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:                               December 31, 1999
                                       OR



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


Commission file number:                                                 0-16749

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

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

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


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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes          X            No
                                            -----------



As of February 4, 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 Six Months Ended December 31, 1999
        and December 31, 1998 (unaudited).....................................3

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

        Condensed Consolidated Statements of Cash Flows for the Six Months
        Ended December 31, 1999 and December 31, 1998 (unaudited).............6

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

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations................................................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.....................................14




<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>

                                  CERBCO, Inc.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<CAPTION>
                                             For the three months ended Dec. 31    For the six months ended Dec. 31
                                             ----------------------------------    --------------------------------
                                                   1999              1998               1999              1998
                                                   ----              ----               ----              ----

<S>                                            <C>               <C>              <C>                <C>
Sales                                          $4,672,268        $5,898,104       $11,986,722        $11,946,046
                                               ----------        ----------       -----------        -----------

Costs and Expenses:
  Cost of sales                                 4,875,453         5,030,790        10,994,839         10,081,241
  Selling, general and administrative expenses  1,212,307         1,249,798         2,475,033          2,456,337
                                               ----------        ----------       -----------        -----------
    Total Costs and Expenses                    6,087,760         6,280,588        13,469,872         12,537,578
                                               ----------        ----------       -----------        -----------

Operating Loss                                 (1,415,492)         (382,484)       (1,483,150)          (591,532)
Investment Income                                 161,178           235,246           326,552            486,108
Interest Expense                                  (49,360)          (11,193)          (43,772)           (23,898)
Other Income - net                                428,258            76,362           448,452            110,000
                                               ----------        ----------       -----------        -----------
Loss Before Non-Owned Interests
  and Incomes Taxes                              (875,416)          (82,069)         (751,918)           (19,322)
Non-Owned Interest in Pretax Loss
  of Midsouth Partners                                  0            20,725            19,889             82,348
                                               ----------        ----------       -----------        -----------
Earnings (Loss) Before Non-Owned Interests
  in Insituform East, Inc. and Income Taxes      (875,416)          (61,344)         (732,029)            63,026
Provision (Credit) for Income Taxes              (261,000)          (20,000)         (201,000)            34,000
                                               ----------        ----------       -----------        -----------
Earnings (Loss) Before Non-Owned Interests
  in Insituform East, Inc.                       (614,416)          (41,344)         (531,029)            29,026
Non-Owned Interests in (Earnings) Loss of
  Insituform East, Inc.                           641,919            30,646           605,083             (4,987)
                                               ----------        ----------       -----------        -----------
                    NET EARNINGS (LOSS)        $   27,503        $  (10,698)      $    74,054        $    24,039
                                               ==========        ==========       ===========        ===========

Net Earnings (Loss) per Share of Common
  Stock:
    Basic Earnings (Loss) per Share            $     0.02        $    (0.01)      $      0.05        $      0.02
                                               ==========        ==========       ===========        ===========
    Diluted Earnings (Loss) per Share          $     0.02        $    (0.01)      $      0.05        $      0.02
                                               ==========        ==========       ===========        ===========


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


<PAGE>


<TABLE>
                                  CERBCO, Inc.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

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

Current Assets:
<S>                                                                                   <C>                   <C>
  Cash and cash equivalents                                                           $14,545,871           $17,050,119
  Accounts receivable                                                                   5,924,812             6,592,913
  Inventories                                                                           1,211,133             1,273,402
  Prepaid and refundable taxes                                                             88,612               550,453
  Prepaid expenses and other                                                              239,419               339,928
                                                                                      -----------           -----------
    Total Current Assets                                                               22,009,847            25,806,815
                                                                                      -----------           -----------

Property, Plant and Equipment - at cost less accumulated depreciation of
  $16,402,327 at December 31, 1999 and $15,432,983 at June 30, 1999                    11,235,260            11,511,536
                                                                                      -----------           -----------

Other Assets:
  Excess of acquisition  cost over value of net assets acquired less accumulated
    amortization of $1,290,488 at December 31, 1999 and $1,253,580 at
    June 30, 1999                                                                       1,797,887             1,998,822
  Deferred income taxes - net of valuation allowance of $242,000 at
    December 31, 1999 and $0 at June 30, 1999                                                   0                     0
  Cash surrender value of SERP life insurance                                           2,426,926             1,730,964
  Deposits and other                                                                       86,822                70,489
                                                                                      -----------           -----------
    Total Other Assets                                                                  4,311,635             3,800,275
                                                                                      -----------           -----------
      Total Assets                                                                    $37,556,742           $41,118,626
                                                                                      ===========           ===========

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


<PAGE>

<TABLE>

                                  CERBCO, Inc.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

<CAPTION>
                                                                                               As of
                                                                                 ---------------- -- -----------------
                                                                                  Dec. 31, 1999       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                                           2,169,970           2,958,136
  Income taxes payable                                                               1,070,432           1,508,353
  Current portion of capital lease obligations                                          35,081              42,167
                                                                                   -----------         -----------
    Total Current Liabilities                                                        3,275,483           4,908,656
                                                                                   -----------         -----------

Long-Term Liabilities:
  Accrued SERP liability                                                               966,227             847,560
  Capital lease obligations (less current portion shown above)                          49,702              62,662
  Deferred income taxes                                                                      0             219,000
                                                                                   -----------         -----------
    Total Long-Term Liabilities                                                      1,015,929           1,129,222
                                                                                   -----------         -----------
      Total Liabilities                                                              4,291,412           6,037,878
                                                                                   -----------         -----------
Commitments and Contingencies

Non-Owned Interests in Consolidated Subsidiary                                       8,372,847          10,262,319
                                                                                   -----------         -----------

Stockholders' Equity:
  Common stock, $.10 par value
    Authorized:  3,500,000 shares
    Issued and outstanding:  1,189,476 shares                                          118,947             118,947
  Class B Common stock (convertible), $.10 par value
    Authorized:  700,000 shares
    Issued and outstanding: 293,480 shares                                              29,348              29,348
  Additional paid-in capital                                                         7,527,278           7,527,278
  Retained earnings                                                                 17,216,910          17,142,856
                                                                                   -----------         -----------
    Total Stockholders' Equity                                                      24,892,483          24,818,429
                                                                                   -----------         -----------
      Total Liabilities and Stockholders' Equity                                   $37,556,742         $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 six months ended Dec. 31
                                                                           ---------------------------------------
                                                                                 1999                  1998
                                                                           -----------------     -----------------

Cash Flows from Operating Activities:
<S>                                                                          <C>                   <C>
  Net earnings                                                               $    74,054           $    24,039
  Adjustments to reconcile net earnings to net cash provided by operations:
    Depreciation and amortization                                              1,217,500             1,059,224
    Amounts attributable to non-owned interests                                 (624,972)              (77,361)
    Deferred income taxes                                                       (219,000)              104,000
    Decrease in other assets                                                           0                17,989
    Increase in accrued SERP liability                                           118,667               122,921
    Changes in operating assets and liabilities:
      (Increase) decrease in accounts receivable                                 668,101              (526,232)
      (Increase) decrease in inventories                                          62,269               (87,588)
      Decrease in prepaid expenses and other current assets                      562,350               317,070
      Decrease in accounts payable and accrued expenses                         (639,870)             (362,231)
      Decrease in income taxes payable                                          (437,921)             (241,921)
                                                                             -----------           -----------
Net Cash Provided by Operating Activities                                        781,178               349,910
                                                                             -----------           -----------

Cash Flows from Investing Activities:
  Capital expenditures, net                                                     (900,649)             (667,976)
  Purchase of remaining interests in Midsouth Partners                          (948,707)                    0
  Increase in investment in Insituform East                                     (151,766)                    0
  Increase in other assets                                                       (20,000)                    0
  Increase in cash surrender value of life insurance                            (695,962)             (260,373)
                                                                             -----------           -----------
Net Cash Used in Investing Activities                                         (2,717,084)             (928,349)
                                                                             -----------           -----------
Cash Flows from Financing Activities:
  Principal payments on revolving lines of credit and
     capital lease obligations                                                   (20,046)              (16,448)
  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                                         (568,342)             (414,744)
                                                                             -----------           -----------

Net Decrease in Cash and Cash Equivalents                                     (2,504,248)             (993,183)
Cash and Cash Equivalents at Beginning of Period                              17,050,119            20,405,039
                                                                             -----------           -----------
Cash and Cash Equivalents at End of Period                                   $14,545,871           $19,411,856
                                                                             ===========           ===========
Supplemental disclosure of cash flow information:
  Interest paid                                                              $   131,906           $    23,898
  Income taxes paid (refunded), net                                          $    (5,920)          $   (76,506)


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



<PAGE>


                                  CERBCO, Inc.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.       Financial Information

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

         The Condensed  Consolidated  Balance Sheet as of December 31, 1999, the
Condensed  Consolidated  Statements of  Operations  for the three months and six
months  ended  December  31,  1999  and  1998,  and the  Condensed  Consolidated
Statements  of Cash Flows for the six months  ended  December  31, 1999 and 1998
have been prepared by the Company  without  audit.  The  Condensed  Consolidated
Balance  Sheet  as of June  30,  1999  (unaudited)  has  been  derived  from the
Company's  June  30,  1999  audited  financial  statements.  In the  opinion  of
management,  all adjustments  (which include only normal recurring  adjustments)
necessary to present  fairly the financial  position,  results of operations and
cash flows at December 31, 1999 and for all periods presented have been made.

         These statements have been prepared in accordance with the instructions
to Form 10-Q and  therefore  do not  necessarily  include  all  information  and
footnotes necessary to a presentation of the financial position,  the results of
operations and the cash flows in conformity with generally  accepted  accounting
principles.  Certain information and footnote  disclosures  normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these condensed
financial   statements  be  read  in  conjunction  with  the  audited  financial
statements  and notes thereto  included in the CERBCO annual report on Form 10-K
for the fiscal year ended June 30, 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 six months ended December 31, 1999 and 1998 include no net shares associated
with unexercised  dilutive stock options.  The following  numbers of shares have
been used in the earnings (loss) per share computations:

<TABLE>
<CAPTION>
                   For the three months ended Dec. 31           For the six months ended Dec. 31
                   ----------------------------------           --------------------------------
                    1999                   1998                    1999                   1998
                    ----                   ----                    ----                   ----

<S>               <C>                    <C>                     <C>                    <C>
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
                  =========              =========               =========              =========
</TABLE>

3.       Income Taxes

         The  calculation  of Insituform  East's Credit for Income Taxes for the
six months ended December 31, 1999, 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 $242,000 at December 31, 1999,
has been  reduced by a valuation  allowance  of $242,000  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:
                                            Dec. 31, 1999         June 30, 1999

Due from customers                             $5,871,473            $6,514,843
Miscellaneous                                      53,339                78,070
                                               ----------            ----------
                                                5,924,812             6,592,913
Less: Allowance for doubtful accounts                   0                     0
                                               ----------            ----------
                                               $5,924,812            $6,592,913
                                               ==========            ==========

5.       Equity in Insituform East

         At December 31, 1999,  CERBCO  beneficially  held  1,322,750  shares of
Insituform  East Common Stock and 296,141 shares of convertible  Insituform East
Class B Common Stock representing approximately 32.6% of the Common Stock, 99.5%
of the Class B Common  Stock,  37.2% of the total  equity and 60.9% 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 six months ended December 31, 1999,  CERBCO  acquired 96,350
shares of Insituform East Common Stock for $151,766.  The difference between the
cost of the stock and the net book value thereof, $164,027, 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 six months ended December 31,
1999. If all the options  outstanding at December 31, 1999 were  exercised,  the
resulting  percentages of CERBCO's equity ownership and total voting power would
be 33.2% 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 six months ended December 31, 1999.

6.       Acquisition of Remaining Interests in Midsouth Partners

         CERBCO's condensed consolidated financial statements as of December 31,
1999 and June 30, 1999,  and for the three months and six months ended  December
31, 1999 and 1998, include the accounts of Midsouth Partners,  Insituform East's
majority-controlled   subsidiary  partnership  since  June  12,  1996.  Midsouth
Partners was organized as Insituform  Midsouth, a Tennessee general partnership,
in December 1985 with Insituform East as a general  partner.  Midsouth  Partners
was the exclusive  licensee for the Insituform(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.

<TABLE>
         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:

<CAPTION>
                                 For the three months ended Dec. 31          For the six months ended Dec. 31
                                 ----------------------------------          --------------------------------
                                         1999              1998                      1999            1998
                                         ----              ----                      ----            ----

<S>                                  <C>               <C>                      <C>               <C>
Sales                                $4,672,268        $5,898,104               $11,986,722       $11,946,046
Net Earnings (Loss)                  $   27,503        $  (14,203)              $    66,664       $     8,241
Net Earnings (Loss) per Share:
    Basic                                 $0.02            $(0.01)                    $0.04             $0.01
    Diluted                               $0.02            $(0.01)                    $0.04             $0.01

         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.
</TABLE>

7.       Accounts Payable and Accrued Liabilities

         Accounts payable and accrued liabilities consist of:

                                            Dec. 31, 1999         June 30, 1999

Accounts payable                               $1,093,311            $1,448,725
Accrued compensation and related expenses       1,076,659             1,361,115
Dividends payable                                       0               148,296
                                               ----------            ----------
                                               $2,169,970            $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 has now been  referred  to  mediation  in the  District of
Columbia, which mediation is ongoing.

Antitrust Suit - U.S. District Court for the Southern District of Texas
-----------------------------------------------------------------------

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

         On January 7, 2000, in response to a stipulation of dismissal  filed on
December 1, 1999,  this lawsuit was  dismissed  with  prejudice  with each party
bearing  its own  costs.  In  connection  with this  dismissal,  defendants  and
plaintiffs executed a Release and Settlement  Agreement dated November 29, 1999,
in which  plaintiffs  released  defendants  from any and all claims and  damages
relating to the lawsuit.

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

         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  consolidated  net earnings of $27,503 ($0.02 per
share) on sales of $4.7 million for the second  quarter of fiscal year 2000, and
consolidated  net  earnings  for the  first six  months  of fiscal  year 2000 of
$74,054 ($0.05 per share) on sales of $12.0  million.  For the second quarter of
fiscal  year 1999,  the  Company  reported a  consolidated  net loss of -$10,698
(-$0.01 per share) on sales of $5.9  million,  which  reduced  consolidated  net
earnings  for the first six  months of fiscal  year 1999 to  $24,039  ($0.02 per
share) on sales of $11.9 million.

         The Company  attributed its modestly positive results for the first six
months  of  fiscal  year  2000 to the  parent  company's  short-term  investment
earnings and  significant  increases in the cash  surrender  values of insurance
policies  funding  its  supplemental  retirement  plan.  Insituform  East,  Inc.
("Insituform  East"),  the  Company's  majority-controlled  and  only  remaining
operating segment,  recognized a consolidated net loss of -$1.0 million on sales
of $12.0  million,  contributing a loss of -$357,770 to CERBCO for the first six
months of fiscal year 2000,  which largely  offset the parent  company's  gains.
These losses were  attributed  to a significant  decrease in  Insituform  East's
immediately  workable  backlog  during  the second  quarter  of the fiscal  year
compounded  by actions  taken during the first nine months of calendar year 1999
to increase future productive capacity.

         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
marginal  operating  results for the third  quarter of fiscal 2000,  with fourth
quarter and subsequent operating results significantly dependent upon growth and
availability of immediately  workable backlog. An improved  immediately workable
backlog  level at the  outset  of the  third  quarter  of  fiscal  year 2000 was
initially  offset by severe winter  weather  conditions  experienced  in January
2000.  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 37% 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.

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

Results of Operations

      Three Months Ended 12/31/99 Compared with Three Months Ended 12/31/98

         Consolidated  sales decreased $1.2 million (-21%) from $5.9 million for
the  quarter  ended  December  31, 1998 to $4.7  million  for the quarter  ended
December 31, 1999.  Comparable  period sales decreased  primarily as a result of
decreases in immediately workable backlog during the current quarter.

         Consolidated operating losses increased $1.0 million from -$0.4 million
in the quarter  ended  December 31, 1998 to -$1.4  million in the quarter  ended
December 31, 1999, due to an increase in Insituform  East's  operating loss from
-$0.2 million to -$1.2 million.  Consolidated cost of sales decreased only 3% in
the second  quarter of fiscal  year 2000 as  compared  to the second  quarter of
fiscal  year  1999,  and as a  result,  gross  profit as a  percentage  of sales
decreased  from a  positive  15% to a negative  4% for the same two  comparative
periods.  This decrease  reflects  primarily the lack of available work to fully
absorb Insituform East's increased semi-fixed costs.  Insituform East's selling,
general and administrative  expenses decreased slightly (-3%), as did the parent
company's unallocated general corporate expenses (-1%) in the three months ended
December 31, 1999.

         Other income  increased $0.4 million  (460%),  primarily as a result of
significant increases in the cash surrender values of insurance policies funding
the parent company's supplemental retirement plan.

        Six Months Ended 12/31/99 Compared With Six Months Ended 12/31/98

         Consolidated sales increased slightly (less than 1%) from $11.9 million
for the six months ended  December 31, 1998 to $12.0  million for the six months
ended December 31, 1999.

         Consolidated operating losses increased $0.9 million from -$0.6 million
in the six months  ended  December  31, 1998 to -$1.5  million in the six months
ended December 31, 1999, due to the increase in Insituform East's operating loss
from -$0.2 million to -$1.1 million.  Consolidated cost of sales increased 9% in
the first six months of fiscal  year 2000 as compared to the first six months of
fiscal  year  1999,  and as a  result,  gross  profit as a  percentage  of sales
decreased to 8% from 16% for the same two  comparative  periods.  This  decrease
reflects  the  absorption  of  increased  semi-fixed  costs over a static  sales
volume.  Insituform East's selling,  general and administrative  costs increased
slightly (2%), while the parent company's unallocated general corporate expenses
decreased (-5%), in the six months ended December 31, 1999.

         Other income  increased  $0.3 million  (308%)  primarily as a result of
significant increases in the cash surrender values of insurance policies funding
the parent company's supplemental retirement plan.

Financial Condition

         During the six months ended December 31, 1999, the Company's  operating
activities  provided  $0.8 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 $1.2 million in depreciation and amortization expenses
included  in  operating  results  and the  adjustment  for the $0.6  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
$0.7 million  decrease in accounts  receivable  and a $0.6  million  decrease in
prepaid  expenses,  which increased cash,  offset by a $0.6 million  decrease in
accounts  payable and a $0.4  million  decrease in income taxes  payable,  which
decreased cash.

         The Company used $2.7 million in cash in  investing  activities  during
the six months  ended  December 31,  1999,  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 $2.5  million  net  decrease in cash during the first six months of
fiscal year 2000, the Company's  liquidity  remained strong with working capital
of $18.7 million and a current ratio of 6.7 to 1 at December 31, 1999.

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

Year 2000 Issues

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

         Prior to December 31, 1999,  the Company  implemented  plans to address
Year 2000 issues.  Primary  areas of focus  included the  Company's  information
technology systems, the Company's  non-information  technology systems, the Year
2000  readiness  of the  Company's  vendors  and  suppliers  and the  Year  2000
readiness of the Company's major customers.  The Company expended  approximately
$30,000 in implementation costs through December 31, 1999. Because the Company's
primary  products  and  services  neither  include  nor rely  upon  computerized
components,  the Company  concluded that there were no additional  contingencies
associated  with  actual or  implied  warranties  related  to its  products  and
services resulting from Year 2000 issues.

         Subsequent to December 31, 1999,  the Company has not  experienced  any
difficulties  with its  information  technology  systems or its  non-information
technology systems resulting from Year 2000 issues. In addition,  the Company is
not aware of any  disruptions  experienced  by its  vendors,  suppliers or major
customers associated with Year 2000 readiness.  As a result, the Company has not
been  required  to  implement  any element of its  contingency  plan in order to
conduct normal business operations in the Year 2000.

         The Company  will  continue to monitor the Year 2000  readiness  of its
vendors,  suppliers  and major  customers.  The  Company  has not  incurred  any
material  expenditures  subsequent to December 31, 1999,  and does not presently
anticipate any significant future costs related to Year 2000 issues.

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,  (b) a previously  disclosed  lawsuit filed in the U.S. District Court
for the  Southern  District of Texas,  Houston  Division,  and (c) a new 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

         Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

         27   - Financial Data Schedule for the period ended December 31, 1999

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

(b)      Reports on Form 8-K:

         No  reports  on Form 8-K were  filed  during  the  three  months  ended
December 31, 1999.


                                   SIGNATURES

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

Date: February 11, 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)



<PAGE>


                       Exhibits to CERBCO, Inc. Form 10-Q





Exhibit 27.       CERBCO, Inc. Financial Data Schedule

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

                         Note:      Exhibit 27, the Financial Data Schedule,  is
                                    a requirement by the Securities and Exchange
                                    Commission  to be  submitted  only  with the
                                    electronic  filing of Form 10-Q.  Therefore,
                                    since   this   schedule   contains   summary
                                    financial  information  found  elsewhere  in
                                    this report, it is not included here.