<PAGE>   1
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-QSB

     (Mark One)
     [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
            For the quarterly period ended June 30, 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 0-19793

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

               DELAWARE                                          84-1169358
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)

      1675 Broadway, Suite 2150
           Denver, Colorado                                        80202
(Address of principal executive offices)                         (Zip code)

                                  (303)592-5555
                (Issuer's telephone number, including area code)

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

                           Yes  X           No
                               ---             ---

      As of July 30, 1999 there were 3,450,153 shares of the issuer's Common
Stock outstanding.

      Transitional Small Business Disclosure Format

                           Yes              No  X
                               ---             ---

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<PAGE>   2
<TABLE>
                           METRETEK TECHNOLOGIES, INC.

                                   FORM 10-QSB
                                TABLE OF CONTENTS

<CAPTION>
                                                                          Page
                                                                          ----
<S>       <C>                                                             <C>
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Unaudited Consolidated Balance Sheets -
               June 30, 1999 and December 31, 1998                          3

          Unaudited Consolidated Statements of Operations -
               For the Three Months Ended June 30, 1999 and
                    June 30, 1998
               For the Six Months Ended June 30, 1999 and
                    June 30, 1998                                           5

          Unaudited Consolidated Statements of Cash Flows -
               For the Six Months Ended June 30, 1999 and
                    June 30, 1998                                           6

          Notes to Unaudited Consolidated Financial Statements              7

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                               9


PART II.  OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Security Holders              20

Item 6.   Exhibits and Reports on Form 8-K                                 20

Signatures                                                                 21
</TABLE>

                                       2
<PAGE>   3
                                     PART I.
                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
                           METRETEK TECHNOLOGIES, INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                                           (UNAUDITED)

<CAPTION>
                                                                    JUNE 30,         DECEMBER 31,
                                                                      1999               1998
                                                                  -----------        ------------
<S>                                                               <C>                <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                      $   586,857        $   639,448
   Trade receivables, less allowance for doubtful accounts
      of $108,467 and $117,469, respectively                        3,885,782          5,006,914
   Other receivables                                                   26,886            152,084
   Inventories                                                      4,362,356          4,412,100
   Net assets of discontinued operations                              291,014            319,393
   Prepaid expenses and other current assets                          301,926            275,782
                                                                  -----------        -----------

      Total current assets                                          9,454,821         10,805,721
                                                                  -----------        -----------

PROPERTY, PLANT AND EQUIPMENT, AT COST:
   Equipment                                                        2,249,170          2,235,732
   Vehicles                                                            52,277             24,733
   Furniture and fixtures                                             504,390            486,857
   Land, building and improvements                                    714,892            714,423
                                                                  -----------        -----------
      Total                                                         3,520,729          3,461,745
   Less accumulated depreciation                                    1,858,917          1,686,721
                                                                  -----------        -----------

      Property, plant and equipment, net                            1,661,812          1,775,024
                                                                  -----------        -----------

OTHER ASSETS:
   Customer lists (net of accumulated amortization
     of $2,733,316 and $2,510,694, respectively)                    6,159,571          6,382,193
   Goodwill and other intangibles (net of accumulated
     amortization of $871,618 and $734,365, respectively)           3,026,819          3,204,606
   Other assets                                                       228,907            218,739
                                                                  -----------        -----------

      Total other assets                                            9,415,297          9,805,538
                                                                  -----------        -----------


TOTAL                                                             $20,531,930        $22,386,283
                                                                  ===========        ===========
</TABLE>

See notes to unaudited consolidated financial statements.

                                       3
<PAGE>   4
<TABLE>
                              METRETEK TECHNOLOGIES, INC. AND SUBSIDIARIES
                                       CONSOLIDATED BALANCE SHEETS
                                               (UNAUDITED)

<CAPTION>
                                                                         JUNE 30,           DECEMBER 31,
                                                                           1999                 1998
                                                                       ------------         ------------
<S>                                                                    <C>                  <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                    $    367,382         $    720,459
   Accrued and other liabilities                                          1,091,154            1,055,372
   Current maturities of capital lease obligations                            3,691                4,507
                                                                       ------------         ------------

      Total current liabilities                                           1,462,227            1,780,338
                                                                       ------------         ------------

LONG-TERM NOTES PAYABLE                                                   2,652,203            3,161,702
                                                                       ------------         ------------

DEPOSITS AND NON-CURRENT CAPITAL
   LEASE OBLIGATIONS                                                          5,000                5,342
                                                                       ------------         ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Redeemable preferred stock - Series A, $.01 par value;
      authorized, 1,000,000 shares; none issued and outstanding
   Redeemable preferred stock - Series B, $.01 par value;
      authorized, 1,000,000 shares; none issued and outstanding
   Redeemable preferred stock - Series C, $.01 par value;
      authorized, 500,000 shares; none issued and outstanding
   Common stock, $.01 par value; authorized, 25,000,000 shares;
      issued and outstanding, 3,461,453 and 3,489,181 shares,
      respectively                                                           34,615               34,892
   Additional paid-in capital                                            38,870,430           38,930,724
   Accumulated other comprehensive income (loss)                             (4,098)               6,657
   Accumulated deficit                                                  (22,488,447)         (21,533,372)
                                                                       ------------         ------------

      Total stockholders' equity                                         16,412,500           17,438,901
                                                                       ------------         ------------


TOTAL                                                                  $ 20,531,930         $ 22,386,283
                                                                       ============         ============
</TABLE>

See notes to unaudited consolidated financial statements.

                                       4
<PAGE>   5
<TABLE>
                                        METRETEK TECHNOLOGIES, INC. AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENTS OF OPERATIONS
                                                         (UNAUDITED)

<CAPTION>
                                                           THREE MONTHS ENDED                        SIX MONTHS ENDED
                                                     ------------------------------          -------------------------------
                                                      JUNE 30,            JUNE 30,             JUNE 30,            JUNE 30,
                                                        1999                1998                 1999                1998
                                                     ----------          ----------          -----------          ----------
<S>                                                  <C>                 <C>                 <C>                  <C>
REVENUES:
   Natural gas measurement sales and services        $4,937,494          $4,245,350          $ 9,892,164          $8,695,146
   Other                                                  7,254              17,820               18,111              39,661
                                                     ----------          ----------          -----------          ----------
      Total revenues                                  4,944,748           4,263,170            9,910,275           8,734,807
                                                     ----------          ----------          -----------          ----------

COSTS AND EXPENSES:
   Cost of measurement sales and services             3,169,534           2,743,626            6,830,257           5,639,097
   General and administrative                           783,963             934,582            1,650,727           1,825,154
   Selling, marketing and service                       568,277             356,470            1,039,120             664,229
   Depreciation and amortization                        317,684             239,634              636,522             476,418
   Research and development                             289,224             237,821              563,867             451,364
   Interest, finance charges and other                   68,101              72,186              144,857              74,712
                                                     ----------          ----------          -----------          ----------
      Total costs and expenses                        5,196,783           4,584,319           10,865,350           9,130,974
                                                     ----------          ----------          -----------          ----------

LOSS FROM CONTINUING
   OPERATIONS BEFORE TAXES                             (252,035)           (321,149)            (955,075)           (396,167)

INCOME TAXES                                               --                  --                   --                  --
                                                     ----------          ----------          -----------          ----------

LOSS FROM CONTINUING
  OPERATIONS                                           (252,035)           (321,149)            (955,075)           (396,167)
                                                     ----------          ----------          -----------          ----------

INCOME (LOSS) FROM
  DISCONTINUED OPERATIONS                                  --               (64,362)                --                27,849
                                                     ----------          ----------          -----------          ----------

NET LOSS                                             $ (252,035)         $ (385,511)         $  (955,075)         $ (368,318)
                                                     ==========          ==========          ===========          ==========

NET INCOME (LOSS) PER BASIC
   AND DILUTED COMMON SHARE:
   Continuing operations                             $    (0.07)         $    (0.09)         $     (0.27)         $    (0.12)
   Discontinued operations                                 0.00               (0.02)                0.00                0.01
                                                     ----------          ----------          -----------          ----------

NET LOSS PER BASIC AND
   DILUTED COMMON SHARE                              $    (0.07)         $    (0.11)         $     (0.27)         $    (0.11)
                                                     ==========          ==========          ===========          ==========

WEIGHTED AVERAGE BASIC AND
  DILUTED COMMON SHARES
  OUTSTANDING                                         3,472,583           3,383,666            3,474,031           3,234,143
                                                     ==========          ==========          ===========          ==========
</TABLE>

See notes to unaudited consolidated financial statements.

                                       5
<PAGE>   6
<TABLE>
                         METRETEK TECHNOLOGIES, INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (UNAUDITED)

<CAPTION>
                                                                       SIX MONTHS ENDED
                                                                           JUNE 30,
                                                                ------------------------------
                                                                   1999                1998
                                                                ----------          ----------
<S>                                                             <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                     $ (955,075)         $ (368,318)
   Adjustments to reconcile net loss to net cash
     provided (used) by continuing operations:
      Income from discontinued operations                             --               (27,849)
      Depreciation and amortization                                636,522             476,418
      Stock plan compensation expense                                 --                77,664
      Loss (gain) on disposal of property, plant
       and equipment                                                   417              (3,712)
   Changes in other assets and liabilities:
      Trade receivables                                          1,121,132             246,805
      Inventories                                                   49,744            (570,275)
      Other current assets                                          99,054             (54,141)
      Other noncurrent assets                                        3,980             (12,090)
      Accounts payable                                            (353,077)             70,720
      Accrued and other liabilities                                 35,782            (343,187)
                                                                ----------          ----------
      Net cash provided (used) by continuing operations            638,479            (507,965)
      Net cash used by discontinued operations                      (6,225)            (56,163)
                                                                ----------          ----------
   Net cash provided (used) by operating activities                632,254            (564,128)
                                                                ----------          ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property, plant and equipment                     (121,417)            (79,009)
   Acquisitions                                                       --            (1,485,618)
   Proceeds from sale of property, plant and equipment               7,800               8,431
                                                                ----------          ----------
      Net cash used by investing activities                       (113,617)         (1,556,196)
                                                                ----------          ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings on notes payable to bank                                --               881,773
   Payments on notes payable to bank                              (509,499)            (49,545)
   Issuance of common stock                                           --                77,664
   Repurchase of common stock                                      (60,571)               --
   Payments on capital lease obligations                            (1,158)             (2,758)
                                                                ----------          ----------
      Net cash provided (used) by financing activities            (571,228)            907,134
                                                                ----------          ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                          (52,591)         (1,213,190)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                   639,448           1,938,554
                                                                ----------          ----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                      $  586,857          $  725,364
                                                                ==========          ==========
</TABLE>

See notes to unaudited consolidated financial statements.

                                       6
<PAGE>   7
                  METRETEK TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                    As of June 30, 1999 and December 31, 1998
          For the Three Month Periods Ended June 30, 1999 and 1998 and
             For the Six Month Periods Ended June 30, 1999 and 1998


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     On June 8, 1999, pursuant to stockholder approval, the Company filed an
amendment to its Restated Certificate of Incorporation, as amended, changing its
name to "Metretek Technologies, Inc." As used in these notes, references to the
"Company" mean Metretek Technologies, Inc. and its wholly owned subsidiaries:
Metretek, Incorporated (referred to herein as "Metretek") and Southern Flow
Companies, Inc. (referred to herein as "Southern Flow").

     The accompanying consolidated financial statements include the accounts of
Metretek Technologies, Inc. and its wholly owned subsidiaries and have been
prepared pursuant to rules and regulations of the Securities and Exchange
Commission. The accompanying consolidated financial statements and notes thereto
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1998.

     In the opinion of the Company's management, all adjustments (all of which
are normal and recurring) have been made which are necessary for a fair
presentation of the consolidated financial position of the Company and its
subsidiaries as of June 30, 1999 and the consolidated results of their
operations and cash flows for the three and six month periods ended June 30,
1999 and 1998.

2.   COMPREHENSIVE INCOME (LOSS)

     The Company's comprehensive loss for the six months ended June 30, 1999 and
1998 was $965,830 and $368,318, respectively. The Company's comprehensive loss
includes net loss and foreign currency translation adjustments.

3.   COMPUTER SOFTWARE COSTS

     In March 1998, the Accounting Standards Executive Committee issued
Statement of Position (SOP) No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use", which the Company adopted
effective January 1, 1999. SOP No. 98-1 requires that the Company capitalize
certain costs incurred in connection with developing or obtaining software for
internal use. The adoption of SOP No. 98-1 did not have a material effect on the
financial position or results of operations of the Company.

                                       7
<PAGE>   8
4.   SEGMENT INFORMATION

     The Company has two reportable business segments: automated energy data
management and natural gas measurement services. The operations of the Company's
automated energy data management segment are conducted by Metretek. Metretek's
manufactured products fall into three categories: remote data collection
products; electronic corrector products; and application-specific products.
Metretek also provides energy data collection and management services and
post-sale support services for its manufactured products.

     The operations of the Company's natural gas measurement services segment
are conducted by Southern Flow. Southern Flow's services include on-site field
services, chart processing and analysis, laboratory analysis, and data
management and reporting. These services are provided principally to customers
involved in natural gas production, gathering, transportation and processing.

     The Company evaluates the performance of its operating segments based on
income (loss) before income taxes, nonrecurring items and interest income and
expense. Intersegment sales are not significant.

     Summarized financial information concerning the Company's reportable
segments is shown in the following table. The "Other" column includes corporate
related items, results of insignificant operations and, as it relates to segment
profit, income and expense not allocated to reportable segments.

<TABLE>
<CAPTION>
                           AUTOMATED     NATURAL GAS
                          ENERGY DATA    MEASUREMENT
                           MANAGEMENT     SERVICES       OTHER         TOTAL
                          -----------    -----------   ---------    ----------
<S>                        <C>           <C>           <C>          <C>
SIX MONTHS ENDED:
-----------------

JUNE 30, 1999
   Revenues                $4,275,525    $5,616,639    $  18,111    $9,910,275
   Segment profit (loss)     (717,867)      534,062     (771,270)     (955,075)

JUNE 30, 1998
   Revenues                $3,241,355    $5,453,791    $  39,661    $8,734,807
   Segment profit (loss)      (98,090)      447,807     (745,884)     (396,167)
</TABLE>

                                       8
<PAGE>   9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

INTRODUCTION

     The following discussion of the results of operations for the Company for
the six month periods ended June 30, 1999 and 1998 and of the consolidated
financial condition of the Company as of June 30, 1999 should be read in
conjunction with the Company's consolidated financial statements and related
notes thereto included elsewhere herein. As used in this Item, references to the
"Company" mean Metretek Technologies, Inc. and its wholly owned subsidiaries:
Metretek, Incorporated (referred to herein as "Metretek") and Southern Flow
Companies, Inc. (referred to herein as "Southern Flow").

RESULTS OF OPERATIONS

     The following table sets forth selected information related to the
Company's primary business segments and is intended to assist the reader in an
understanding of the Company's results of operations for the periods presented.

<TABLE>
<CAPTION>
                                                  Six Months Ended
                                                       June 30,
                                               ----------------------
                                                1999            1998
                                                ----            ----
                                            (dollar amounts in thousands)
<S>                                            <C>             <C>
REVENUES:
    Southern Flow                              $5,617          $5,454
    Metretek                                    4,275           3,241
    Other                                          18              40
                                               ------          ------
    Total                                      $9,910          $8,735
                                               ======          ======
GROSS PROFIT:
    Southern Flow                              $1,365          $1,308
    Metretek                                    1,697           1,748
                                               ------          ------
    Total                                      $3,062          $3,056
                                               ======          ======
SEGMENT PROFIT (LOSS):
    Southern Flow                              $  534          $  448
    Metretek                                     (718)            (98)
    Other                                        (771)           (746)
                                               ------          ------
    Loss from continuing operations              (955)           (396)
    Income from discontinued operations          --                28
                                               ------          ------
    Total                                      $ (955)         $ (368)
                                               ======          ======
</TABLE>

                                       9
<PAGE>   10
    The Company has two reportable business segments: automated energy data
management; and natural gas measurement services. The operations of the
Company's automated energy data management segment are conducted by Metretek.
Metretek's manufactured products fall into three categories: remote data
collection products; electronic corrector products; and application-specific
products. Metretek also provides energy data collection and management services
and post-sale support services for its manufactured products.

    The operations of the Company's natural gas measurement services segment are
conducted by Southern Flow. Southern Flow's services include on-site field
services, chart processing and analysis, laboratory analysis, and data
management and reporting. These services are provided principally to customers
involved in natural gas production, gathering, transportation and processing.

    The Company evaluates the performance of its operating segments based on
income (loss) before taxes, nonrecurring items and interest income and expense.
Other profit (loss) amounts in the table above include corporate related items
and income and expense not allocated to its operating segments.

    During 1998, the Company decided to discontinue its business segment engaged
in acquiring or financing the acquisition of natural gas assets through private
programs. The 1998 financial statements have been reclassified to exclude the
operating results of this segment from continuing operations and to account for
this segment as discontinued operations. The following discussion relates only
to the Company's continuing operations.

SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998

     Revenues. The Company's consolidated revenues for the six months ended June
30, 1999 increased $1,175,468, or 13%, compared to the same period in 1998, due
to an increase in revenues by each of the Company's two operating segments.
Southern Flow's revenues increased $162,848, or 3%, for the six months ended
June 30, 1999, compared to the same period in 1998. Metretek's revenues for the
six months ended June 30, 1999 increased $1,034,170, or 32%, compared to the
same period in 1998, consisting of an increase in domestic sales of $1,098,428,
offset in part by a decrease in international sales of $64,258. The increase in
Metretek's domestic sales was the net result of the following key factors: (i)
an increase in sales of the electronic corrector product line acquired from
American Meter in May 1998; (ii) an increase in sales of Metretek's remote data
collection products and systems, due to an overall increase in domestic demand;
and (iii) a decrease in Metretek's circuit board assembly sales. The decrease in
international sales is attributable to a decrease in sales of Metretek's remote
data collection products and systems in the United Kingdom and in Argentina. A
comparison of Metretek's current domestic and international product mix is as
follows:

                                       10
<PAGE>   11
<TABLE>
<CAPTION>
                                 Six Months Ended June 30,
                                 -------------------------
                                    1999           1998
                                    ----           ----
                               (dollar amounts in thousands)
<S>                                <C>      <C>   <C>       <C>
   Remote data collection          $2,522   59%   $2,481    76%
     products and systems
   Electronic corrector products    1,389   32%      153     5%
   Circuit board assembly sales       364    9%      607    19%
                                   ------         ------

   Total                           $4,275         $3,241
                                   ======         ======
</TABLE>


     Costs and Expenses. Costs of sales and services include materials, labor,
personnel and related overhead costs incurred by the Company to manufacture
products and provide services. Cost of sales and services for the six months
ended June 30, 1999 increased $1,191,160, or 21%, compared to the same period in
1998. Metretek's cost of sales and services for the six months ended June 30,
1999 increased $1,085,238, or 73%, compared to the same period in 1998. This
increase was due primarily to higher personnel and related overhead costs
associated with the integration and manufacturing of the electronic corrector
product line which was acquired by Metretek in May 1998. Although Metretek's
revenues for the six months ended June 30, 1999 increased approximately 32%
compared to the same period in 1998, Metretek's overall gross profit margin
decreased from 53.9% to 39.7% compared to the same period in 1998. Southern
Flow's cost of sales and services for the six months ended June 30, 1999
increased $105,922, or 3%, compared to the same period in 1998. Southern Flow's
gross profit margin for the six months ended June 30, 1999 increased slightly
from 24.0% to 24.3% compared to the same period in 1998, which is within the
range of normal fluctuations.

     General and administrative expenses include personnel and related overhead
costs for the support and administration functions of the Company. General and
administrative expenses for the six months ended June 30, 1999 decreased
$174,427, or 10%, compared to the same period in 1998, due principally to the
effect of the following factors: (i) a decrease in expenses of Metretek of
approximately $69,000 attributable to overall cost savings at Metretek and Sigma
VI resulting from combining certain administrative functions; (ii) decreases in
general and corporate expenses of approximately $67,000 primarily due to the
elimination of compensation costs associated with the Company's 1998 Employee
Stock Purchase Plan, which was terminated in July 1998; and (iii) a decrease in
expenses of Southern Flow of approximately $38,000 primarily attributable to
reduced state and franchise taxes in 1999 compared to 1998.

     Selling, marketing and service expenses consist of personnel and related
overhead costs, including commissions for the sale and marketing activities of
the

                                       11
<PAGE>   12
Company, together with advertising and promotion costs. Selling, marketing and
service expenses for the six months ended June 30, 1999 increased $374,891, or
56%, compared to the same period in 1998, all of which related to activities at
Metretek. The increase in these expenses was due principally to an increase in
the number of sales and customer service personnel in 1999 compared to the same
period in 1998 primarily associated with the integration of the electronic
corrector product line.

     Depreciation and amortization expenses include the depreciation and
amortization of the Company's real property, customer list, goodwill and
capitalized software development costs. Depreciation and amortization expenses
for the six months ended June 30, 1999 increased $160,104, or 34%, compared to
the same period in 1998. This increase was due to additional goodwill
amortization costs related to Metretek's acquisitions in the second quarter of
1998 as well as increased depreciation expenses at both Metretek and Southern
Flow.

     Research and development expenses include personnel and related overhead
costs for product and service development, enhancements, and upgrades. Research
and development expenses for the six months ended June 30, 1999 increased
$112,503, or 25%, compared to the same period in 1998, primarily due to
increased personnel costs.

     Interest, finance charges and other expenses include interest and finance
charges on the Company's credit facility as well as other non-operating
expenses. Interest, finance charges and other expenses for the six months ended
June 30, 1999 increased $70,145, or 94%, compared to the same period in 1998.
The increase reflects interest expense on additional borrowings in 1999 compared
to 1998 in order to fund Metretek's acquisitions in the second quarter of 1998,
borrowings to finance increases in Metretek's inventory and accounts receivable,
and the amortized portion of capitalized finance charges incurred in 1998 to
obtain the Company's current credit facility.

SEASONALITY AND CYCLICALITY

    Metretek historically derives substantially all of its revenues from sales
of its products and services to the utility industry. Metretek has experienced
variability of operating results on both an annual and a quarterly basis due
primarily to utility purchasing patterns and delays of purchasing decisions as a
result of mergers and acquisitions in the utility industry and changes or
potential changes to the federal and state regulatory frameworks within which
the utility industry operates. The utility industry, both domestic and foreign,
is generally characterized by long budgeting, purchasing and regulatory process
cycles that can take up to several years to complete. Metretek's utility
customers typically issue requests for quotes and proposals, establish
committees to evaluate the purchase, review different technical options with
vendors, analyze performance and cost/benefit justifications and perform a
regulatory review, in addition to applying the normal budget approval process
within a utility. Purchases of Metretek's products are, to a substantial extent,
deferrable in the event that utilities reduce capital expenditures as a result
of mergers and acquisitions, pending or

                                       12
<PAGE>   13
unfavorable regulatory decisions, poor revenues due to weather conditions,
rising interest rates or general economic downturns, among other factors.

     Based upon the discussion set forth in this item, the Company believes that
future revenues, expenses and results of operations are likely to vary
significantly from quarter to quarter. As a result, quarterly comparisons of
operating results are not necessarily meaningful or indicative of future
performance.

FINANCIAL CONDITION AND LIQUIDITY

     The Company requires capital principally for (i) the financing of inventory
and accounts receivable, (ii) research and development expenses, (iii) capital
expenditures for property and equipment and software development, and (iv) the
funding of possible future acquisitions.

     Net cash provided by operating activities was approximately $632,000 for
the six months ended June 30, 1999, that was the net result of the following:
(i) approximately $318,000 of cash used to fund continuing operations, before
changes in assets and liabilities; (ii) approximately $956,000 of cash provided
by changes in working capital and other asset and liability accounts; and (iii)
approximately $6,000 of cash used by discontinued operations.

     The Company plans to continue research and development efforts to enhance
its existing products and develop new products. The Company anticipates that its
research and development costs in 1999 will be approximately $1,100,000, all of
which will relate to Metretek's business. Research and development expenses in
the amount of $563,867 were incurred in the six month period ended June 30,
1999.

     The Company anticipates capital expenditures in 1999 of approximately
$275,000, primarily for production and laboratory equipment, computer software
and hardware. Capital expenditures for the six month period ended June 30, 1999
totaled $121,417.

     On April 14, 1998, the Company and its wholly owned subsidiaries entered
into a loan and security agreement (the "Loan Agreement") with a commercial bank
(the "Lender") providing for a combined $5,000,000 credit facility consisting of
loans (the "Loans") and letters of credit subject to limitations described
below. The Loan Agreement provides for daily advances in the form of Loans to
fund capital requirements, and daily paydowns on outstanding balances of the
Loans from collection of customer accounts receivable. The Company makes monthly
interest payments computed at prime plus 1% (8.75% at June 30, 1999) on
outstanding balances of the Loans. The Loans mature on March 14, 2001.

     The Loans are secured by the tangible and intangible assets of the Company,
Southern Flow, and Metretek, including equipment, inventory, receivables, and
cash deposits, and the pledge of the shares of the Company's subsidiaries. The
Loan

                                       13
<PAGE>   14
Agreement requires the Company to maintain a minimum tangible net worth, a
maximum debt to tangible net worth ratio, minimum annual net income, a minimum
debt service coverage ratio, and contains other standard covenants related to
operations of the Company, including prohibitions on the payment of dividends
and the issuance or repurchase of securities (with certain exceptions) without
the Lender's consent.

     Borrowings on the Loans are limited to the sum of 80% of eligible accounts
receivable of Southern Flow and Metretek and 50% of raw materials and finished
goods inventory (up to a combined maximum of $1,500,000) of
Southern Flow and Metretek. At June 30, 1999, the Company had a combined
$3,441,762 Loan availability, of which $2,052,203 had been borrowed by Southern
Flow and Metretek, leaving $1,389,559 in unused Loan availability.

     In September 1998, the Board of Directors of the Company adopted a stock
repurchase plan (the "Stock Repurchase Plan") pursuant to which the Company is
authorized to purchase up to approximately 7% of its outstanding Common Stock in
open market transactions, from time to time as management deems appropriate, if
the market price of the Company's stock remains below certain levels. The
Company may use the repurchased shares for employee benefit plans and other
corporate purposes, may hold the repurchased shares in treasury or may retire
the purchased shares. Through June 30, 1999, the Company had repurchased 84,816
shares of its Common Stock at an average price of $2.23 per share.

     Based on the Company's current plans and assumptions, management believes
that the Company's capital resources, including cash and cash equivalents,
amounts available under existing credit facilities and funds generated from
continuing operations, and additional proceeds from the disposition of the
remaining assets of its discontinued operations, will be sufficient to meet its
currently anticipated cash needs, including its working capital needs, capital
commitments and debt service requirements, for at least the next twelve months.
Additionally, the Company may also use a portion of its capital resources to
acquire businesses, products or technologies or to repurchase its shares of
Common Stock. However, the Company may require additional funds to support its
working capital requirements or for other purposes. Depending upon the Company's
financial condition, including its liquidity needs and business activities, the
conditions in the equity, debt and other financial markets, as well as other
factors, the Company may from time to time seek to raise additional funds from
the proceeds of public or private equity financing, debt financing, the sale of
assets or from other sources. There can be no assurance that such additional
funds will be available to the Company or that, if available, such funds can be
obtained on terms favorable to the Company.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which, as amended by SFAS No. 137, is

                                       14
<PAGE>   15
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
SFAS No. 133 requires that all derivatives be recognized at fair value in the
statement of financial position, and that the corresponding gains or losses be
reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that exists.
The Company is currently evaluating the impact SFAS No. 133 will have on its
financial statements, if any.

     In March 1998, the Accounting Standards Executive Committee issued
Statement of Position (SOP) No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use", which the Company adopted
effective January 1, 1999. SOP No. 98-1 requires that the Company capitalize
certain costs incurred in connection with developing or obtaining software for
internal use. The adoption of SOP No. 98-1 did not have a material effect on the
financial position or results of operations of the Company.

YEAR 2000 COMPLIANCE

     The "Year 2000 issue," which presents potential risks and uncertainties to
virtually all businesses, is the result of computer programs that use two digits
rather than four to define the applicable year. Any computer programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This situation could result in system failures or
miscalculations causing disruptions to operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar or normal business activities.

     The Company has nearly completed its evaluation and assessment of its
information technology and non-information technology systems, including
software, hardware and equipment that may be potentially affected by the Year
2000 issue. The Company has and will continue to modify and replace portions of
its existing information technology systems so they will function properly with
respect to dates in the year 2000 and thereafter. The Company believes that any
Year 2000 issues with respect to its internal information technology systems
have been substantially resolved, and the remainder will be resolved, by either
internal software programming adjustments or by the installation of Year 2000
compliant information systems. The Company expects to complete substantially all
modifications and replacements required for Year 2000 compliance in its
information systems prior to November 1, 1999. The Company is also in the
process of assessing non-information technology system containing embedded chips
that may be Year 2000 sensitive to identify operating systems and equipment that
are necessary or critical for continued operations. The Company has tested and
will continue to test essential operating systems and equipment containing
embedded chips for Year 2000 compliance and to reprogram or replace such
equipment as appropriate. Based upon its assessments to date, the Company is not
aware of any significant Year 2000 issues in its control that will not be
resolved prior to the Year 2000.

                                      15
<PAGE>   16
     The Company has also extensively tested the technologies it sells for Year
2000 issues. The Company believes that the technologies and services it
currently sells are Year 2000 compliant, but the Company intends to continue
testing to address any Year 2000 issues that may arise. The Company has made
available Year 2000 modifications, upgrades and replacement technology to its
customers that purchased prior technologies that were not Year 2000 compliant.
Metretek's website includes a listing of products that Metretek has identified
as either Year 2000 compliant, non-compliant, or compliant with qualifications
as noted. The Company intends to make all requisite modifications, replacements
and patches in order to resolve any Year 2000 issues that arise with respect to
technologies and services sold by the Company.

     The Company believes that the greatest risk from Year 2000 issues will
result from the failure of third parties, with which the Company has material
relationships, to become Year 2000 compliant. The Company relies on third party
service providers for services such as telecommunications, internet services,
utilities and other key services. Interruption of these services due to Year
2000 issues could materially adversely effect the Company's operations. The
Company has communicated with certain third parties, including vendors,
suppliers, service providers and customers, that the Company believes are
critical to its business operations and with respect to which the Company
believes Year 2000 issues could materially affect the Company's business.
Although the Company is not presently aware of any significant vendor, supplier,
service provider or customer that will have Year 2000 issues material to the
Company's operations, many businesses are resistant to providing any written or
binding assurances that they will be Year 2000 compliant. In addition, the
Company has no control over Year 2000 compliance programs by third parties.
Accordingly, the Company cannot provide any assurance that the systems of its
essential vendors, suppliers, service providers or customers will be Year 2000
compliant. The lack of Year 2000 compliance by such third parties could have a
material adverse impact on the Company's results of operations, financial
condition and business. If any such third parties (other than customers) are not
Year 2000 compliant and such non-compliance had or is likely to have a material
adverse effect on the Company, then the Company expects to utilize alternate
vendors, suppliers and service providers (subject to availability) which are
Year 2000 compliant. The Company intends to have in inventory a reserve of raw
materials, which it believes is sufficient to avoid a disruption in its
manufacturing process, to minimize the risk associated with third-party
suppliers experiencing Year 2000 issues. However, the loss or shortage of supply
in any critical component of inventory, due to supplier Year 2000 issues or
otherwise, could materially and adversely affect the Company's manufacturing
operations.

     The Company expects total incremental costs (other than internal labor
time) of becoming Year 2000 compliant not to exceed approximately $150,000, of
which the Company has spent approximately $122,000 through June 30, 1999. The
Company is funding the costs associated with Year 2000 compliance through
operating cash flows and does not expect to defer any significant information
technology projects in order to become Year 2000 compliant. The Company intends
to capitalize and depreciate costs

                                       16
<PAGE>   17
which represent investments in new or upgraded technology that qualify as
capital investments and to expense all other costs as incurred.

     It is difficult to predict with a high degree of accuracy, and impossible
to guaranty, what impact any Year 2000 issues will have on the Company. The
Company is in the process of attempting to assess the most reasonably likely
worst case Year 2000 scenario, although the Company believes that it, as most
businesses, will not be able to identify such scenario with any meaningful
degree of certainty, given all the risks and uncertainties related to the Year
2000 issue, many of which are outside of its control. The Company currently
anticipates a minimal level of disruption, inconveniences and inefficiencies in
its operations as a result of systems failures, primarily related to
non-compliance by third parties. The Company believes the risks are greatest
with respect to electric power and water supply, telecommunications and
transportation. Outages in any of these supplies could prevent the Company from
providing its services in measuring and monitoring the energy consumption of its
customers. Even if the Company could perform its services, these outages could
prevent or delay the delivery of the information results to its customers. If
the Company is unable to provide such services, then its revenues and results of
operation, will be materially reduced. Year 2000 issues may also cause temporary
delays in the delivery of raw materials and supplies, but the Company does not
expect any such delays to materially affect the Company's operations. Other
possible consequences include, but are not limited to, interruption of banking
and commercial payment systems, invoicing errors, collection difficulties,
inability to process customer transactions or otherwise engage in similar normal
business activities, which events are beyond the reasonable ability of the
Company to assess or control. There can be no assurance that Year 2000 issues
will not be material to the Company, or that the cost of interruptions with the
systems of third parties will not have a material adverse effect on the
Company's business, financial condition or results of operations.

     Although the Company has not created a specific contingency plan to address
the most reasonably likely worst case Year 2000 scenario, the Company is in the
process of developing contingency plans for certain Year 2000 problems, such as
identifying alternate vendors, suppliers and service providers, identifying
alternative methods for transmitting energy measurement and monitoring
information to its customers and preparing manual back-up methods for certain
software-intensive operations. However, as the Company continues to assess the
Year 2000 issue, in the event management believes it is warranted, the Company
will develop a specific Year 2000 "worst case" contingency plan. The Company
will continually refine its contingency plans throughout 1999 as additional
information becomes available.

     This item discussing Year 2000 issues contains forward-looking statements.
The costs and anticipated completion dates for Year 2000 compliance by the
Company and the estimated impact of Year 2000 issues on the Company are based
upon management's best estimates at this time, which were derived utilizing
numerous assumptions as to future events and third party activities, including
the continued availability of certain resources, third party modifications plans
and other factors, and

                                       17
<PAGE>   18
may be updated from time to time as additional information becomes available.
However, the Company cannot guarantee that these estimates will be achieved, and
actual results could differ materially from those anticipated. Specific factors
that may cause such material differences include, but are not limited to, the
availability and costs of Year 2000 compliant technology, the ability to
identify and correct all potential Year 2000 sensitive issues, the ability of
essential third parties to bring their systems into Year 2000 compliance, the
level of Year 2000 disruptions experienced by the Company's vendors, suppliers,
service providers and customers, the success of any required contingency actions
and similar uncertainties.

     The Year 2000 statements in this item, as well as other Company disclosures
regarding Year 2000 issues, are intended to constitute "Year 2000 Readiness
Disclosures" under the Year 2000 Information and Readiness Disclosure Act.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Form 10-QSB contains, under "Item 2, Management's Discussion and
Analysis of Financial Condition and Results of Operations", as well as other
parts of this Form 10-QSB, certain forward-looking statements within the meaning
of and made pursuant to the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. From time to time, the Company may publish or otherwise
make available forward-looking statements of this nature. Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events or performance, and underlying assumptions and other statements
which are other than statements of historical facts. When used in this Form
10-QSB, the words "may", "could", "will", "project", "intend", "continue",
"believe", "anticipate", "estimate", "expect" and similar predictive, future
tense or forward-looking terminology, are intended to identify forward-looking
statements. Examples of forward-looking statements include statements regarding,
among other matters, (1) the Company's plans, intentions, beliefs and
expectations with respect to its future prospects, including its products and
services, its business and growth strategies, its discontinued operations; (2)
industry trends, competitive conditions and market conditions, segments and
trends; (3) expected capital expenditures and research and development costs;
(4) the sufficiency of funds from operations and available borrowings to meet
the Company's future working capital and capital expenditure needs; and (5) the
Company's plans, intentions, beliefs and expectations with respect to Year 2000
issues.

     Such forward-looking statements are based on the current plans, intentions,
beliefs and expectations of management as well as assumptions made by and
information currently available to management. Forward-looking statements are
not guarantees of future performance or events but are subject to, and are
qualified by, risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by those statements. These risks and
uncertainties include, but are not limited to, (1) changes in the energy
industry in general and the natural gas industry in particular; (2) the capital
resources, technological requirements and internal

                                       18
<PAGE>   19
business plans of the natural gas utilities industry; (3) technological and
market changes in the natural gas industry; (4) the complexity, uncertainty and
time constraints associated with the development and market acceptance of new
product and service designs and technologies; (5) general economic and business
conditions; (6) the Company's ability to successfully implement, and the
market's acceptance of, Metretek's "TotalPlan(TM)" and "TotalEnergyPlan (TM)"
offerings; (7) the Company's ability to successfully integrate and utilize the
product lines and business acquired from American Meter, including the risks
that revenues from the acquired business could be lower than expected and that
related costs could be higher than expected; (8) the impact and timing of the
deregulation of the various energy markets; (9) utility purchasing patterns and
delays and potential changes to the federal and state regulatory frameworks
within which the utility industry operates; (10) risks and uncertainties
associated with Year 2000 issues (See "Year 2000 Compliance" above); (11)
fluctuations in quarterly operating results; (12) effects of a change in product
mix on the Company's expected gross margins and net income; (13) the effects of
any corporate acquisitions, dispositions or other corporate transactions; (14)
risks associated with international operations; (15) reliance on strategic
alliances; (16) the amount of additional proceeds from the disposition of the
remaining net assets and other revenues from discontinued operations; (17) the
receipt and timing of future customer orders; (18) the impact of competitive
factors affecting the Company's operations, including the introduction of
competitor's products, services and technologies by competitors; (19) unexpected
events affecting the Company's ability to obtain funds from operations, debt or
equity to finance operations, pay interest and other obligations, and fund
needed capital expenditures and other investments; (20) the Company's ability to
protect its proprietary information and technology; (21) the impact of current
and future laws and government regulations affecting the energy industry in
general and the natural gas industry in particular; and (22) other risks and
uncertainties that are discussed in this Form 10-QSB or that are discussed from
time to time in the Company's other reports and filings with the Securities and
Exchange Commission, including the factors described under "Additional Factors
That May Affect The Company's Future Results" in the Company's Form 10-KSB for
the fiscal year ended December 31, 1998. The Company does not intend, and
assumes no responsibility, to update any oral or written forward-looking
statements made by the Company.

                                       19
<PAGE>   20
                                    PART II.
                                OTHER INFORMATION

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

     At the annual meeting of stockholders of the Company, held on June 7, 1999,
the following proposals were submitted to and approved by the stockholders:

Proposal 1:  To elect three directors of the Company, each for a three year term
             expiring at the 2002 Annual Meeting of Stockholders.

<TABLE>
<CAPTION>
                                           FOR         WITHHOLD
                                           ---         --------
<S>                                     <C>            <C>
                 A. Bradley Gabbard     2,659,865      513,333
                 Ronald W. McKee        2,741,213      431,985
                 Albert F. Thomasson    2,662,415      510,783
</TABLE>

Proposal 2:  To adopt and approve an amendment to the Company's Restated
             Certificate of Incorporation, as amended, to change the name of the
             Company to Metretek Technologies, Inc.

<TABLE>
<CAPTION>
                    FOR          AGAINST        ABSTAIN
                    ---          -------        -------
<S>              <C>             <C>            <C>
                 2,760,314       408,465         4,419
</TABLE>

Proposal 3:  To ratify the appointment of Deloitte & Touche LLP as the Company's
             independent auditors for the fiscal year ending December 31, 1999.

<TABLE>
<CAPTION>
                    FOR          AGAINST        ABSTAIN
                    ---          -------        -------
<S>              <C>             <C>            <C>
                 2,763,390       405,100         4,708
</TABLE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          27.1     Financial Data Schedule

     (b)  The Company filed a report on Form 8-K with the Securities and
          Exchange Commission on April 14, 1999 (Items 5 and 7), reporting the
          Company's written response to a stockholder proposal.

          The Company filed a report on Form 8-K with the Securities and
          Exchange Commission on June 8, 1999 (Items 5 and 7), reporting a
          Certificate of Amendment of its Restated Certificate of Incorporation,
          as amended, changing its name to "Metretek Technologies, Inc."

                                       20
<PAGE>   21
                                   SIGNATURES

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


                                      MARCUM NATURAL GAS SERVICES, INC.

Date:  August 12, 1999                  By:    /s/ W. Phillip Marcum
     -------------------                   -------------------------------------
                                           W. Phillip Marcum
                                           President and Chief Executive Officer


Date:  August 12, 1999                  By:    /s/ A. Bradley Gabbard
     -------------------                   -------------------------------------
                                           A. Bradley Gabbard
                                           Executive Vice President
                                           and Chief Financial Officer

                                       21
<PAGE>   22
                                  EXHIBIT INDEX


  Exhibit
  Number
  -------

   27.1       Financial Data Schedule