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

                                   FORM 10-QSB

[   X  ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
For the quarterly period ended:                            December 31, 2001
                                       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 small business issuer 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                        20785-1608
 (Address of principal executive offices)                      (Zip Code)


Issuer'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)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act  during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing  requirements for the past 90 days. Yes X No
                                                                         --- ---


As of February 1, 2002,  the following  number of shares of each of the issuer's
classes of common stock were outstanding:

                          Common Stock              1,189,538
                          Class B CommonStock         293,418
                                                 ------------
                          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 Six Months Ended December 31, 2001 and
          December 31, 2000 (unaudited).....................................  3

          Condensed Consolidated Balance Sheets as of December 31, 2001
          and June 30, 2001 (unaudited).....................................  4

          Condensed Consolidated Statements of Cash Flows for the Six
          Months Ended December 31, 2001 and December 31, 2000 (unaudited)..  5

          Notes to Condensed Consolidated Financial Statements (unaudited)..  6

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations.............................................  9

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings................................................. 12

Item 2.   Changes in Securities and Use of Proceeds......................... 12

Item 3.   Defaults upon Senior Securities................................... 12

Item 4.   Submission of Matters to a Vote of Security Holders............... 12

Item 5.   Other Information................................................. 12

Item 6.   Exhibits and Reports on Form 8-K.................................. 12




<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

<TABLE>
                                                         For the three months                  For the six months
                                                         --------------------                  ------------------
                                                            ended Dec. 31                        ended Dec. 31
                                                            -------------                        -------------
<CAPTION>
                                                       2001               2000              2001               2000
                                                   --------------    ---------------    --------------     --------------

<S>                                                <C>                   <C>            <C>                  <C>
Sales                                              $  5,185,027          $5,805,494     $10,049,883          $12,137,583
                                                   --------------    ---------------    --------------     --------------

Costs and Expenses:
  Cost of sales                                        4,320,394          5,190,917         9,320,869         10,353,899
  Selling, general and administrative expenses           855,827          1,184,724         2,000,827          2,321,020
                                                   --------------    ---------------    --------------     --------------
    Total Costs and Expenses                           5,176,221          6,375,641        11,321,696         12,674,919
                                                   --------------    ---------------    --------------     --------------

Operating Profit (Loss)                                    8,806          (570,147)       (1,271,813)          (537,336)
Investment Income                                        128,152            254,249           297,787            500,912
Interest Expense                                         (1,481)            (4,471)           (3,542)            (8,548)
Other Income (Expense) - net                             245,385          (378,983)          (85,002)          (387,557)
                                                   --------------    ---------------    --------------     --------------
Profit (Loss) Before Non-Owned Interests in              380,862          (699,352)       (1,062,570)          (432,529)
  Insituform East, Inc. and Income Taxes
Provision (Credit) for Income Taxes                       10,000             39,000            30,000             85,000
                                                   --------------    ---------------    --------------     --------------
Profit (Loss) Before Non-Owned Interests in              370,862          (738,352)       (1,092,570)          (517,529)
  Insituform East, Inc.
Non-Owned Interests in (Earnings) Loss of
  Insituform East, Inc.                                 (56,604)            241,934           632,667            116,751
                                                   --------------    ---------------    --------------     --------------
                              NET EARNINGS (LOSS)      $ 314,258         $(496,418)        $(459,903)         $(400,778)
                                                   ==============    ===============    ==============     ==============

Net Earnings (Loss) per Share of Common Stock:
    Basic Earnings (Loss) per Share                     $   0.21         $   (0.33)        $   (0.31)         $   (0.27)
                                                   ==============    ===============    ==============     ==============
    Diluted Earnings (Loss) per Share                   $   0.21         $   (0.33)        $   (0.31)         $   (0.27)
                                                   ==============    ===============    ==============     ==============
</TABLE>










See notes to condensed consolidated financial statements.


<PAGE>


                                  CERBCO, Inc.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<TABLE>
                                                                                                             As of
                                                                                           ----------------- --- ----------------
<CAPTION>
                                                                                            Dec. 31, 2001          June 30, 2001
                                                                                           -----------------     ----------------
ASSETS
Current Assets:
<S>                                                                                         <C>                   <C>
   Cash and cash equivalents                                                                $   3,152,710         $  1,735,972
   Marketable securities                                                                       8,304,337             7,995,843
   Accounts receivable                                                                         5,355,214             6,983,481
   Inventories                                                                                 1,175,909             1,102,521
   Prepaid and refundable taxes                                                                  130,418                80,418
   Prepaid expenses and other                                                                    203,523               289,217
                                                                                           -----------------     ----------------
     Total Current Assets                                                                     18,322,111            18,187,452
                                                                                           -----------------     ----------------

Property, Plant and Equipment - at cost less accumulated depreciation of $17,541,010 at
   December 31, 2001 and $16,922,043 at June 30, 2001                                          7,830,682             8,516,639
                                                                                           -----------------     ----------------

Other Assets:
   Excess of acquisition cost over value of net assets acquired less accumulated
     amortization of $1,421,477 at December 31, 2001 and $1,388,825 at June 30, 2001           1,518,312             1,550,964
   Cash surrender value of SERP life insurance                                                 2,179,215             2,000,107
   Marketable securities                                                                       2,003,168             3,582,029
   Deferred income taxes - net of valuation allowance of $2,264,000 at December 31, 2001
     and $1,858,000 at June 30, 2001                                                                   0                     0
   Deposits and other                                                                             49,706                53,156
                                                                                           -----------------
                                                                                                                 ----------------
     Total Other Assets                                                                        5,750,401             7,186,256
                                                                                           -----------------     ----------------
         Total Assets                                                                       $ 31,903,194          $ 33,890,347
                                                                                           =================     ================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued liabilities                                                 $   2,035,045          $  2,991,939
  Income taxes payable                                                                            90,000                10,000
  Current portion of capital lease obligations                                                    22,504                32,448
                                                                                                                 ----------------
                                                                                           -----------------
     Total Current Liabilities                                                                 2,147,549             3,034,387
                                                                                           -----------------     ----------------

Long-Term Liabilities:
  Accrued SERP liability                                                                       1,532,851             1,532,851
  Capital lease obligations (less current portion shown above)                                     2,402                10,147
                                                                                                                 ----------------
                                                                                           -----------------
     Total Long-term Liabilities                                                               1,535,253             1,542,998
                                                                                                                 ----------------
                                                                                           -----------------
         Total Liabilities                                                                     3,682,802             4,577,385
                                                                                           -----------------     ----------------

Commitments and Contingencies

Non-Owned Interests in Consolidated Subsidiaries                                               4,942,233             5,574,900
                                                                                           -----------------     ----------------

Stockholders' Equity:
  Common stock, $.10 par value
     Authorized:  3,500,000 shares
     Issued and outstanding: 1,189,538 shares (at December 31, 2001)                             118,953
     Issued and outstanding:  1,189,476 shares (at June 30, 2001)                                                      118,947
  Class B Common stock (convertible), $.10 par value
     Authorized:  700,000 shares
     Issued and outstanding: 293,418 shares (at December 31, 2001)                                29,342
     Issued and outstanding: 293,480 shares (at June 30, 2001)                                                          29,348
  Additional paid-in capital                                                                   7,527,278             7,527,278
  Retained earnings                                                                           15,602,586            16,062,489
                                                                                           -----------------     ----------------
     Total Stockholders' Equity                                                               23,278,159            23,738,062
                                                                                           -----------------     ----------------
         Total Liabilities and Stockholders' Equity                                         $ 31,903,194          $ 33,890,347
                                                                                           =================     ================
See notes to condensed consolidated financial statements.
</TABLE>

<PAGE>


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

<TABLE>
                                                                                  For the six months ended Dec. 31
                                                                               ---------------------------------------
<CAPTION>
                                                                                     2001                  2000
                                                                               -----------------     -----------------

Cash Flows from Operating Activities:
<S>                                                                                  <C>                   <C>
  Net loss                                                                           $(459,903)            $(400,778)
  Adjustments to reconcile net loss to net cash provided by (used in)
     operations:
     Depreciation and amortization                                                      793,874             1,011,023
     Amounts attributable to non-owned interests                                      (632,667)             (116,751)
     Gain on sale of equipment                                                          (3,361)              (53,137)
     Increase in accrued SERP liability                                                       0               133,497
     Changes in operating assets and liabilities:
       Decrease (increase) in accounts receivable                                     1,628,267           (1,096,477)
       (Increase) decrease in inventories                                              (73,388)               159,131
       Decrease (increase) in prepaid expenses and other current assets                  85,694               (9,194)
       Decrease in accounts payable and accrued expenses                              (808,598)             (380,366)
       Increase (decrease) in income taxes payable                                       30,000             (195,000)
                                                                               -----------------     -----------------
Net Cash Provided by (Used in) Operating Activities                                     559,918             (948,052)
                                                                               -----------------     -----------------

Cash Flows from Investing Activities:
  Capital expenditures                                                                 (74,760)             (226,939)
  Sale of equipment                                                                       6,306                68,762
  Redemption (purchase) of marketable securities - net                                1,270,367             (167,992)
  Increase in investment in Insituform East                                                   0               (2,930)
  (Increase) decrease in cash surrender value of life insurance                       (179,108)               217,007
                                                                               -----------------     -----------------
Net Cash Provided by (Used in) Investing Activities                                   1,022,805             (112,092)
                                                                               -----------------     -----------------

Cash Flows from Financing Activities:
  Principal payments under capital lease obligations                                   (17,689)              (14,983)
  Dividends paid                                                                      (148,296)             (148,296)
                                                                               -----------------     -----------------
Net Cash Used in Financing Activities                                                 (165,985)             (163,279)
                                                                               -----------------     -----------------

Net Increase (Decrease) in Cash and Cash Equivalents                                  1,416,738           (1,223,423)
Cash and Cash Equivalents at Beginning of Period                                      1,735,972             2,344,077
                                                                               -----------------     -----------------
Cash and Cash Equivalents at End of Period                                           $3,152,710            $1,120,654
                                                                               =================     =================

Supplemental disclosure of cash flow information:
  Interest paid                                                                      $    3,542            $    7,947
  Income taxes paid                                                                  $        0            $  280,000
</TABLE>




See notes to condensed consolidated financial statements.



<PAGE>


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

1.   Financial Information

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

     The  Condensed  Consolidated  Balance  Sheet as of December 31,  2001,  the
Condensed  Consolidated  Statements of  Operations  for the three months and six
months  ended  December  31,  2001  and  2000,  and the  Condensed  Consolidated
Statements  of Cash Flows for the six months  ended  December  31, 2001 and 2000
have been prepared by the Company  without  audit.  The  Condensed  Consolidated
Balance  Sheet  as of June  30,  2001  (unaudited)  has  been  derived  from the
Company's  June  30,  2001  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 December 31, 2001 and for all periods presented have been made.

     These  statements have been prepared in accordance with the instructions to
Form  10-QSB 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  accounting  principles
generally  accepted in the United  States of America.  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-KSB for the fiscal year ended June 30, 2001.
Operating  results  for  interim  periods  are  not  necessarily  indicative  of
operating results for an entire fiscal year.

2.   Earnings Per Share

     Basic earnings per share data are computed based upon the weighted  average
number of common shares  outstanding  during each period.  Diluted  earnings per
share data are computed based upon the weighted  average number of common shares
outstanding  during the period including common stock  equivalents from dilutive
stock options,  if any. The weighted average number of common shares outstanding
used in computing diluted earnings per share for the three months and six months
ended  December  31,  2001  and  2000  include  no net  shares  associated  with
unexercised  dilutive stock options.  The following  numbers of shares have been
used in the earnings per share computations:

<TABLE>
                                                        For the three months and six months ended Dec. 31
                                                   --------------------------------------------------------- ----
<CAPTION>
                                                              2001                               2000
                                                   ---------------------------         --------------------------
<S>                                                        <C>                                 <C>
                  Basic                                    1,482,956                           1,482,956
                                                   ===========================         ==========================
                  Diluted                                  1,482,956                           1,482,956
                                                   ===========================         ==========================
</TABLE>

3.       Marketable Securities

         Marketable securities consist of:
<TABLE>
                                                          Dec. 31, 2001                         June 30, 2001
                                             ------------------------------ ------    -- ----------------------- --- --
<CAPTION>
                                                Amortized              Fair             Amortized            Fair
                                                  Cost                Value               Cost               Value
                                             ----------------    -----------------    --------------     --------------
        Current:
<S>                                            <C>                 <C>                 <C>                <C>
            U.S. Government and agencies       $ 5,047,745         $ 5,081,281         $ 6,495,213        $ 6,546,031
            Corporate                            3,256,592           3,281,976           1,500,630          1,504,102
                                             ----------------    -----------------    --------------     --------------
                                                 8,304,337           8,363,257           7,995,843          8,050,133
                                             ----------------    -----------------    --------------     --------------
        Non-current:
            U.S. Government and agencies         2,003,168           2,018,829           2,270,179          2,277,260
            Corporate                                    0                   0           1,311,850          1,323,338
                                             ----------------    -----------------    --------------     --------------
                                                 2,003,168           2,018,829           3,582,029          3,600,598
                                                                 -----------------                       --------------
                                             ----------------                         --------------
                Total marketable securities    $10,307,505         $10,382,086         $11,577,872        $11,650,731
                                             ================    =================    ==============     ==============
</TABLE>




4.       Accounts Receivable

         Accounts receivable consist of:

<TABLE>
<CAPTION>
                                                      Dec. 31, 2001          June 30, 2001
                                                      -------------          -------------
<S>                                                      <C>                    <C>
        Due from customers                               $5,194,895             $6,689,864
        Miscellaneous                                       160,319                293,617
                                                      -----------------      -----------------
                                                          5,355,214              6,983,481
        Less: Allowance for doubtful accounts                     0                      0
                                                      -----------------      -----------------
                                                         $5,355,214             $6,983,481
                                                      =================      =================
</TABLE>


5.   Equity in Insituform East

     At  December  31,  2001,  CERBCO  beneficially  held  1,414,850  shares  of
Insituform  East Common Stock,  par value $0.04 per share (the "Common  Stock"),
and 296,141  shares of  convertible  Insituform  East Class B Common Stock,  par
value $0.04 per share (the "Class B Common Stock"),  representing  approximately
34.9% of the Common Stock, 99.5% of the Class B Common Stock, 39.3% of the total
equity  and  62.2% 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 or six months
ended  December 31, 2001.  If all the options  outstanding  at December 31, 2001
were exercised, the resulting percentages of CERBCO's equity ownership and total
voting power would be 34.9% and 57.8%, respectively.

     From time to time, Insituform East purchases shares of its common stock for
treasury.  Changes  in capital  structure  resulting  from such stock  purchases
increase CERBCO's equity ownership.  Insituform East did not purchase any shares
during the three months ended December 31, 2001.


6.   Accounts Payable and Accrued Liabilities

     Accounts payable and accrued liabilities consist of:

<TABLE>
<CAPTION>
                                                        Dec. 31, 2001         June 30, 2001
                                                      ------------------     -----------------

<S>                                                      <C>                   <C>
       Accounts payable                                  $1,298,831            $1,685,392
       Accrued compensation and other expenses              736,214             1,158,251
       Dividends payable                                          0               148,296
                                                      ------------------     -----------------
                                                         $2,035,045            $2,991,939
                                                      ==================     =================
</TABLE>


7.   Contingencies

Dispute with ITI - United States District Court for the Middle District of
--------------------------------------------------------------------------
Tennessee
---------

     As previously reported, on December 3, 1999, Insituform Technologies,  Inc.
and its  Netherlands  affiliate  (collectively,  "ITI") filed suit in the United
States  District Court for the Middle District of Tennessee  against  Insituform
East and its subsidiary Midsouth Partners.  In its amended Complaint,  which was
filed on June 13,  2000,  ITI  contends  that  Midsouth  Partners has violated a
Settlement Agreement entered into in July 1999 (the "Settlement Agreement") with
respect to certain  litigation  initiated  earlier in 1999 by allegedly using or
failing to timely remove from certain  materials and equipment the Insituform(R)
trademark.  ITI contends that these alleged breaches of the Settlement Agreement
also  constitute  violations of the Lanham Act and the Tennessee Model Trademark
Act. In August 2001, ITI filed a Supplemental  Amended  Complaint  alleging that
Midsouth Partners is insolvent and that this is further breach of the Settlement
Agreement.  ITI seeks to terminate the Settlement Agreement and with it Midsouth
Partners'  rights to continue to exploit within its former  exclusive  territory
the  technology  available  to it under its former  Insituform  license,  to use
certain  tube labeled with the name  "Insituform,"  and to continue  buying tube
from ITI as  provided  in the  Settlement  Agreement,  and  (iv) the  Settlement
Agreement is or can be  terminated.  ITI seeks a  declaration  that the right of
Insituform East and its  subsidiaries to perform  certain  subcontract  work for
Midsouth Partners  pursuant to the Settlement  Agreement is or can be terminated
and that the other  provisions of the Settlement  Agreement remain in full force
and  effect.  In  addition,  ITI seeks  unspecified  damages  under a  "holdover
license" theory.

     ITI also contends that the various license  agreements  between  Insituform
East and ITI bar Insituform East from exploiting the Insituform  process,  using
the  Insituform  trademark,   or  practicing  any  CIPP  techniques  outside  of
Insituform  East's  territories  without payment of the  appropriate  cross-over
royalty and regular  royalty  totaling 20% (except as otherwise  provided by the
Settlement Agreement) and that these restrictions extend to Midsouth Partners as
well,  because Midsouth Partners and Insituform East are allegedly alter egos of
one another.  ITI contends that  Insituform  East is using Midsouth  Partners to
practice CIPP rehabilitation  processes outside of the territory provided for in
the  Settlement  Agreement and that the failure to pay a royalty and  cross-over
royalty  constitutes a breach of Insituform East's obligations under its license
agreements  with ITI. ITI seeks a declaration  that  Insituform  East's licenses
require the payment of a cross-over royalty for Midsouth Partners'  installation
of alternative  CIPP processes  outside of the territory in which ITI, under the
terms of the  Settlement  Agreement,  granted  Midsouth  Partners  the  right to
utilize  the  Insituform  Process  in the  condition  and state as  commercially
practiced  on the  date  of  settlement.  ITI  also  seeks  a  declaration  that
Insituform  East's  licenses  require the payment of  cross-over  royalties  for
Insituform   East's   installation  of  the  Insituform   Process  in  so-called
"Insituform  Owner-Reserved  Territories."  In  addition,  ITI seeks to  recover
royalties and cross-over  royalties from Insituform East for Midsouth  Partners'
installation of alternative CIPP processes.

     In addition, ITI seeks a declaration that it is no longer obligated to make
payments to Insituform  East under its August 4, 1980 agreement with  Insituform
East's  predecessor-in-interest (the "SAW Agreement"), under which ITI agreed to
pay Insituform East's predecessor-in-interest for recruiting potential licensees
of the  Insituform  process.  ITI  contends  that its  acquisition  or merger of
several such licensees has extinguished its obligations  under the SAW Agreement
to pay  Insituform  East,  which was assigned the right to receive  payments for
such licensees in April 1981.

     Trial is  currently  scheduled  for February  19,  2002,  and  discovery is
completed.  Insituform  East denies that ITI is entitled to the relief it seeks.
In addition,  Insituform East has counterclaimed,  seeking declarations that (I)
Midsouth  Partners  is not in  breach  of the  Settlement  Agreement,  (ii)  its
licenses  require  only the  payment of a royalty  for its  installation  of the
Insituform  Process  outside  of  its  exclusive  territories  and  not,  as ITI
contends, the payment of an additional cross-over royalty; and (iii) ITI remains
obligated to  Insituform  East under the SAW  Agreement.  The Court,  over ITI's
objection,  has also permitted  Insituform East and Midsouth  Partners to assert
the defense of patent  misuse.  The  position of  Insituform  East and  Midsouth
Partners  is that ITI  cannot  enforce  the  Company's  licenses,  which fail to
provide for the  diminution  of  royalties  upon the  expiration  of the primary
patents for the  Insituform  Process or to  distinguish  between  the  royalties
attributable to such patents and those  attributable to trademark rights,  trade
secrets  or  other  patents,   to  recover  royalties  for  Midsouth   Partners'
utilization of CIPP technologies available in the public domain. Insituform East
seeks unspecified damages from ITI in its counterclaims.

     The parties filed  cross-motions for partial summary  judgment.  ITI sought
summary  judgment on Insituform  East's patent misuse  defense.  ITI also sought
summary judgment on its claim that Midsouth  Partners is insolvent and that this
constitutes a breach of the  Settlement  Agreement.  Insituform  East,  Midsouth
Partners,  Insitu, Inc., and Midsouth LLC sought summary judgment on ITI's claim
for damages under the  Settlement  Agreement,  the Lanham Act, and the Tennessee
Model  Trademark Act, as well as declaratory  judgments that  Insituform East is
entitled to install the Insituform process outside of its exclusive  territories
and to do so without paying ITI a cross-over  royalty and that Midsouth partners
is free to offer competing  brands of CIPP  rehabilitation  and to do so without
paying  ITI any  royalties.  The Court  granted  in part and  denied in part the
parties'  motions.  The Court  ruled that the Company is entitled to install the
Insituform  process outside of its exclusive  territory.  The Court also granted
ITI's  motion for  partial  summary  judgment  on the patent  misuse  issue with
respect to East,  while  declining  to decide the issue with respect to Midsouth
Partners.  The Court denied the parties' motions as to all other issues,  ruling
that there exist disputed issues of material fact precluding  summary  judgment.
The ultimate outcome of this suit cannot be ascertained at this time.

     While it is not possible at this time 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  opinion  of  management,  in  the  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  without  payment of royalty and
cross-over  royalty to ITI, such event could have a material  adverse  effect on
the future financial position of Insituform East.


Summary and Other
-----------------

     Management believes ultimate resolution of the matters discussed above 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,  the  aggregate  of which  will not,  in the  opinion  of  management,
materially affect the Company's financial position or results of operations.

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

Overview and Outlook

     The Company  reported  consolidated  net  earnings  of $314,258  ($0.21 per
share) on sales of $5.2 million for the second quarter,  and a consolidated  net
loss of -$459,903 (-$0.31 per share) on sales of $10.0 million for the first six
months of fiscal year 2002. For the comparative periods of fiscal year 2001, the
Company  reported a  consolidated  net loss of  -$496,418  (-$0.33 per share) on
sales of $5.8  million,  and a  consolidated  net loss of -$400,778  (-$0.27 per
share) on sales of $12.1 million, respectively.

     The Company attributed its positive second quarter results to the favorable
results  of  Insituform   East,   Inc.   ("Insituform   East"),   the  Company's
majority-controlled  and only  operating  segment,  and to increases in the cash
surrender values of insurance policies funding the parent company's supplemental
retirement plan. Insituform East recognized  consolidated earnings of $93,208 on
sales of $5.2 million,  contributing earnings of $36,604 to CERBCO in the second
quarter of fiscal year 2002.  Insituform  East  attributed  its positive  second
quarter results primarily to an improved volume of immediately  workable backlog
in its licensed Insituform process territory and a focused reduction in activity
and  associated  costs in the southeast  region of the United  States,  a region
generally served by its Midsouth Partners subsidiary.

     While current midyear  operating results for Insituform East are materially
less  favorable  than  midyear  results of the  previous  year,  the  Company is
particularly  encouraged  by Insituform  East's  notable  current  turnaround to
positive  results for the most recent three  months.  The Company  believes that
business factors  contributing to the positive recent quarter reflect underlying
reductions in Insituform East's ongoing operating  expenses and increased normal
margin sales  volume,  both  currently  anticipated  to remain  favorable  going
forward.  However,  and with  respect to all such  forward-looking  information,
there can be no assurances regarding the Company's future operating performance.
In this regard, the Company recognizes that the potential for continued positive
operating results for Insituform East in the third quarter of fiscal 2002 ending
March 31, 2002, could be negatively  impacted by reduced revenues resulting from
as yet  unencountered  severe winter  conditions,  if any, and  increased  costs
associated with the trial phase of litigation  initiated against Insituform East
and its wholly-owned subsidiary,  Midsouth Partners; by Insituform Technologies,
Inc. in  December,  1999.  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 or
circumstance, the Company's forward-looking results typically are anticipated to
substantially  parallel  CERBCO's  approximate 39%  participation in the forward
results of Insituform East.

     Insituform  East's total backlog value of all  uncompleted  and  multi-year
contract awards was approximately $17.4 million at December 31, 2001 as compared
to $27.6 million at December 31, 2000. The twelve-month  backlog at December 31,
2001 was approximately $8.9 million as compared to $17.7 million at December 31,
2000. The total backlog value of all  uncompleted  and  multi-year  contracts at
December  31, 2001 and 2000  includes  work not  estimated  to be  released  and
installed  within  twelve  months,  as well as potential  work  included in term
contract  awards which may or may not be fully  ordered by contract  expiration.
While   potentially   helpful  as  a  possible  trend  indicator,   "total"  and
"twelve-month"  backlog figures at specific dates are not necessarily indicative
of sales and earnings for future periods due to the irregular timing and receipt
of major project awards, including large, multi-year, menu-priced contracts with
estimated but uncertain  order  quantities  further  subject to the specifics of
individual  work  releases.  On a week-to-week  and  month-to-month  basis,  the
availability  of often  volatile  "immediately  workable"  backlog most directly
affects  productivity,  with such availability subject to unpredictable  changes
such  as  weather,   customer-initiated  delays  and  found  variances  in  site
conditions.

     In addition to Insituform  East's  immediately  workable  backlog,  another
significant  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.

     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 year 1999 lawsuit against  Insituform
East and  Midsouth  Partners 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
certain  competitive  rights  of  Midsouth  Partners  acquired  pursuant  to the
Midsouth  Settlement  Agreement.  While the ultimate  outcome of any litigation,
including ITI's most recent December 1999 litigation,  cannot be  predetermined,
pending  resolution  Insituform East and Midsouth Partners intend to continue to
exercise  their  respective  rights under  license  agreements  and the Midsouth
Settlement  Agreement as exercised prior to the instigation of such  litigation.
Trial of the December 1999  litigation  is currently  scheduled for February 19,
2002.

Results of Operations

      Three Months Ended 12/31/01 Compared with Three Months Ended 12/31/00

     Consolidated  sales decreased $0.6 million (-11%) from $5.8 million for the
quarter ended  December 31, 2000 to $5.2 million for the quarter ended  December
31, 2001,  due  primarily to reduced  comparable  period sales in the  southeast
region of the United States.

     Consolidated   operating  results  increased  from  an  operating  loss  of
-$570,147  for the quarter  ended  December 31, 2000 to an  operating  profit of
$8,806 for the quarter  ended  December  31,  2001.  Consolidated  cost of sales
decreased  17% in the second  quarter  of fiscal  year 2002 as  compared  to the
second quarter of fiscal year 2001. As a result, gross profit as a percentage of
sales increased from a gross profit of 11% for the second quarter of fiscal year
2001 to a gross profit of 17% for the second  quarter of fiscal year 2002.  This
increase is due primarily to an improved mix of work to include a reduced volume
of lower margin work  performed in the  southeast  region of the United  States.
Insituform East's selling,  general and  administrative  expenses decreased 26%,
due in part to reduced marketing and legal expenses during the second quarter of
fiscal year 2002. The parent company's  unallocated  general corporate  expenses
decreased  36% in the second  quarter of fiscal  year 2002,  primarily  due to a
decrease in legal fees,  directors fees and public disclosure expense.  CERBCO's
annual  meeting for fiscal year 2001 was  postponed  from the second  quarter of
fiscal year 2002 to later in the fiscal year.

     Investment  income decreased 50% in the second quarter of fiscal year 2002,
primarily as a result of a decline in interest rates.  Other income  (expense) -
net increased from a net loss of -$378,983 to a net gain of $245,385,  primarily
as a result of increases  in the cash  surrender  values of  insurance  policies
funding the parent  company's  supplemental  retirement  plan during the current
quarter.

     The  provision  for  income  taxes  shown for the  comparable  periods  was
recorded by CERBCO.  No provision  for income  taxes was recorded by  Insituform
East for the second  quarter  of fiscal  year 2002 as the  provision  calculated
using  applicable  enacted  federal  and state  tax rates of 39% of the  pre-tax
earnings  was applied to reduce the  valuation  allowance  recorded  against the
deferred tax asset.  No credit for income taxes was recorded by Insituform  East
for the  second  quarter  of fiscal  year 2001 as the  credit  calculated  using
applicable  enacted  federal and state tax rates of 39% of pretax  earnings  was
applied to increase the valuation  allowance  recorded  against the deferred tax
asset.

        Six Months Ended 12/31/01 Compared with Six Months Ended 12/31/00

     Consolidated sales decreased $2.1 million (-17%) from $12.1 million for the
six months  ended  December  31, 2000 to $10.0  million for the six months ended
December  31, 2001,  due  primarily  to reduced  comparable  period sales in the
southeast region of the United States; and, to a lesser extent, a reduced volume
of immediately  workable  backlog in Insituform  East's  licensed  Insituform(R)
process territory.

     The  consolidated  operating loss increased $0.7 million from -$0.5 million
in the six months  ended  December  31, 2000 to -$1.3  million in the six months
ended  December 31, 2001,  due  primarily  to an increase in  Insituform  East's
operating loss for the  comparable  periods from -$0.1 million to -$0.9 million.
Consolidated  cost of sales decreased 10% in the first six months of fiscal year
2002 as compared to the first six months of fiscal year 2001. As a result, gross
profit as a percentage of sales  decreased from a gross profit of 15% to a gross
profit of 7% for the first six months of fiscal year 2002.  This decrease is due
primarily to reduced margins  experienced in the southeast  region of the United
States and the  absorption of semi-fixed  costs over reduced sales levels during
the first six months of fiscal year 2002. Insituform East's selling, general and
administrative  expenses  decreased  13%, due in part to reduced  marketing  and
legal  expenses  during the  second  quarter  of fiscal  year  2002.  The parent
company's  unallocated general corporate expenses decreased 17% primarily due to
a decrease in legal fees, directors fees and public disclosure expense. CERBCO's
annual  meeting for fiscal year 2001 was  postponed  from the second  quarter of
fiscal year 2002 to later in the fiscal year.

     Other income  (expense) - net  increased  from a net loss of -$387,557 to a
net loss of -$85,002  primarily as a result of period  fluctuations  in the cash
surrender values of insurance policies funding the parent company's supplemental
retirement plan.

     The  provision  for  income  taxes  shown for the  comparable  periods  was
recorded by CERBCO. No credits for income taxes were recorded by Insituform East
for the first six  months  of  fiscal  year 2002 or for the first six  months of
fiscal year 2001 as the credits  calculated using applicable enacted federal and
state tax rates of 39% of the  pre-tax  losses  were  reduced  by  $406,000  and
$75,000 valuation  allowances recorded against the deferred tax asset during the
six months ended December 31, 2001 and 2000, respectively.

Financial Condition

     During the six months  ended  December 31, 2001,  the  Company's  operating
activities  provided  approximately  $560,000 in cash. This result is due to the
Company's net loss being more than offset by the net effect of (i) several items
that did not affect the Company's  cash,  including $0.8 million in depreciation
and  amortization  expenses  and $0.6  million in the  consolidated  net loss in
Insituform East attributable to non-owned  interests,  and (ii) changes in items
that did affect  the  Company's  cash,  including  a $1.6  million  decrease  in
accounts  receivable,  resulting from improved customer  collections  during the
period.

     The Company's investing activities provided $1.0 million in cash during the
six  months  ended  December  31,  2001,  primarily  due to the  timing  between
purchases and redemptions of its investments in marketable debt securities.  The
Company used cash of $0.2 million in its financing activities,  primarily due to
the payment of dividends by the parent company, CERBCO.

     The  Company's   liquidity   remained   strong  with  working   capital  of
approximately  $16.1  million and a current  ratio of 8.5 to 1 at  December  31,
2001. The parent company,  CERBCO, has cash and temporary  investments in excess
of $13.4 million  which,  pending longer term  investment,  it believes are more
than  adequate  to meet  its  own  cash  flow  requirements  and  the  temporary
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.



<PAGE>


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

     See Part I, Item 1, "Notes to Condensed  Consolidated  Financial Statements
(unaudited)  - Note  7.  Contingencies"  for  details  concerning  a  previously
disclosed  lawsuit filed in the U.S.  District Court for the Middle  District of
Tennessee against Insituform East and Midsouth Partners.

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

     As  previously  disclosed,  the Company had  determined to delay its annual
meeting of stockholders,  typically held in the second quarter.  The Company has
presently targeted its annual meeting for April 11, 2002, at a specific time and
location  to be further  determined  by the Board of  Directors  and  adequately
noticed to stockholders when set.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

         99   - CERBCO,  Inc.  Consolidating  Schedules:  Statement of
                Operations  Information  for the three months ended
                December 31, 2001;  Statement of Operations  Information
                for the six months ended December 31, 2001;  Balance Sheet
                Information and Consolidating Elimination Entries as of
                December 31, 2001.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed during the quarter ended December 31,
         2001.


<PAGE>


                                   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: February 12, 2002

                            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>


































                                  CERBCO, Inc.
                  3421 Pennsy Drive o Landover o Maryland 20785
                                Tel: 301.773.1784
                                Fax: 301.322.3041
                         24-Hour FaxVault: 301.773.4560