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

                                   FORM 10-KSB

|X|  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934

                   For the fiscal year ended December 31, 2007

|_|  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
     OF 1934

            For the transition period from __________ to ____________

                        COMMISSION FILE NUMBER 000-51929

                                   ESCO, INC.
                 (Name of small business issuer in its charter)

             Nevada                                             20-3750479
(State or other jurisdiction of                                (IRS Employer
 incorporation or organization)                             Identification No.)

             10330 Regency Parkway Dr., Suite 100, Omaha, NE 68114
               (Address of principal executive offices) (zip code)

                    Issuer's telephone number:(402) 397-2200
                         Facsimile number:(402) 390-7134

         Securities registered under Section 12(b) of the Exchange Act:

            Title                     of each class Name of exchange on which
                                      registered None

         Securities registered under Section 12(g) of the Exchange Act:

                          COMMON STOCK. $.001 par value
                                (Title of Class)

Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act 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 |_|

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

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |X| No |_|

The issuer's revenues for its most recent fiscal year ended December 31, 2007.
$0.00

The number of shares of Common Stock, $0.001 par value, outstanding on December
31, 2007, was 15,500 shares, held by 12 stockholders.

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

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                                TABLE OF CONTEXT

                                                                            Page

                                     PART I

Item 1  DESCRIPTION OF BUSINESS......................................    1

Item 2  DESCRIPTION OF PROPERTY......................................    9

Item 3  LEGAL PROCEEDINGS............................................    9

Item 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS........    9

                                     PART II

Item 5  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.....    9

Item 6  PLAN OF OPERATION............................................    9

Item 7  FINANCIAL STATEMENTS ........................................    11

Item 8  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE ..................................    11

Item 8A  CONTROLS AND PROCEDURES ....................................    11

Item 8B  OTHER INFORMATION .........................................    11

                                    PART III

Item 9  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
          PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXHCNAGE
          ACT .......................................................    11

Item 10 EXECUTIVE COMPENSATION ......................................    14

Item 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED STOCKHOLDER MATTERS ................    14

Item 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
          DIRECTORS INDEPENDENCE ....................................    15

Item 13 EXHIBITS ....................................................    15

Item 14 PRINCIPAL ACCOUNTANT AND SERVICES ...........................    15

SIGNATURES ..........................................................    16


<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

      Esco, Inc., was incorporated in the State of Nevada on November 4, 2005 as
a vehicle to pursue a business combination. The business purpose of the Company
is to seek the acquisition of, or merger with, an existing company. As a result,
we do not have any active business operations and at this time we are considered
a "Blank Check" company.

      The SEC defines a "Blank Check Company" as "any development stage company
that is issuing a penny stock, within the meaning of Section 3 (a)(51) of the
Exchange Act, and that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an unidentified company or
companies." Many states have enacted statutes, rules and regulations limiting
the sale of securities of "blank check" companies in their respective
jurisdictions. Our management does not intend to undertake any efforts to cause
a market to develop in our securities, either debt or equity, until we have
successfully concluded a business combination.

      We registered our common stock on a Form 10-SB registration statement
filed pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") and
Rule 12(g) thereof. We file with the Securities and Exchange Commission periodic
and episodic reports under Rule 13(a) of the Exchange Act, including quarterly
reports on Form 10-QSB and annual reports on Form 10-KSB. We intend to comply
with the periodic reporting requirements of the Exchange Act for so long as we
are subject to those requirements.

      Management believes that there are perceived benefits to being a reporting
company with a class of publicly-registered securities. These are commonly
thought to include (1) the ability to use registered securities to make
acquisition of assets or businesses; (2) increased visibility in the financial
community; (3) the facilitation of borrowing from financial institutions; (4)
improved trading efficiency; (5) stockholder liquidity; (6) greater ease in
subsequently raising capital; (7) compensation of key employees through stock
options; (8) enhanced corporate image; and (9) a presence in the United States
capital market.

      The Company's principal business objective for the next 12 months and
beyond such time will be to achieve long-term growth potential through a
combination with a business rather than immediate, short-term earnings. The
Company will not restrict its potential candidate target companies to any
specific business, industry or geographical location and, thus, may acquire any
type of business. The analysis of new business opportunities has and will be
undertaken by or under the supervision of the officers and directors of the
Company. We have considered potential acquisition transactions with several
companies, but as of this date have not entered into any definitive agreement
with any party. The Company has unrestricted flexibility in seeking, analyzing
and participating in potential business opportunities.

      A business entity, if any, which may be interested in a business
combination with us may include (1) a company for which a primary purpose of
becoming public is the use of its securities for the acquisition of assets or
businesses; (2) a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities on terms acceptable
to it; (3) a company which wishes to become public with less dilution of its
common stock than would occur normally upon an underwriting; (4) a company which
believes that it will be able to obtain investment capital on more favorable
terms after it has become public; (5) a foreign company which may wish to gain
an initial entry into the United States securities market; (6) a special
situation company, such as a company seeking a public market to satisfy
redemption requirements under a qualified Employee Stock Option Plan; or (7) a
company seeking one or more of the other perceived benefits of becoming a public
company.

      We may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes. We may
acquire assets and establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.


                                        1
<PAGE>


      Our management, which in all likelihood will not be experienced in matters
relating to the business of a target business, will rely upon its own efforts in
accomplishing our business purposes. Outside consultants or advisors may be
utilized by us to assist in the search for qualified target companies. If we do
retain such an outside consultant or advisor, any cash fee earned by such person
will need to be assumed by the target business, as we have no cash assets with
which to pay such obligation.

      The analysis of new business opportunities will be undertaken by, or under
the supervision of our officers and directors, who are not a professional
business analysts. In analyzing prospective business opportunities, management
may consider such matters as:

      o     Potential for growth, indicated by new technology, anticipated
            market expansion or new products;

      o     Competitive position as compared to other firms of similar size and
            experience within the industry segment as well as within the
            industry as a whole;

      o     Strength and diversity of management, either in place or scheduled
            for recruitment;


                                        2
<PAGE>


      o     Capital requirements and anticipated availability of required funds,
            to be provided by the Company or from operations, through the sale
            of additional securities, through joint ventures or similar
            arrangements or from other sources;

      o     The cost of participation by the Company as compared to the
            perceived tangible and intangible values and potentials;

      o     The extent to which the business opportunity can be advanced;

      o     The accessibility of required management expertise, personnel, raw
            materials, services, professional assistance and other required
            items; and

      o     Other relevant factors.

      Management does not have the capacity to conduct as extensive an
investigation of a target business as might be undertaken by a venture capital
fund or similar institution. As a result, management may elect to merge with a
target business which has one or more undiscovered shortcomings and may, if
given the choice to select among target businesses, fail to enter into an
agreement with the most investment-worthy target business.

      Following a business combination we may benefit from the services of
others in regard to accounting, legal services, underwritings and corporate
public relations. If requested by a target business, management may recommend
one or more underwriters, financial advisors, accountants, public relations
firms or other consultants to provide such services.

      A potential target business may have an agreement with a consultant or
advisor, providing that services of the consultant or advisor be continued after
any business combination. Additionally, a target business may be presented to us
only on the condition that the services of a consultant or advisor be continued
after a merger or acquisition. Such preexisting agreements of target businesses
for the continuation of the services of attorneys, accountants, advisors or
consultants could be a factor in the selection of a target business.

      In implementing a structure for a particular business acquisition, we may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. We may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is likely that our present management and stockholder will no longer be in
control. In addition, it is likely that our officer and director will, as part
of the terms of the acquisition transaction, resign and be replaced by one or
more new officers and directors.

      It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances however, as a
negotiated element of its transaction, we may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after we have entered
into an agreement for a business combination or have consummated a business
combination and we are no longer considered a blank check company. The issuance
of additional securities and their potential sale into any trading market which
may develop in our securities may depress the market value of our securities in
the future if such a market develops, of which there is no assurance.

      While the terms of a business transaction to which we may be a party
cannot be predicted, it is expected that the parties to the business transaction
will desire to avoid the creation of a taxable event and thereby structure the
acquisition in a tax-free reorganization under Sections 351 or 368 of the
Internal Revenue Code of 1986, as amended.


                                        3
<PAGE>


      With respect to any merger or acquisition negotiations with a target
business, management expects to focus on the percentage of the Company which
target business stockholder would acquire in exchange for their shareholdings in
the target business. Depending upon, among other things, the target business's
assets and liabilities, our stockholder will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. Any merger or acquisition effected by us can be expected
to have a significant dilutive effect on the percentage of shares held by our
stockholder at such time.

      No assurances can be given that we will be able to enter into a business
combination, as to the terms of a business combination, or as to the nature of
the target business.

      As of the date hereof, management has not made any final decision
concerning or entered into any written agreements for a business combination.
When any such agreement is reached or other material fact occurs, we will file
notice of such agreement or fact with the Securities and Exchange Commission on
Form 8-K. Persons reading this Form 10-KSB are advised to determine if we have
subsequently filed a Form 8-K.

      We anticipate that the selection of a business opportunity in which to
participate will be complex and without certainty of success. Management
believes (but has not conducted any research to confirm) that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, and providing liquidity for our stockholder
and other factors. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.

      We do not currently intend to retain any entity to act as a "finder" to
identify and analyze the merits of potential target businesses.

RISK FACTORS

An investment in the Company is highly speculative in nature and involves an
extremely high degree of risk.

There may be conflicts of interest between our management and our non-management
stockholders. Conflicts of interest create the risk that management may have an
incentive to act adversely to the interests of other investors. A conflict of
interest may arise between our management's personal pecuniary interest and its
fiduciary duty to our stockholders. Further, our management's own pecuniary
interest may at some point compromise its fiduciary duty to our stockholders. In
addition, our officers and directors are currently involved with other blank
check companies and conflicts in the pursuit of business combinations with such
other blank check companies with which they and other members of our management
are, and may be the future be, affiliated with may arise. If we and the other
blank check companies that our officers and directors are affiliated with desire
to take advantage of the same opportunity, then those officers and directors
that are affiliated with both companies would abstain from voting upon the
opportunity. In the event of identical officers and directors, the officers and
directors will arbitrarily determine the company that will be entitled to
proceed with the proposed transaction. Further, Erickson & Sederstrom, P.C.., is
acting as legal counsel to the Company. Our officers and directors are currently
shareholders of Erickson & Sederstrom, P.C. We cannot assure you that conflicts
of interest among us, Erickson & Sederstrom, P.C. and our stockholders will not
develop.

Our business is difficult to evaluate because we have no operating history.

As the Company has no operating history or revenue and only minimal assets,
there is a risk that we will be unable to continue as a going concern and
consummate a business combination. The Company has had no recent operating
history nor any revenues or earnings from operations since inception. We have no
significant assets or financial resources. We will, in all likelihood, sustain
operating expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in our incurring a net
operating loss that will increase continuously until we can consummate a
business combination with a profitable business opportunity. We cannot assure
you that we can identify a suitable business opportunity and consummate a
business combination.

There is competition for those private companies suitable for a merger
transaction of the type contemplated by management.


                                        4
<PAGE>


The Company is in a highly competitive market for a small number of business
opportunities which could reduce the likelihood of consummating a successful
business combination. We are and will continue to be an insignificant
participant in the business of seeking mergers with, joint ventures with and
acquisitions of small private and public entities. A large number of established
and well-financed entities, including small public companies and venture capital
firms, are active in mergers and acquisitions of companies that may be desirable
target candidates for us. Nearly all these entities have significantly greater
financial resources, technical expertise and managerial capabilities than we do;
consequently, we will be at a competitive disadvantage in identifying possible
business opportunities and successfully completing a business combination. These
competitive factors may reduce the likelihood of our identifying and
consummating a successful business combination.

Future success is highly dependent on the ability of management to locate and
attract a suitable acquisition.

The nature of our operations is highly speculative and there is a consequent
risk of loss of your investment. The success of our plan of operation will
depend to a great extent on the operations, financial condition and management
of the identified business opportunity. While management intends to seek
business combination(s) with entities having established operating histories, we
cannot assure you that we will be successful in locating candidates meeting that
criterion. In the event we complete a business combination, the success of our
operations may be dependent upon management of the successor firm or venture
partner firm and numerous other factors beyond our control.

The Company has no existing agreement for a business combination or other
transaction.

We have no arrangement, agreement or understanding with respect to engaging in a
merger with, joint venture with or acquisition of, a private or public entity.
No assurances can be given that we will successfully identify and evaluate
suitable business opportunities or that we will conclude a business combination.
Management has not identified any particular industry or specific business
within an industry for evaluation. We cannot guarantee that we will be able to
negotiate a business combination on favorable terms, and there is consequently a
risk that funds allocated to the purchase of our shares will not be invested in
a company with active business operations.

Management intends to devote only a limited amount of time to seeking a target
company which may adversely impact our ability to identify a suitable
acquisition candidate. While seeking a business combination, management
anticipates devoting no more than a few hours per week to the Company's affairs.
Our officers have not entered into written employment agreements with us and are
not expected to do so in the foreseeable future. This limited commitment may
adversely impact our ability to identify and consummate a successful business
combination. The time and cost of preparing a private company to become a public
reporting company may preclude us from entering into a merger or acquisition
with the most attractive private companies.


                                        5
<PAGE>


Target companies that fail to comply with SEC reporting requirements may delay
or preclude acquisition.

Sections 13 and 15(d) of the Exchange Act require reporting companies to provide
certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two, or three
years, depending on the relative size of the acquisition. The time and
additional costs that may be incurred by some target entities to prepare these
statements may significantly delay or essentially preclude consummation of an
acquisition. Otherwise suitable acquisition prospects that do not have or are
unable to obtain the required audited statements may be inappropriate for
acquisition so long as the reporting requirements of the Exchange Act are
applicable.

The Company may be subject to further government regulation which would
adversely affect our operations.

Although we will be subject to the reporting requirements under the Exchange
Act, management believes we will not be subject to regulation under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), since
we will not be engaged in the business of investing or trading in securities. If
we engage in business combinations which result in our holding passive
investment interests in a number of entities, we could be subject to regulation
under the Investment Company Act. If so, we would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. We have obtained no formal determination from the Securities
and Exchange Commission as to our status under the Investment Company Act and,
consequently, violation of the Act could subject us to material adverse
consequences.

Any potential acquisition or merger with a foreign company may subject us to
additional risks.

If we enter into a business combination with a foreign concern, we will be
subject to risks inherent in business operations outside of the United States.
These risks include, for example, currency fluctuations, regulatory problems,
punitive tariffs, unstable local tax policies, trade embargoes, risks related to
shipment of raw materials and finished goods across national borders and
cultural and language differences. Foreign economies may differ favorably or
unfavorably from the United States economy in growth of gross national product,
rate of inflation, market development, rate of savings, and capital investment,
resource self-sufficiency and balance of payments positions, and in other
respects.

There is currently no trading market for our common stock.

Outstanding shares of our Common Stock cannot be offered, sold, pledged or
otherwise transferred unless subsequently registered pursuant to, or exempt from
registration under, the Securities Act and any other applicable federal or state
securities laws or regulations. These restrictions will limit the ability of our
stockholders to liquidate their investment.


                                        6
<PAGE>


Our business will have no revenues unless and until we merge with or acquire an
operating business.

We are a development stage company and have had no revenues from operations. We
may not realize any revenues unless and until we successfully merge with or
acquire an operating business. The Company intends to issue more shares in a
merger or acquisition, which will result in substantial dilution.

Our articles of incorporation authorize the issuance of a maximum of
1,000,000,000 shares of common stock and a maximum of 100,000,000 shares of
preferred stock.

Any merger or acquisition effected by us may result in the issuance of
additional securities without stockholder approval and may result in substantial
dilution in the percentage of our common stock held by our then existing
stockholders. Moreover, the common stock issued in any such merger or
acquisition transaction may be valued on an arbitrary or non-arm's-length basis
by our management, resulting in an additional reduction in the percentage of
common stock held by our then existing stockholders. Our Board of Directors has
the power to issue any or all of such authorized but unissued shares without
stockholder approval. To the extent that additional shares of Common Stock or
Preferred Stock are issued in connection with a business combination or
otherwise, dilution to the interests of our stockholders will occur and the
rights of the holders of Common Stock might be materially adversely affected.

The Company has conducted no market research or identification of business
opportunities, which may affect our ability to identify a business to merge with
or acquire.

The Company has neither conducted nor have others made available to us results
of market research concerning prospective business opportunities. Therefore, we
have no assurances that market demand exists for a merger or acquisition as
contemplated by us. Our management has not identified any specific business
combination or other transactions for formal evaluation by us, such that it may
be expected that any such target business or transaction will present such a
level of risk that conventional private or public offerings of securities or
conventional bank financing will not be available. There is no assurance that we
will be able to acquire a business opportunity on terms favorable to us.
Decisions as to which business opportunity to participate in will be
unilaterally made by our management, which may act without the consent, vote or
approval of our stockholders.

Because we may seek to complete a business combination through a "reverse
merger", following such a transaction we may not be able to attract the
attention of major brokerage firms.

Additional risks may exist since we will assist a privately held business to
become public through a "reverse merger." Securities analysts of major brokerage
firms may not provide coverage of our Company since there is no incentive to
brokerage firms to recommend the purchase of our common stock. No assurance can
be given that brokerage firms will want to conduct any secondary offerings on
behalf of our post-merger company in the future. We cannot assure you that
following a business combination with an operating business, our common stock
will be listed on NASDAQ or any other securities exchange.


                                        7
<PAGE>


Following a business combination, we may seek the listing of our common stock on
NASDAQ or the American Stock Exchange.

However, we cannot assure you that following such a transaction, we will be able
to meet the initial listing standards of either of those or any other stock
exchange, or that we will be able to maintain a listing of our common stock on
either of those or any other stock exchange. After completing a business
combination, until our common stock is listed on the NASDAQ or another stock
exchange, we expect that our common stock would be eligible to trade on the OTC
Bulletin Board, another over-the-counter quotation system, or on the "pink
sheets," where our stockholders may find it more difficult to dispose of shares
or obtain accurate quotations as to the market value of our common stock. In
addition, we would be subject to an SEC rule that, if it failed to meet the
criteria set forth in such rule, imposes various practice requirements on
broker-dealers who sell securities governed by the rule to persons other than
established customers and accredited investors. Consequently, such rule may
deter broker-dealers from recommending or selling our common stock, which may
further affect its liquidity. This would also make it more difficult for us to
raise additional capital following a business combination.

There is no public market for our common stock, nor have we ever paid dividends
on our common stock.

There is no public trading market for our common stock and none is expected to
develop in the foreseeable future unless and until the Company completes a
business combination with an operating business and such business files a
registration statement under the Securities Act of 1933, as amended.
Additionally, we have never paid dividends on our Common Stock and do not
presently intend to pay any dividends in the foreseeable future. We anticipate
that any funds available for payment of dividends will be re-invested into the
Company to further its business strategy.

Authorization of Preferred Stock.

Our Articles of Incorporation authorizes the issuance of up to 100,000,000
shares of preferred stock with designations, rights and preferences determined
from time to time by its Board of Directors. Accordingly, our Board of Directors
is empowered, without stockholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting, or other rights which could adversely
affect the voting power or other rights of the holders of the common stock. In
the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although we have no present intention to issue any
shares of its authorized preferred stock, there can be no assurance that the
Company will not do so in the future. Control by management.

Management currently owns approximately 29.03% of all the issued and outstanding
capital stock of the Company. Consequently, management has the ability to
influence control of the operations of the Company and, acting together, will
have the ability to influence or control substantially all matters submitted to
stockholders for approval, including:


                                        8
<PAGE>


      o     Election of the board of directors;

      o     Removal of any directors;

      o     Amendment of the Company's articles of incorporation or bylaws; and

      o     Adoption of measures that could delay or prevent a change in control
            or impede a merger, takeover or other business combination.

These stockholders will thus have substantial influence over our management and
affairs and other stockholders of the Company possess no practical ability to
remove management or effect the operations of the business of the Company.
Accordingly, this concentration of ownership by itself may have the effect of
impeding a merger, consolidation, takeover or other business consolidation, or
discouraging a potential acquiror from making a tender offer for the common
stock.

ITEM 2. DESCRIPTION OF PROPERTY

The Company neither rents nor owns any properties. The Company currently has no
policy with respect to investments or interests in real estate, real estate
mortgages or securities of, or interests in, persons primarily engaged in real
estate activities.

ITEM 3. LEGAL PROCEEDINGS

      There is no litigation pending or threatened by or against us.

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

      No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fiscal year covered by this
report.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) Market Information. The Company's common stock is not trading on any stock
exchange. The Company is not aware of any market activity in its stock since its
inception through the date of this filing.

(b) Holders. As of the date hereof, there are twelve record holders of 15,500
shares of the Company's common stock.

(c) Dividends. The Registrant has not paid any cash dividends to date and does
not anticipate or contemplate paying dividends in the foreseeable future. It is
the present intention of management to utilize all available funds for the
development of the Company's business.

ITEM 6. PLAN OF OPERATION

The Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. Our principal business objective for the
next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict our potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.

The Company does not currently engage in any business activities that provide
cash flow. The costs of investigating and analyzing business combinations for
the next 12 months and beyond such time will be paid with money in our treasury.


                                        9
<PAGE>


During the next twelve months we anticipate incurring costs related to:

(i) filing of Exchange Act reports, and

(ii) costs relating to consummating an acquisition.

We believe we will be able to meet these costs through use of funds in our
treasury and additional amounts, as necessary, to be loaned to or invested in us
by our stockholders, management or other investors.

The Company may consider a business which has recently commenced operations, is
a developing company in need of additional funds for expansion into new products
or markets, is seeking to develop a new product or service, or is an established
business which may be experiencing financial or operating difficulties and is in
need of additional capital. In the alternative, a business combination may
involve the acquisition of, or merger with, a company which does not need
substantial additional capital, but which desires to establish a public trading
market for its shares, while avoiding, among other things, the time delays,
significant expense, and loss of voting control which may occur in a public
offering.

Any target business that is selected may be a financially unstable company or an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be subject to
numerous risks inherent in the business and operations of financially unstable
and early stage or potential emerging growth companies. In addition, we may
effect a business combination with an entity in an industry characterized by a
high level of risk, and, although our management will endeavor to evaluate the
risks inherent in a particular target business, there can be no assurance that
we will properly ascertain or assess all significant risks.

Our management anticipates that it will likely be able to effect only one
business combination, due primarily to our limited financing, and the dilution
of interest for present and prospective stockholders, which is likely to occur
as a result of our management's plan to offer a controlling interest to a target
business in order to achieve a tax free reorganization. This lack of
diversification should be considered a substantial risk in investing in us,
because it will not permit us to offset potential losses from one venture
against gains from another.

The Company anticipates that the selection of a business combination will be
complex and extremely risky. Because of general economic conditions, rapid
technological advances being made in some industries and shortages of available
capital, our management believes that there are numerous firms seeking even the
limited additional capital which we will have and/or the perceived benefits of
becoming a publicly traded corporation. Such perceived benefits of becoming a
publicly traded corporation include, among other things, facilitating or
improving the terms on which additional equity financing may be obtained,
providing liquidity for the principals of and investors in a business, creating
a means for providing incentive stock options or similar benefits to key
employees, and offering greater flexibility in structuring acquisitions, joint
ventures and the like through the issuance of stock. Potentially available
business combinations may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex.

Off-Balance Sheet Arrangements

      We do not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.


                                       10
<PAGE>


Going Concern

      The financial statements included in this filing have been prepared in
conformity with generally accepted accounting principles that contemplate the
continuance of us as a going concern. Our lack of cash is inadequate to pay all
of the costs associated with our operations. Management intends to use
borrowings and security sales to mitigate the effects of its cash position,
however no assurance can be given that debt or equity financing, if and when
required will be available. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded assets
and classification of liabilities that might be necessary should we be unable to
continue existence.

ITEM 7. FINANCIAL STATEMENTS

      See Index to Financial Statements and Financial Statement Schedules
appearing on page F-1 through F-8 of this Form 10-KSB.

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

None.

ITEM 8A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed pursuant to the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules, regulations and related forms, and that
such information is accumulated and communicated to our principal executive
officer and principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. The Company's internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.

As of December 31, 2007, we carried out an evaluation, under the supervision and
with the participation of our principal executive officer and our principal
financial officer of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on this evaluation, our principal
executive officer and our principal financial officer concluded that our
disclosure controls and procedures were effective as of the end of the period
covered by this report.

This Annual Report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this Annual Report.

Changes in Internal Controls.

There have been no changes in our internal controls over financial reporting
during the period covered by this report that has materially affected or is
reasonably likely to materially affect our internal controls. This annual report
does not include a report of management's assessment regarding internal control
over financial reporting or an attestation report of the company's registered
public accounting firm due to a transition period established by rules of the
SEC for newly public companies.

ITEM 8B. OTHER INFORMATION

None.

                                    PART III

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

(a) Identification of Directors and Executive Officers.


                                       11
<PAGE>


A. Identification of Directors and Executive Officers. The current officers and
directors will serve for one year or until their respective successors are
elected and qualified. They are:

Name                Age      Positions and Offices Held
-----------------   ---   --------------------------------
Virgil K. Johnson    65   Director
William T. Foley     47   President, Treasurer & Secretary

Virgil K. Johnson has been a principal shareholder of the law firm of Erickson &
Sederstrom, P.C., 10330 Regency Parkway Drive, Omaha, Nebraska 68114, for more
than 25 years. Mr. Johnson was also a principal shareholder and director of
Nebraska State Bank, a state chartered bank with principal offices in Omaha,
Nebraska until it was acquired by Mutual Omaha in November of 2007.

William T. Foley has been a shareholder of the law firm of Erickson &
Sederstrom, P.C. since 1995.

B. Significant Employees. None.

C. Family Relationships. None.

D. Involvement in Certain Legal Proceedings.


                                       12
<PAGE>


(1) No director, officer, significant employee or consultant has been convicted
in a criminal proceeding, exclusive of traffic violations or is subject to any
pending criminal proceeding.

(2) No bankruptcy petitions have been filed by or against any business or
property of any director, officer, significant employee or consultant of the
Company nor has any bankruptcy petition been filed against a partnership or
business association where these persons were general partners or executive
officers.

(3) No director, officer, significant employee or consultant has been
permanently or temporarily enjoined, barred, suspended or otherwise limited from
involvement in any type of business, securities or banking activities.

(4) No director, officer or significant employee has been convicted of violating
a federal or state securities or commodities law.

PRIOR BLANK CHECK COMPANY EXPERIENCE

None of the Company's officers and directors has any prior experience with a
blank check company.

CONFLICTS OF INTEREST

There may be conflicts of interest between our management and our non-management
stockholders. Conflicts of interest create the risk that management may have an
incentive to act adversely to the interests of other investors. A conflict of
interest may arise between our management's personal pecuniary interest and its
fiduciary duty to our stockholders. Further, our management's own pecuniary
interest may at some point compromise its fiduciary duty to our stockholders. In
addition, our officers and directors are currently involved with other blank
check companies and conflicts in the pursuit of business combinations with such
other blank check companies with which they and other members of our management
are, and may be the future be, affiliated with may arise. If we and the other
blank check companies that our officers and directors are affiliated with desire
to take advantage of the same opportunity, then those officers and directors
that are affiliated with both companies would abstain from voting upon the
opportunity. In the event of identical officers and directors, the officers and
directors will arbitrarily determine the company that will be entitled to
proceed with the proposed transaction. Further, Erickson & Sederstrom, P.C.., is
acting as legal counsel to the Company. Our officers and directors are currently
shareholders of Erickson & Sederstrom, P.C. There can be no assurance that
conflicts of interest among us, Erickson & Sederstrom, P.C. and our stockholders
will not develop.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires our officers and directors, and persons who beneficially own
more than ten percent of our common stock, to file initial reports of ownership
and reports of changes in ownership with the SEC. Executive officers, directors
and greater than ten percent beneficial owners are required by SEC regulations
to furnish us with copies of all Section 16(a) forms they file. Based upon a
review of the copies of such forms furnished to us and written representations
from our executive officer and director, we believe that during the year ended
2007 all forms 3 and 4 were filed on a timely basis.

Audit Committee and Financial Expert

We do not have an Audit Committee, our President and Chief Financial Officer
performs the same functions of an Audit Committee, such as: recommending a firm
of independent certified public accountants to audit the annual financial
statements; reviewing the independent auditors independence, the financial
statements and their audit report; and reviewing management's administration of
the system of internal accounting controls. The Company does not currently have
a written audit committee charter or similar document.


                                       13
<PAGE>


We have no financial expert. We believe the cost related to retaining a
financial expert at this time is prohibitive. Further, because of our start-up
operations, we believe the services of a financial expert are not warranted.

Code of Ethics

We have not adopted a corporate code of ethics. Our decision to not adopt such a
code of ethics results from our having only one officer and one director and
from the limited operations and resources of the Company. We believe that the
limited interaction which occurs because of having a limited number of officers
and limited operations eliminates the current need for such a code.

Nominating Committee

We do not have a Nominating Committee or Nominating Committee Charter. We have
elected not to have a Nominating Committee in that we are a development stage
company with limited operations and resources.

ITEM 10. EXECUTIVE COMPENSATION

Our officer and director do not receive any compensation for their services
rendered, have not received such compensation in the past, and are not accruing
any compensation pursuant to any agreement with us. However, our officer and
director anticipate receiving benefits as beneficial stockholders and, possibly,
in other ways upon consummation of a merger/acquisition transaction.

No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by us for the benefit of our employees.

Compensation Committee

We do not have a formal Compensation Committee. Our lack of payment of any
executive compensation and our development stage status, we deemed a
Compensation Committee to not be necessary at this time.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

(a) Security ownership of certain beneficial owners.

The following table sets forth, as of the date of this Registration Statement,
the number of shares of Common Stock owned of record and beneficially by
executive officers, directors and persons who hold more than 5% of the
outstanding Common Stock of the Company. Also included are the shares held by
all executive officers and directors as a group.


                                       14
<PAGE>


<TABLE>
<CAPTION>
                                            Name and Address       Amount and Nature of
Title of Class                           of Beneficial Owner (1)   Beneficial Owner (2)   Percent of Class
------------------------------------   -------------------------   --------------------   ----------------
<S>                                    <C>                                 <C>                  <C>
Common Stock                           William T. Foley                    2,000                12.90
Common Stock                           Virgil K. Johnson                   2,500                16.13
Common Stock                           Charles V. Sederstrom (3)           2.500                16.13
Common Stock                           Thomas J. Culhane                   1,000                 6.45
Common Stock                           Charles Humble                      1,000                 6.45
Common Stock                           Daniel B. Kinnamon                  2,000                12.90
Common Stock                           Jerald L. Rauterkus                 1,000                 6.45
Common Stock                           Mark M. Schorr                      1,500                 9.68
All directors and executive officers                                       4,500                29.03
as a group (2 persons)
</TABLE>

(1) The address for each stockholder is 10330 Regency Parkway Drive, Suite 100,
Omaha, Nebraska 68114.

(2) Except as otherwise indicated, all shares are beneficially owned directly by
each stockholder.

(3) The shares beneficially owned by Mr. Sederstrom are held in the name of CVS
Operations Group Limited Partnership, a Nebraska limited partnership.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTORS INDEPENDENCE

Except as otherwise indicated herein, there have been no related party
transactions, or any other transactions or relationships required to be
disclosed pursuant to Item 404 of Regulation S-B.

ITEM 13. EXHIBITS

3.1 Articles of Incorporation.*
3.2 By-Laws.*
31**
32**

*Previously Filed as part of our Form 10-SB registration statement filed
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"). **Filed
herewith.

ITEM 14. PRINCIPAL ACCOUNTANT AND SERVICES

AUDIT FEES

      The following is a summary of the fees billed to us by Robison, Hill &
Company for professional services rendered during the years ended December 31,
2007 and 2006:

Service               2006     2007
------------------   ------   ------
Audit Fees           $2,900   $7,895
Audit-Related Fees       --       --
Tax Fees             $  100   $  105
All Other Fees           --       --
                     ------   ------
Total                $3,000   $   --
                     ======   ======


                                       15
<PAGE>


AUDIT-RELATED FEES

Audit related fees consist of fees billed for professional services rendered for
the audits of our consolidated financial statements, reviews of our interim
consolidated financial statements included in quarterly reports, services
performed in connection with filings with the Securities & Exchange Commission
and related comfort letters and other services that are normally provided by
Robison, Hill & Company in connection with statutory and regulatory filings or
engagements

TAX FEES

Consists of fees billed for professional services for tax compliance, tax advice
and tax planning. These services include assistance regarding federal, state and
local tax compliance and consultation in connection with various transactions
and acquisitions..

ALL OTHER FEES

None.


                                   SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                       Date: April 15, 2007

                                       ESCO, Inc.


                                       By: /s/ William T. Foley
                                           ------------------------------
                                           Name: William T. Foley
                                           Title: President


                                       16
<PAGE>



                                    CONTENTS


                                                                            Page

Report of Independent Registered Public Accountants.........................F-1

Comparative Balance Sheet
December 31, 2007 and 2006..................................................F-3

Statements of Operations
For the years ended December 31, 2007 and 2006 and for the cumulative period
from March 6, 1997 (inception) to
December 31, 2006...........................................................F-4

Statement of Stockholders' Equity
Since March 6, 1997 (inception) to December 31, 2007........................F-5

Statements of Cash Flows
For the years ended December 31, 2007 and 2006 and the cumulative period
from March 6, 1997 (inception)  to December 31, 2007........................F-6

Notes to Financial Statements...............................................F-7


<PAGE>



                                                [LETTERHEAD OF ROBIN, HILL & CO]

--------------------------------------------------------------------------------
ROBISON, HILL & CO.                              Certified Public Accountants
A PROFESSIONAL CORPORATION
                                                 BRENT M. DAVIES, CPA
                                                 DAVID O. SEAL, CPA
                                                 W. DALE WESTENSKOW, CPA
                                                 BARRY D. LOVELESS, CPA
                                                 STEPHEN M. HALLEY, CPA



               INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS' REPORT


ESCO, Inc,
(A Development Stage Company)

We have audited the accompanying balance sheets of ESCO, Inc. (a development
stage company) as of December 31, 2007 and 2006 and the related statements of
operations and cash flows for each of years in the two-year period ended
December 31, 2007 and the cumulative since November 4, 2005 to December 31, 2007
and the statement of stockholders' equity from November 4, 2005 (inception) to
December 31, 2007. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ESCO, Inc. (a development stage
company) as of December 31, 2007 and 2006 and the results of its operations and
its cash flows for each of the two years ended December 31, 2007 and 2006 and
the cumulative since November 4, 2005 to December 31, 2007 in conformity with
accounting principles generally accepted in the United States of America.


                                       F-1
<PAGE>

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, as of December 31, 2007, the Company has no source of
revenue, has suffered recurring losses from operations, has a deficit
accumulated during development stage and requires additional financing in order
to finance its business activities on an ongoing basis that raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.


                                        /S/ Robison, Hill & Co.
                                        -----------------------
                                        Certified Public Accountants

Salt Lake City, Utah
April 14, 2008



                                       F-2
<PAGE>

                                   ESCO, INC.
                          (A Development Stage Company)
                            COMPARATIVE BALANCE SHEET


<TABLE>
<CAPTION>
                                                                       December 31,      December 31,
                                                                           2007              2006
                                                                      --------------    --------------
<S>                                                                   <C>               <C>
Assets:
   Cash                                                               $          397    $        4,457
                                                                      --------------    --------------
 Total Assets                                                         $          397    $        4,457
                                                                      ==============    ==============
Liabilities:
  Accounts Payable                                                    $        4,000    $           --
                                                                      --------------    --------------
Stockholders' Equity:
  Preferred Stock, par value $.001, Authorized 100,000,000 shares, Issued 0
    shares at December 31, 2007 and December 31, 2006
  Common Stock, par value $.001,
    Authorized 1,000,000,000 shares, Issued 15,500 shares
    at December 31, 2007 and December 31, 2006
                                                                                  16                16
  Paid-In Capital
                                                                              15,484            15,484
  Deficit Accumulated During the Development Stage                           (19,103)          (11,043)
                                                                      --------------    --------------
     Total Stockholders' Equity
                                                                              (3,603)            4,457
                                                                      --------------    --------------
     Total Liabilities and Stockholders' Equity                       $          397    $        4,457
                                                                      ==============    ==============
</TABLE>


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

                                       F-3
<PAGE>

                                   ESCO, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                           Cumulative
                                                                              since
                                                                           November 4,
                                                                              2005
                                            For the Years Ended           inception of
                                                December 31,              development
                                           2007              2006             stage
                                      --------------    --------------   --------------
<S>                                   <C>               <C>              <C>
Revenues:                             $           --    $           --   $           --

Expenses:
   General & Administrative                   19,103
                                                                 8,060            3,060
                                      --------------    --------------   --------------

     Net Loss                         $       (8,060)   $       (3,060)  $      (19,103)
                                      ==============    ==============   ==============

Basic & Diluted Loss per Share        $        (0.52)   $        (0.20)
                                      ==============    ==============

Weighted Average Shares Outstanding           15,500            15,500
                                      ==============    ==============
</TABLE>


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


                                       F-4
<PAGE>


                                   ESCO, INC.
                          (A Development Stage Company)
                       STATEMENTS OF STOCKHOLDERS' EQUITY
             SINCE NOVEMBER 4, 2005 (INCEPTION) TO DECEMBER 31, 2007

<TABLE>
<CAPTION>
                                                                                                  Deficit
                                                                                                Accumulated
                                                                                                   Since
                                                                                                November 4,
                                                                                                   2005
                                                                                               Inception of
                                                   Common Stock                 Paid-In         Development
                                              Shares          Par Value         Capital            Stage
                                          --------------   --------------   --------------    --------------
<S>                 <C>                                    <C>              <C>               <C>
Balance at November 5, 2005 (Inception)               --   $           --   $           --    $           --

November 29, 2005, Stock Issued for
Cash                                              15,500               16           15,484    $           --

Net loss for year-end December 31, 2005
                                                      --               --               --            (7,983)
                                          --------------   --------------   --------------    --------------

Balance at December 31, 2005                      15,500   $           16   $       15,484    $       (7,983)

Net Loss for year-end December 31, 2006               --               --               --    $       (3,060)
                                          --------------   --------------   --------------    --------------

Balance at December 31, 2006                      15,500   $           16   $       15,484
                                                                                              $      (11,043)

Net Loss for year-end December 31, 2007               --               --               --    $       (8,060)
                                          --------------   --------------   --------------    --------------

                                          ==============   ==============   ==============    ==============
Balance at December 31, 2007                      15,500   $           16   $       15,484    $      (19,103)
                                          ==============   ==============   ==============    ==============
</TABLE>

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


                                       F-5
<PAGE>


                                   ESCO, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                          Cumulative
                                                                                             since
                                                                                          November 4,
                                                                                             2005
                                                           For the Years Ended           inception of
                                                               December 31,              development
                                                         2007              2006             stage
                                                    --------------    --------------    --------------
<S>                                                 <C>               <C>               <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss                                            $       (8,060)   $       (3,060)   $      (19,103)

Increase (Decrease) in Accounts Payable
                                                             4,000            (7,963)            4,000
                                                    --------------    --------------    --------------
  Net Cash Used in operating activities                     (4,060)          (11,023)          (19,103)
                                                    --------------    --------------    --------------

CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by investing activities
                                                    --------------    --------------    --------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
Common Stock Issued for Cash                                15,500
                                                    --------------    --------------    --------------
Net Cash Provided by Financing Activities                   15,500
                                                    --------------    --------------    --------------

Net (Decrease) Increase in
  Cash and Cash Equivalents                                 (4,060)          (11,023)              397
Cash and Cash Equivalents
  at Beginning of Period                                     4,457            15,480
                                                    --------------    --------------    --------------
Cash and Cash Equivalents
  at End of Period                                  $          397    $        4,457    $          397
                                                    ==============    ==============    ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
  Interest                                          $                 $                 $
  Franchise and income taxes                        $                 $                 $
</TABLE>


SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:  None

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


                                       F-6
<PAGE>

                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2007

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      This summary of accounting policies for ESCO, Inc. (a development stage
company) is presented to assist in understanding the Company's financial
statements. The accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.

Nature of Operations and Going Concern

      The accompanying financial statements have been prepared on the basis of
accounting principles applicable to a "going concern," which assume that the
Company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.

      These financial statements do not reflect adjustments that would be
necessary if the Company were unable to continue as a "going concern." If the
Company were unable to continue as a "going concern," then substantial
adjustments would be necessary to the carrying values of assets, the reported
amounts of its liabilities, the reported revenues and expenses, and the balance
sheet classifications used.

Organization and Basis of Presentation

      The Company was incorporated under the laws of the State of Nevada on
November 4, 2005, under the name of ESCO, Inc. The Company is to serve as a
vehicle to effect a merger, exchange of capital stock, asset acquisition, or
other business combination with a domestic or foreign private business. Since
November 4, 2005, the Company is in the development stage, and has not commenced
planned principal operations. The Company has a December 31 year end.

Nature of Business

      The Company has no products or services as of December 31, 2007. The
Company was organized as a vehicle to seek merger or acquisition candidates.

Concentration of Credit Risk

      The Company has no significant off-balance-sheet concentrations of credit
risk such as foreign exchange contracts, options contracts or other foreign
hedging arrangements.

Cash and Cash Equivalents

      For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.


                                       F-7
<PAGE>


                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2007
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

      The Company accounts for income taxes under the provisions of SFAS No.
109, "Accounting for Income Taxes." SFAS No.109 requires recognition of deferred
income tax assets and liabilities for the expected future income tax
consequences, based on enacted tax laws, of temporary differences between the
financial reporting and tax bases of assets and liabilities.

Fair Value of Financial Instruments

      The carrying value of the Company's financial instruments, including cash
and accounts payable at December 31, 2007, approximates their fair values.

Pervasiveness of Estimates

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

Loss per Share

Loss per Share

      The basic loss per share is as follows:

<TABLE>
<CAPTION>
                                                For the year ended    For the year ended
                                                 December 31, 2006     December 31, 2007
                                                ------------------    ------------------
<S>                                             <C>                   <C>
      BASIC LOSS PER SHARE                      $             0.20    $             0.52

      Loss to common shareholders - numerator   $           (3,060)   $           (8,060)

      Weighted Average Shares Issued and
        Outstanding - denominator                           15,500               15, 500
</TABLE>

      Basic income (loss) per share has been computed by dividing the income
(loss) for the year applicable to the common stockholders by the weighted
average number of common shares outstanding during the years. There were no
common equivalent shares outstanding at December 31, 2007, and 2006, and thus
there would be no anti-dilutive affect to earnings per share.

                                       F-8
<PAGE>


                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2007
                                   (Continued)


Recent Accounting Standards

      In February 2007, the FASB issued SFAS no, 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 provides
companies with an option to report selected financials assets and liabilities at
fair value. The objective of SFAS 159 is to reduce both complexity in accounting
for financial instruments and the volatility in earnings caused by measuring
related assets and liabilities differently. Generally accepted accounting
principles have required different measurement attributes for different assets
and liabilities that can create artificial volatility in earnings. The FASB has
indicated it believes that SFAS 159 helps to mitigate this type of
accounting-induced volatility by enabling companies to report related assets and
liabilities at fair value, which would likely reduce the need for companies to
comply with detailed rules for hedge accounting. SFAS 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar types
of assets and liabilities. SFAS 159 does not eliminate disclosure requirements
included in other accounting standards, including requirements for disclosures
about fair value measurements included in SFAS 157 and SFA No. 107, "Disclosures
about Fair Value of Financial Instruments." SFAS 159 is effective for the
Company as of the beginning of fiscal year 2009. The adoption of this
pronouncement is not expected to have an impact on the Company's financial
position, results of operations or cash flows.

      In December 2007, the FASB issued No. 160, "Noncontrolling Interests in
Financial Statements, an amendment of ARB No. 51" ("SFAS 160"). SFAS 160 amends
ARB 51 to establish accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. It
clarifies that a noncontrolling interest in a subsidiary is an ownership
interest in the consolidated entity that should be reported as equity in the
consolidated financial statements. This Statement is effective for fiscal years
beginning on or after December 15, 2008. Early adoption is not permitted.
Management is currently evaluating the effects of this statement, but it is not
expected to have any impact on the Company's financial statements.

                                       F-9
<PAGE>


                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2007
                                   (Continued)


Recent Accounting Standards - continued

      In December 2007, the FASB issued No. 141(R), "Business Combinations"
("SFAS 141(R)". SFAS 141(R) provides companies with principles and requirements
on how an acquirer recognizes and measures in its financial statements the
identifiable assets acquired, liabilities assumed, and any noncontrolling
interest in the acquiree as well as the recognition and measurement of goodwill
acquired in a business combination. SFAS 141(R) also requires certain
disclosures to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. Acquisition costs associated
with the business combination will generally be expensed as incurred. SFAS
141(R) is effective for business combinations occurring in fiscal years
beginning after December 15, 2008, which will require the Company to adopt these
provisions for business combinations occurring in fiscal 2009 and thereafter.
Early adoption of SFAS 141(R) is not permitted. Management is currently
evaluating the effects of this statement, but it is not expected to have any
impact on the Company's financial statements.

      In March 2008, the FASB issued No. 161, "Disclosures about Derivative
Instruments and Hedging Activities", an amendment of FASB Statement No. 133.
("SFAS 161"). SFAS 161 requires enhanced disclosures about an entity's
derivative and hedging activities and thereby improves the transparency of
financial reporting. This Statement is effective for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008, with
early application encouraged. This Statement encourages, but does not require,
comparative disclosures for earlier periods at initial adoption. Management is
currently evaluating the effects of this statement, but it is not expected to
have any impact on the Company's financial statements.

Reclassifications

      Certain reclassifications may have been made in the 2006 financial
statements to conform with the December 31, 2007, presentation.

Concentration of Credit Risk

      The Company has no significant off-balance-sheet concentrations of credit
risk such as foreign exchange contracts, options contracts or other foreign
hedging arrangements.


                                       F-10
<PAGE>


                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2007
                                   (Continued)


NOTE 2 - INCOME TAXES

      As of December 31, 2007, the Company had a net operating loss carry
forward for income tax reporting purposes of approximately $19,103 that may be
offset against future taxable income through 2027. Approximately, $3,060 and
$7,938 of the carry forward will expire in 2026 and 2025, respectively. Current
tax laws limit the amount of loss available to be offset against future taxable
income when a substantial change in ownership occurs. Therefore, the amount
available to offset future taxable income may be limited. No tax benefit has
been reported in the financial statements, because the Company believes there is
a 50% or greater chance the carry forwards will expire unused. Accordingly, the
potential tax benefits of the loss carry forwards are offset by a valuation
allowance of the same amount.

NOTE 3 - DEVELOPMENT STAGE COMPANY

      The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage. The Company's financial statements are prepared using
generally accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the Company does not have significant cash
or other material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a going
concern. In the interim, shareholders of the Company have committed to meeting
its minimal operating expenses.

NOTE 4 - COMMITMENTS

      As of December 31, 2007, corporate officers from their business offices
have conducted all activities of the Company. Currently, there are no
outstanding debts owed by the company for the use of these facilities and there
are no commitments for future use of the facilities.

NOTE 5 - COMMON STOCK TRANSACTIONS

      On November 29, 2005, the Company issued 15,500 shares of common stock for
$1.00 per share.

NOTE 6 - SUBSEQUENT EVENT

      Effective January 1, 2008, the shareholders of the Company entered into a
Share Purchase Agreement, wherein they are selling ninety-seven percent (97%) of
their shares of common stock to Luther Capital Management, LLC. Closing has been
delayed, but is expected to occur prior to June 30, 2008.

                                      F-11
<PAGE>


                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2007
                                   (Continued)


NOTE 7 - UNCERTAIN TAX POSITIONS

      Effective January 1, 2007, the Company adopted the provisions of FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 prescribes a
recognition threshold and a measurement attribute for the financial statement
recognition and measurement of tax positions taken or expected to be taken in a
tax return. For those benefits to be recognized, a tax position must be
more-likely-than-not to be sustained upon examination by taxing authorities. The
adoption of the provisions of FIN 48 did not have a material impact on the
Company's condensed consolidated financial position and results of operations.
At January 1, 2007, the Company had no liability for unrecognized tax benefits
and no accrual for the payment of related interest and penalties. The Company
did not record a cumulative effect adjustment relating to the adoption of FIN
48.

      Interest costs related to unrecognized tax benefits are classified as
"Interest expense, net" in the accompanying condensed consolidated statements of
operations. Penalties, if any, would be recognized as a component of "Selling,
general and administrative expenses". The Company recognized $0.00 of interest
and penalties expense related to unrecognized tax benefits during 2007. In many
cases the Company's uncertain tax positions are related to tax years that remain
subject to examination by relevant tax authorities. With few exceptions, the
Company is generally no longer subject to U.S. federal, state, local or non-U.S.
income tax examinations by tax authorities for years before 2004. The following
describes the open tax years, by major tax jurisdiction, as of December 31,
2007:

                United States (a)          2004 - Present

      (a) Includes federal as well as state or similar local jurisdictions, as
applicable.



                                      F-12