U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

        [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  For the Quarterly Period ended April 18, 1999

                                       OR

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

           for the transition period from ___________ to ___________.


                         Commission File Number 33-95796


                         TANNER'S RESTAURANT GROUP, INC.
                         -------------------------------
                 (Name of small business issuer in its charter)


             Texas                                        76-0406417
             -----                                        ----------
  (State or other jurisdiction                (IRS Employer  Identification No.)
of incorporation or organization)

                        5500 Oakbrook Parkway, Suite 260
                             Norcross, Georgia 30093
                             -----------------------
          (Address of principal executive offices, including zip code)


                    Issuer's telephone number: (770) 248-2298


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

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date: 8,334,489 shares as of June 1,
1999.

<PAGE>

                                TABLE OF CONTENTS
                                -----------------


                                                                            PAGE
                                                                            ----


PART I  FINANCIAL INFORMATION

     Item 1.  Financial Statements..........................................  3
     Item 2.  Management's Discussion and Analysis or Plan of Operation.....  8

PART II OTHER INFORMATION

     Item 1.  Legal Proceedings............................................. 13
     Item 2.  Changes in Securities and Use of Proceeds..................... 14
     Item 3.  Defaults Upon Senior Securities............................... 15
     Item 4.  Submission of Matters to a Vote of Security Holders........... 15
     Item 6.  Exhibits and Reports on Form 8-K.............................. 15

SIGNATURES.................................................................. 17

EXHIBIT INDEX............................................................... 18



                                        2
<PAGE>
<TABLE>
<CAPTION>


                                     PART I
                              FINANCIAL INFORMATION

Item 1. Financial Statements

Tanner's Restaurant Group, Inc. Consolidated Balance Sheet

                                                                 April 18,    December 27,
                                                                   1999           1998
                                                               (Unaudited)
                                                               -----------    -----------
<S>                                                            <C>            <C>
Assets
Current assets:
    Cash                                                       $    49,640    $   222,163
    Accounts receivable                                             82,938        130,086
    Inventory                                                       95,259        113,734
    Prepaid expenses                                                32,755         21,989
                                                               -----------    -----------
               Total current assets                                260,592        487,972


Property and equipment, net                                      2,343,604      2,092,698
Intangible assets, net                                           3,011,069      3,119,870
Goodwill, net                                                      984,916      1,002,303
Other assets                                                       140,137        161,252
                                                               -----------    -----------
               Total assets                                    $ 6,740,318    $ 6,864,095
                                                               ===========    ===========

Liabilities and Stockholders' Equity

Current liabilities:
    Accounts payable                                           $ 1,003,458    $ 1,390,697
    Accrued expenses                                             1,514,804      2,254,666
    Current portion of long-term debt                              771,884        882,801
                                                               -----------    -----------
               Total current liabilities                         3,290,146      4,528,164


Long-term debt                                                   2,271,506      2,306,884
                                                               -----------    -----------
               Total liabilities                                 5,561,652      6,835,048
                                                               -----------    -----------

Commitments and contingencies

Stockholders' equity:
    Preferred stock                                              1,215,152      1,253,822
    Common stock: $.01 par value; authorized 200 million
        shares: issued and outstanding 8,334,489 in 1999 and        83,345         82,301
        8,230,080 in 1998
    Additional paid-in capital                                   9,120,555      9,082,929
    Stock subscription receivable                               (2,000,000)    (4,000,000)
    Accumulated deficit                                         (7,240,386)    (6,390,005)
                                                               -----------    -----------
               Total stockholders' equity                        1,178,666         29,047
                                                               -----------    -----------
               Total liabilities and stockholders' equity      $ 6,740,318    $ 6,864,095
                                                               ===========    ===========



                  The accompanying notes are an integral part of these
                           consolidated financial statements.

                                           3
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<CAPTION>


Tanner's Restaurant Group, Inc.
Consolidated Statements of Operations


                                                                     For the 16 Weeks Ended
                                                                   --------------------------
                                                                    April 18,      April 19,
                                                                       1999           1998
                                                                   (Unaudited)    (Unaudited)
                                                                   -----------    -----------
Revenue
<S>                                                                <C>            <C>
     Restaurant sales revenue                                      $ 2,976,852    $ 3,524,283
     Catering revenue                                                  131,172        195,954
     Franchise and royalty revenue                                         955         36,478
                                                                   -----------    -----------

                Total revenue                                        3,108,979      3,756,715
                                                                   -----------    -----------

Costs and expenses
Restaurant and catering operating expenses:
     Food, beverage and paper                                          998,053      1,353,020
     Payroll and benefits                                            1,127,947      1,357,269
     Depreciation and amortization                                     207,947        203,011
     Other operating expenses                                          743,442        732,418
     Loss on restaurant closings                                       300,000
                                                                   -----------    -----------

                Total restaurant and catering operating expenses     3,377,389      3,645,718
                                                                   -----------    -----------

                Income from restaurant and catering operations        (268,410)       110,997

General and administrative expenses                                    433,695        396,965
                                                                   -----------    -----------

                Operating loss                                        (702,105)      (285,968)

Other income (expense):
     Other income (expense)                                            (33,132)           348
     Interest expense                                                 (115,144)      (211,546)
                                                                   -----------    -----------

                Net loss                                           $  (850,381)   $  (497,166)
                                                                   ===========    ===========

Basic and diluted loss per share                                   $     (0.12)   $     (0.15)





                    The accompanying notes are an integral part of these
                             consolidated financial statements.

                                             4
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<PAGE>
<TABLE>
<CAPTION>

Tanner's Restaurant Group, Inc.
Consolidated Statements of Cash Flows

                                                                       For the 16 Weeks Ended
                                                                     --------------------------
                                                                      April 18,       April 19,
                                                                         1999           1998
                                                                     (Unaudited)    (Unaudited)
                                                                     -----------    -----------
Cash flows from operating activities:
<S>                                                                  <C>            <C>
    Net loss                                                         $  (850,381)   $  (497,166)
    Adjustments to reconcile net loss to net cash
       provided by (used in) operating activities:
         Depreciation and amortization                                   207,947        203,011
         Loss on restaurant closings                                     300,000
         Changes in assets and liabilities:
            Accounts receivable                                           47,148        (22,970)
            Inventory                                                     18,475         13,121
            Prepaid expenses                                             (10,766)       (10,643)
            Other assets                                                  15,807           (167)
            Accounts payable                                            (387,238)      (107,620)
            Accrued expenses and other liabilities                    (1,039,863)       471,738
                                                                     -----------    -----------
               Net cash provided by (used in) operating activities    (1,698,871)        49,304
                                                                     -----------    -----------

Cash flows from investing activities:
    Purchase of property and equipment                                  (327,357)      (143,240)
                                                                     -----------    -----------
               Net cash used in investing activities                    (327,357)      (143,240)
                                                                     -----------    -----------
Cash flows from financing activities:
    Cash overdraft                                                                     (212,605)
    Repayments of debt                                                  (146,295)       (68,876)
    Proceeds from issuance of long-term debt                                            583,115
    Proceeds from sale of Series D preferred stock                     2,000,000
                                                                     -----------    -----------
               Net cash provided by financing activities               1,853,705        301,634
                                                                     -----------    -----------
Net change in cash and cash equivalents                                 (172,523)       207,698
Cash and cash equivalents, beginning of year                             222,163
                                                                     -----------    -----------
Cash and cash equivalents, end of period                             $    49,640    $   207,698
                                                                     ===========    ===========


Non-cash investing and financing activities:
    Dividends accrued on Series A preferred stock                    $   138,436
    Accretion of redeemable TRC preferred stock                                     $    42,305
    Dividends accrued on redeemable TRC preferred stock                                  75,000

Supplemental cash flow information:
    Interest paid                                                    $   114,298    $    65,926



                     The accompanying notes are an integral part of these
                              consolidated financial statements.

                                              5
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<PAGE>


Tanner's Restaurant Group
Notes to Consolidated Financial Statements (Unaudited)


1.   Basis of Presentation:

     On January 14, 1999,  Tanner's  Restaurant Group, Inc. ("we" or "Tanner's,"
     formerly  known as  Harvest  Restaurant  Group,  Inc.) and TRC  Acquisition
     Corporation  ("TRC") completed a forward  triangular  merger. For financial
     and accounting purposes,  the effective date of the merger was December 27,
     1998, and we have prepared the consolidated  financial  statements assuming
     the merger  closed as of the end of the day on December  27,  1998.  In the
     merger,  shareholders  of TRC  received  a  majority  of the  shares of our
     outstanding  common  stock.  For this  reason,  we treated  the merger as a
     reverse  acquisition  by TRC for  accounting  purposes.  As a  result,  the
     consolidated  financial  statements  presented are those of TRC rather than
     Harvest Restaurant Group Inc.

2.   Description of Business:

     Tanner's  Restaurant Group, Inc. and its wholly owned subsidiaries  operate
     nine casual dining  restaurants and franchise one restaurant under the name
     "Rick  Tanner's  Original  Grill."  The  restaurants  specialize  in fresh,
     convenient  meals featuring  rotisserie  chicken  entrees,  barbecued ribs,
     hamburgers,  freshly prepared vegetables, salads, and other side dishes. At
     the end of fiscal year 1998,  11  restaurants  were located in the Atlanta,
     Georgia  metropolitan area. During the first quarter of 1999, we closed two
     under-performing  restaurants,   resulting  in  a  charge  to  earnings  of
     $300,000.  We also operate one casual dining seafood  restaurant  under the
     name "Crabby Bob's Seafood  Grill," which we opened in May 1999 in suburban
     Atlanta.

     We  have  prepared  the  accompanying   unaudited   consolidated  financial
     statements in accordance with the instructions to Form 10-QSB. Accordingly,
     certain  information and footnote  disclosures  normally included in annual
     financial   statements  prepared  in  accordance  with  generally  accepted
     accounting  principles have been omitted. In management's  opinion, we have
     made all  adjustments  (consisting  of  normal  accruals  and  adjustments)
     considered necessary for a fair presentation. The statements are subject to
     year-end  adjustment.  The  consolidated  results of operations  for the 16
     weeks  ended April 18,  1999 may not be  indicative  of the results for the
     full fiscal year. For further  information,  refer to the audited financial
     statements  we filed  with the SEC in our Form  10-KSB  for the year  ended
     December 27, 1998.

     The accompanying unaudited consolidated financial statements assume that we
     will  continue  as a going  concern.  The  significant  net  losses we have
     incurred,  our negative  working  capital  position,  and our  inability to
     generate  significant positive cash flows from operations all significantly
     strain our financial  position.  We have obtained a commitment from a group
     of outside investors to invest $6,000,000 in Tanner's,  and as of April 18,
     1999, these investors have invested  $4,000,000  under this commitment.  We
     believe that the successful  completion of this anticipated  transaction is
     critical to continue  our current  plan of  operations.  We expect that the
     $2,000,000 that we received under the financing commitment during the first
     quarter  of  1999,  combined  with  our  cost  containment  and  cash  flow
     management  strategies,  will  enable us to  continue  operations  until we
     receive the final  $2,000,000.  Because we believe it is  probable  that we
     will  receive  the  final  $2,000,000  in the  early  summer  of 1999,  the
     consolidated  financial statements do not reflect any adjustments that will
     be necessary if we do not receive that  $2,000,000.  In May 1999, after the
     first quarter ended, we received $375,000 of the $2,000,000 that remains to
     be invested. We expect to receive another $125,000 shortly.

                                       6
<PAGE>

3.   Earnings Per Share:

     We calculate  earnings per share in accordance  with Statement of Financial
     Accounting  Standards  ("SFAS") No. 128, Earnings Per Share, which requires
     dual  disclosure of earnings per share,  basic and diluted.  Basic earnings
     per share equals net earnings  divided by the  weighted  average  number of
     common  shares  outstanding  and does not include the  dilutive  effects of
     stock options or  convertible  securities.  Diluted  earnings per share are
     computed by giving  effect to our  dilutive  stock  options,  warrants  and
     preferred  stock.  We have  adjusted the  weighted  average  common  shares
     outstanding  presented  below to reflect the 1.57075 to 1 exchange ratio in
     the merger.  Options and  warrants,  which we refer to as potential  common
     stock  equivalents,  are  excluded  from the  diluted  earnings  per  share
     calculations because they are antidilutive,  given that we are operating at
     a net loss.  These  securities  could become  dilutive when our  operations
     result in a net profit.

     The  following  table  represents  the  calculation  of basic  and  diluted
     earnings per share:

                                                     For the 16 Weeks Ended
                                                   -------------------------
                                                     April 18,     April 19,
                                                       1999           1998
                                                       ----           ----
    Net loss                                       $ (850,381)   $ (497,166)
    Less:  Dividends on Series A preferred stock     (138,436)
           Dividends on TRC preferred stock                         (75,000)
           Accretion on TRC preferred stock                         (42,305)
                                                    ---------    ----------
    Net loss attributable to common shareholders     (988,817)     (614,471)

    Weighted average common shares outstanding      8,311,994     4,123,219

    Basic and diluted loss per share               $     (.12)   $    (0.15)


4.   Capital Structure:

     On  March  12,  1999,  our  shareholders  voted to amend  our  articles  of
     incorporation  to increase the number of authorized  shares of common stock
     from  20,000,000  to  200,000,000  and to  change  our  name  to  "Tanner's
     Restaurant Group, Inc."

                                       7
<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation

     Please read the following  discussion in connection  with the  consolidated
financial  statements  and  related  notes to them  included  elsewhere  in this
report.

Overview

     Tanner's  Restaurant  Group,  Inc. ("we" or "Tanner's"),  formerly known as
Harvest  Restaurant  Group,  Inc., was  incorporated in June 1993 under the name
"Clucker's Tex-Mex Venture, Inc." On January 14, 1999, Harvest Restaurant Group,
Inc. and TRC Acquisition  Corporation completed a forward triangular merger. For
financial and accounting purposes, the effective date of the merger was December
27, 1998, and we have prepared the consolidated  financial  statements  assuming
the merger  closed as of the end of the day on December 27, 1998. In the merger,
TRC's  shareholders  received a majority of the shares of our outstanding common
stock. For this reason,  we have treated the merger as a reverse  acquisition by
TRC for accounting purposes. As a result, the consolidated  financial statements
presented are those of TRC rather than Harvest.

     As a result of the  merger,  we now own and  franchise  ten "Rick  Tanner's
Original  Grill"  restaurants  formerly  owned and  franchised  by TRC.  All ten
Tanner's restaurants are located in Georgia - nine are company-owned, and one is
franchised.  In May  1999,  we  opened a seafood  restaurant,  also in  Georgia,
operating  under the name "Crabby  Bob's  Seafood  Grill." In May 1999,  we also
entered  into an  agreement  with  Crabby  Bob's  Seafood,  Inc.  and its parent
entities to acquire the assets of two more Crabby Bob's  restaurants.  We expect
to complete this acquisition in June 1999.

     Our  restaurants  are  designed  to appeal  to  traditional  casual  dining
customers by offering  large  portions of high quality foods at low prices.  Our
restaurants  are   competitively   positioned   between  home  meal  replacement
restaurants and full bar casual  restaurants  that have less portable foods. The
menu at our Rick Tanner's Original Grill restaurants  features over 40 different
entrees and 15 different  appetizers.  All entrees are prepared  using aged beef
and fresh chicken and seafood, are cooked to order, and are served with a choice
of two  out of 15  different  freshly  prepared  vegetables.  Our  Crabby  Bob's
restaurant  offers fresh seafood,  crabs,  oysters and a full service bar. Since
inception, over 25% of our sales have come from takeout/takehome service.

     Our growth strategy is to open new company-owned  restaurants,  to increase
sales at existing  restaurants,  to develop and expand our franchising  program,
and to evaluate and  possibly  acquire  complementary  restaurant  concepts.  We
intend to develop  restaurants  primarily in the greater  Atlanta  market and in
selected Southeastern markets,  where we believe we will be able to use existing
supervisory,  marketing and distribution systems.  Additionally,  we may seek to
acquire other restaurant  concepts that would complement our existing  business,
allowing  growth and improving  profitability.  We are  evaluating  our existing
restaurant  locations,  and may close  certain  unprofitable  restaurants  as we
expand our business concept and focus on increasing profitability.

     A significant  factor in both the  structure  and  completion of the merger
with TRC was a commitment by third party  investors to invest  $6,000,000 in the
new combined company.  As of April 18, 1999, we had received  $4,000,000 of this
$6,000,000  commitment.  In May 1999,  after the first  quarter  had  ended,  we
received  $375,000  of the  $2,000,000  that  remains to be  invested  under the
commitment.  We will use this  financing  primarily for working  capital and the
development  of up to four  company-owned  restaurants  and the  opening  of one
franchised  restaurant  during  1999,  although we cannot  assure you that these
development plans will be successful.

                                       8
<PAGE>


Results of  Operations  for the 16 Week Period Ended April 18, 1999  Compared to
the 16 Week Period Ended April 19, 1998

     Revenues.  Total revenues decreased  $647,736,  or 17.2%,  during the first
quarter (16 weeks) ended April 18, 1999, compared to the corresponding period of
1998. We had nine  restaurants in operation on April 18, 1999, which is one less
than we had on April 19, 1998. This decrease in sales is partially  attributable
to having one less restaurant in operation, but is primarily due to a decline in
same store sales of 15.5%.  This  decrease in same store sales  results  largely
from the levelling off of sales of two restaurants  that we opened in the fourth
quarter of 1997,  and can also be  attributed  to a 56%  decrease in coupons and
promotional discounts.

     Costs  and  Expenses.  In  general,  costs of  goods  sold  decreased  as a
percentage  of sales during the first  quarter of 1999,  due to the reduction in
coupons and  promotions  that began in the fourth  quarter of 1997 and continued
through 1998. These types of promotions tend to increase the number of customers
that visit the  restaurant  and thereby  tend to increase  sales.  However,  the
operating  expenses  on these  sales are  higher  because  the  sales  have been
discounted below the menu price. This decrease in costs is most evident in food,
beverage and paper costs.

     Food, beverage and paper costs were 32.1% of sales for the first quarter of
1999  versus  36.0% of sales for the same period in 1998.  The 3.9%  decrease in
food costs as a percentage of sales was  primarily a result of decreased  coupon
and discount  promotions in 1999 as mentioned above.  Additionally,  we achieved
some operational improvements and purchasing efficiencies.

     Payroll  and benefit  expense  was 36.3% of sales for the first  quarter of
1999 compared to 36.1% of sales for the same period in 1998. We pay a portion of
a benefits package that permits restaurant  managers to obtain health,  life and
disability  insurance.  Benefit costs rose 0.3% as a percentage  of sales,  as a
result of decreased sales. This was offset by a decrease of 0.1% in labor costs.

     Other  operating  expenses  increased as a percentage of sales to 25.2% for
the first  quarter of 1999 from 19.5% for the same  period in 1998.  Advertising
expenditures  decreased by 1.7% but were partially offset by an increase of 0.9%
in  fees  for  delivery  service,  resulting  in a net  decrease  of  0.8%  as a
percentage  of sales.  Repairs and  maintenance  and  restaurant  administration
expense  increased by 1.0% while utility expense increased by 1.1% of sales, and
rent expense  increased to 3.2% of sales. All of these increases are primarily a
result of the  decrease in sales.  Pre-opening  expenses  increased  1.2% in the
first quarter of 1999 due to the development of one new restaurant  scheduled to
open in the second  quarter of 1999 compared to no new  restaurants in the first
quarter of 1998.

     Total  occupancy  costs,  consisting of  depreciation,  rent and restaurant
interest  expense,  increased to 11.0% in the first quarter of 1999 from 7.6% in
the first quarter of 1998. These fixed costs fluctuate as a percentage of sales,
increasing  as sales  decrease.  We  expect  occupancy  costs to  decrease  as a
percentage of sales as we open more "end-cap"  restaurants located at the end of
strip  shopping  centers,  as opposed to  freestanding  buildings.  Freestanding
buildings tend to have higher capital  investments,  as well as financing costs,
thereby resulting in larger depreciation charges and greater interest costs.

                                       9

<PAGE>

     Depreciation  and  amortization  expense  in  the  first  quarter  of  1999
increased by 1.3% over the first quarter of 1998,  due to fixed asset  additions
at a new store opened at the end of the second quarter of 1998.

     Loss on  restaurant  closings  of  $300,000  for the first  quarter of 1999
relates to  charges  recognized  in  connection  with the  closure of two of our
under-performing  units. Included in this caption are charges for the write-down
of  property  and  equipment  to their net  realizable  values  and real  estate
disposition costs.

     General  and  administrative  expenses  increased  to $433,695 in the first
quarter of 1999 from $396,965 in the first quarter of 1998, due to  reallocating
the corporate office personnel to support additional growth.

     Other Income (Expense). Other income increased in the first quarter of 1999
to 0.2% of sales,  from 0.01% of sales in the first  quarter  of 1998.  Interest
expense  decreased to $114,925 in the first quarter of 1999 from $211,720 in the
first quarter of 1998. This is primarily attributable to the cancellation of the
debenture to the former  president  of Tanner's.  Our  effective  interest  rate
increased to 12.3% for the first quarter of 1999.

     Net Loss.  We incurred a net loss of $850,381 for the first quarter of 1999
compared to $497,166 for the same period in 1998.  This  increase was  primarily
attributable  to the  $300,000  charge  for store  closings.  We expect to incur
losses  in future  periods  until we expand  our base of  restaurants  to offset
current general and administrative expenses and costs of expansion.

     As we pursue our plans for growth, we expect to see the following trends in
operating  costs.  We expect  that food,  beverage  and paper  costs and payroll
expenses will increase during the first two months of a restaurant's operations.
Pre-opening  expenses are expected to total approximately  $100,000 for each new
restaurant and are expensed as incurred in accordance with Statement of Position
98-5, Reporting on the Costs of Start-up Activities. The majority of pre-opening
costs are incurred in the  accounting  period prior to opening and in the period
that a restaurant opens. If we are able to increase our base of restaurants, the
effects of the  above-mentioned  operating  trends  will  decrease,  and the new
restaurants will have less of an impact on our consolidated results.

Liquidity and Capital Resources

     Our cash and cash equivalents  decreased  $172,523 during the first quarter
of 1999.  The principal  source of funds  consisted of $2,000,000  received from
outside investors. The primary uses of funds consisted of

     (a) cash used in  operations  of  $1,698,871,  including  the  payment  and
resolution of current accounts payable and accrued liabilities of $1,423,101,

     (b) the  purchase  of  additional  fixed  assets  for a new  restaurant  of
$327,357, and

     (c) payment of debt of $146,295.

                                       10
<PAGE>


     We have  incurred  operating  losses since  inception,  and as of April 18,
1999, we had an accumulated  deficit of $7,240,386 and a working capital deficit
of  $3,029,554.  We  are  not  currently  generating  sufficient  revenues  from
operations to meet our cash requirements. Because substantially all sales in our
restaurants  are for cash,  and  operating  costs are  generally due in 15 to 45
days,  we are able to operate  with  negative  working  capital.  Also,  we have
obtained  extended payment schedules with several of our larger vendors allowing
for  payment  terms  of 60 to 90 days.  Additionally,  some of our  vendors  and
governing  authorities  have agreed to extend  payment terms for  obligations we
previously incurred.

     In addition to our other  liabilities,  we  currently  owe an  aggregate of
approximately  $650,000  to two  lenders,  one of  which  is SECA  VII,  LLC,  a
significant shareholder,  for interim financing loaned in early 1998. One of our
directors,  James R. Walker,  is an equity owner of SECA. One of these unsecured
loans  matures  on  our  receipt  of  the  final  $2,000,000  of  the  financing
commitment,  and the SECA loan  matures on the  earlier of that date or July 31,
1999.  FINOVA, our senior secured lender, has advised us that any payment of the
principal  amount  on these two loans  will be a default  under our  outstanding
$2,000,000  loan from FINOVA unless we repay the FINOVA loan in full at the same
time. The final  $2,000,000 that we are scheduled to receive under the financing
commitment will be insufficient to repay both the FINOVA loan and the short-term
loans,  and we presently  have no  arrangement to repay both the FINOVA loan and
the short-term  loans. We may,  therefore,  default on these loans unless we can
make other arrangements. We are working to resolve this situation. If we default
under any of these loan agreements,  we may be forced to sell some or all of our
assets,  to relinquish  control of the company,  or to renegotiate  terms of our
outstanding  obligations on terms less favorable to us. Any event of that nature
is likely to have a material adverse effect on us.

     We have not paid dividends on our Series A preferred stock since June 1998,
and we are currently analyzing our alternatives for addressing these arrearages.
The total amount of dividends in arrears as of March 31, 1999 is $578,752.

     We  opened  one  new  company-owned  restaurant  in  May  1999.  One of our
franchised  restaurants  closed in  February  1999 due to  franchisee  financing
arrangements and location issues. We closed two  under-performing  company-owned
restaurants  in March 1999,  which resulted in a charge to earnings of $300,000.
In the  remainder  of 1999,  we plan to open up to four  more new  company-owned
restaurants and one franchised restaurant. Our capital requirements to meet this
development plan could be as much as $1.2 million.

     On May 11,  1999 we entered  into an  agreement  to  acquire  the assets of
Crabby Bob's Seafood,  Inc. Crabby Bob's is a restaurant chain consisting of two
restaurants  located in Southern  California  that offer fresh  seafood,  crabs,
oysters  and a full  service  bar.  We will  pay  $600,000  and  assume  certain
liabilities  related to the  Crabby  Bob's  business  as  consideration  for the
acquisition of these restaurants and other assets related to their operation. We
will pay this amount at closing by delivery of a note,  which will be payable by
us, at our option, either (a) in cash or (b) in a combination of cash and stock.

     Although  we do not  currently  have  the  capital  resources  to meet  our
development  plan,  outside  investors  invested  $2,000,000 of their $6,000,000
financing commitment in the first quarter of 1999. As part of the commitment, we
are  obligated  to issue 9,198  shares of our Series D preferred  stock to these
investors.  In May 1999, after the first quarter ended, these investors invested
$375,000 of the final  $2,000,000  in exchange for our  agreement to deliver 375
shares  of  Series D  preferred  stock to them on an  accelerated  basis.  These
investors  have orally  committed to invest  another  $125,000  shortly and will
invest the remaining $1,500,000 of the $6,000,000  commitment when the shares of
common  stock into  which the Series D  preferred  shares  are  convertible  are
registered  with  the SEC.  We  intend  to cause  that  registration  to  become
effective in late spring of 1999. We plan to meet our capital  requirements  for
new restaurant development, the acquisition of Crabby Bob's, and working capital
through the remainder of this  funding.  We may also raise  additional  funds by
borrowing.

                                       11
<PAGE>


     Additionally,  we have  decided to sell our  property  on Tezel Road in San
Antonio,  Texas. We anticipate that the sale of the Tezel property,  if and when
completed, will generate approximately $350,000 in net proceeds. Under the terms
of a severance  agreement  that we entered into with William J.  Gallagher,  our
former chief executive officer and a former director,  we are obligated to apply
the  proceeds  of the  sale of the  Tezel  property  to  satisfy  any  remaining
obligations to Mr. Gallagher under the severance agreement before we apply those
proceeds to any other use. As of June 1, 1999, we owed $90,000 to Mr.  Gallagher
under the severance agreement.

     If the current development schedule is not delayed,  management anticipates
that  by the  fourth  quarter  of  1999,  we  will  have a  base  of  profitable
restaurants that will allow us to begin to leverage our non-operating expenses.

Forward-Looking Statements

     This  report  contains  forward-looking  statements  within the  meaning of
Section 27A of the  Securities  Act and Section 21E of the Exchange  Act.  These
statements  appear  in a  number  of  places  in this  report  and  include  all
statements that are not historical facts. Some of the forward-looking statements
relate to our intent, belief or expectations  regarding our strategies and plans
for  operations  and  growth,  including  development  and  construction  of new
restaurants.  Other  forward-looking  statements  relate to trends affecting our
financial condition and results of operations, and our anticipated capital needs
and expenditures.

     Our forward-looking statements are not guarantees of future performance and
involve risks and  uncertainties,  and actual results may differ materially from
those anticipated in the forward-looking statements, as a result of:

     -    an inability to meet our obligations as they become due;
     -    increased competition in the casual dining market;
     -    difficulty attacting and keeping good managers and franchises;
     -    increased labor, food and other costs;
     -    changes in economic conditions; and
     -    the possibility  that we do not close the Crabby Bob's  acquisition as
          we anticipate.

     In  addition,  the market  price of the common  stock may from time to time
fluctuate widely as a result of, among other things:

     -    our operating results;
     -    the operating results of other similarly-situated companies; and
     -    changes in the performance of the stock market in general.

                                       12
<PAGE>


     Investors  should review the more detailed  description  of these and other
possible  risks  contained in the "Risk  Factors"  sections of the  registration
statements we file with the SEC under the Securities Act.

Year 2000 Computer Issues

     The "Year 2000 problem" is a general term used to identify  those  computer
problems or applications  that are programmed to use a two-digit field,  instead
of a  four-digit  field,  for the year  component of a date.  Those  programs or
applications  which are programmed in this manner,  may, for example,  recognize
the year 2000 as the year  1900,  thus  causing  potential  system  failures  or
miscalculations  that could result in disruptions of normal business operations.
We have  evaluated  our  state  of  readiness,  the  costs  involved  to  become
compliant,  the risks involved,  and our contingency  plans. Our primary uses of
software  systems  are  our  corporate  accounting  and  restaurant   management
software.

     We have  completed an initial  assessment of our core computer  information
systems and are now  undertaking  the  necessary  steps to make our systems Year
2000  compliant.  We believe that the cost to upgrade our  software  will not be
material.  We are currently evaluating and assessing those computer systems that
do not relate to information systems, such as telecommunications, HVAC, and fire
and  safety  systems,  which  typically  include  embedded  technology  such  as
microcontrollers that may be harder to test, and may require repairs or complete
replacement.  We expect to complete this assessment during the second quarter of
1999.

     We are in the  process  of  contacting  all  significant  vendors  and  our
independent  payroll vendor to verify that those vendors are also addressing the
problem.  We have developed  contingency  plans where necessary.  Some Year 2000
issues that may  adversely  affect our  operations  are beyond our  control.  We
cannot now  estimate  the  potential  adverse  effect  that may result  from the
failure  of any of our  vendors  to become  Year  2000  compliant,  although  we
continue  to  believe  that  there  will be no  direct  material  effect  on our
operating performance or results of operations.


                            PART II-OTHER INFORMATION

Item 1. Legal Proceedings

     We are a named party in the following legal proceedings:

     On June 1, 1998,  Harvest  was named as a defendant  in a lawsuit  filed in
Texas in Nueces  District  Court by Lin Chin Liu Ho and Chi Pen Ho (Case  Number
98-2048-E).  The  plaintiffs  are seeking  damages of  $150,000  for breach of a
commercial lease. This case is set for trial in August 1999.

     On August 12, 1998,  Harvest was named as a defendant in a lawsuit filed in
Texas by Green Tree Vendor Services Co. in Bexar County Court (Case No. 247317).
The plaintiff is seeking to recover damages of $38,691 for Harvest's  failure to
make  payments  under two  equipment  leases.  The  plaintiff  has filed a first
amended  motion for summary  judgment,  which has not yet been set for  hearing.
Settlement  negotiations  are ongoing.  Because the  plaintiff  has not sold the
property, damages are unlitigated.

                                       13
<PAGE>


     On August 20, 1998,  Harvest was named as a defendant in a lawsuit filed in
Texas by Toufic Khalifa in Bexar County  District Court (Case No.  98-CI-12200).
The plaintiff is seeking  damages in the amount of at least  $240,000 for breach
of a commercial lease. The case is now in the discovery phase.

     Before the merger,  Harvest  settled a number of lawsuits  and claims,  and
since the merger we have settled additional  lawsuits and claims.  Some of these
settlements are documented by executed settlement  agreements and releases while
others are not.

     We are also  involved  in other  claims  arising  in the  normal  course of
business.  In our  opinion,  although  the  outcomes  of  any  such  claims  are
uncertain,  in the  aggregate  they are not  likely to have a  material  adverse
effect on us.


Item 2. Changes in Securities and Use of Proceeds

     We have issued the following unregistered  securities in reliance on one or
more of the exemptions from registration provided by Sections 3(a)(9), 3(a)(11),
4(2) and 4(6) of the Securities  Act,  Regulation D and Rule 701, as promulgated
by the  SEC  under  the  Securities  Act.  Recipients  of  securities  in  these
transactions   represented   their  intention  to  acquire  the  securities  for
investment  purposes  only and not with a view to or for the sale in  connection
with any distribution thereof, and appropriate legends were affixed to the share
certificates  issued in such  transactions.  We believe that all  recipients  of
these  securities  had  adequate  information  about us,  either  through  their
relationships with us or through information that we provided to them.

     On January 14, 1999, we issued 1,998 shares of Series D preferred  stock to
our outside  investors  in  exchange  for 133.2  outstanding  shares of Series B
preferred  stock,  and we issued  2,600  shares of Series D  preferred  stock in
exchange for the 200 outstanding shares of Series C preferred stock. As a result
of these  issuances,  there are no longer any shares of Series B preferred stock
or Series C preferred stock outstanding.

     Also on January  14,  1999,  we placed  2,600  shares of Series D preferred
stock into escrow to be released to the outside investors upon the occurrence of
certain  specified events. On or about January 22, 1999, the approximate date on
which we received $1,000,000 from the outside investors because we satisfied the
condition that we file a preliminary  proxy  statement  related to a shareholder
vote to increase the number of authorized  shares of common  stock,  we released
1,300 of these Series D shares from escrow.  On or about  February 10, 1999, the
approximate  date on which  we  received  another  $1,000,000  from the  outside
investors  because we satisfied  the  condition  that we mail  definitive  proxy
materials  to our  shareholders,  we released  the  remaining  1,300 shares from
escrow.

     On January 14, 1999,  in connection  with the merger,  we issued a total of
approximately  744,500 shares of Series E preferred  stock to Richard E. Tanner,
who is one of our  directors,  and to SECA VII,  LLC,  RBB Bank,  AG and  Holden
Holding  Corporation,  all of which are also  holders  of our common  stock.  We
issued  469,775 of these  shares of Series E  preferred  stock to Mr.  Tanner in
exchange for his 500 shares of TRC Class A preferred  stock,  his execution of a
severance agreement,  and his cancellation of a note from TRC. We issued 183,150
of these shares to SECA VII, LLC,  45,787.5 shares to RBB Bank, AG, and 45,787.5
shares to Holden  Holding  Corporation,  in exchange  for the TRC Class A shares
these entities held before the merger.

                                       14
<PAGE>


     Also on January 14, 1999,  we issued an  aggregate  of 4,123,219  shares of
common  stock to the  former  holders  of the  common  stock of TRC  Acquisition
Corporation  as  consideration  for the  merger  of TRC with and into one of our
wholly-owned subsidiaries.

     In addition,  as part of the merger, we assumed the TRC 1996 Employee Stock
Option Plan and options  previously issued  thereunder to acquire  approximately
854,488 shares of common stock.  We also assumed options and warrants to acquire
approximately 1,522,286 more shares of common stock.

     As part of the financing  commitment,  we have agreed to issue  warrants to
acquire  100,000  shares  of common  stock to the  Series D  investors  for each
$1,000,000  of  Series  D  preferred  stock  issued.  Assuming  that  the  final
$2,000,000 of the financing commitment is received,  we will issue another 2,000
shares of Series D preferred stock.  Upon such issuance,  we will have issued an
aggregate of $9,198,000 of Series D preferred stock. Accordingly, we have issued
or will  issue  warrants  to acquire an  aggregate  of 919,800  shares of common
stock.


Item 3. Defaults Upon Senior Securities

     We have not paid dividends on our Series A preferred stock since June 1998,
and we are currently analyzing our alternatives for addressing these arrearages.
The amount of dividends that accrued on the Series A preferred  stock during the
first quarter of 1999 was $138,436.  As of March 31, 1999, the aggregate  amount
of the dividends in arrears was $578,752.


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

     On March 12,  1999,  we held a special  meeting  at which our  shareholders
voted in favor of two  amendments  to our articles of  incorporation.  The first
amendment  increased the number of shares of common stock that we are authorized
to issue from  20,000,000  shares to 200,000,000  shares.  The second  amendment
changed our name from  Harvest  Restaurant  Group,  Inc. to Tanner's  Restaurant
Group, Inc. A total of 8,241,609 shares were entitled to vote on each matter.

     With  respect to the  proposal to amend our  articles of  incorporation  to
change our name to Tanner's Restaurant Group, Inc.,  7,352,794 shares were voted
in favor of the proposal,  31,480 shares were voted against the proposal, 58,206
shares abstained, and 799,129 shares were not voted.

     With  respect to the  proposal to amend our  articles of  incorporation  to
increase  the number of shares of common stock that we are  authorized  to issue
from 20,000,000  shares to 200,000,000  shares,  7,228,549  shares were voted in
favor of the proposal,  151,674  shares were voted against the proposal,  62,257
shares abstained, and 799,129 shares were not voted.


Item 6. Exhibits and Reports on Form 8-K

     We have filed  certain of the exhibits  required by Item 601 of  Regulation
S-B with previous  registration  statements or reports. As specifically noted in
the  footnotes  to  the  following   Index  to  Exhibits,   those  exhibits  are
incorporated  into this report on Form  10-QSB by  reference  to the  applicable
statement or report.

                                       15
<PAGE>


Exhibit No.                Title
-----------                -----

3.01      Articles of Incorporation, as amended.(1)

4.01      Loan  Agreement by and among TRC  Acquisition  Corporation  and Sirrom
          Capital Corporation, dated October 22, 1996.(1)

4.02      Assumption  Agreement,  Consent and First Amendment to Loan Agreement,
          dated January 14, 1999, by and among Hartan,  Inc., Harvest Restaurant
          Group, Inc., and Sirrom Capital Corporation. (1)

4.03      Guaranty Agreement,  dated January 14, 1999, Harvest Restaurant Group,
          Inc., and Sirrom Capital Corporation. (1)

4.04      Amended and Restated Secured  Promissory Note, dated January 14, 1999,
          made by Hartan,  Inc. for the benefit of Sirrom  Capital  Corporation.
          (1)

4.05      Amended and Restated Stock Purchase  Warrant,  dated January 14, 1999.
          (1)

10.02     TRC Acquisition Corporation 1996 Employee Stock Option Plan. (1)

10.04     Employment  Agreement,  dated  January 14, 1999,  by and among Harvest
          Restaurant Group, Inc., Hartan, Inc. and Clyde E. Culp, III. (1)

10.05     Severance  Agreement,  dated  January 14, 1999,  by and among  Harvest
          Restaurant Group, Inc., Hartan, Inc. and William J. Gallagher. (1)

10.05(a)  Letter Amendment to Severance Agreement, dated March 16, 1999. (1)

10.06     Form of  Subscription  Agreement  for Series D  Convertible  Preferred
          Stock. (1)

10.07     Form  of  Registration  Rights  Agreement  for  Series  D  Convertible
          Preferred Stock. (1)

10.08     Form of Warrant  Agreement for Series D Convertible  Preferred  Stock.
          (1)

10.09     Letter Amendment, dated January 12, 1999. (1)

10.10     Letter Amendment, dated January 13, 1999. (1)

27.1      Financial Data Schedule as of April 18, 1999.

------------------------

(1)  Incorporated  by  reference to our Annual  Report on Form 10-KSB,  filed on
     March 29, 1999.

                                       16

<PAGE>

                                   SIGNATURES

     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    TANNER'S RESTAURANT GROUP, INC.


Date: June 2, 1999                  By:  /s/  Clyde E. Culp, III
                                       -----------------------------------------
                                       Name: Clyde E. Culp, III
                                       Title: Chairman of the Board of Directors
                                              and Chief Executive Officer


Date: June 2, 1999                  By: /s/  Timothy R. Robinson
                                       -----------------------------------------
                                       Name: Timothy R. Robinson
                                       Title: Chief Financial Officer




                                       17
<PAGE>

                                  EXHIBIT INDEX

     We have filed  certain of the exhibits  required by Item 601 of  Regulation
S-B with previous  registration  statements or reports. As specifically noted in
the  footnotes  to  the  following   Index  to  Exhibits,   those  exhibits  are
incorporated  into this report on Form  10-QSB by  reference  to the  applicable
statement or report.

Exhibit No.                Title
-----------                -----

3.01      Articles of Incorporation, as amended.(1)

4.02      Loan  Agreement by and among TRC  Acquisition  Corporation  and Sirrom
          Capital Corporation, dated October 22, 1996.(1)

4.02      Assumption  Agreement,  Consent and First Amendment to Loan Agreement,
          dated January 14, 1999, by and among Hartan,  Inc., Harvest Restaurant
          Group, Inc., and Sirrom Capital Corporation. (1)

4.03      Guaranty Agreement,  dated January 14, 1999, Harvest Restaurant Group,
          Inc., and Sirrom Capital Corporation. (1)

4.04      Amended and Restated Secured  Promissory Note, dated January 14, 1999,
          made by Hartan,  Inc. for the benefit of Sirrom  Capital  Corporation.
          (1)

4.05      Amended and Restated Stock Purchase  Warrant,  dated January 14, 1999.
          (1)

10.02     TRC Acquisition Corporation 1996 Employee Stock Option Plan. (1)

10.04     Employment  Agreement,  dated  January 14, 1999,  by and among Harvest
          Restaurant Group, Inc., Hartan, Inc. and Clyde E. Culp, III. (1)

10.05     Severance  Agreement,  dated  January 14, 1999,  by and among  Harvest
          Restaurant Group, Inc., Hartan, Inc. and William J. Gallagher. (1)

10.05(a)  Letter Amendment to Severance Agreement, dated March 16, 1999. (1)

10.06     Form of  Subscription  Agreement  for Series D  Convertible  Preferred
          Stock. (1)

10.07     Form  of  Registration  Rights  Agreement  for  Series  D  Convertible
          Preferred Stock. (1)

10.08     Form of Warrant  Agreement for Series D Convertible  Preferred  Stock.
          (1)

10.09     Letter Amendment, dated January 12, 1999. (1)

10.10     Letter Amendment, dated January 13, 1999. (1)

27.1      Financial Data Schedule as of April 18, 1999.

------------------------

(1)  Incorporated  by  reference to our Annual  Report on Form 10-KSB,  filed on
     March 29, 1999.

                                       18