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, 2000
                                       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 May 5,  2000,  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



<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, 2000 and March 31, 1999
        (unaudited)........................................................  3

        Condensed Consolidated Balance Sheets as of March 31, 2000 and
        June 30, 1999 (unaudited)..........................................  4

        Condensed  Consolidated  Statements  of Cash Flows for the Nine
        Months Ended March 31, 2000 and March 31, 1999 (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.........  14

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...................................  15




<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
                                          ----------------------------------                ---------------------------------
                                             2000                    1999                    2000                    1999
                                         -----------             -----------             -----------             -----------

<S>                                       <C>                     <C>                    <C>                     <C>
Sales                                     $4,762,450              $4,993,149             $16,749,172             $16,939,195
                                         -----------             -----------             -----------             -----------

Costs and Expenses:
  Cost of sales                            5,298,881               5,325,240              16,293,720              15,406,481
  Selling, general and
    administrative expenses                1,186,687               1,365,512               3,661,720               3,821,849
                                         -----------             -----------             -----------             -----------
    Total Costs and Expenses               6,485,568               6,690,752              19,955,440              19,228,330
                                         -----------             -----------             -----------             -----------

Operating Loss                            (1,723,118)             (1,697,603)             (3,206,268)             (2,289,135)
Investment Income                            178,904                 192,699                 477,642                 678,807
Interest Expense                                (228)                 (7,075)                (16,186)                (30,973)
Other Income - net                           253,124                 147,864                 701,576                 250,505
                                         -----------             -----------             -----------             -----------
Loss Before Non-Owned
  Interests and Income Taxes              (1,291,318)             (1,364,115)             (2,043,236)             (1,390,796)
Non-Owned Interest in Pretax
  Loss of Midsouth Partners                        0                 430,060                  19,889                 512,408
                                         -----------             -----------             -----------             -----------
Loss Before Non-Owned
  Interests in Insituform
  East, Inc. and Income
  Taxes                                   (1,291,318)               (934,055)             (2,023,347)               (878,388)
Provision (Credit) for Income Taxes           37,000                (392,000)               (164,000)               (358,000)
                                         -----------             -----------             -----------             -----------
Loss Before Non-Owned
  Interests in Insituform
  East, Inc.                              (1,328,318)               (542,055)             (1,859,347)               (520,388)
Non-Owned Interests in Loss
  of Insituform East, Inc.                   915,144                 400,018               1,504,492                 395,184
                                         -----------             -----------             -----------             -----------
                        NET LOSS         $  (413,174)            $  (142,037)            $  (354,855)            $  (125,204)
                                         ===========             ===========             ===========             ===========

Net Loss per Share of Common Stock:
  Basic Loss per Share                   $     (0.28)            $     (0.10)            $     (0.24)            $     (0.08)
  Diluted Loss per Share                 $     (0.28)            $     (0.10)            $     (0.24)            $     (0.08)


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



<PAGE>


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

<CAPTION>
                                                                                             As of
                                                                           -------------------------------------------
                                                                             Mar. 31, 2000            June 30, 1999
                                                                           -------------------     -------------------
ASSETS

Current Assets:
<S>                                                                               <C>                     <C>
  Cash and cash equivalents                                                       $13,804,365             $17,050,119
  Accounts receivable                                                               5,973,230               6,592,913
  Inventories                                                                       1,329,571               1,273,402
  Prepaid and refundable taxes                                                         88,490                 550,453
  Prepaid expenses and other                                                          287,393                 339,928
                                                                                 ------------             -----------
    Total Current Assets                                                           21,483,049              25,806,815
                                                                                 ------------             -----------

Property,  Plant  and  Equipment  - at cost  less  accumulated
  depreciation  of $16,719,142 at March 31, 2000 and
  $15,432,983 at June 30, 1999                                                     10,744,776              11,511,536
                                                                                 ------------             -----------

Other Assets:
  Excess of acquisition  cost over value of net assets
    acquired less accumulated amortization of $1,420,089 at March 31,
    2000 and $1,253,580 at June 30, 1999                                            1,668,286               1,998,822
  Deferred income taxes - net of valuation
    allowance of $825,000 at March 31, 2000 and
    $0 at June 30, 1999                                                                     0                       0
  Cash surrender value of SERP life insurance                                       2,605,156               1,730,964
  Deposits and other                                                                   84,163                  70,489
                                                                                 ------------             -----------
    Total Other Assets                                                              4,357,605               3,800,275
                                                                                 ------------             -----------
      Total Assets                                                                $36,585,430             $41,118,626
                                                                                 ============             ===========


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



<PAGE>



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

<CAPTION>
                                                                                             As of
                                                                          ------------------------------------------
                                                                            Mar. 31, 2000          June 30, 1999
                                                                          -------------------    -------------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
<S>                                                                              <C>                    <C>
  Partner's loans to Midsouth Partners                                           $         0            $   400,000
  Accounts payable and accrued liabilities                                         2,667,483              2,958,136
  Income taxes payable                                                             1,107,432              1,508,353
  Current portion of capital lease obligations                                        31,318                 42,167
                                                                                 -----------            -----------
    Total Current Liabilities                                                      3,806,233              4,908,656
                                                                                 -----------            -----------

Long-Term Liabilities:
  Accrued SERP liability                                                           1,032,975                847,560
  Capital lease obligations (less current
    portion shown above)                                                              42,677                 62,662
  Deferred income taxes                                                                    0                219,000
                                                                                 -----------            -----------
    Total Long-Term Liabilities                                                    1,075,652              1,129,222
                                                                                 -----------            -----------
      Total Liabilities                                                            4,881,885              6,037,878
                                                                                 -----------            -----------

Commitments and Contingencies

Non-Owned Interests in Consolidated Subsidiary                                     7,239,971             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                                                               16,788,001             17,142,856
                                                                                 -----------            ------------
    Total Stockholders' Equity                                                    24,463,574             24,818,429
                                                                                 -----------            ------------
      Total Liabilities and Stockholders' Equity
                                                                                 $36,585,430            $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 nine months ended Mar. 31
                                                                   -----------------------------------------
                                                                         2000                        1999
                                                                   --------------              --------------

Cash Flows from Operating Activities:
<S>                                                                <C>                         <C>
  Net loss                                                         $    (354,855)              $    (125,204)
  Adjustments to reconcile net loss to net cash
    used in operations:
    Depreciation and amortization                                      1,813,674                   1,606,265
    Amounts attributable to non-owned interests                       (1,524,381)                   (907,592)
    Deferred income taxes                                               (219,000)                   (183,000)
    Decrease in other assets                                                   0                      17,990
    Increase in accrued SERP liability                                   185,415                    182,224
    Changes in operating assets and liabilities:
      (Increase) decrease in accounts receivable                         619,683                  (1,390,569)
      (Increase) decrease in inventories                                 (56,169)                    (78,980)
      (Increase) decrease in prepaid expenses and other
        current assets                                                   514,498                     237,236
      Increase (decrease) in accounts payable and
        accrued expenses                                                (142,357)                    362,724
      Decrease in income taxes payable                                  (400,921)                   (289,393)
                                                                     -----------                 -----------

Net Cash Provided by (Used in) Operating Activities                      435,587                    (568,299)
                                                                     -----------                 -----------

Cash Flows from Investing Activities:
  Capital expenditures, net                                             (986,997)                 (1,679,957)
  Increase in investment in Insituform East                             (272,315)                   (104,401)
  Purchase of remaining interests in Midsouth Partners                  (948,707)                          0
  Increase in cash surrender value of life insurance                    (874,192)                   (371,638)
  Increase in other assets                                               (20,000)                          0
                                                                     -----------                 -----------
Net Cash Used in Investing Activities                                 (3,102,211)                 (2,155,996)
                                                                     -----------                 -----------

Cash Flows from Financing Activities:
  Principal payments on capital lease obligations                        (30,834)                    (25,313)
  Proceeds from loans to Midsouth Partners from non-
    owned interests                                                            0                     200,000
  Repayment of loans to Midsouth Partners from non-owned
    interests                                                           (400,000)                   (250,000)
  Dividends paid                                                        (148,296)                   (148,296)
                                                                     -----------                 -----------
  Net Cash Used in Financing Activities                                 (579,130)                   (223,609)
                                                                     -----------                 -----------

Net Decrease in Cash and Cash Equivalents                             (3,245,754)                 (2,947,904)
Cash and Cash Equivalents at Beginning of Period                      17,050,119                  20,405,039
                                                                     -----------                 -----------
Cash and Cash Equivalents at End of Period                           $13,804,365                 $17,457,135
                                                                     ===========                 ===========
Supplemental disclosure of cash flow information:
  Interest paid                                                      $   213,569                 $    42,232
  Income taxes paid (refunded), net                                  $    (6,042)                $   (46,197)


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, 2000,  the
Condensed  Consolidated  Statements of Operations  for the three months and nine
months ended March 31, 2000 and 1999, and the Condensed Consolidated  Statements
of Cash  Flows  for the nine  months  ended  March  31,  2000 and 1999 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 March 31, 2000
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 (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, 2000 and 1999  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:

        For the three months ended Mar. 31     For the nine months ended Mar. 31
        ----------------------------------     ---------------------------------
            2000            1999                   2000                1999
            ----            ----                   ----                ----

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

3.       Income Taxes

         The  calculation  of Insituform  East's Credit for Income Taxes for the
nine months ended March 31, 2000,  using  applicable  enacted  federal and state
rates,   resulted  in  a  net  deferred  tax  asset  as  temporary   differences
attributable  to operating loss  carryforwards  exceed  deferred tax liabilities
attributable  to other  temporary  differences,  principally  the recognition of
depreciation  expense. The deferred tax asset of $825,000 at March 31, 2000, has
been reduced by a valuation  allowance of $825,000 because,  based on the weight
of evidence  available,  to include  Insituform  East's pretax  operating losses
recognized  during the past three fiscal years,  it is more likely than not that
the deferred tax asset will not be realized.

4.       Accounts Receivable

        Accounts receivable consist of:

                                               Mar. 31, 2000   June 30, 1999
                                               -------------   -------------

        Due from customers                     $5,792,494       $6,514,843
        Miscellaneous                             180,736           78,070
                                               ----------       ----------
                                                5,973,230        6,592,913
        Less: Allowance for doubtful accounts           0                0
                                               ----------       ----------
                                               $5,973,230       $6,592,913
                                               ==========       ==========

5.       Equity in Insituform East

         At March  31,  2000,  CERBCO  beneficially  held  1,393,950  shares  of
Insituform  East Common Stock and 296,141 shares of convertible  Insituform East
Class B Common Stock representing approximately 34.3% of the Common Stock, 99.5%
of the Class B Common  Stock,  38.8% of the total  equity and 61.9% 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 Insituform  East 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 nine months ended March 31, 2000,  CERBCO  acquired  167,550
shares of Insituform East Common Stock for $272,315.  The difference between the
cost of the stock and the net book value thereof, $276,945, 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 nine months ended March 31,
2000.  If all the  options  outstanding  at March 31, 2000 were  exercised,  the
resulting  percentages of CERBCO's equity ownership and total voting power would
be 34.6% and 56.7%, 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 nine months ended March 31, 2000.

6.       Acquisition of Remaining Interests in Midsouth Partners

         CERBCO's condensed  consolidated  financial  statements as of March 31,
2000 and June 30, 1999, and for the three months and nine months ended March 31,
2000 and 1999,  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(R)  process and NuPipe(R) 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 the Insituform  process 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:

                     For the three months ended     For the nine months ended
                               Mar. 31                        Mar. 31
                     --------------------------     ----------------------------
                         2000          1999             2000            1999
                         ----          ----             ----            ----

Sales                $4,762,450     $4,993,149      $16,749,172     $16,939,195
Net Loss             $ (413,174)    $ (233,111)     $  (362,570)    $  (234,123)
Net Loss per Share:
    Basic                $(0.28)        $(0.16)          $(0.24)         $(0.15)
    Diluted              $(0.28)        $(0.16)          $(0.24)         $(0.15)

         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.

7.       Accounts Payable and Accrued Liabilities

        Accounts payable and accrued liabilities consist of:

                                                   Mar. 31, 2000  June 30, 1999
                                                   -------------  -------------

        Accounts payable                           $1,492,919        $1,448,725
        Accrued compensation and related expenses   1,174,564         1,361,115
        Dividends payable                                   0           148,296
                                                   ----------        ----------
                                                   $2,667,483        $2,958,136
                                                   ==========        ==========

8.       Contingencies

Stockholder Suit - Superior Court of the District of Columbia

         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.

         Also 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 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.  On May 20, 1999,  the Court
denied the  Company's  motion for summary  judgment on the ground of  collateral
estoppel. The matter was then referred to mediation in the District of Columbia.

         During  the  mediation  proceeding,  the  parties  to the D.C.  lawsuit
entered into  settlement  negotiations.  On or about April 10, 2000, the parties
signed a  stipulation  of settlement  of that lawsuit (the  "Stipulation").  The
tentative  settlement  described  in the  Stipulation  provides for a payment by
Rogers  & Wells  to the  Company  of  $700,000  and for an  exchange  of  mutual
releases,  including  releases of the  Company by  plaintiffs.  The  Stipulation
further provides that plaintiffs'  counsel will petition the D.C. Superior Court
for an  award  of  $233,333  in  attorneys'  fees  (one-third  of  the  proposed
settlement  proceeds)  and  approximately  $32,000 in  expenses.  As of the date
hereof, the Company has sent a notice of pendency of the D.C. lawsuit and of the
proposed  settlement to the Company's  stockholders.  On May 31, 2000,  the D.C.
Superior  Court  will hold a  hearing  to  determine  whether  (i) the  proposed
settlement  described  in  the  Stipulation  should  be  approved  as  fair  and
reasonable  to  the  Company  and  its  stockholders,  and  (ii)  the  requested
attorneys' fees and expenses should be awarded to plaintiffs.

Dispute with ITI - U.S. District Court for the Middle District of Tennessee
---------------------------------------------------------------------------

         As previously reported by the Company, on December 3, 1999, ITI and its
Netherlands  affiliate  filed a lawsuit in the United States  District Court for
the Middle District of Tennessee  against  Insituform East,  Midsouth  Partners,
Insituform East's wholly-owned  subsidiary,  and other Company  affiliates.  ITI
takes the position in the suit that all CIPP  processes  are  derivative  of the
Insituform  process  and that  neither the Company  nor  Midsouth  Partners  can
utilize other CIPP processes without utilizing ITI's  intellectual  property and
trade  secrets.  ITI seeks to enjoin the  Company  and  Midsouth  Partners  from
utilizing other CIPP processes. In the alternative, ITI seeks a declaration that
the Company and Midsouth Partners must pay ITI a cross-over royalty for any CIPP
work  performed  in  "Insituform  Owner  Reserved   Territories."  ITI  seeks  a
declaration  that  the  Company  and  Midsouth  Partners  are in  breach  of the
Settlement Agreement. ITI seeks injunctive relief and unspecified damages.

         On  January  18,  2000,  Insituform  East  filed  its  answer  to ITI's
complaint. In its answer, Insituform East responded to the allegations contained
in ITI's complaint and presented  counterclaims  against ITI which,  among other
things,  seek declaratory  judgments of the Court reaffirming various provisions
of the existing Midsouth Settlement  Agreement and particularly  reaffirming the
right of Midsouth Partners to utilize CIPP  rehabilitation  processes other than
the Insituform  process.  Insituform East seeks unspecified  damages from ITI in
its counterclaims.

         The ultimate outcome and consequences of the suit cannot be ascertained
at this time.  While it is not  possible  at this time,  during the  preliminary
stages of this  litigation,  to establish the ultimate  amount of liability,  if
any,  associated  with  this  suit,  it is  the  opinion  of the  management  of
Insituform East that the aggregate  amount of any such liability will not have a
material   adverse  effect  on  the  financial   position  of  Insituform  East.
Conversely,  in the  unforeseen  event  that  the  plaintiffs/counter-defendants
substantially  prevailed  on  their  claims  against  Insituform  East  and  its
subsidiary  Midsouth  Partners,  including the  restriction  or  elimination  of
Midsouth  Partners  existing  rights to expand  nationally  and to practice CIPP
rehabilitation  process  methods,  such  unforeseen  event could have a material
adverse effect on the future financial position of Insituform East.

Summary and Other

         Management  believes ultimate  resolution of the above 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 will, in the opinion of management,  materially  affect
the Company's financial position, results of operations or cash flows.

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 -$413,174  (-$0.28 per
share) on sales of $4.8  million for the third  quarter and a  consolidated  net
loss of  -$354,855  (-$0.24  per share) on sales of $16.7  million for the first
nine  months  of fiscal  year  2000.  In the  prior  fiscal  year,  the  Company
recognized 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 attributed its negative results during the three months and
nine months ended March 31, 2000 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,  2000,
Insituform  East  recognized a consolidated  net loss of -$1,495,126 on sales of
$4.8 million,  contributing  a loss of -$579,982 to CERBCO.  For the nine months
ended March 31, 2000,  Insituform  East  recognized a  consolidated  net loss of
-$2,457,979  on sales of $16.7  million,  contributing  a loss of  -$953,487  to
CERBCO. Insituform East attributed its negative results for the three months and
nine  months  ended  March 31,  2000  primarily  to a  significant  decrease  in
immediately  workable backlog during the second and third quarters of the fiscal
year.

         CERBCO's  negative  results for the three  months and nine months ended
March 31, 1999 were  attributed to the negative  results of Insituform  East for
those  periods  as a result  of that  company's  acceptance  of  additional  job
completion  costs  on  several  incomplete  projects,  litigation  costs  and an
increase in discounted sales performed during the respective periods.

         As previously  reported,  Insituform East's Insituform process licensor
and  former   partner  in  the   Midsouth   Partners   partnership,   Insituform
Technologies,  Inc.  ("ITI"),  initiated a second  calendar 1999 lawsuit against
Insituform East and its subsidiaries on December 3, 1999, following the July 20,
1999  settlement  (the "Midsouth  Settlement  Agreement") of earlier  litigation
filed March 11, 1999.  The newest  litigation  appears again  targeted by ITI to
usurp for itself  certain  rights  belonging to  Insituform  East or to Midsouth
Partners including Insituform East's legitimate competitive rights as a licensee
and the  competitive  rights  of  Midsouth  Partners  acquired  pursuant  to the
Midsouth  Settlement  Agreement.  While the  ultimate  outcome  of the  December
litigation  cannot be  determined  at this  time,  Insituform  East  intends  to
continue to exercise its rights under its license  agreements with ITI to expand
the market for the Insituform process within its exclusively licensed territory,
while   Midsouth   Partners   intends  to  expand  its   offering   of  pipeline
rehabilitation processes outside its former territory.

         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  immediately  workable
backlog of customer  orders,  the Company  presently  anticipates  improved  but
continuing  negative  operating  results for the fourth  quarter of fiscal 2000,
with fiscal year 2001 operating results significantly  dependent upon growth and
availability  of  immediately  workable  backlog.   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 39%  participation  in the
forward results of Insituform East.

         In addition to immediately workable backlog, a primary 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
either  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.

         In response to continuing  unfavorable  operating  margins,  Insituform
East is embarking on an  aggressive  cost  reduction  program.  Insituform  East
intends  going  forward to provide a range of  customer  service  and quality in
response to market demand, including being the efficient low-cost provider where
product price is the predominantly controlling procurement factor.

Results of Operations

       Three Months Ended 3/31/00 Compared with Three Months Ended 3/31/99

         Consolidated  sales  decreased $0.2 million (-5%) from $5.0 million for
the quarter ended March 31, 1999 to $4.8 million for the quarter ended March 31,
2000.  Comparable period sales decreased  primarily as a result of a significant
decrease in immediately workable backlog during the current quarter.

         Consolidated operating losses increased approximately 2% in the quarter
ended March 31, 2000 due to an  approximately  2% increase in Insituform  East's
operating  loss.  Consolidated  cost of sales showed a lesser  decrease than the
decrease in sales (less than 1%) in the current  quarter as compared to the same
quarter in the previous fiscal year, and as a result, negative gross profit as a
percentage of sales increased from -7% to -11% for the two comparative quarters.
This decrease is due primarily to increased semi-fixed costs incurred to support
increased  productive  capacity,  to include  support costs  associated with the
Company's  Ohio branch office  reestablished  in March 1999.  Insituform  East's
selling, general and administrative expenses decreased 15%. The parent company's
unallocated  general corporate expenses decreased slightly (less than 1%) in the
three months ended March 31, 2000.

         The loss from  operations for the third quarter of fiscal year 2000 was
significantly  affected by recognition of 100% of the negative operating results
of Midsouth Partners after July 20, 1999 and the valuation allowance recorded by
Insituform  East against the tax provision  calculated at statutory  rates.  The
Company's  -$1,364,115 Loss Before Non-owned  Interests in Insituform East, Inc.
and Income  Taxes for the three  months  ended March 31, 1999 was reduced by the
$430,060  allocation of Midsouth Partners pretax loss to non-owned interests and
a $392,000  credit for Income Taxes  recorded by Insituform  East. No credit for
income  taxes was recorded by  Insituform  East for the three months ended March
31, 2000, as the $583,000 credit calculated using applicable enacted federal and
state tax rates of 39% of Insituform  East's pretax loss was reduced by an equal
$583,000 valuation  allowance recorded against the deferred tax asset during the
period.

        Nine Months Ended 3/31/00 Compared With Nine Months Ended 3/31/99

         Consolidated  sales decreased $0.2 million (-1%) from $16.9 million for
the nine months ended March 31, 1999 to $16.7  million for the nine months ended
March 31, 2000.  Comparable period sales decreased  primarily as a result of the
sales  decreases in the second and third  quarters of the current fiscal year of
$1.2  million and $0.2 million  respectively,  which offset the increase of $1.2
million in the first quarter of the current fiscal year.

         Consolidated operating losses increased $0.9 million from -$2.3 million
in the nine  months  ended  March 31,  1999 to -$3.2  million in the nine months
ended  March 31,  2000,  due to a $0.9  million  increase in  Insituform  East's
operating  loss.  Consolidated  cost of sales increased $0.9 million (6%) in the
current nine month period as compared to the same period in the previous  fiscal
year,  and as a result when coupled with the decrease in sales over the same two
periods,  gross profit as a percentage  of sales  decreased  from 9% to 3%. This
decrease  reflects the absorption of increased  semi-fixed  costs resulting from
increased   productive   capacity  over  an  essentially  static  sales  volume.
Insituform East's selling,  general and administrative costs decreased 4%, while
the parent company's  unallocated general corporate expenses decreased 3% in the
current nine-month period.

         Other income  increased  $0.5 million  (180%)  primarily as a result of
significant increases in the cash surrender values of insurance policies funding
the parent company's supplemental retirement plan.

         The loss from  operations for the first nine months of fiscal year 2000
was significantly affected by the recognition of all but $19,889 of the negative
operating  results  of  Midsouth  Partners  for the nine  month  period  and the
valuation  allowance  recorded by  Insituform  East  against  the tax  provision
calculated at statutory rates.  The Company's  -$1,390,796 Loss Before Non-owned
Interests in  Insituform  East,  Inc. and Income Taxes for the nine months ended
March 31,  1999 was reduced by the  $512,408  allocation  of  Midsouth  Partners
pretax  loss to  non-owned  interests  and a $388,000  credit  for income  taxes
recorded by Insituform East. A credit for income taxes of $219,000,  recorded by
Insituform  East for the nine months ended March 31,  2000,  is 8% of its pretax
loss of -$2,676,979 as the credit calculated using applicable  federal and state
tax rates of 39% of  Insituform  East's  pretax  loss was  reduced by a $825,000
valuation allowance recorded against the deferred tax asset during the period.

Financial Condition

         During the nine months ended March 31, 2000,  the  Company's  operating
activities  provided  $0.4 million in cash.  This result is due primarily to the
net effect of (i)  several  items that did not affect the amount of cash held by
the Company,  such as the $1.8 million in depreciation and amortization expenses
included  in  operating  results  and the  adjustment  for the $1.5  million  of
Insituform East's consolidated net loss attributable to non-owned interests, and
(ii) the  changes in items  that did  affect the amount of cash held,  such as a
$0.6 million  decrease in accounts  receivable  and a $0.5  million  decrease in
prepaid  expenses,  which increased cash,  offset by a $0.1 million  decrease in
accounts  payable and a $0.4  million  decrease in income taxes  payable,  which
decreased cash.

         The Company used $3.1 million in cash in  investing  activities  during
the nine months  ended March 31,  2000,  primarily  to  purchase  the  remaining
non-owned interests in Midsouth Partners,  and for equipment purchases and other
capital   improvements.   The  Company  also  used  $0.6  million  in  financing
activities, primarily due to the repayment of loans made to Midsouth Partners by
its former  partners  and payment of dividends  by the parent  company,  CERBCO.
Despite the $3.2  million  net  decrease in cash during the first nine months of
fiscal year 2000, the Company's  liquidity  remained strong with working capital
of $17.6 million and a current ratio of 5.6 to 1 at March 31, 2000.

         Management  anticipates  that  Insituform  East may  continue  to incur
operating losses in the future which,  along with increased  production  levels,
will require  additional  capital  expenditures.  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 any additional cash flow  requirements of Insituform East
in the foreseeable future.

Forward-Looking Information

         This report contains  forward-looking  statements within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements that are
based  on  certain  assumptions  and  describe  future  plans,  strategies,  and
expectations  of the  Company  are  generally  identifiable  by use of the words
"believe," "expect," "intend,"  "anticipate,"  "estimate,"  "project" or similar
expressions.  The Company's  ability to predict  results or the actual effect of
future plans or strategies is  inherently  uncertain.  Factors that could have a
material  adverse affect on the  operations and future  prospects of the Company
include,  but  are not  limited  to the  availability  of  immediately  workable
backlog,  mix of work,  weather,  changes in interest rates and general economic
conditions,  and  legislative/regulatory  changes. These risks and uncertainties
should be considered in evaluating forward-looking statements and undue reliance
should not be placed on such statements.

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 8.  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 U.S. District Court
for the Middle District of Tennessee.

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

         On May 5, 2000,  the Company  reported  that,  commencing  May 9, 2000,
trading  in its shares of common  stock  will  shift  from the  Nasdaq  National
Market(R) to The Nasdaq SmallCap MarketSM.  The Company's Nasdaq trading symbol,
CERB, remains unchanged.  The shift in trading to The Nasdaq SmallCap Market was
implemented  because the Company's  present market size did not permit continued
maintenance under the rules of the larger National Market System.

         The  Company  noted that The Nasdaq  SmallCap  Market  offers  both the
Company and its present and prospective shareholders continuous transaction data
in terms of price and volume  activity  similar to the Nasdaq  National  Market,
including  vigorous  competition  among multiple  market  makers.  Bid and asked
prices,  last-sale  prices and volume  information are available  throughout the
trading day. High, low and closing price  information will continue to appear in
major newspapers such as The Wall Street Journal and The Washington Post.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

        27      -  Financial Data Schedule for the period ended March 31, 2000
        99      -  CERBCO,  Inc.   Consolidating   Schedules:   Statement  of
                   Operations  Information  for the three months ended March 31,
                   2000; Statement of Operations Information for the nine months
                   ended  March  31,  2000;   Balance  Sheet   Information   and
                   Consolidating Elimination Entries as of March 31, 2000.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed  during the three  months ended March
31, 2000.
                                   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 12, 2000

                     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 Operations
             Information   for  the  Three  Months  Ended  March  31,  2000;
             Statement of Operations  Information  for the Nine Months Ended
             March 31, 2000;  Balance Sheet  Information  and  Consolidating
             Elimination Entries as of March 31, 2000.