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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, 2006

|_|  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. $0001 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, 2006.
$0.00

The number of shares of Common Stock, $0.001 par value, outstanding on December
31, 2006, was 15,500 shares, held by 12 stockholders.

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

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<PAGE>

                                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  OTHERE INFORMATION .........................................    11

                                    PART III

Item 9  DIRECTORES, 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 to
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-12 of this Form 10-KSB. [VINTAGE TO ATTACHE
FINANCIAL STATEMENTS W/F PAGE NUMBERS]

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

None.

ITEM 8A. CONTROLS AND PROCEDURES

The Company is a development stage company with no revenues and the Company's
President and Chief Financial Officer has responsibility for our internal
controls and procedures over the our financial reporting.

We have implemented and maintain disclosure controls and procedures which
consist of: the control environment, risk assessment, control activities,
information and communication and monitoring. Our scope of internal control
therefore extends to policies, plans procedures, processes, systems, activities,
initiatives, and endeavors required of a company with limited transactions,
revenues, expenses, and operations. These controls and procedures are designed
to ensure that the information required to be disclosed in our Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules.

There have been no significant changes (including corrective actions with regard
to significant deficiencies or material weaknesses) in the Company's internal
controls or in other factors that could significantly affect the controls
subsequent to the date of the evaluation referenced below.

Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision of its President and Chief Financial Officer,
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures. Based on the foregoing, our President and Chief
Financial Officer concluded, given the Company's limited operations, that the
Company's disclosure controls and procedures were effective.

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    64   Director
William T. Foley     46   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 is also a principal shareholder and director of
Nebraska State Bank, a state chartered bank with principal offices in Omaha,
Nebraska.

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
2006 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,
2006 and 2005:

Service               2006     2005
------------------   ------   -----
Audit Fees           $ 2900   $3400
Audit-Related Fees       --      --
Tax Fees                100     100
All Other Fees           --      --
                     ------   -----
Total                $3,000   $3500
                     ======   =====


                                       15
<PAGE>


AUDIT-RELATED FEES

Consists 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 2, 2007

                                       ESCO, Inc.


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


                                       16
<PAGE>





                                    Esco, Inc
                          (A Development Stage Company)

                                       -:-

                INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS' REPORT

                           December 31, 2006 and 2005






<PAGE>



                                    CONTENTS


                                                                         Page

<TABLE>
<CAPTION>
<S>                                                                      <C>
Report of Independent Registered Public Accountants......................F-1

Comparative Balance Sheet
December 31, 2006 and 2005................................................F-3

Statements of Operations
For the years ended December 31, 2006 and 2005 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, 2006.....................F-5

Statements of Cash Flows
For the years ended December 31, 2006 and 2005 and the cumulative period
from March 6, 1997 (inception)  to December 31, 2006.....................F-6

Notes to Financial Statements............................................F-7
</TABLE>



<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


               REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

Esco, Inc
(A Development Stage Company)

We have audited the  accompanying  balance  sheets of Esco,  Inc (a  development
stage company) as of December 31, 2006, and 2005, and the related  statements of
operations,  and cash flows for the years ended December 31, 2006, and 2005, and
the cumulative  since November 5, 2005 (inception) to December 31, 2006, and the
statement of stockholder's equity since November 5, 2005 (inception) to December
31, 2006.  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, 2006, and 2005 and the results of its operations and
its  cash  flows  for the  years  ended  December  31,  2006,  and  2005 and the
cumulative  since  November  5,  2005  (inception)  to  December  31,  2006,  in
conformity with accounting principles generally accepted in the United States of
America.


                                      F-1
<PAGE>



The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
financial  statements,  the Company has an  accumulated  deficit,  has recurring
losses,  has  no  revenues  and  requires  additional  financing,   which  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


                                          ---------------------------------
                                          Certified Public Accountants
Salt Lake City, Utah
March 30, 2007




                                       F-2
<PAGE>


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

<TABLE>
<CAPTION>
                                                                               December 31,   December 31,
                                                                                  2006           2005
                                                                              -----------    -----------
<S>                                                                           <C>            <C>
Assets:
   Cash                                                                       $     4,457    $    15,480
                                                                              -----------    -----------

 Total Assets                                                                 $     4,457    $    15,480
                                                                              ===========    ===========

Liabilities:
  Accounts Payable                                                            $        --    $     7,963
                                                                              -----------    -----------

Stockholders' Equity:
  Preferred Stock, par value $.001, Authorized 100,000,000 shares, Issued 0
    shares at December 31, 2006 and December 31, 2005                                  --             --

  Common Stock, par value $.001,
    Authorized 1,000,000,000 shares, Issued 15,500 shares
    at December 31, 2006 and December 31, 2005                                         16             16

  Paid-In Capital                                                                  15,484         15,484

  Deficit Accumulated During the Development Stage                                (11,043)        (7,983)
                                                                              -----------    -----------

     Total Stockholders' Equity                                                     4,457          7,517
                                                                              -----------    -----------

     Total Liabilities and Stockholders' Equity                               $     4,457    $    15,480
                                                                              ===========    ===========
</TABLE>

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


                                      F-3
<PAGE>

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

                                                               Cumulative
                                                                  since
                                                               November 4,
                                                                   2005
                                    For the Years Ended        inception of
                                        December 31,           development
                                    2006           2005           stage
                                 -----------    -----------    -----------
Revenues:                        $        --    $        --            $--

Expenses:
   General & Administrative            3,060          7,983         11,043
                                 -----------    -----------    -----------

     Net Loss                    $    (3,060)   $    (7,983)   $   (11,043)
                                 ===========    ===========    ===========

Basic & Diluted Loss per Share   $     (0.20)   $     (0.90)
                                 ===========    ===========

Weighted Average Shares
Outstanding                           15,500          8,820
                                 ===========    ===========

   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, 2006

<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)
                                             ===========      ===========      ===========      ===========
</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
                                                           2006               2005             stage
                                                       ------------       ------------       ------------
<S>                                                    <C>                <C>                <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss                                               $     (3,060)      $     (7,983)      $    (11,043)

Increase (Decrease) in Accounts Payable                      (7,963)             7,963                 --
                                                       ------------       ------------       ------------
  Net Cash Used in operating activities                     (11,023)               (20)           (11,043)
                                                       ------------       ------------       ------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by investing activities                        --                 --                 --
                                                       ------------       ------------       ------------

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

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

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, 2006

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 Esco,
Inc. (hereto referred to as 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.

Several conditions and events cast doubt about the Company's ability to continue
as a "going concern." The Company has incurred net losses of approximately
$11,043 for the period from November 4, 2005 (inception) to December 31, 2006,
has an accumulated deficit, has recurring losses, has no revenues and requires
additional financing in order to finance its business activities on an ongoing
basis. The Company's future capital requirements will depend on numerous factors
including, but not limited to, continued progress in finding a merger candidate
and the pursuit of business opportunities. The Company is actively pursuing
alternative financing and has had discussions with various third parties,
although no firm commitments have been obtained. In the interim, shareholders of
the Company have committed to meeting its operating expenses. Management
believes that actions presently being taken to revise the Company's operating
and financial requirements provide them with the opportunity to continue as a
"going concern"

These financial statements do not reflect adjustments that would be necessary if
the Company were unable to continue as a "going concern." While management
believes that the actions already taken or planned, will mitigate the adverse
conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial statements, there can be
no assurance that these actions will be successful. 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. The Company did not have any operating activities during the period
from its incorporation through December 31, 2006 and was considered dormant.

Nature of Business

The Company has no products or services as of December 31, 2006. The Company was
organized as a vehicle to seek merger or acquisition candidates.

                                      F-7
<PAGE>

                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2006
                                   (Continued)

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

Financial Instruments

The Company's financial assets consist of cash. The Company has no financial
liabilities. Except as otherwise noted, it is management's opinion that the
Company is not exposed to significant interest or credit risks arising from
these financial instruments. The fair values of these financial instruments
approximate their carrying values due to the sort-term maturities of these
instruments.

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.

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.

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.

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.


                                      F-8
<PAGE>

                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2006
                                   (Continued)

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,       December 31,
                                                            2005                2006
                                                         ------------       ------------
<S>                                                      <C>                <C>
BASIC LOSS PER SHARE                                     $       0.90       $       0.20

Loss to common shareholders - numerator                  $     (7,983)      $     (3,060)

Weighted  Average  Shares  Issued  and
Outstanding - denominator                                       8,820             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, 2006 and 2005, and thus there
would be no anti-dilutive affect to earnings per share.

Recent Accounting Standards

In February 2006, The FASB issued SFAS No. 155 "Accounting for Certain Hybrid
Financial Instruments - an amendment of FASB Statements No. 133 and 140." This
statement amends FASB 133, Accounting for Derivative Instruments and Hedging
Activities and Statement and No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. The statement permits fair
value remeasurement for any hybrid financial instrument that contains an
embedded derivative that would otherwise require bifurcation, clarifies which
interest only strips and principal are not subject to the requirements of
Statement 133, establishes a requirement to evaluate interest in securitized
financial assets, clarifies that concentrations of credit risk in the form of
subordination are not embedded derivatives and amends statement 140 to eliminate
the prohibition on a qualifying special-purpose entity from holding a derivative
financial instrument to a beneficial interest other than another derivative
financial instrument. The statement is effective for fiscal years beginning
after September 15, 2006. Management does not expect this statement to have any
material effect on its financial statements.

In March 2006 the FASB issued SFAS No. 156 " Accounting for Servicing of
Financial Instruments - an amendment of FASB No.140, Accounting for Transfers
and Servicing of Financial Instruments and Extinguishments of Liabilities. The
statement requires an entity to recognize a servicing asset or servicing
liability each time it undertakes an obligation to service an asset by entering
into a servicing contract, requires all separately recognized servicing assets
and servicing liabilities to be initially measured at fair market value, permits
an entity to choose either the amortization method or fair market value
measurement method for subsequent measurement periods for each class of
separately recognized servicing assets and servicing liabilities, permits a
one-time reclassification of available-for-sale securities to trading securities
by entities with recognized servicing rights at its initial adoption, and
requires separate presentation of servicing assets

                                      F-9
<PAGE>

                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2006
                                   (Continued)

Recent Accounting Standards (Continued)

and servicing liabilities subsequently measured at fair value. The statement is
effective for fiscal years beginning after September 15, 2006. Management does
not expect this statement to have any material effect on its financial
statements.

In June, 2006 the FASB issued FIN 48, "Accounting for Uncertainty in Income
Taxes--an interpretation of FASB Statement No. 109". This Interpretation
clarifies, among other things, the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements in accordance with FASB
Statement No. 109, Accounting for Income Taxes. This Interpretation prescribes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return.

This Interpretation also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition is effective for fiscal years beginning after December 15, 2006.
Earlier application is encouraged if the enterprise has not yet issued financial
statements, including interim financial statements, in the period the
Interpretation is adopted. FIN 48, Accounting for Uncertainty in Income
Taxes--an interpretation of FASB Statement No. 109, is effective for fiscal
years beginning after December 15, 2006. Earlier application is encouraged if
the enterprise has not yet issued financial statements, including interim
financial statements, in the period the Interpretation is adopted. Management is
evaluating the financial impact of this pronouncement.

In September 2006, the FASB issued SFAS No. 157, "Accounting for Fair Value
Measurements." SFAS No. 157 defines fair value, and establishes a framework for
measuring fair value in generally accepted accounting principles and
expandsdisclosure about fair value measurements. SFAS No. 157 is effective for
the Company for financial statements issued subsequent to November 15, 2007. The
Company does not expect the new standard to have any material impact on the
financial position and results of operations.

In September 2006, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 108 ("SAB 108") which provides interpretive
guidance on how the effects of the carryover or reversal of prior year
misstatements should be considered in quantifying a current year misstatement.
SAB 108 becomes effective in fiscal 2007. Management is evaluating the financial
impact of this pronouncement.

Reclassifications

Certain reclassifications have been made in the 2005 financial statements to
conform with the December 31, 2006 presentation.


                                      F-10
<PAGE>

                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2006
                                   (Continued)

NOTE 2 - INCOME TAXES

As of December 31, 2006, the Company had a net operating loss carry forward for
income tax reporting purposes of approximately $11,043 that may be offset
against future taxable income through 2026. Approximately, $7,983 of the carry
forward will expire in 2025. 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.

                               2006               2005
                          ------------       ------------
Net Operating Losses      $       1656       $       1197

Valuation Allowance              (1656)             (1197)
                          ------------       ------------
                          $         --       $         --
                          ============       ============



The provision for income taxes differs from the amount computed using the
federal US statutory income tax rate as follows:

                                                    2006               2005
                                                ------------       ------------
Provision (Benefit) at US Statutory Rate        $        459  $            1197

Increase (Decrease) in Valuation Allowance              (459)             (1197)
                                                ------------       ------------
                                                $         --      $          --
                                                ============       ============

The Company evaluates its valuation allowance requirements based on projected
future operations. When circumstances change and causes a change in management's
judgment about the recoverability of deferred tax assets, the impact of the
change on the valuation is reflected in current income.

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.


                                      F-11
<PAGE>

                                   ESCO, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR THE YEAR ENDED DECEMBER 31, 2006
                                   (Continued)

NOTE 4 - COMMITMENTS

         As of December 31, 2006 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.

                                      F-12