher costs expressed as a percentage of net sales are incurred until
route  density is achieved.  At December 31, 1999, we serviced over 400 bulk CO2
customers per delivery vehicle from 39% of our depots.

Selling, General and Administrative Expenses

         Selling, general and administrative expenses increased by $407,000 from
$2.5 million in the 1998 period to $2.9 million in the 1999 period and decreased
as a  percentage  of net sales  from  21.8% to 20.9%.  The  dollar  increase  is
primarily  attributable to growth in the number of marketing and  administrative
personnel and their associated expenses. The percentage decrease is attributable
to economies of scale.  At December 31, 1998, we had operations in 44 states and
employed 162 marketing and administrative personnel and at December 31, 1999, we
had  operations  in 44 states and  employed  181  marketing  and  administrative
personnel.

Depreciation and Amortization

         Depreciation and  amortization  increased by $718,000 from $3.1 million
in the 1998 period to $3.8  million in the 1999 period.  As a percentage  of net
sales,  such  expenses  increased  from 27.5% in the 1998 period to 27.8% in the
1999 period. Depreciation expense increased by $503,000 from $2.2 million in the
1998 period to $2.7 million in the 1999 period  principally  due to the increase
in  bulk  CO2  systems  leased  to  customers.  As a  percentage  of net  sales,
depreciation  expense  increased  from 19.2% in the 1998  period to 19.4% in the
1999 period.  Amortization  expense  increased by $215,000  from $936,000 in the
1998 period to $1.2  million in the 1999 period  primarily  due to  amortization
related  to  deferred  charges  and  deferred  lease  acquisition  costs.  As  a
percentage of net sales, amortization expense increased from 8.3% to 8.4%.

Operating Income

         For the reasons described above, operating income was $277,000, or 2.0%
of net sales,  in the 1999 period,  compared to an operating loss of ($367,000),
or (3.3%) of net sales, in the 1998 period.

Interest Expense

         Net interest  expense  increased  by $620,000  from $1.8 million in the
1998 period to $2.4 million in the 1999 period and  increased as a percentage of
net sales  from 16.2% to 17.8%.  This  increase  is  primarily  attributable  to
increased  level of long-term debt and  subordinated  debt in the 1999 period as
compared to the 1998 period.

Net Loss

         For the reasons  described  above,  net loss  decreased by $23,000,  or
1.1%,  in the 1998 period  compared to the 1999 period.  No provision for income
tax  expense in either the 1998  period or the 1999  period has been made due to
historical net losses.


                                       13
<PAGE>

EBITDA

         For the reasons described above, EBITDA,  representing operating income
plus  depreciation and amortization,  increased by $1.4 million,  or 49.9%, from
$2.7 million in the 1998 period to $4.1 million in the 1999 period and increased
as a percentage of net sales from 24.2% to 29.9%, respectively.


Six Months  Ended  December 31, 1999  Compared to Six Months Ended  December 31,
1998

Net Sales

         Net sales  increased by $5.2 million,  or 23.4%,  from $22.1 million in
the 1998 period to $27.3  million in the 1999 period.  The increase in net sales
was primarily due to internal growth in the number of Company owned and customer
owned bulk CO2 systems serviced.  At December 31, 1999, there were approximately
53,000 Company owned and 9,000  customer  owned bulk CO2 systems in service,  an
increase of 10,000, or 19.3%,  over the  approximately  43,000 Company owned and
9,000 customer owned bulk CO2 systems in service at December 31, 1998.

Cost of Products Sold

         Cost of products sold increased by $1.9 million,  from $11.8 million in
the 1998  period  to  $13.7  million  in the  1999  period  and  decreased  as a
percentage of net sales from 53.5% to 50.4%. The dollar increase is attributable
to our continued growth.  The percentage  decrease is attributable to a decrease
in fully loaded route drivers.  Fully loaded route drivers increased by $541,000
from $4.1  million in the 1998  period to $4.6  million  in the 1999  period and
decreased as a percentage of net sales from 18.6% to 17.0%. Overtime,  expressed
as a percentage  of net sales,  was 3.1% in the 1998 period and 1.8% in the 1999
period. The overtime percentage decrease is attributable to a proactive approach
to  overtime  management  enabled  by new  software.  We  operated  69 depots at
December 31, 1999 and December 31, 1998. When we open new service  locations and
expand into new markets, higher costs expressed as a percentage of net sales are
incurred until route density is achieved.

Selling, General and Administrative Expenses

         Selling, general and administrative expenses increased by $890,000 from
$4.9 million in the 1998 period to $5.8 million in the 1999 period and decreased
as a  percentage  of net sales  from  22.1% to 21.2%.  The  dollar  increase  is
primarily  attributable to growth in the number of marketing and  administrative
employees and their associated expenses. The percentage decrease is attributable
to economies of scale.  At December 31, 1998, we had operations in 44 states and
employed 162 marketing and administrative personnel and at December 31, 1999, we
had  operations  in 44 states and  employed  181  marketing  and  administrative
personnel.

Depreciation and Amortization

         Depreciation  and  amortization  increased  by $1.5  million  from $5.9
million in the 1998 period to $7.4 million in the 1999  period.  As a percentage
of net sales, such expenses  increased from 26.9% in the 1998 period to 27.2% in
the 1999  period.  Depreciation  expense  increased  by $1.1  million  from $4.1
million in the 1998 period to $5.2 million in the 1999 period principally due to
the increase in bulk CO2 systems  leased to  customers.  As a percentage  of net
sales,  depreciation expense increased from 18.5% in the 1998 period to 18.9% in
the 1999 period. Amortization expense increased by $425,000 from $1.9 million in
the 1998 period to $2.3 million in the 1999 period primarily due to amortization
related  to  deferred  charges  and  deferred  lease  acquisition  costs.  As  a
percentage of net sales, amortization expense remained at 8.3%.

Operating Income

         For the reasons described above, operating income was $331,000, or 1.2%
of net sales,  in the 1999 period,  compared to an operating loss of ($547,000),
or (2.5%) of net sales, in the 1998 period.




                                       14
<PAGE>

Interest Expense

         Net interest expense increased by $1.5 million from $3.4 million in the
1998 period to $4.9 million in the 1999 period and  increased as a percentage of
net sales from 15.3% to 17.9%.  This increase is  attributable  to the increased
level of long-term debt and subordinated  debt in the 1999 period as compared to
the 1998 period.


Net Loss

         For the reasons  described  above,  net loss increased by $616,000,  or
15.7%,  from $3.9 million in the 1998 period to $4.5 million in the 1999 period.
No provision for income tax expense in either the 1998 period or the 1999 period
has been made due to historical net losses.

EBITDA

         For the reasons described above, EBITDA,  representing operating income
plus  depreciation and amortization,  increased by $2.4 million,  or 43.8%, from
$5.4 million in the 1998 period to $7.8 million in the 1999 period and increased
as a percentage of net sales from 24.4% to 28.4%, respectively.

Liquidity and Capital Resources

         Our cash requirements  consist principally of (1) capital  expenditures
associated  with  purchasing  and placing new bulk CO2 systems  into  service at
customers' sites; (2) payments of interest on outstanding indebtedness;  and (3)
working capital. Whenever possible, we seek to obtain the use of vehicles, land,
buildings,  and other office and service  equipment under operating  leases as a
means of conserving capital. As of December 31, 1999, we anticipated making cash
capital  expenditures  of at least  $10.0  million to $20.0  million  during the
remaining six months of fiscal 2000, primarily for purchases of bulk CO2 systems
that we expect to place into  service.  Once bulk CO2  systems  are placed  into
service,  we generally  experience  positive cash flows on a per-unit  basis, as
there  are  minimal  additional  capital  expenditures   required  for  ordinary
operations.  In addition to capital  expenditures related to internal growth, we
review  opportunities  to acquire bulk CO2 service  businesses,  and may require
cash in an amount  dictated  by the  scale  and  terms of any such  transactions
successfully concluded.

         During  fiscal 1999,  our capital  resources  included  cash flows from
operations,  available borrowing capacity under our credit facility and proceeds
from the sale of our 12%  Senior  Subordinated  Promissory  Notes  due 2005 (the
"2005 Notes").

         On May 4, 1999,  we entered into a $75.0  million  amended and restated
revolving  credit facility with a syndicate of banks led by SunTrust Bank, South
Florida,  National  Association  ("Amended  SunTrust  Facility").   The  Amended
SunTrust  Facility contains interest rates and an unused facility fee based on a
pricing grid calculated quarterly on senior funded debt to annualized EBITDA. We
are  entitled  to select the Base Rate or LIBOR,  plus  applicable  margin,  for
principal  drawings under the Amended  SunTrust  Facility.  The applicable LIBOR
margin  pursuant to the pricing grid ranges from 1.75% to 3.5%,  the  applicable
unused facility fee pursuant to the pricing grid ranges from 0.375% to 0.50% and
the applicable  Base Rate margin  pursuant to the pricing grid ranges from 0.25%
to 2.00%.  Interest  only is payable  periodically  until the  expiration of the
Amended SunTrust  Facility.  The Amended SunTrust  Facility expires May 4, 2002,
however,   it  contains  a  two  year  renewal   option   subject  to  approval.
Additionally,  it is collateralized by substantially all of our assets. Drawings
pursuant to the Amended  SunTrust  Facility are limited to availability  under a
formula  predicated  upon multiples of EBITDA and gross margin  factors.  We are
precluded  from  declaring or paying any cash dividends and are required to meet
certain  affirmative  and  negative  covenants,  including  but not  limited  to
financial covenants.

         Simultaneously  with  the  Amended  SunTrust  Facility,  we sold  $10.0
million of our 2005 Notes.  Except for their October 31, 2005 maturity date, the
2005 Notes are substantially identical to our 12% Senior Subordinated Promissory
Notes due 2004 (the "2004  Notes").  The 2005  Notes  were sold with  detachable
6-1/2 year  warrants to purchase an  aggregate  of 372,892  shares of our Common
Stock at an exercise price of $6.65 per stock unit. In connection  with the sale
of the 2005 Notes,  certain financial covenants governing the 2004 Notes and the
2005 Notes were adjusted as of March 31, 1999 and prospectively and the exercise
price for 612,023  warrants issued in connection with the sale of the 2004 Notes
was reduced to $6.65 per stock unit.

         In January and February 2000,  the agreements  governing the 12% Senior
Subordinated  Promissory Notes and the Amended SunTrust Facility,  respectively,
were  amended to adjust  certain  financial  covenants  for the  quarter  ending
December 31, 1999 and prospectively.


                                       15
<PAGE>

         During the six months ended  December 31, 1999,  our capital  resources
included cash flows from operations and available  borrowing  capacity under the
Amended  SunTrust  Facility.  As of December 31, 1999, a total of $48.75 million
was  outstanding  under the Amended  SunTrust  Facility  with  interest at three
hundred fifty basis points above the applicable  London InterBank  Offering Rate
("LIBOR") (9.68% to 10.03% at December 31, 1999).

         We believe that cash flows from  operations  and  available  borrowings
under  the  Amended  SunTrust  Facility  will be  sufficient  to  fund  proposed
operations for at least the next twelve months.

         Working  Capital.  At June 30, 1999, we had negative working capital of
$455,000. At December 31, 1999, we had negative working capital of $2.4 million.

         Cash Flows from Operating Activities. For the six months ended December
31, 1998 and December 31, 1999,  net cash provided by operating  activities  was
$3.3 million and $4.3 million,  respectively.  The increase from the 1998 period
to the 1999 period of $932,000 is  primarily  due to an increase in the net loss
of $616,000 while  depreciation and amortization  increased by $1.5 million from
the 1998  period to the 1999  period and a $2.1  million  increase  in  accounts
receivable  in the 1998  period  compared  to a decrease of $333,000 in the 1999
period.

         Cash Flows from Investing Activities. For the six months ended December
31, 1998 and December 31, 1999, net cash used in investing  activities was $13.9
million  and  $11.0  million,  respectively.  These  investing  activities  were
primarily  attributable  to the  installation  and  direct  placement  costs and
acquisition of bulk CO2 systems.

         Cash Flows from Financing Activities. For the six months ended December
31, 1998 and December 31, 1999, cash flows provided by financing activities were
$10.4 million and $5.3 million,  respectively. For the six months ended December
31, 1998 and December 31, 1999,  net cash provided by financing  activities  was
primarily from the issuance of long-term debt.

Year 2000

         Our computer and other business  operating  systems were  unaffected by
the "Year 2000" problem,  having  successfully rolled over from 1999 to 2000. We
are also  unaware  of any Year  2000  issues  affecting  any of our  significant
business partners, suppliers or customers.

Inflation

         The modest levels of inflation in the general economy have not affected
our  results of  operations.  Additionally,  our  customer  contracts  generally
provide for annual  increases  in the monthly  rental rate based on increases in
the consumer  price index.  We believe that  inflation  will not have a material
adverse effect on our future results of operations.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         As discussed under  "Management's  Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources" above, as
of  December  31,  1999,  a total of $48.75  million was  outstanding  under the
Amended  SunTrust  Facility  with  interest at three  hundred fifty basis points
above the  applicable  90 day LIBOR rate (9.68% to 10.03% at December 31, 1999).
Based upon $48.75 million  outstanding  under the Amended  SunTrust  Facility at
December 31, 1999, our annual interest cost under the Amended SunTrust  Facility
would  increase by $488,000 for each one percent  increase in LIBOR (i.e.,  from
8.0% to 9.0%).

         In order to reduce our exposure to increases in LIBOR, and consequently
to increases in interest  payments,  on June 9, 1998 we entered into an interest
rate swap transaction (the "Swap") with SunTrust Bank, Atlanta, in the amount of
$10.0  million  (the  "Notional  Amount").  The  effective  date of the  Swap is
September 2, 1998 and it terminates on September 5, 2000.  Pursuant to the Swap,
we pay a fixed interest rate of 6% per annum and receive a LIBOR-based  floating
rate.  The  effect  of the Swap is to  neutralize  any  changes  in LIBOR on the
Notional  Amount.  If LIBOR  decreases below 6% during the period the Swap is in
effect,  interest  payments by us on the Notional Amount will be greater than if
we had not entered into the Swap, since by exchanging LIBOR for a fixed interest
rate,  we would not benefit from  falling  interest  rates on LIBOR,  a variable
interest  rate.  We do not enter into  speculative  derivative  transactions  or
leveraged swap transactions.
                                       16

<PAGE>

PART II.  OTHER INFORMATION

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

             (a)     Our Annual meeting of Shareholders  was held on December 2,
1999 (the "Annual Meeting").


             (b)     Edward M. Sellian, Robert Ranieri, Craig L. Burr, Robert L.
Frome, John A. Kerney,  Daniel Raynor and Richard D. Waters, Jr. were elected as
directors to serve until the next annual  meeting of the  shareholders  or until
their  successors are elected and qualified.  No other director's term of office
continued after the Annual Meeting.

             (c)(1)  Election of Directors:

                                 Number of                       Number of
                                 Votes For                    Votes Against

Edward M. Sellian                6,586,057                       165,985
Robert Ranieri                   6,587,607                       164,435
Craig L. Burr                    6,585,957                       166,085
Robert L. Frome                  6,587,407                       164,635
John A. Kerney                   6,586,257                       165,785
Daniel Raynor                    6,584,457                       167,585
Richard D. Waters, Jr.           6,583,317                       168,725

                (2)  Amendment of 1995 Stock Option Plan
<TABLE>
<CAPTION>

                     Number of          Number of          Number of            Number of
                     Votes For          Votes Against      Votes Abstaining     Non-Votes
                     ---------          -------------      ----------------     ---------

<S>                  <C>                   <C>                 <C>              <C>
                     3,295,366             999,457             45,595           2,411,624
</TABLE>


ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K.

             (a)  Exhibits.

                  10.1  -Second  Amendment  and Waiver to Amended  and  Restated
             Revolving  Credit  Agreement  dated as of February ___, 2000 by and
             among  the  Company,  SunTrust  Bank,  Bank  Austria  Creditanstalt
             Corporate Finance,  Inc., The Provident Bank, Bank  Leumi-Le-Israel
             B.M., IBJ Whitehall Business Credit Corporation and Hamilton Bank.

                  10.2 - Amendment  No. 4 to Senior  Subordinated  Note Purchase
             Agreement dated as of January ___, 2000 between the Company,  NuCo2
             Acquisition  Corp.,  Koch Compressed  Gases,  Inc. and Chase Equity
             Associates,  LLC, DK Acquisition  Partners,  L.P., Empire Insurance
             Company,  ORIX USA  Corporation,  PaineWebber  High Income Fund and
             SunTrust Banks, Inc.

                    27 - Financial Data Schedule.

             (b)    Reports on Form 8-K.

                    (1) No  reports on Form 8-K were  filed  during the  quarter
ended December 31, 1999.


                                       17
<PAGE>
                                   SIGNATURES

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


                                            NuCo2 Inc.


Dated:  February 11, 2000               By: /s/ Joann Sabatino
                                            --------------------------------
                                            Joann Sabatino
                                            Chief Financial Officer



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