**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


Washington,
      DC




**FORM
      10-Q**




**x**  **QUARTERLY
      REPORT PURSUANT SECTION 13**


**OR
      15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**




For
      the
      quarterly period ended September 30, 2008




**o**  **TRANSITION
      REPORT PURSUANT 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.**


(Exact
      name of small business issuer as specified in its charter)





Nevada
            
            20-3750479(State
                or other jurisdiction of
            
            (I.R.S.
                employerincorporation
                or organization)
            
            identification
                number)10330
                Regency Parkway Drive, Suite 100Omaha,
                NE
            
            68114(Address
                of principal executive offices)
            
            (Zip
                Code)




Issuer’s
      telephone number: (402) 397-2200




No
      change


(Former
      name, former address and former fiscal


year,
      if
      changed since last report)




Facsimile
      number (402) 390-7137




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.   YES x NO o




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting
      company.




Large
      accelerated filer o Accelerated filer o Non-accelerated filer o Smaller
      reporting company 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 o










**Copies
      to:**




William
      T. Foley, Esq.


Erickson
      & Sederstrom, P.C.


10330
      Regency Parkway Drive


Omaha,
      NE
      68114


(402)
      390-7117




Check
      whether the issuer (1) filed all reports required 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 o




Check
      whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange
      Act). Yes x No o




**APPLICABLE
      ONLY TO CORPORATE ISSUERS**




State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: 15,500 shares of Common Stock, par value
      $
      .001 per share, outstanding as of November 14, 2008.




Transitional
      Small Business Disclosure Format (Check one): YES o NO x


2




Index





PagePart
                I — FINANCIAL INFORMATIONItem
                1. Financial Statements
            4Item
                2. Management’s Discussion and Analysis or Plan of
                Operation
            11Item
                4T. Controls and Procedures
            13Part
                II — OTHER INFORMATION:Item
                1. Legal Proceedings
            14Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            14Item
                3. Defaults Upon Senior Securities
            14Item
                4. Submission of Matters to a Vote of Security Holders
            14Item
                5. Other Information
            14Item
                6. Exhibits and Reports on Form 8-K
            14Signatures
            15


3


**Item
      1. Financial Statements**




ESCO,
      INC.


(A
      Development Stage Company)


BALANCE
      SHEET


(Unaudited)





September 30,
            
            December 31,2008
            
            2007Assets:Cash
            
            $
            577
            
            $
            397Total
                Assets
            
            $
            577
            
            $
            397Liabilities:Accounts
                Payable
            
            $
            -0-
            
            $
            4,000Shareholder
                Loan – Short Term
            
            
            5,200
            
            
            -Total
                Liabilities
            
            
            5,200
            
            
            4,000Stockholders’
                Equity:Preferred
                Stock, par value $.001,Authorized
                100,000,000 shares, Issued 0 sharesat
                June 30, 2008 and December 31, 2007
            
            
            -
            
            
            -Common
                Stock, par value $.001,Authorized
                1,000,000,000 shares, Issued 15,500 sharesat
                June 30, 2008 and December 31, 2007
            
            
            16
            
            
            16Paid-In
                Capital
            
            
            15,484
            
            
            15,484Deficit
                Accumulated During the Development Stage
            
            
            (20,123
            )
            
            (19,103
            )Total
                Stockholders’ Equity
            
            
            (4,623
            )
            
            (3,603
            )Total
                Liabilities and Stockholders’ Equity
            
            $
            577
            
            $
            397





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


4


ESCO,
      INC.


(A
      Development Stage Company)


STATEMENTS
      OF OPERATIONS


(Unaudited)




CumulativesinceNovember 4,2005For the Three Months Ended
            
            For the Nine Months Ended
            
            inception ofSeptember 30,
            
            September 30,
            
            development2008
            
            2007
            
            2008
            
            2007
            
            stageRevenues:
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Expenses:General
                & Administrative
            
            
            (133
            )
            
            15
            
            
            1,020
            
            
            1,545
            
            
            20,123Net
                Income (Loss)
            
            $
            133
            
            $
            (15
            )
            $
            (1,020
            )
            $
            (1,545
            )
            $
            (20,123
            )Basic
                & Diluted Loss per Share
            
            $
            -
            
            $
            -
            
            $
            (.07
            )
            $
            (0.10
            )Weighted
                Average SharesOutstanding
            
            
            15,500
            
            
            15,500
            
            
            15,500
            
            
            15,500








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


5





ESCO,
      INC.


(A
      Development Stage Company)


STATEMENTS
      OF CASH FLOWS


(Unaudited)





Cumulative,sinceFor the Nine Months Ended
            
            November 4,September 30,
            
            20052008
            
            2007
            
            inceptionCASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                Loss
            
            $
            (1,020
            )
            $
            (1,545
            )
            $
            (20,123
            )Increase
                (Decrease) in Accounts Payable
            
            
            (4,000
            )
            
            -
            
            
            -Net
                Cash Used in operating activities
            
            
            (5,020
            )
            
            (1,545
            )
            
            (20,123
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Net
                cash provided by investing activities
            
            
            -
            
            
            -
            
            
            -CASH
                FLOWS FROM FINANCING ACTIVITIES:Shareholder
                Loan – Short Term
            
            
            5,200
            
            
            
            
            
            5,200Common
                Stock Issued for Cash
            
            
            -
            
            
            -
            
            
            15,500Net
                Cash Provided by Financing Activities
            
            
            5,200
            
            
            -
            
            
            20,700Net
                (Decrease) Increase inCash
                and Cash Equivalents
            
            
            180
            
            
            (1,545
            )
            
            577Cash
                and Cash Equivalentsat
                Beginning of Period
            
            
            397
            
            
            4,457
            
            
            -Cash
                and Cash Equivalentsat
                End of Period
            
            $
            577
            
            $
            2,912
            
            $
            577SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATION:Cash
                paid during the year for:Interest
            
            $
            -
            
            $
            -
            
            $
            -Franchise
                and income taxes
            
            $
            -
            
            $
            -
            
            $
            -SUPPLEMENTAL
                DISCLOSURE OF NON-CASH INVESTING AND FINANCINGACTIVITIES:None





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


6


ESCO,
      INC.


(A
      Development Stage Company)


NOTES
      TO FINANCIAL STATEMENTS


(Unaudited)





**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.





**Interim
      Financial Statements**





The
      unaudited financial statements as of September 30, 2008 and for the nine (9)
      months then ended, reflect, in the opinion of management, all adjustments (which
      include only normal recurring adjustments) necessary to fairly state the
      financial position and results of operations for the nine (9) months. Operating
      results for interim periods are not necessarily indicative of the results,
      which
      can be expected for full years.





**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 $20,123
      for the period from November 4, 2005 (inception) to September 30, 2008, 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. 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.


7





ESCO,
      INC.


(A
      Development Stage Company)


NOTES
      TO FINANCIAL STATEMENTS


(Unaudited)





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





**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 September 30, 2008 and is in the development
      stage.





**Nature
      of Business**





The
      Company has no products or services as of September 30, 2008. The company was
      organized as a vehicle to seek merger or acquisition candidates.





**Financial
      Instruments**





The
      Company’s financial assets consist of cash. The Company has no financial
      liabilities, except a short term demand loan from a shareholder. 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.





**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.





**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**





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 September 30, 2008 and 2007.




8





ESCO,
      INC.


(A
      Development Stage Company)


NOTES
      TO FINANCIAL STATEMENTS


(Unaudited)





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





**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.





**Recent
      Accounting Standards**





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.




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.


9





ESCO,
      INC.


(A
      Development Stage Company)


NOTES
      TO FINANCIAL STATEMENTS


(Unaudited)





**NOTE
      2 – 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
      3 – COMMITMENTS**





As
      of
      September 30, 2008 corporate officers from either their homes or 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
      4 - COMMON STOCK TRANSACTIONS**





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





**NOTE
      5 – SHORT TERM SHAREHOLDER LOAN**





On
      March
      17, 2008 and March 18, 2008, the Company secured a short term loan in the face
      amount of $5,200 from Virgil K. Johnson, one of its shareholder, which is due
      on
      demand and bears interest beginning April 1, 2008 at a rate of 7.0% per annum,
      payable upon demand or at least by December 31 st of each
      year.





**NOTE
      6 – SALE OF CONTROLLING INTEREST**





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 December 31, 2008.





10








**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION.**





***Forward
      Looking Statement Notice***





Certain
      statements made in this Quarterly Report on Form 10-Q are “forward-looking
      statements” (within the meaning of the Private Securities Litigation Reform Act
      of 1995) regarding the plans and objectives of management for future operations.
      Such statements involve known and unknown risks, uncertainties and other factors
      that may cause actual results, performance or achievements of SRKP 16, Inc.
      (“we”, “us”, “our” or the “Company”) to be materially different from any future
      results, performance or achievements expressed or implied by such
      forward-looking statements. The forward-looking statements included herein
      are
      based on current expectations that involve numerous risks and uncertainties.
      The
      Company’s plans and objectives are based, in part, on assumptions involving the
      continued expansion of business. Assumptions relating to the foregoing involve
      judgments with respect to, among other things, future economic, competitive
      and
      market conditions and future business decisions, all of which are difficult
      or
      impossible to predict accurately and many of which are beyond the control of
      the
      Company. Although the Company believes its assumptions underlying the
      forward-looking statements are reasonable, any of the assumptions could prove
      inaccurate and, therefore, there can be no assurance the forward-looking
      statements included in this Quarterly Report will prove to be accurate. In
      light
      of the significant uncertainties inherent in the forward-looking statements
      included herein, the inclusion of such information should not be regarded as
      a
      representation by the Company or any other person that the objectives and plans
      of the Company will be achieved.





***Description
      of Business***





The
      Company, based on proposed business activities, is a “blank check” company. The
      SEC defines those companies as “any development stage company that is issuing a
      penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange
      Act of 1934, as amended (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. The Company is also a “shell company,”
defined in Rule 12b-2 under the Exchange Act as a company with no or nominal
      assets (other than cash) and no or nominal operations. 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. The Company intends to comply with the periodic reporting
      requirements of the Exchange Act for so long as we are subject to those
      requirements.





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. 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 an operating business. 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.





***Liquidity
      and Capital Resources***





As
      of
      September 30, 2008, the Company had assets equal to $577, consisting exclusively
      of cash.  The Company’s current liabilities as of September 30, 2008
      totaled $5,200, comprised mostly of monies due to stockholders. The Company
      borrowed these funds from Virgil Johnson, its director and stockholder, on
      March
      17, 2008 so that operations could continue. The note is due on demand and bears
      interest at 7% per annum beginning on April 1, 2008. The Company can provide
      no
      assurance that it can continue to satisfy its cash requirements for at least
      the
      next twelve months.


11


The
      Company has only cash assets and has generated no revenues since inception.
      The
      Company is also dependent upon the receipt of capital investment or other
      financing to fund its ongoing operations and to execute its business plan of
      seeking a combination with a private operating company. In addition, the Company
      is dependent upon certain related parties to provide continued funding and
      capital resources. If continued funding and capital resources are unavailable
      at
      reasonable terms, the Company may not be able to implement its plan of
      operations.





***Results
      of Operations***





The
      Company has not conducted any active operations since inception, except for
      its
      efforts to locate suitable acquisition candidates.  The Company had net
      income of $133 for the three months ended September 30, 2008, due to the write
      off a finance charges previously deducted by the Company, and has incurred
      a net
      loss of $20,123 for the period November 4, 2005 (inception) to September 30,
      2008.  The Company has incurred a net loss of $1,020 for the nine months
      ended September 30, 2008.  It is management's assertion that these
      circumstances may hinder the Company's ability to continue as a going
      concern.





On
      January 1, 2008, the shareholders of the Company entered into a Share Purchase
      Agreement, wherein they are selling ninety-seven percent of their shares of
      Common Stock to Luther Capital Management, Inc. Closing has been delayed, but
      it
      is expected that closing will during 2008.





***Off-Balance
      Sheet Arrangements***  ****





The
      Company does not have any off-balance sheet arrangements that have or are
      reasonably likely to have a current or future effect on the Company’s financial
      condition, changes in financial condition, revenues or expenses, results of
      operations, liquidity, capital expenditures or capital resources that is
      material to investors. ****




12





**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





As
      a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
      is not required to provide information required by this Item.




**ITEM
      4T. CONTROLS AND PROCEDURES.**





Our
      management with the participation and under the supervision of our Chief
      Executive Officer and Chief Financial Officer reviewed and evaluated the
      effectiveness of the design and operation of our disclosure controls and
      procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act)
      as of
      the end of the period covered by this report. Based upon their evaluation,
      our
      Chief Executive Officer and Chief Financial Officer concluded that, as of the
      end of such period, our disclosure controls and procedures are effective and
      sufficient to ensure that we record, process, summarize, and report information
      required to be disclosed in the reports we filed under the Exchange Act within
      the time periods specified in the Securities and Exchange Commission's rules
      and
      regulations.





There
      were no changes in the Company's internal controls over financial reporting,
      known to the chief executive officer or the chief financial officer, that
      occurred during the period covered by this report that has materially affected,
      or is reasonably likely to materially affect, the Company's internal control
      over financial reporting.


13





**PART
      II — OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS.**





To
      the
      best knowledge of the officers and directors, the Company is not a party to
      any
      legal proceeding or litigation.





**ITEM
      1A. RISK FACTORS**




As
      a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
      is not required to provide information required by this Item.





**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
      None.**





**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES. None.**





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
      None.**





**ITEM
      5. OTHER INFORMATION. None.**





**ITEM
      6. EXHIBITS.**





Exhibit
                No.
            
            Description*3.1
            
            Articles
                of Incorporation, as filed with the Nevada Secretary State on November
                4,
                2005.*3.2
            
            By-Laws31.1
            
            Certification
                of the Company’s Principal Executive Officer to Section 302 of the
                Sarbanes-Oxley Act of 2002, with respect to the Quarterly Report
                on Form
                10-QSB for the quarter ended September 30, 2006.32.1
            
            Certification
                of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002.




*
      Filed
      as an exhibit to the Company’s Registration Statement on Form 10-SB, as filed
      with the Securities and Exchange Commission on April 25, 2006, and incorporated
      herein by this reference.


14





**SIGNATURES**




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




Dated:
      November 14, 2008





**ESCO,
                INC.**By:
            /s/
                William T. FoleyWilliam
                T. Foley, President




15