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

                                    FORM 10-Q

[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
For the quarterly period ended:                               September 30, 1999
                                       OR



[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
For the transition period from -------------------- to -------------------------


Commission file number:                                                  0-16749

                                  CERBCO, Inc.
             (Exact name of registrant as specified in its charter)

                       Delaware                                54-1448835
            (State or other jurisdiction of                 (I.R.S. Employer
            incorporation or organization)                 Identification No.)

         3421 Pennsy Drive, Landover, Maryland                  20785
       (Address of principal executive offices)              (Zip Code)


          Registrant's telephone and fax numbers, including area code:
                               301-773-1784 (tel)
                               301-322-3041 (fax)
            301-773-4560 (24-hour public information FaxVault System)


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


As of November 9, 1999, the following number of shares of each of the issuer's
classes of common stock were outstanding:
                       Common Stock                       1,189,476
                       Class B Common Stock                 293,480
                         Total                            1,482,956

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                              Page

Item 1.  Financial Statements..................................................3

         Condensed Consolidated Statements of Earnings for the
         Three Months Ended September 30, 1999 and
         September 30, 1998 (unaudited)........................................3

         Condensed Consolidated Balance Sheets as of September 30, 1999
         and June 30, 1999 (unaudited).........................................4

         Condensed Consolidated Statements of Cash Flows for the
         Three Months Ended September 30, 1999 and
         September 30, 1998 (unaudited)........................................6

         Notes to Condensed Consolidated Financial Statements (unaudited)......7

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations................................................11

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........13

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings....................................................14

Item 2.  Changes in Securities and Use of Proceeds............................14

Item 3.  Defaults upon Senior Securities......................................14

Item 4.  Submission of Matters to a Vote of Security Holders..................14

Item 5.  Other Information....................................................14

Item 6.  Exhibits and Reports on Form 8-K.....................................14


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
                                  CERBCO, Inc.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (unaudited)

<CAPTION>
                                                                                For the three months ended Sept. 30
                                                                                     1999                 1998

<S>                                                                               <C>                  <C>
Sales                                                                           $  7,314,454         $  6,047,942
                                                                                ------------         ------------

Costs and Expenses:
  Cost of sales                                                                    6,119,386            5,050,451
  Selling, general and administrative expenses                                     1,262,726            1,206,539
                                                                                ------------         ------------
    Total Costs and Expenses                                                       7,382,112            6,256,990
                                                                                ------------         ------------

Operating Loss                                                                       (67,658)            (209,048)
Investment Income                                                                    178,412              250,862
Interest Expense                                                                      (7,450)             (12,705)
Other Income - net                                                                    20,194               33,638
                                                                                ------------         ------------
Earnings Before Non-Owned Interests and Incomes Taxes                                123,498               62,747
Non-Owned Interest in Pretax Loss of Midsouth Partners                                19,889               61,623
                                                                                ------------         ------------
Earnings Before Non-Owned Interests in Insituform East, Inc.
  and Income Taxes                                                                   143,387              124,370
Provision for Income Taxes                                                            60,000               54,000
                                                                                -------------        ------------
Earnings Before Non-Owned Interests in Insituform East, Inc.                          83,387               70,370
Non-Owned Interests in Earnings of Insituform East, Inc.                             (37,886)             (35,633)
                                                                                ------------         ------------
                                                                  NET EARNINGS  $     45,501         $     34,737
                                                                                ============         ============

Net Earnings per Share of Common Stock:
  Basic Earnings per Share                                                      $       0.03         $        0.02
                                                                                ============         =============
  Diluted Earnings per Share                                                    $       0.03         $        0.02
                                                                                ============         =============

See notes to condensed consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
                                  CERBCO, Inc.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

<CAPTION>
                                                                                                     As of
                                                                                    -------------------------------------
                                                                                    Sept. 30, 1999         June 30, 1999
                                                                                    ----------------      ---------------
ASSETS

Current Assets:
<S>                                                                                   <C>                   <C>
  Cash and cash equivalents                                                           $14,606,824           $17,050,119
  Accounts receivable                                                                   7,870,943             6,592,913
  Inventories                                                                           1,149,239             1,273,402
  Prepaid and refundable taxes                                                             87,677               550,453
  Prepaid expenses and other                                                              280,547               339,928
                                                                                      -----------           -----------
    Total Current Assets                                                               23,995,230            25,806,815
                                                                                      -----------           -----------

Property, Plant and Equipment - at cost less accumulated depreciation of
  $15,993,670 at September 30, 1999 and $15,432,983 at June 30, 1999                   11,626,542            11,511,536
                                                                                      -----------           -----------

Other Assets:
  Excess of acquisition  cost over value of net assets acquired less accumulated
  amortization of $1,272,687 at September 30, 1999 and $1,253,580 at
    June 30, 1999                                                                       1,948,956             1,998,822
  Cash surrender value of SERP life insurance                                           1,806,369             1,730,964
  Deposits and other                                                                       88,934                70,489
                                                                                      -----------           -----------
    Total Other Assets                                                                  3,844,259             3,800,275
                                                                                      ===========           ===========
      Total Assets                                                                    $39,466,031           $41,118,626
                                                                                      ===========           ===========

See notes to condensed consolidated financial statements.
</TABLE>

<PAGE>


<TABLE>
                                  CERBCO, Inc.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

<CAPTION>
                                                                                               As of
                                                                                 -------------------------------------
                                                                                 Sept. 30, 1999       June 30, 1999
                                                                                 ----------------    -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
<S>                                                                              <C>                  <C>
  Loans to Midsouth Partners from non-owned interests                            $           0        $    400,000
  Accounts payable and accrued liabilities                                           2,998,139           2,958,136
  Income taxes payable                                                               1,075,432           1,508,353
  Current portion of capital lease obligations                                          38,696              42,167
                                                                                 -------------        ------------
    Total Current Liabilities                                                        4,112,267           4,908,656
                                                                                 -------------        ------------

Long-Term Liabilities:
  Capital lease obligations (less current portion shown above)                          56,356              62,662
  Deferred income taxes                                                                255,000             219,000
  Accrued SERP liability                                                               906,893             847,560
                                                                                 -------------        ------------
    Total Long-term Liabilities                                                      1,218,249           1,129,222
                                                                                 -------------        ------------
      Total Liabilities                                                              5,330,516           6,037,878
                                                                                 -------------        ------------

Commitments and Contingencies

Non-Owned Interests in Consolidated Subsidiaries                                     9,271,585          10,262,319
                                                                                 -------------        ------------

Stockholders' Equity:
  Common stock, $.10 par value
    Authorized:  3,500,000 shares
    Issued and outstanding:  1,189,476 shares                                          118,947             118,947
Class B Common stock (convertible), $.10 par value
    Authorized:  700,000 shares
    Issued and outstanding: 293,480 shares                                              29,348              29,348
Additional paid-in capital                                                           7,527,278           7,527,278
  Retained earnings                                                                 17,188,357          17,142,856
                                                                                 -------------        ------------
    Total Stockholders' Equity                                                      24,863,930          24,818,429
                                                                                 =============        ============
      Total Liabilities and Stockholders' Equity                                   $39,466,031         $41,118,626
                                                                                 =============        ============

See notes to condensed consolidated financial statements.
</TABLE>

<PAGE>


<TABLE>
                                  CERBCO, Inc.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<CAPTION>
                                                                        For the three months ended Sept. 30
                                                                        -----------------------------------
                                                                               1999                 1998
                                                                        -----------------     ----------------

Cash Flows from Operating Activities:
<S>                                                                     <C>                   <C>
  Net earnings                                                          $       45,501        $       34,737
  Adjustments to reconcile net earnings
    to net cash used in operations:
    Depreciation and amortization                                              600,145               510,204
    Amounts attributable to non-owned interests                                 17,997               (25,990)
    Deferred income taxes                                                       36,000               104,000
    Decrease in other assets                                                         0                17,990
    Increase in accrued SERP liability                                          59,333                70,318
    Changes in operating assets and liabilities:
      Increase in accounts receivable                                       (1,278,030)             (997,445)
      Decrease in inventories                                                  124,163                 9,285
      Decrease in prepaid expenses                                              59,381                65,938
      (Increase) decrease in prepaid taxes                                     462,776               (22,442)
      Increase in accounts payable and accrued expenses                        188,299                35,414
      Increase (decrease) in income taxes payable                             (432,921)               60,000
                                                                        --------------        --------------
  Net Cash Used in Operating Activities                                       (117,356)             (137,991)
                                                                        --------------        --------------

Cash Flows from Investing Activities:
  Capital expenditures, net                                                   (694,489)             (398,035)
  Purchase of remaining interests in Midsouth Partners                        (948,707)                    0
  Increase in investment in Insituform East                                    (29,265)                    0
  Increase in other assets                                                     (20,000)                    0
  Increase in cash surrender value of SERP life insurance                      (75,405)              (80,299)
                                                                        --------------        --------------
  Net Cash Used in Investing Activities                                     (1,767,866)             (478,334)
                                                                        --------------        --------------

Cash Flows from Financing Activities:
  Repayment of loans to Midsouth Partners from non-owned interests            (400,000)                    0
  Principal payments under capital lease obligations                            (9,777)               (8,008)
  Dividends paid                                                              (148,296)             (148,296)
                                                                        --------------        --------------
  Net Cash Used in Financing Activities                                       (558,073)             (156,304)
                                                                        --------------        --------------

Net Decrease in Cash and Cash Equivalents                                   (2,443,295)             (772,629)
Cash and Cash Equivalents at Beginning of Period                            17,050,119            20,405,039
                                                                        ==============        ==============
Cash and Cash Equivalents at End of Period                              $   14,606,824        $   19,632,410
                                                                        ==============        ==============

Supplemental disclosure of cash flow information:
  Interest paid                                                         $       58,221        $       12,705
                                                                        ==============        ==============
  Income taxes refunded                                                 $       (5,855)       $      (87,598)
                                                                        ==============        ==============
See notes to condensed consolidated financial statements.
</TABLE>


<PAGE>


                                  CERBCO, Inc.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.       Financial Information

         The condensed consolidated financial statements include the accounts of
the parent holding company, CERBCO, Inc. ("CERBCO"); and its majority-controlled
subsidiary,  Insituform East, Incorporated  ("Insituform East"). All significant
intercompany accounts and transactions have been eliminated.

         The Condensed  Consolidated Balance Sheet as of September 30, 1999, the
Condensed  Consolidated  Statements  of  Earnings  for the  three  months  ended
September 30, 1999 and 1998, and the Condensed  Consolidated  Statements of Cash
Flows for the three months ended  September 30, 1999 and 1998 have been prepared
by the Company  without audit.  The Condensed  Consolidated  Balance Sheet as of
June 30, 1999  (unaudited)  has been  derived from the  Company's  June 30, 1999
audited  financial  statements.  In the opinion of management,  all  adjustments
(which include only normal  recurring  adjustments)  necessary to present fairly
the financial  position,  results of operations  and cash flows at September 30,
1999 and for all periods presented have been made.

         These statements have been prepared in accordance with the instructions
to Form 10-Q and  therefore  do not  necessarily  include  all  information  and
footnotes necessary to a presentation of the financial position,  the results of
operations and the cash flows, in conformity with generally accepted  accounting
principles.  Certain information and footnote  disclosures  normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these condensed
financial   statements  be  read  in  conjunction  with  the  audited  financial
statements  and notes thereto  included in the CERBCO annual report on Form 10-K
for the fiscal year ended June 30, 1999.  Operating  results for interim periods
are not necessarily indicative of operating results for an entire fiscal year.

2.       Earnings Per Share

         Basic  earnings  per share data are  computed  based upon the  weighted
average number of common shares outstanding during each period. Diluted earnings
per share data are  computed  based upon the weighted  average  number of common
shares  outstanding  during the period including  common stock  equivalents from
dilutive  stock  options,  if any. The weighted  average number of common shares
outstanding  used in computing  diluted  earnings per share for the three months
ended  September  30,  1999 and  1998  include  no net  shares  associated  with
unexercised  dilutive stock options.  The following  numbers of shares have been
used in the earnings per share computations:

                                         For the three months ended Sept. 30
                                          1999                       1998

                  Basic                 1,482,956                  1,482,956
                                        =========                  =========
                  Diluted               1,482,956                  1,482,956
                                        =========                  =========

3.       Accounts Receivable

         Accounts receivable consist of:
                                           Sept. 30, 1999         June 30, 1999

Due from customers                             $7,583,340            $6,514,843
Miscellaneous                                     287,603                78,070
                                               ----------            ----------
                                                7,870,943             6,592,913
Less: Allowance for doubtful accounts                   0                     0
                                               ----------            ----------
                                               $7,870,943            $6,592,913
                                               ==========            ==========

4.       Equity in Insituform East

         At September 30, 1999,  CERBCO  beneficially  held 1,244,750  shares of
Insituform  East Common Stock and 296,141 shares of convertible  Insituform East
Class B Common Stock representing approximately 30.7% of the Common Stock, 99.5%
of the Class B Common  Stock,  35.4% of the total  equity and 59.8% of the total
voting power of all outstanding classes of Insituform East common stock. Holders
of Class B Common Stock,  voting  separately as a class, have the right to elect
the remaining  members of the Board of Directors after election of not less than
25% of such members by holders of shares of Common Stock, voting separately as a
class.

         During the quarter ended  September 30, 1999,  CERBCO  acquired  18,350
shares of Insituform East Common Stock for $29,264.  The difference  between the
cost of the stock and the net book value thereof,  $30,759, has been credited to
excess of acquisition cost over value of net assets acquired.

         From time to time, Insituform East issues additional shares of stock as
a result of stock  dividends and  exercised  stock  options.  Changes in capital
structure  resulting from such additional stock issues decrease  CERBCO's equity
ownership.  No additional shares were issued in the three months ended September
30, 1999. If all the options  outstanding at September 30, 1999 were  exercised,
the resulting  percentages of CERBCO's  equity  ownership and total voting power
would be 31.6% and 55.6%, respectively.

         From time to time, Insituform East purchases shares of its common stock
for treasury.  Changes in capital structure  resulting from such stock purchases
increase CERBCO's equity ownership.  Insituform East did not purchase any shares
during the three months ended September 30, 1999.

5.       Acquisition of Remaining Interests in Midsouth Partners

         CERBCO's consolidated financial statements as of September 30, 1999 and
June 30, 1999, and for the quarters ended  September 30, 1999 and 1998,  include
the  accounts  of  Midsouth  Partners,   Insituform  East's  majority-controlled
subsidiary  partnership since June 12, 1996.  Midsouth Partners was organized as
Insituform  Midsouth,  a Tennessee  general  partnership,  in December 1985 with
Insituform  East as a  general  partner.  Midsouth  Partners  was the  exclusive
licensee for the Insituform  process and NuPipe  process in Tennessee,  Kentucky
(excluding Boone,  Kenton and Campbell  counties) and northern  Mississippi from
December 2, 1985 through  July 20,  1999.  The  Partnership's  general  partners
through July 20, 1999 were Insitu, Inc., a wholly-owned subsidiary of Insituform
East; Insituform Technologies,  Inc. ("ITI"); and Insituform Southwest, Inc., an
affiliate of ITI.

         Partnership  profits and losses were allocated through July 20, 1999 to
the partners as follows:

         Insitu, Inc.                              42.5%
         Insituform Technologies, Inc.             42.5%
         Insituform Southwest, Inc.                15.0%

         In March  1999,  ITI gave  notice  of a  purported  termination  of the
Midsouth  Partners  partnership,   purportedly   terminated  Midsouth  Partners'
Insituform(R)  License Agreement and simultaneously  commenced litigation in the
Chancery  Court of  Delaware  to deny  Midsouth  Partners  any rights to further
utilize  cured-in-place  pipe  ("CIPP")  rehabilitation  processes as previously
practiced under such license.  In April 1999, Midsouth Partners responded to the
Delaware  Chancery Court  litigation and filed a demand for arbitration with the
American Arbitration Association.

         Insituform  East  settled its  disputes  with ITI  concerning  Midsouth
Partners  under the terms of an agreement  reached July 20, 1999 (the  "Midsouth
Settlement  Agreement")  and actions before the Delaware  Chancery Court and the
American Arbitration Association were dismissed. Under the terms of the Midsouth
Settlement  Agreement,  a wholly-owned  subsidiary of Insituform  East purchased
ITI's interests in the Midsouth Partners  partnership at book value and Midsouth
Partners remained entitled to continue the business of the partnership under its
present name. The  Insituform(R)  License  Agreement and its  requirement to pay
royalties were relinquished under the settlement,  henceforth  permitting direct
competition between ITI and Midsouth Partners. The Midsouth Settlement Agreement
expressly  provides that Midsouth  Partners may utilize processes other than the
Insituform  process  to  perform  pipe  rehabilitation  services,  and  Midsouth
Partners also obtained a royalty-free non-exclusive right, without limitation in
time and within the partnership's  previously licensed  territory,  to continued
use of the  cured-in-place  pipe  processes,  technique and  inventions  that it
formerly  practiced  pursuant  to  its  since-terminated  Insituform(R)  License
Agreement as the same existed on July 20, 1999.

         Effective  July 20, 1999,  Insituform  East,  through its  wholly-owned
subsidiary, Midsouth, L.L.C., acquired the remaining 57.5% interests in Midsouth
Partners previously held by ITI and Insituform Southwest, Inc. for $948,707, the
book  value of their  respective  partnership  accounts  on July 20,  1999.  The
acquisition  was accounted for as a purchase.  Partnership  pretax  earnings and
losses  attributable  to these  interests,  previously  allocated  to  non-owned
interests in consolidation, have been allocated to Insituform East subsequent to
July 20, 1999.

         Unaudited pro forma results of operations,  assuming acquisition of the
remaining interests in Midsouth Partners had occurred as of July 1, 1998, are as
follows:

                                           Three Months Ended September 30,
                                                1999              1998
        Sales                                $7,314,454        $6,047,942
        Net Earnings                            $40,934           $22,443
        Net Earnings per Share:
            Basic                                 $0.03             $0.02
            Diluted                               $0.03             $0.02

         This pro forma  information  does not purport to be  indicative  of the
results that  actually  would have been  recognized if the  operations  had been
combined during the periods  presented and is not intended to be a projection of
future results.

6.       Accounts Payable and Accrued Liabilities

         Accounts payable and accrued liabilities consist of:

                                           Sept. 30, 1999         June 30, 1999

Accounts payable                             $1,534,391            $1,448,725
Accrued compensation and related expenses     1,463,748             1,361,115
Dividends payable                                     0               148,296
                                             ----------            ----------
                                             $2,998,139            $2,958,136
                                             ==========            ==========

7.       Contingencies

         As previously  reported by the Company,  in March 1990, the controlling
stockholders  of the Company,  Messrs.  George Wm. Erikson and Robert W. Erikson
(together,  the  "Eriksons"),  executed  a letter  of  intent  and  subsequently
executed four amendments thereto (collectively referred to herein as the "Letter
of Intent") with Insituform Technologies, Inc. ("ITI") to effect a sale of their
controlling  interest  in the  Company  to ITI  for  $6,000,000  (the  "Proposed
Transaction").  The Proposed  Transaction,  if  consummated,  would have had the
effect  of  making  ITI  the  controlling   stockholder  of  the  Company,  and,
indirectly,  of each of the  Company's  three direct  subsidiaries  at the time,
including  Insituform East. In September 1990, the Eriksons informed the Company
that the Letter of Intent had expired without  consummation of any  transaction,
that it would not be further extended,  that  negotiations had ceased,  and that
the Eriksons had no further  intention at the time of pursuing the proposed sale
of their controlling interest in the Company to ITI.

         Also as previously reported by the Company, two stockholders  commenced
a derivative  lawsuit in the Delaware Court of Chancery  against the Eriksons in
August,  1990,  making certain  claims with respect to the Proposed  Transaction
(the "Delaware  Action").  The Delaware Action finally was concluded on December
3, 1997, when the Delaware Supreme Court issued its order affirming the findings
of the Court of Chancery  with respect to (a) the trial  court's  assessment  of
certain  damages  against the Eriksons on remand from a previous  appeal and (b)
the renewed  petition of plaintiffs'  attorneys for an award of attorneys'  fees
and  expenses.  Those  findings by the Court of Chancery had been made on remand
from the same  Delaware  Supreme  Court after a 1996 ruling in which the Supreme
Court affirmed the Court of Chancery's  holding that CERBCO had not suffered any
transactional damages with respect to the Proposed Transaction.

         As  previously  reported by the  Company,  in January  1993,  a lawsuit
against the partners in the law firm of Rogers & Wells and the Company,  arising
out of the subject matter of the Delaware litigation,  was filed in the Superior
Court of the District of Columbia (the "D.C.  Complaint").  Plaintiffs  were the
same two stockholders  who were plaintiffs in the Delaware Action,  and a former
director of the Company,  and alleged  that Rogers & Wells  breached its duty of
loyalty and care to the Company by representing  allegedly conflicting interests
of the Eriksons in the Proposed  Transaction  with ITI.  Plaintiffs also claimed
that Rogers & Wells committed malpractice by allegedly making misrepresentations
to the Company's  Board and allegedly  failing to properly  inform the Company's
Board.  Plaintiffs claimed that the conduct of Rogers & Wells caused the Company
to lose an opportunity to sell its control of Insituform East to ITI, caused the
Company to incur substantial  expense, and unjustly enriched Rogers & Wells. The
D.C.  Complaint  sought to recover  from Rogers & Wells (i) damages in an amount
equal to all fees paid to Rogers & Wells,  (ii)  damages  in an amount  not less
than $6  million  for the loss of the  opportunity  for the  Company to sell its
control of Insituform East to ITI, and (iii) punitive damages. Although the D.C.
Complaint stated that it was filed on behalf of the Company, management does not
believe  that  Rogers & Wells  should  be sued on any of the  claims  set  forth
therein.

         Motions to  dismiss  this case by the  Company  and Rogers & Wells were
denied,  but a stay of the  proceedings  was granted  until  after the  Delaware
trial.  Plaintiffs  agreed to a stay in the Superior  Court  action  pending the
outcome of the  appeal of the  outcome of the  Delaware  Action to the  Delaware
Supreme Court and, subsequently, the stay was continued at least until such time
as the Delaware  Court of Chancery  ruled upon  plaintiffs'  pending  motion for
post-remand  relief.  After the Delaware  Supreme  Court's most recent ruling on
December 3, 1997,  finally affirming the Delaware Court of Chancery with respect
to such post-remand relief and a renewed petition for counsel fees and expenses,
the stay of the District of Columbia action was lifted,  and plaintiffs filed an
amended  D.C.  Complaint.  In the  amended  D.C.  Complaint,  plaintiffs  assert
essentially  the same conflicts of interest  charges  against Rogers & Wells but
shift  their  focus  from  the  value of the  alleged  lost  opportunity  to the
litigation  expenses incurred by the Company in the Delaware Action.  Plaintiffs
now seek to recover  from Rogers & Wells (i)  damages in an amount  equal to all
fees paid to Rogers & Wells, (ii) damages for more than $2 million in attorneys'
fees  and  expenses  incurred  by  CERBCO  in  the  Delaware  Action  and  other
unspecified compensatory damages, and (iii) punitive damages. On March 27, 1998,
the Company filed its answer to the amended D.C.  Complaint,  in which it denied
all liability and asserted  certain  affirmative  defenses.  On the same day, it
filed its motion for summary judgment,  together with a supporting memorandum of
law, on the grounds of  collateral  estoppel  and res  judicata.  Rogers & Wells
likewise answered the amended D.C.  Complaint,  denying  liability,  and filed a
motion for summary  judgment on  collateral  estoppel  grounds.  On February 18,
1999, the D.C.  Superior Court entered an Order denying the Company's  motion on
the ground of res judicata, but granting the defendants' summary judgment motion
on the issue of punitive  damages only. On April 9, 1999, the Court  conducted a
hearing  limited to the issues of causation,  damages,  and collateral  estoppel
with respect to the  defendants'  pending  motions.  On May 20, 1999,  the Court
denied the  Company's  motion for summary  judgment on the ground of  collateral
estoppel.  The matter has now been  referred  to  mediation  in the  District of
Columbia.

         As  previously  reported,  on June 30,  1998,  Inliner  U.S.A.  and CAT
Contracting,  Inc. filed an antitrust suit against ITI,  Insituform  Gulf South,
Inc.  and  Insituform  East in United  States  District  Court for the  Southern
District of Texas,  Houston Division,  alleging violations by ITI (including all
of its subsidiary  licensees),  Insituform Gulf South, Inc., and Insituform East
of Sections 1 and 2 of the Sherman Act, Section 2 of the Clayton Act, as amended
by  the  Robinson-Patman   Act,  Section  43(a)  of  the  Lanham  Act,  business
disparagement,  tortious  interference  with contracts and prospective  business
relationships,   and  unfair  competition.   Plaintiffs  are  seeking  from  the
defendants an unspecified  amount of  compensatory  damages,  treble damages and
attorneys' fees, as well as punitive damages of $50 million.

         Insituform  East believes it has strong  defenses to, and is vigorously
contesting,  this suit.  In an October  21, 1999  Order,  the Court  granted the
Company's  motion to compel  plaintiffs  to respond to its  discovery,  ordering
plaintiffs  to  respond  within  ten  days;  and the  Court  denied  plaintiff's
counsel's motion to withdraw at this time,  ordering plaintiffs to file a status
report  concerning  their search for new counsel within ten days. On November 1,
1999,  plaintiffs  responded by indicating that this case will be dismissed with
prejudice by plaintiffs.  Although the ultimate  outcome and consequences of the
suit cannot be  ascertained  at this time and the  results of legal  proceedings
cannot be  predicted  with  certainty,  it is the opinion of the  management  of
Insituform East that the suit is meritless and will not have a material  adverse
effect on the  financial  condition or the results of  operations  of Insituform
East.

         Management  believes ultimate resolution of these matters will not have
a  material  effect on the  financial  statements  of  CERBCO.  Accordingly,  no
provision for these  contingencies  has been reflected  therein.  The Company is
also  involved  in other  contingencies  arising out of the  ordinary  course of
business,  none of which could, in the opinion of management,  materially affect
the Company's financial position or results of operations.

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

Overview and Outlook

         The Company  reported  consolidated  net earnings of $45,501  ($.03 per
share) on sales of $7.3 million for the first  quarter of fiscal year 2000.  For
the  first  quarter  of  the  previous  fiscal  year,  the  Company   recognized
consolidated net earnings of $34,737 ($.02 per share) on sales of $6.0 million.

         The Company  attributed its modestly favorable first quarter results in
fiscal year 2000 to the positive results of Insituform  East, Inc.  ("Insituform
East") and the parent company's short-term investment earnings, in approximately
equal measure. Insituform East, the Company's majority-controlled subsidiary and
only operating segment, recognized consolidated net earnings of $58,617 on sales
of $7.3 million,  contributing earnings of $20,731 to CERBCO. The parent company
contributed  earnings of  $24,770.  These  operating  results are similar to the
results of the first quarter of the previous  fiscal year when  Insituform  East
recognized  consolidated  net  earnings  of  $52,928  on sales of $6.0  million,
contributing  earnings of $17,295 to CERBCO, and the parent company  contributed
earnings of $17,442.

         With respect to forward-looking  information, and while there can be no
assurances  regarding the Company's future operating  performance,  based on the
volume and mix of Insituform  East's  present and expected  workable  backlog of
customer  orders,  the  Company  presently  anticipates  that a  combination  of
additional sales at normal margins and increased production levels by Insituform
East  will be  required  to  sustain  positive  operating  results  through  the
remainder  of  fiscal  year  2000.  Income  from  the  Company's   non-operating
activities  presently is  anticipated  to  approximate  the normal levels of its
holding company expenses into the future;  accordingly,  absent unusual items or
circumstance, the Company's forward-looking results typically are anticipated to
substantially  parallel  the  Company's  approximate  35%  participation  in the
forward results of Insituform East.

         The principal factor affecting the Company's future performance remains
the  volatility of Insituform  East's  earnings as a function of sales volume at
normal margins. Accordingly,  because a substantial portion of Insituform East's
costs are semi-fixed in nature,  its earnings can, at times, be severely reduced
or eliminated  during  periods of depressed  sales at normal margins or material
increases in  discounted  sales,  even where total  revenues may  experience  an
apparent  buoyancy or growth from the addition of  discounted  sales  undertaken
from  time to  time  for  strategic  reasons.  Conversely,  at  normal  margins,
increases in Insituform East's period sales typically leverage positive earnings
significantly.

         The Company believes the trenchless pipeline reconstruction marketplace
is  continuing  to expand,  thereby  enticing,  however,  the entry of ever more
contractors  with limited  cured-in-place  ("CIPP")  installation  experience or
inferior  products  hoping that cheap  price alone might  permit them to succeed
against the Company's quality and time tested CIPP rehabilitation capability. In
that segment of the market where  technical  risk and the lowest priced  product
may be deemed "good enough," the Company is at a  disadvantage  and market share
participation strategically undertaken by the Company in such segment, at levels
materially  below normal  margins,  necessarily  dilutes the  Company's  overall
margin  performance.  Conversely,  in the "best value" and quality-based  market
segment,  the  Company's  quality CIPP  rehabilitation  capability  continues to
provide a distinct  advantage.  While both the Federal  Government  and industry
routinely  use best  value  and  quality-weighted  contract  award  criteria  in
technical   procurements,   municipalities   and  local  governments  are  often
politically  reluctant to modernize from simply "low bid" buying to "best value"
buying. In the face of mounting technical failures from awards based upon lowest
price, municipalities also are expected over time to reevaluate traditional "low
bid" award  criteria - in favor of "best value" award  criteria - when procuring
trenchless technology for the rehabilitation of older pipelines.

Results of Operations

      First Quarter ended 9/30/99 Compared with First Quarter ended 9/30/98

         Consolidated  sales  increased $1.3 million (21%) from $6.0 million for
the  quarter  ended  September  30, 1998 to $7.3  million for the quarter  ended
September 30, 1999, as a result of increased sales in Insituform East's licensed
Insituform territory. Consolidated cost of sales also increased 21% in the first
quarter of fiscal year 2000. As a result,  gross profit as a percentage of sales
was 16% of sales for each of the comparable periods.  Consolidated cost of sales
remained  consistent  in the  comparable  periods  primarily  due  to  increased
semi-fixed  costs  incurred in the first  quarter of fiscal year 2000 to support
increased  installation  activities,  including  support costs  associated  with
Insituform East's Ohio branch office reestablished in March 1999, and unbudgeted
additions in legal and other expenses during the quarter.

         Consolidated operating results improved somewhat from an operating loss
of -$0.2 million in the quarter ended September 30, 1998 to an operating loss of
-$0.07  million in the  quarter  ended  September  30,  1999,  primarily  due to
Insituform  East's selling,  general and  administrative  costs  increasing only
$0.07 million (7%), a lesser percentage increase than its percentage increase in
sales and cost of sales.  The parent  company's  unallocated  general  corporate
expenses remained approximately the same in the comparable periods.

Financial Condition

         During the quarter  ended  September  30,  1999,  the Company used $0.1
million  in  cash  in  operating  activities,  primarily  due to a $1.3  million
increase  in  Accounts  Receivable  that  more than  offset  net  earnings  plus
depreciation  and  amortization  expenses not requiring the outlay of cash.  The
increase in accounts  receivable  is due  primarily to an increase in Insituform
East's sales from the quarter ended June 30, 1999 to the quarter ended September
30, 1999.

         The Company used $1.8 million in cash investing  activities  during the
quarter  ended  September  30,  1999,  primarily  for the  purchase of remaining
non-owned  interests in Midsouth  Partners  and  equipment  purchases  and other
capital   improvements.   The  Company  also  used  $0.6  million  in  financing
activities, primarily due to the repayment of partner loans to Midsouth Partners
by former partners and the payment of dividends by the parent  company,  CERBCO.
Despite the $2.4 million net decrease in cash during the first quarter of fiscal
year 2000, the Company's  liquidity remained strong with working capital of over
$19 million and a current ratio of 5.8 at September 30, 1999.

         The Company  anticipates  that  Insituform East will continue to expand
production  capabilities in the current fiscal year which,  along with improving
operational   performance,   will  require  additional   capital   expenditures.
Management believes that Insituform East has cash reserves,  bank line of credit
availability or borrowing  potential against  unencumbered  assets sufficient to
meet future cash flow requirements.  In addition, the parent holding company has
cash and temporary  investments in excess of $13 million  which,  pending longer
term investment, management believes are more than adequate to meet its own cash
flow  requirements  and the temporary  requirements  of  Insituform  East in the
foreseeable future.

Year 2000 Issues

         The  inability  of  present   computerized  systems  to  process  dates
correctly  beyond  December 31, 1999 and the potential  impact on businesses and
governments in the future are generally referred to as "Year 2000" issues.

         The Company has implemented plans to address Year 2000 issues.  Primary
areas of  focus  include  the  Company's  information  technology  systems,  the
Company's  non-information  technology  systems,  the Year 2000 readiness of the
Company's  vendors and  suppliers  and the Year 2000  readiness of the Company's
major  customers.  Because the Company's  primary  products and services neither
include nor rely upon computerized  components,  the Company believes that there
are no additional  contingencies  associated  with actual or implied  warranties
related to its products and services resulting from Year 2000 issues.

         With  respect to the  Company's  information  technology  systems,  the
Company's primary  accounting and information  process system is Year 2000 ready
and will recognize years 2000 through 2029 in the proper century.  The Company's
preliminary  assessment of supporting  information systems is that these systems
either are Year 2000 ready,  can be modified to become Year 2000 ready, or would
not have a significant  impact on either the primary  accounting and information
system or the Company's operating activities should non-compliant systems not be
properly  modified.  Vendor-supplied  modifications  for supporting  information
systems were  implemented  and tested prior to June 30, 1999 and are believed to
be Year 2000 ready.

         With respect to the Company's  non-information  technology systems, the
Company is dependent on information  from vendors and suppliers in assessing and
evaluating these systems.  As potential Year 2000 issues were identified  during
the  preliminary  assessment  stage,  implementation  plans were  developed  and
executed.  The Company initiated and completed  corrective action for its office
telephone system and headquarters facility security system, the only two systems
that were identified as not being Year 2000 ready.

         With respect to the Company's suppliers and customers,  the Company has
initiated  preliminary  correspondence  with  selected  critical  suppliers  and
customers.  Responses  received to date indicate that  responding  suppliers and
customers  either are currently  Year 2000 ready or expect to be Year 2000 ready
by December 31, 1999. The Company will continue to seek to obtain responses from
suppliers  and  customers  who have not as yet  responded  to  inquiries  and is
monitoring Year 2000 readiness from respondents not as yet Year 2000 ready.

         The Company currently  estimates that the cost of implementing its Year
2000 Plan will not exceed $50,000. This estimate is based on presently available
information  and may require future  reassessment.  Specifically,  this estimate
would change if, after receipt of information from key suppliers or customers, a
modified contingency plan required  development and implementation.  The Company
has incurred $27,000 in implementation costs through September 30, 1999.

         There can be no assurances  that the  Company's  Year 2000 Plan will be
successful.  The Company is  dependent  on vendors to identify  and correct Year
2000 issues related to the Company's  utilities and equipment using computerized
components.  In addition, if key vendors fail to provide materials or sufficient
electrical power or other utilities critical to the Company's operations,  or if
transportation  of the Company's  personnel and equipment is seriously  impeded,
then any such failure or impedance  could have a material  adverse effect on the
operational performance and financial condition of the Company.

         In  addition,  if major  municipal,  industrial  or federal  government
customers are seriously  affected,  directly or indirectly,  by Year 2000 issues
such that pipeline  rehabilitation  programs are delayed or abandoned,  this too
could  have a  material  adverse  effect  on  the  operational  performance  and
financial condition of the Company.

         The Company  established a contingency  plan,  effective June 30, 1999,
based  primarily on  potential  actions that would be required if key vendors or
customers are unable to address and resolve Year 2000 issues that would directly
or indirectly impact the Company's ability to conduct normal business operations
in the year 2000 and beyond. Specifically,  the Company has identified potential
alternate vendors for critical installation  materials,  tube and resin, in case
primary  tube and resin  suppliers  fail to provide  materials  critical  to the
Company's operations. In addition, the Company intends to rely on the geographic
separation of its operations  facilities  and reallocate  resources as necessary
should vendors fail to supply sufficient  electrical power or other utilities to
an operations  facility,  or if  transportation  of the Company's  personnel and
equipment is seriously impeded in a particular geographic area.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         See  Part  I,  Item  1,  "Notes  to  Condensed  Consolidated  Financial
Statements  (unaudited) - Note 7.  Contingencies"  for details  concerning (a) a
previously  disclosed  lawsuit  pending in the Superior Court of the District of
Columbia,  and (b) a previously  disclosed  lawsuit  filed in the U.S.  District
Court for the Southern District of Texas, Houston Division.

Item 2.  Changes in Securities and Use of Proceeds

         Not applicable.

Item 3.  Defaults upon Senior Securities

         Not applicable.

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

         Not applicable.

Item 5.  Other Information

         Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

         27   - Financial Data Schedule

         99     - CERBCO, Inc.  Consolidating  Schedules:  Statement of Earnings
                Information  for the three  months  ended  September  30,  1999;
                Balance Sheet Information; and Consolidating Elimination Entries
                as of September 30, 1999.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed  during the quarter  ended  September
30, 1999.


                                   SIGNATURES

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

Date: November 12, 1999

                                CERBCO, Inc.
                                (Registrant)


                                /s/ ROBERT W. ERIKSON
                                Robert W. Erikson
                                President



                                /s/ ROBERT F. HARTMAN
                                Robert F. Hartman
                                Vice President, Secretary & Treasurer
                                (Principal Financial and Accounting Officer)





                       Exhibits to CERBCO, Inc. Form 10-Q





Exhibit 27.       CERBCO, Inc. Financial Data Schedule

Exhibit 99.       CERBCO, Inc. Consolidating  Schedules:  Statement of Earnings
                  Information for the Three  Months  Ended September 30,  1999;
                  Balance Sheet Information; and Consolidating Elimination
                  Entries as of September 30, 1999.