SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(MARK ONE)

X        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended March 31, 1996

___      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: 33-15097-D

                          BASIC NATURAL RESOURCES, INC.
             (Exact name of registrant as specified in its charter)

         Colorado                              84-10457105
(State or other Jurisdiction of            (I.R.S. Employer
incorporation or organization)           Identification Number)


    2450 South Shore Boulevard
     Suite 210, Houston Texas                              77573
(Address of Principal Executive Offices)                 (Zip Code)

     Registrant's telephone number, including area code: (713) 877-8080

     Check whether the issuer (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 No X

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
stock as of the latest practicable date.

Common Stock, $.00005 Par Value                     2,376,287
                                      (Shares outstanding as of March 31, 1996)

Transitional Small Business Disclosure Format (Check One)   Yes        No   X


                                        1

<PAGE>



                          BASIC NATURAL RESOURCES, INC.
                  QUARTERLY REPORT ON FORM 10-Q FOR THE INTERIM
                           PERIOD ENDED MARCH 31, 1996

                                TABLE OF CONTENTS

                                                                          Page
                                                                         Number

Part I. Financial Information

Item I. Financial Statements

        Balance Sheets at March 31, 1996 and June 30, 1995....................3

        Statements of Operations for the Nine Months Ended
        March 31, 1996 and 1995...............................................4

        Statements of Changes in Stockholders' Deficit for the  Nine Months
        Ended March 31, 1996 and the year ended June 30, 1995.................5

        Statements of Cash Flows for the Nine Months Ended March 31,
        1996 and 1995.........................................................6

        Notes to Financial Statements.........................................7

Item 2. Management's  Discussion and Analysis of Financial Condition and
        Results of Operations.................................................7

Part II. Other Information

Item 1.  Legal Proceedings....................................................8

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

         Signatures...........................................................9




                                        2

<PAGE>



                          BASIC NATURAL RESOURCES INC.
                                 Balance Sheets
<TABLE>
<CAPTION>
                                                                          March 31, 1996             June 30, 1995
                                                                            (Unaudited)                 (Audited)
                                                                         ----------------          ----------------

ASSETS
Current Assets:
<S>                                                                      <C>                       <C>
   Cash and cash equivalents                                             $              0          $            644
                                                                         ----------------          ----------------

            Total Current Assets                                                        0                       644
                                                                         ----------------          ----------------
             Total Assets                                                $              0          $            644
                                                                         ================          ================
LIABILITIES AND STOCKHOLDERS' DEFICIT:
Current Liabilities:
   Accounts payable and accrued liabilities                              $         28,009          $         12,372
    Loan Payable                                                                   13,200                         0
    Income taxes payable                                                                0                     3,299
                                                                         ----------------          ----------------
          Total Liabilities                                                        41,209                    15,671
Stockholder's (Deficit):
  Preferred Stock - $1 par value 10,000,000 shares authorized; 
   174,865 shares of Series A Voting Preferred Stock outstanding 
   at March 30, 1996 and June 30,1995                                             174,865                   174,865
  Common stock - $.00005 par value, 536,000,000
   shares authorized; 2,376,287 shares issued and
   outstanding at March 30, 1996 and 2,176,289 shares
   issued and outstanding at June 30, 1995                                            119                       109

  Additional paid-in capital                                                    4,610,729                 4,570,739
  Retained (deficit)                                                           (4,826,922)               (4,760,740)
                                                                         ----------------          ----------------

TOTAL STOCKHOLDERS' (DEFICIT)                                                     (41,209)                  (15,027)
                                                                         ----------------           ---------------
TOTAL LIABILITIES AND
   STOCKHOLDERS' DEFICIT                                                 $              0           $           644
                                                                         ================           ===============
</TABLE>

               See accompanying notes to the financial statements.


                                        3

<PAGE>



                          BASIC NATURAL RESOURCES INC.
                            Statements of Operations
<TABLE>
<CAPTION>
                                                                                    Nine Months Ended
                                                                            March 31, 1996        March 31,1995
                                                                             (Unaudited)           (Unaudited)
                                                                        ------------------    ------------------

<S>                                                                     <C>                   <C>
REVENUES                                                                $                0    $                0
Cost and Expenses:
    Depreciation and amortization                                                        0                51,483
    General and administrative expenses                                             69,403                   156
     Interest                                                                           81                     0
                                                                        ------------------    ------------------

        Total Costs and Expenses                                                    69,484                51,639
                                                                        ------------------    ------------------

Income (loss) from Continuing Operations:                                          (69,484)              (51,639)
    Debt forgiveness                                                                     0                53,964
    Investment income (loss)                                                             3                     0
                                                                        -------------------   ------------------
Income (loss) before income taxes                                                  (69,481)                2,325
    Income tax expense (benefit)                                                    (3,299)                    0
                                                                        -------------------   ------------------
    Net income (loss)                                                   $          (66,182)   $            2,325
                                                                        ===================   ==================
    Income (loss) per share (continuing operations)                     $             (.03)   $              .00
    Income (loss) per share (discontinued operations)                                 . 00                  . 00
                                                                        -------------------   ------------------

    Income (loss) per share                                             $             (.03)   $              .00
                                                                        ===================   ==================
</TABLE>

               See accompanying notes to the financial statements.



                                        4

<PAGE>



                          BASIC NATURAL RESOURCES INC.
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

                    For Year Ended June 30,1995 (audited) and
              For the Nine Months ended March 31, 1996 (unaudited)
<TABLE>
<CAPTION>
                                        Common                   Preferred             Additional       Retained           Total
                                 ---------------------     ----------------------       Paid-in        Earnings       Stockholders'
                                 Shares       Amount       Shares        Amount         Capital       (Deficit)          Deficit
                                 ---------   ---------     ---------   -----------  -------------     ------------  ---------------

<S>                              <C>         <C>             <C>       <C>          <C>               <C>           <C>
Balances at June 30, 1994        2,785,746   $     139       174,865   $   174,865  $   4,446,541     $ (4,763,840) $      (142,295)
Common stock issued to
 pay liabilities                    50,000           3             0             0        124,165                0          124,168
Common stock cancelled            (659,457)        (33)            0             0             33                0                0
Net income                               0           0             0             0              0            3,100            3,100
                                -----------  ----------    ---------   -----------  -------------     ------------  ---------------
Balance at June 30, 1995         2,176,289         109       174,865       174,865      4,570,739      (4,760,740)          (15,027)
Common stock sold for
cash                               200,000          10             0             0         39,990               0            40,000
Rounding related to stock
reverse                                 (2)          0             0             0              0               0                 0
Net (loss)                               0           0             0             0              0         (66,182)          (66,182)
                               ------------ ----------    ----------   -----------  -------------    -------------  ----------------

Balances at March 31, 1996       2,376,287  $      119       174,865   $   174,865  $   4,610,729    $ (4,826,922)  $       (41,209)
                               ============ ==========    ==========   ===========  =============    =============  ================

</TABLE>

               See accompanying notes to the Financial Statements
                                        5

<PAGE>


                          BASIC NATURAL RESOURCES INC.
                            Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                    March 31,1996          March 31, 1995
                                                                     (Unaudited)             (Unaudited)
                                                                   -----------------      --------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                <C>                    <C>
   Net income from (loss)                                          $          (66,182)    $               2,325
   Adjustments  to  reconcile  net income  (loss) to net cash
     used in  operating activities:
      Depreciation and amortization                                                  0                        0
      Stock issued (canceled) for non-cash items                                     0                        0
      Bad debts                                                                      0                        0
      Disposition of assets                                                          0                        0

  Changes in Assets and Liabilities:
     Trade receivables                                                               0                        0
      Other receivables                                                              0                        0
      Deposits                                                                       0                        0
      Income taxes payable                                                      (3,299)                       0
      Accounts payable and accrued liabilities                                  15,637                        0
                                                                    -------------------   ---------------------

      Net cash used in Operating Activities                                    (53,844)                   2,325
CASH FLOWS FROM FINANCING ACTIVITIES:
       Loan proceeds                                                            13,200                        0
       Sale of common stock                                                     40,000                        0
                                                                    -------------------   ---------------------

       Net cash provided by financing activities                                53,200                        0
                                                                    -------------------   ---------------------

       Net increase (decrease) in cash                                            (644)                   2,325
                                                                    -------------------   ---------------------

CASH AT BEGINNING OF YEAR                                                          644                      642
                                                                    -------------------   ---------------------

CASH AT END OF PERIOD                                               $                0    $               2,967
                                                                    -------------------   ---------------------

SUPPLEMENTAL CASH FLOW INFORMATION
    Interest paid                                                   $                0    $                 235
    Income taxes paid                                                                0                        0
                                                                     ------------------   ---------------------

CASH AT END OF PERIOD                                               $                0    $                 235
                                                                    ===================   =====================

</TABLE>

                 See accompanying notes to financial statements


                                        6

<PAGE>



                          BASIC NATURAL RESOURCES INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1996


1.   Basis of Presentation

     The financial  statements of Basic Natural  Resources Inc. (the "Company"),
included  herein,  are  unaudited for all periods ended March 31, 1996 and 1995.
They reflect all adjustments  (consisting of normal recurring adjustments) which
are, in the opinion of  management,  necessary to fairly  depict the results for
the  periods  presented.  Certain  information  and note  disclosures,  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles,  have been  condensed  or omitted  pursuant to rules and
regulations  of the  Securities  and Exchange  Commission.  It is suggested that
these  financial  statements be read in conjunction  with the audited  financial
statements for the years ended June 30, 1995 and 1994, which are included in the
Company's  annual report.  The Company believes that the disclosures made herein
are adequate to make the information presented not misleading.

2.   Earnings per Common and Common Equivalent Share

     Earnings  per common and common  equivalent  share is based on the  average
number of common shares and dilutive  common share  equivalents  outstanding for
the nine months and the quarters ended March 31, 1996 and 1995.

Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

General

     The Company ceased all oil and gas  operations in June 1994,  following the
disposition  of its  oil  and  gas  interests.  The  Company  continues  to seek
acquisitions  and  mergers  in  the  area  of  computer  related   technologies.
Management  believes  that  an  acquisition  of  this  nature  will  provide  an
opportunity to enhance shareholder value.

Results of Operations

      Analysis of Third Quarter 1996 Compared to Third Quarter 1995

     Costs and  expenses  for the nine  months  ended  March 31,  1996  declined
significantly  compared  to the same  period in 1995.  The  decline in costs and
expenses is due to management's decision to cease all of the Company's operating
activities during the period ended March 31, 1995.



                                        7

<PAGE>



Liquidity and Capital Resources

     There were no recorded  revenues  for the nine months ended March 31, 1996.
For the period from December 31, 1995 to March 31, 1996 there was  insignificant
change in the  Company's  working  capital.  At December 31,  1995,  the Company
maintained a negative  liquidity  position which is evidenced by a current ratio
of .006 to 1. The Company has no major capital  commitments at the present time.
Management continues to review potential acquisition  candidates in the computer
related  technolgies  industry  in its  endeavor  to  restructure  the  Company,
increase the Company's  current ratio and liquidity,  and generate capital which
would provide cash flow for future capital expansion.

PART II           OTHER INFORMATION

Item 1.           Legal Proceedings

     This  Company is involved in a lawsuit in the State of Texas which  relates
to an  environmental  matter.  The  Company has been  advised  that it will cost
approximately  $80,000 to perform a study to determine the extent of damage. The
estimated cost related to clean-up  could be in excess of $500,000.  The Company
currently has no means to pay any costs associated with this lawsuit. Management
is  negotiating a settlement  agreement with the parties to resolve this matter.
The  proposed  settlement  provides for a payment of $10,000 and the issuance of
3,000,000 shares of the Company's common stock.

Item 6. Exhibits and Reports on Form 8-K

                  A.       Exhibits
                           None

                  B.       Reports on Form 8-K
                           None



                                        8

<PAGE>


                                                    SIGNATURES


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




                                       BASIC NATURAL RESOURCES, INC.



Dated: December 18, 1996               By:    /s/ Samuel M. Skipper
                                          -------------------------
                                           Samuel M. Skipper
                                           Chairman of the Board



                                        9

<PAGE>