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:                                   March 31, 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 February 5, 1999, the following number of shares of each of the issuer's
classes of common stock were outstanding:
                   Common Stock                       1,186,976
                   Class B Common Stock                 295,980
                     Total                            1,482,956

<PAGE>

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                              Page

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

        Condensed Consolidated Statements of Operations for the
        Three Months and the Nine Months Ended March 31, 1999 and
        March 31, 1998 (unaudited)............................................3

        Condensed Consolidated Balance Sheets as of March 31, 1999
        and June 30, 1998 (unaudited).........................................4

        Condensed Consolidated Statements of Cash Flows for the Nine Months
        Ended March 31, 1999 and March 31, 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................................................10

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

PART II - OTHER INFORMATION

Item 1. Legal Proceedings....................................................13

Item 2. Changes in Securities and Use of Proceeds............................13

Item 3. Defaults upon Senior Securities......................................13

Item 4. Submission of Matters to a Vote of Security Holders..................13

Item 5. Other Information....................................................13

Item 6. Exhibits and Reports on Form 8-K.....................................13


<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>

                                  CERBCO, Inc.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
<CAPTION>

                                             For the three months ended Mar. 31    For the nine months ended Mar. 31
                                             ----------------------------------    ---------------------------------
                                                   1999              1998               1999              1998
                                                   ----              ----               ----              ----

<S>                                                 <C>               <C>               <C>                <C>        
Sales                                               $ 4,993,149       $ 4,147,345       $16,939,195        $18,783,253
                                                    -----------       -----------       -----------        -----------

Costs and Expenses:
  Cost of sales                                       5,325,240         4,510,966        15,406,481         16,254,863
  Selling, general and administrative expenses        1,365,512         1,224,374         3,821,849          4,066,863
                                                    -----------       -----------       -----------        -----------
    Total Costs and Expenses                          6,690,752         5,735,340        19,228,330         20,321,726
                                                    -----------       -----------       -----------        -----------

Operating Loss                                       (1,697,603)       (1,587,995)       (2,289,135)        (1,538,473)
Investment Income                                       192,699           239,023           678,807            791,346
Interest Expense                                         (7,075)           (8,048)          (30,973)           (48,540)
Other Income - net                                      147,864           127,090           250,505            452,690
                                                    -----------       -----------       -----------        -----------
Loss Before Non-Owned Interests                                                                                          
  and Incomes Taxes                                  (1,364,115)       (1,229,930)       (1,390,796)          (342,977)
Non-Owned Interest in Pretax Loss                                                                                        
  of MIDSOUTH Partners                                  430,060           242,176           512,408            650,272
                                                    -----------       -----------       -----------        -----------
Earnings (Loss) Before Non-Owned Interests                                                                               
  in Insituform East, Inc. and Income Taxes            (934,055)         (987,754)         (878,388)           307,295
Provision (Credit) for Income Taxes                    (392,000)         (420,000)         (358,000)            66,000
                                                    -----------       -----------       -----------        -----------
Earnings (Loss) Before Non-Owned Interests                                                                               
  in Insituform East, Inc.                             (542,055)         (567,754)         (520,388)           241,295
Non-Owned Interests in Loss of                                                                                           
  Insituform East, Inc.                                 400,018           459,067           395,184             78,668
                                                    -----------       -----------       -----------        -----------
                              NET EARNINGS (LOSS)   $  (142,037)      $  (108,687)      $  (125,204)       $   319,963
                                                    ===========       ===========       ===========        ===========

Net Earnings (Loss) per Share of Common
  Stock:
    Basic Earnings (Loss) per Share                   $   (0.10)      $     (0.07)      $     (0.08)       $      0.21
                                                                                                                    
    Diluted Earnings (Loss) per Share                 $   (0.10)      $     (0.07)      $     (0.08)       $      0.21
                                                                                                                    
See notes to condensed consolidated financial statements.
</TABLE>



<PAGE>

<TABLE>

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

                                                                                                 As of
                                                                                    -------------------------------------
                                                                                     Mar. 31, 1999         June 30, 1998
                                                                                    ----------------      ---------------
ASSETS

Current Assets:
<S>                                                                                  <C>                   <C>         
  Cash and cash equivalents                                                          $ 17,457,135          $ 20,405,039
  Accounts receivable                                                                   6,525,616             5,185,047
  Inventories                                                                           1,460,841             1,381,861
  Prepaid and refundable taxes                                                            787,896               948,486
  Prepaid expenses and other                                                              394,285               420,931
                                                                                     ------------          ------------
    Total Current Assets                                                               26,625,773            28,341,364
                                                                                     ------------          ------------

Property, Plant and Equipment - at cost less accumulated depreciation of
  $14,875,193 at March 31, 1999 and $14,245,135 at June 30, 1998                       11,342,041            11,196,448
                                                                                     ------------          ------------

Other Assets:
  Excess of acquisition  cost over value of net assets acquired less accumulated
  amortization of $1,231,613 at March 31, 1999 and $1,165,712 at
    June 30, 1998                                                                       2,254,739             2,320,640
  Cash surrender value of SERP life insurance                                           1,601,893             1,230,255
  Deposits and other                                                                       98,489               122,479
                                                                                     ------------          ------------
    Total Other Assets                                                                  3,955,121             3,673,374
                                                                                     ============          ============
      Total Assets                                                                   $ 41,922,935          $ 43,211,186
                                                                                     ============          ============

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

<PAGE>


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

<CAPTION>
                                                                                               As of
                                                                                 -------------------------------------
                                                                                  Mar. 31, 1999       June 30, 1998
                                                                                 ----------------    -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
<S>                                                                              <C>                 <C>          
  Partner's loans to Midsouth Partners                                           $     200,000       $     250,000
  Accounts payable and accrued liabilities                                           2,916,106           2,701,678
  Income taxes payable                                                               1,061,432           1,350,825
  Current portion of capital lease obligations                                          40,142              34,621
                                                                                  ------------       -------------
    Total Current Liabilities                                                        4,217,680           4,337,124
                                                                                  ------------       -------------

Long-Term Liabilities:
  Capital lease obligations (less current portion shown above)                          73,995             104,829
  Deferred income taxes                                                                732,000             915,000
  Accrued SERP liability                                                               788,197             605,973
                                                                                  ------------       -------------
    Total Long-term Liabilities                                                      1,594,192           1,625,802
                                                                                  ------------       -------------
      Total Liabilities                                                              5,811,872           5,962,926
                                                                                  ------------       -------------

Commitments and Contingencies

Non-Owned Interests in Consolidated Subsidiaries                                    10,840,588          12,068,262
                                                                                  ------------       -------------

Stockholders' Equity:
  Common stock, $.10 par value
    Authorized:  3,500,000 shares
    Issued and outstanding:  1,186,976 shares                                          118,697             118,697
  Class B Common stock (convertible), $.10 par value
    Authorized:  700,000 shares
    Issued and outstanding: 295,980 shares                                              29,598              29,598
  Additional paid-in capital                                                         7,742,959           7,527,278
  Retained earnings                                                                 17,379,221          17,504,425
                                                                                  ------------        ------------
    Total Stockholders' Equity                                                      25,270,475          25,179,998
                                                                                  ============        ============
      Total Liabilities and Stockholders' Equity                                  $ 41,922,935        $ 43,211,186
                                                                                  ============        ============
See notes to condensed consolidated financial statements.
</TABLE>


<PAGE>


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

                                                                            For the nine months ended Mar. 31
                                                                           -------------------------------------
                                                                                 1999                  1998
                                                                           -------------------------------------

Cash Flows from Operating Activities:
<S>                                                                          <C>                 <C>          
  Net earnings (loss)                                                        $  (125,204)        $     319,963
  Adjustments to reconcile net earnings
    to net cash used in operations:
    Depreciation and amortization                                              1,606,265             1,675,135
    Amounts attributable to non-owned interests                                 (907,592)             (728,940)
    Deferred income taxes                                                       (183,000)              (65,000)
    Decrease in other assets                                                      17,990                18,348
    Increase in accrued SERP liability                                           182,224               121,276
    Changes in operating assets and liabilities:
      (Increase) decrease in accounts receivable                              (1,390,569)              990,083
      (Increase) decrease in inventories                                         (78,980)              114,666
      (Increase) decrease in prepaid expenses and other current assets           237,236              (572,241)
      Increase (decrease) in accounts payable and accrued expenses               362,724            (1,263,244)
      Decrease in income taxes payable                                          (289,393)           (4,807,292)
                                                                             -----------         -------------
Net Cash Used in Operating Activities                                           (568,299)           (4,197,246)
                                                                             -----------         -------------

Cash Flows from Investing Activities:
  Capital expenditures, net                                                   (1,679,957)           (1,110,513)
  Increase in investment in Insituform East                                     (104,401)                    0
  Increase in cash surrender value of life insurance                            (371,638)             (352,421)
                                                                             -----------         -------------
Net Cash Used in Investing Activities                                         (2,155,996)           (1,462,934)
                                                                             -----------         -------------

Cash Flows from Financing Activities:
  Proceeds from revolving lines of credit                                              0             1,800,000
  Principal payments on revolving lines of credit and
     capital lease obligations                                                   (25,313)           (1,820,853)
  Proceeds from loans to Midsouth Partners from non-owned interests              200,000                     0
  Repayment of loans to Midsouth Partners from non-owned interests              (250,000)                    0
  Dividends paid                                                                (148,296)           (2,474,276)
  Proceeds from exercise of stock options                                              0                34,500
                                                                             -----------         -------------
  Net Cash Used in Financing Activities                                         (223,609)           (2,460,629)
                                                                             -----------         -------------

Net Decrease in Cash and Cash Equivalents                                     (2,947,904)           (8,120,809)
Cash and Cash Equivalents at Beginning of Period                              20,405,039            27,081,412
                                                                             ===========         =============
Cash and Cash Equivalents at End of Period                                   $17,457,135          $ 18,960,603
                                                                             ===========         =============   

Supplemental disclosure of cash flow information:
  Interest paid                                                              $    42,232         $      65,317
  Income taxes paid (refunded), net                                          $   (46,197)        $   5,352,211

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,"  the  "Company"  or
"Registrant"),   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 March 31, 1999,  the
Condensed  Consolidated  Statements of Operations  for the three months and nine
months ended March 31, 1999 and 1998, and the Condensed Consolidated  Statements
of Cash  Flows  for the nine  months  ended  March  31,  1999 and 1998 have been
prepared by the Company without audit. The Condensed  Consolidated Balance Sheet
as of June 30, 1998  (unaudited)  has been derived from the  Company's  June 30,
1998 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 March 31, 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, 1998.  Operating  results for interim periods
are not necessarily indicative of operating results for an entire fiscal year.

2.       Earnings (Loss) Per Share

         Basic  earnings  (loss)  per share  data are  computed  based  upon the
weighted average number of common shares outstanding during each period. Diluted
earnings per share 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
and nine months ended March 31, 1999 and 1998  include no net shares  associated
with unexercised  dilutive stock options.  The following  numbers of shares have
been used in the earnings (loss) per share computations:
<TABLE>
<CAPTION>

                   For the three months ended Mar. 31           For the nine months ended Mar. 31
                   ----------------------------------           ---------------------------------
                    1999                   1998                    1999                   1998
                    ----                   ----                    ----                   ----

<S>               <C>                    <C>                     <C>                    <C>      
Basic             1,482,956              1,482,956               1,482,956              1,482,759
                  =========              =========               =========              =========
Diluted           1,482,956              1,482,956               1,482,956              1,482,759
                  =========              =========               =========              =========
</TABLE>

3.       Accounts Receivable
<TABLE>
<CAPTION>

         Accounts receivable consist of:
                                                     Mar. 31, 1999         June 30, 1998

<S>                                                     <C>                   <C>       
Due from customers                                      $6,442,514            $5,134,644
Miscellaneous                                               83,102                50,403
                                                        ----------            ----------
                                                         6,525,616             5,185,047
Less: Allowance for doubtful accounts                            0                     0
                                                        ----------            ----------
                                                        $6,525,616            $5,185,047
                                                        ==========            ==========
</TABLE>

4.       Equity in Insituform East

         At March  31,  1999,  CERBCO  beneficially  held  1,218,000  shares  of
Insituform  East Common Stock and 296,141 shares of convertible  Insituform East
Class B Common Stock representing approximately 30.0% of the Common Stock, 99.5%
of the Class B Common  Stock,  34.8% of the total  equity and 59.4% 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.

         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 and nine months
ended  March 31,  1999.  If all the options  outstanding  at March 31, 1999 were
exercised,  the resulting  percentages  of CERBCO's  equity  ownership and total
voting power would be 31.0% and 55.3%, 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 and nine months ended March 31, 1999.

5.       Accounts Payable and Accrued Liabilities
<TABLE>
<CAPTION>

         Accounts payable and accrued liabilities consist of:

                                                     Mar. 31, 1999         June 30, 1998

<S>                                                     <C>                   <C>       
Accounts payable                                        $1,351,094            $1,154,576
Accrued compensation and related expenses                1,565,012             1,398,806
Dividends payable                                                0               148,296
                                                        ----------            ----------
                                                        $2,916,106            $2,701,678
                                                        ==========            ==========
</TABLE>

6.       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,
Insituform  East,  Capitol,  and  CERBERONICS.  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  $6,000,000  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 of the D.C. 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.  A further  decision from the
D.C. Superior Court is expected later this year.

         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.  Plaintiffs'
allegations were consistent with the allegations  contained in the third amended
complaint of earlier litigation initiated October 23, 1996 and dismissed without
prejudice on June 18, 1998.

         Insituform  East believes it has strong  defenses to, and is vigorously
contesting,  this  suit.  On August  17,1998,  Insituform  East filed its answer
denying  plaintiffs'  claims and a motion to dismiss this action.  The court has
not yet taken action with respect to this motion.  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 a consolidated  net loss of -$142,037  (-$0.10 per
share)  on sales  of $5.0  million,  and a  consolidated  net loss of  -$125,204
(-$0.08  per  share) on sales of $16.9  million  for the three  months  and nine
months ended March 31, 1999, respectively. The Company recognized a consolidated
net  loss  of  -$108,687  (-$0.07  per  share)  on  sales  of $4.1  million  and
consolidated  net  earnings  of  $319,963  ($0.21  per  share) on sales of $18.8
million for the three months and nine months ended March 31, 1998, respectively.

         The Company attributed its negative results during the three months and
nine months ended March 31, 1999 to the negative results during the same periods
of Insituform East, Inc. ("Insituform East"), the Company's  majority-controlled
and  only  operating  segment.  For the  three  months  ended  March  31,  1999,
Insituform East recognized a consolidated net loss of -$613,082 on sales of $5.0
million,  contributing a loss of -$213,064 to CERBCO.  For the nine months ended
March 31, 1999,  Insituform East recognized a consolidated net loss of -$605,674
on  sales  of  $16.9  million,  contributing  a loss  of  -$210,490  to  CERBCO.
Insituform  East  attributed its negative  results for the three months and nine
months ended March 31, 1999 to its acceptance of additional job completion costs
on several  incomplete  projects,  costs incurred in connection  with litigation
initiated by Insituform  Technologies,  Inc. ("ITI") against Insituform East and
its  majority-controlled  subsidiary,  Midsouth  Partners,  and an  increase  in
discounted sales performed during the periods.  CERBCO's  favorable  results for
the nine months ended March 31, 1998 were  primarily  due to  investment  income
earned  on the  short-term  investment  of cash  realized  from  the sale of its
interest in Capitol  Office  Solutions  on June 30,  1997,  and its receipt of a
one-time  payment of damages in connection  with the Delaware Action in December
1997.

         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 the combination of a
regular component of sales at normal margins and increased  production  capacity
for anticipated net increases in discounted  sales will be required  through the
remainder  of fiscal  year 1999 and beyond to absorb  both  normal and  expected
operating costs and the additional  anticipated costs associated with continuing
litigation and arbitration with ITI over the future of Midsouth Partners. Income
from the Company's non-operating activities presently is anticipated to continue
to  approximate  the normal  levels of its  holding  company  expenses  into the
future; accordingly, absent unusual items, the Company's forward-looking results
are  anticipated   substantially  to  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
imitations and substitute products hoping that cheap price alone may permit them
to succeed in a market  otherwise  dominated  by  Insituform.  In those  limited
markets where the lowest priced product may be deemed technically "good enough,"
Insituform  is at a  disadvantage.  Market share  participation  in this segment
strategically  undertaken  by  Insituform  East  from  time to time to  preserve
competitive  presence,  typically at levels  materially  below  normal  margins,
necessarily   dilutes  the  overall  margin   performance  of  Insituform  East.
Conversely,  in "best value" and quality-based markets,  Insituform remains at a
distinct advantage. While both the Federal Government and industry routinely use
best value and  quality-weighted  contract award criteria in more  sophisticated
procurements,  municipalities  and other local governments are often politically
reluctant to modernize  from simply "low bid" to "best value"  evaluations  when
buying  sophisticated  processes  and  technologies.  In the  face  of  mounting
technical  failures from awards based upon lowest price,  local governments also
are expected over time to reevaluate simple low bid award criteria - in favor of
"best value"  award  criteria - when  procuring  trenchless  technology  for the
rehabilitation of older pipelines.

Results of Operations

      Third Quarter ended 3/31/99 Compared with Third Quarter ended 3/31/98

         Consolidated sales increased approximately $0.8 million (20%) from $4.1
million  for the quarter  ended  March 31, 1998 to $5.0  million for the quarter
ended March 31, 1999. Comparable period sales increased primarily as a result of
increases in available work.

         Consolidated  operating  losses  increased  from  -$1.6  million in the
quarter  ended  March 31, 1998 to -$1.7  million in the quarter  ended March 31,
1999,  primarily due to an increase in  Insituform  East's  operating  loss from
-$1.4 million to -$1.5 million in the same comparable periods. Consolidated cost
of sales  increased  18% in the third quarter of fiscal year 1999 as compared to
the third  quarter of fiscal year 1998.  As a result,  gross profit  (loss) as a
percentage  of sales  improved  from  (9%) to (7%)  for the same two  comparable
periods.  The improvement in gross profit (loss) as a percentage of sales is due
primarily to absorption of semi-fixed  costs over higher sales volume during the
third  quarter of fiscal  year 1999.  Insituform  East's  selling,  general  and
administrative expenses increased $0.1 million (12%) for the current period, due
primarily  to costs  incurred in  connection  with  litigation  initiated by ITI
against  Insituform East. The parent  Company's  unallocated  general  corporate
expenses remained approximately the same in the comparable periods.

        Nine Months Ended 3/31/99 Compared With Nine Months Ended 3/31/98

         Consolidated  sales  decreased  approximately  $1.8 million (-10%) from
$18.8  million for the nine months ended March 31, 1998 to $16.9 million for the
nine months ended March 31, 1999. Comparable period sales decreased primarily as
a result of  significant  revenues  from the Perry  Nuclear  project  recognized
during the first quarter of fiscal year 1998.

         Consolidated  operating losses increased from -$1.5 million in the nine
months ended March 31, 1998 to -$2.3  million in the nine months ended March 31,
1999,  primarily due to an increase in  Insituform  East's  operating  loss from
-$1.0 million to -$1.7 million in the same comparable periods. Consolidated cost
of sales decreased 5% in the nine months ended March 31, 1999 as compared to the
nine months ended March 31, 1998.  As a result,  gross profit as a percentage of
sales decreased from 13% to 9% for the same two comparable periods. The decrease
in gross  profit as a percentage  of sales is due  primarily  to  absorption  of
semi-fixed  costs over lower sales volume during the nine months ended March 31,
1999. Insituform East's selling,  general and administrative  expenses decreased
$0.2 million (-7%) for the current nine months, primarily as a result of reduced
costs to support decreased production activities more than offsetting additional
legal expenses incurred during the third quarter of fiscal year 1999. The parent
company's unallocated general corporate expenses remained approximately the same
in the comparable nine-month periods.

         Other income  decreased $0.2 million (-45%)  primarily as a result of a
one-time  payment of damages to CERBCO in connection with the Delaware Action in
the quarter ended December 31, 1997.

Financial Condition

         During the nine months ended March 31, 1999,  the  Company's  operating
activities used approximately $0.6 million in cash. This result is due primarily
to the  unfavorable  impact of the Company's  net operating  loss to include the
non-owned interests in the losses of the Company's consolidated subsidiaries and
a $1.4  million  increase  in  accounts  receivable  more  than  offsetting  the
favorable  impact of a $0.3  million  increase in payables and accruals and $1.6
million in depreciation and amortization  expenses included in operating results
that did not require the outlay of cash.

         The Company used $2.2 million in cash in  investing  activities  during
the nine months ended March 31, 1999 primarily for equipment purchases and other
capital  improvements by Insituform  East. The Company also used $0.2 million in
financing  activities,  primarily  due to the payment of dividends by the parent
company,  CERBCO. Despite the $2.9 million net decrease in cash during the first
nine months of fiscal year 1999, the Company's  liquidity  remained  strong with
working  capital of over $22  million  and a current  ratio of 6.31 at March 31,
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  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 $16 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.

         As previously disclosed,  the Company may purchase additional shares of
Common Stock of Insituform  East.  The Company  expects that any such  purchases
would be made in open market transactions,  at the then-prevailing market price,
and  executed  through  brokers.  Any such  purchases  will  require  use of the
Company's working capital.

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
compliant 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  compliant,  can be  modified  to become Year 2000
compliant,  or  should  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.

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

         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  compliant or expect to be Year 2000
compliant  by December 31, 1999.  Prior to June 30, 1999,  the Company  plans to
seek to  obtain  responses  from  suppliers  and  customers  who have not as yet
responded  to  inquiries  and  develop a plan to monitor  and  assess  Year 2000
readiness from respondents not as yet Year 2000 compliant.

         The Company currently  estimates that the cost of implementing its Year
2000  Plan will not  exceed  $200,000.  This  preliminary  estimate  is based on
presently available information and will be updated as the Company continues its
assessment and proceeds with implementation.  Specifically,  this estimate would
change if, after  receipt of  information  from key  suppliers or  customers,  a
formal contingency plan required development and implementation. The Company has
incurred approximately $21,000 in implementation costs through March 31, 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  the  Company  with
materials  critical to its operations,  or with sufficient  electrical  power or
other utilities,  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 200 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 has not yet established a contingency  plan, but intends to
formulate one prior to June 30, 1999, based primarily on potential  actions that
would be required if key vendors or customers were 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.

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 6.  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 for the period ended March 31, 1999

         99   - CERBCO, Inc.  Consolidating  Schedules:  Statement of Operations
                Information for the three months ended March 31, 1999;
                Statement  of  Operations  Information  for the nine  months
                ended  March 31,  1999;  Balance  Sheet  Information  and
                Consolidating Elimination Entries as of March 31, 1999.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed  during the three  months ended March
31, 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: May 17, 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)

<PAGE>

                       Exhibits to CERBCO, Inc. Form 10-Q





Exhibit 27. CERBCO, Inc. Financial Data Schedule

Exhibit 99. CERBCO, Inc.  Consolidating  Schedules:  Statement of Operations
            Information for the Three Months Ended March 31, 1999;  Statement of
            Operations  Information  for the Nine Months  Ended March 31,  1999;
            Balance Sheet Information and Consolidating  Elimination  Entries as
            of March 31, 1999.