FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549




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

                    For the Quarter ended September 30, 1999

                                       AND

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934


                         Commission File Number: 0-9562


                            Colonial Industries, Inc.

                          formerly Impact Energy, Inc.
             (Exact name of Registrant as specified in its charter)



             Texas                                        84-0818655
(Jurisdiction of Incorporation)             (I.R.S. Employer Identification No.)

   2284 West Holcombe, Houston Texas                         77030
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code:       (713) 526-8223


Securities registered pursuant to Section 12(b) of the Act:     None


Securities registered pursuant to Section 12(g) of the Act:     None

Yes [X] No [] (Indicate by check mark whether the  Registrant  (1) has filed all
report  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.)

As of September 30, 1999, the number of shares  outstanding of the  Registrant's
Common Stock was 6,802,100.


<PAGE>



                          PART I: FINANCIAL INFORMATION

                          Item 1. Financial Statements

     Attached hereto and incorporated herein by this reference are consolidated
unaudited financial statements for the Quarter ended September 30, 1999, as
Exhibit QF 99 #3.

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

(a) Management's Discussion and Analysis of Financial Condition and Results of
Operations

     The Issuer has no current business, and has had no operations in the last
fiscal year, and most recent two quarters of the current fiscal year. Its
recorded "operating expenses" of $21,709 consist of corporate maintenance
expenses, legal, professional, certificate and transfer agency, accounting,
auditing and interest. This Issuer has no business or productive assets and
remains essentially dormant, its activities limited to maintaining its corporate
franchise in Texas, and making required periodic filings and disclosure. The
Issuer has no assets or revenue. The Issuer has no present capital resource and
accordingly no liquidity. It has accrued liabilities of $108,631, of which
$67,039 is principal, and $41,592 is accrued interest.

(b) Plan of Operation. The Company is a candidate for a business combination,
joint venture, or structured acquisition, which, if effective, would create
profitability for the Company and its shareholders.

(c) Reverse Acquisitions. A reverse acquisition is one in which a private
business is acquired by a public corporation in exchange for a transfer of
control of the public company to the owners of the private targeted acquisition
company. The public company acquires the private company, in form, but the
private company acquires the public company in substance. This corporation, by
its very nature and current status, is a potential participant in one or more
reverse acquisition transactions, at some undetermined future time. There are no
present activities, discussions or negotiations, planned or in progress, with
any entity or interest group, for any direct or reverse acquisitions, or
business combinations, of any kind.

                           PART II: OTHER INFORMATION


                    Item 6. Exhibits and Reports on Form 8-K

     Exhibit QF 99 #3      Financial Statements (Un-Audited) September 30, 1999



                                        2

<PAGE>


                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-Qsb Report for the Quarter ended September 30, 1999, has been signed
below by the following person on behalf of the Registrant and in the capacity
and on the date indicated.


September 30, 1999


                            Colonial Industries, Inc.

                          formerly Impact Energy, Inc.



                                       by




/s/                                                                          /s/
-----------------------------------          -----------------------------------
Joe Kane                                                              Jack Wells
PRESIDENT/DIRECTOR                                           SECRETARY/TREASURER





                                        3

<PAGE>






                                Exhibit QF 99 #3

                         UN-AUDITED FINANCIAL STATEMENTS

                            for the Nine Months Ended

                            September 30, 1999 & 1998





                                        4

<PAGE>



                            COLONIAL INDUSTRIES, INC.
                           BALANCE SHEETS (UNAUDITED)
              for the nine months ended September 30, 1999 and 1998


<TABLE>
<CAPTION>
                                                                                September 30,            September 30,
                                                                                    1999                     1998
                                                                                ------------             ------------
<S>                                                                             <C>                      <C>
                                     ASSETS

CURRENT ASSETS

           Cash                                                                 $        -0-                      -0-

TOTAL CURRENT ASSETS                                                                     -0-                      -0-
                                                                                ------------             ------------


TOTAL ASSETS                                                                    $        -0-             $        -0-
                                                                                ============             ============



                       LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

     Accounts payable                                                           $     67,039             $     48,932
     Accrued interest                                                                 42,816                   34,252
                                                                                ------------             ------------
           Total Current Liabilities                                                 109,855                   83,184
                                                                                ------------             ------------

STOCKHOLDERS' EQUITY

     Common Stock, no par value; authorized 75,000,000
        shares of no par value, issued and outstanding;                                                    13,110,115
        6,802,434,  6,802,434 ans 999 shares respectively
     Additional paid-in Capital (Discount on stock)                                  (47,132)

     Accumulated Surplus (Deficit)                                                   (62,723)             (13,193,299)
                                                                                ------------             ------------

Total Stockholders' Equity                                                          (109,855)                 (83,184)
                                                                                ------------             ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $        -0-             $        -0-
                                                                                ============             ============
</TABLE>


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


                                    page F-1



<PAGE>


                            COLONIAL INDUSTRIES, INC.

             STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
             for the nine months ended September 30, 1999 and 1998


<TABLE>
<CAPTION>
                                               September 30,            September 30,             Cumulative
                                                   1999                     1998                    Amounts
                                               ------------             ------------             ------------
<S>                                            <C>                      <C>                      <C>
REVENUES                                       $        -0-             $        -0-             $        -0-
                                               ------------             ------------             ------------

EXPENSES
     Professional fees                               15,787                                            15,787
     Transfer Agent                                   2,267                                             2,267
     Accountant                                       1,208                                             1,208
     Interest Expense                                 3,671                    2,447                   40,368
                                               ------------             ------------             ------------

        Total Operating Expense                      22,933                    2,447                   59,630
                                               ------------             ------------             ------------

NET INCOME (LOSS)                              $    (22,933)            $     (2,447)            $    (59,630)
                                               ============             ============             ============

NET (LOSS) PER SHARE                           $   (0.00337)            $   (0.00003)            $   (0.00080)
                                               ============             ============             ============

Weighted average shares outstanding               6,802,434               74,955,530               74,955,530
                                               ============             ============             ============
</TABLE>


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



                                    page F-2



<PAGE>


                            COLONIAL INDUSTRIES, INC.

            STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
   for the period from inception of the Development Stage on January 1, 1990,
           for the fiscal years ended December 31, 1991, through 1998
                and for the nine months ended September 30, 1999


<TABLE>
<CAPTION>
                                                                                                    Additional           Deficit
                                                                                                     Paid-in           Accumulated
                                                                                                     Capital            During the
                                                                     Common Stock                  (Discount on         Development
                                                              Shares              Amount              Stock)               Stage
                                                           ------------        ------------        ------------        ------------
<S>                                                           <C>              <C>                 <C>                 <C>
Balance at beginning of development                                 999        $ 13,110,115        $                   $(13,159,047)
   stage - January 1, 1990

Net Loss December 31, 1990-1997                                                                                             (34,252)
                                                           ------------        ------------        ------------        ------------

Balance December 31, 1997                                           999          13,110,115                   0         (13,193,299)

Fractional shares from stock split                                1,435

Shares issued for acquisition of
   Colonial Industries and reorganization                     6,800,000         (13,110,115)            (48,932)         13,159,047

Net Loss December 31, 1998                                       (5,538)
                                                           ------------        ------------        ------------        ------------

Balance December 31, 1998                                     6,802,434                                 (48,932)            (39,790)

Cash received in 1999 as compensation for
   1,800,000 shares issued in 1998 for
   acquisition of Colonial Industries and                                                                 1,800
   reorganization @ $0.001 each

Net (Loss) for the period ended
     June 30, 1999                                                                                                          (22,933)
                                                           ------------        ------------        ------------        ------------

Balance at September 30, 1999                                 6,802,434        $          0        $    (47,132)       $    (62,723)
                                                           ============        ============        ============        ============
</TABLE>


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


                                    page F-3



<PAGE>


                            COLONIAL INDUSTRIES, INC.
                       STATEMENTS OF CASH FLOW (UNAUDITED)
              for the nine months ended September 30, 1999 and 1998


<TABLE>
<CAPTION>
                                                 September 30,         September 30,        Cumulative
                                                     1999                  1998               Amounts
                                                 -------------         -------------        ----------
<S>                                                <C>                   <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES

   Net Income (Loss)                               $(22,933)             $(4,893)            $(62,723)
   Add item not requiring the use of cash             3,671                4,893               43,461
                                                   --------              -------             --------

Net use of cash from operating activities           (19,262)                 -0-              (19,262)
                                                   --------              -------             --------

CASH FLOWS FROM INVESTING ACTIVITIES
   Issuance of common stock                           1,800

   Increase (decrease) in accounts payable           17,462

NET INCREASE IN CASH

CASH AT BEGINNING OF PERIOD                             -0-                  -0-                  -0-
                                                   --------              -------             --------

CASH AT END OF PERIOD                                  $-0-                 $-0-                 $-0-
                                                   ========              =======             ========
</TABLE>


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



                                    page F-4

<PAGE>


                            Colonial Industries, Inc.
                          (a Development Stage Company)
                 Notes to The Consolidated Financial Statements
                           September 30, 1999 and 1998

NOTE I - Summary of Significant Accounting Policies

     a.   Organization

          Colonial  Industries,  Inc.  ("the  Company)  formerly known as Impact
     Energy,  Inc.,  (a  Colorado  corporation  organized  on April 1, 1980) was
     originally formed to engage in exploration for, and development, production
     and sale of, oil and gas.  During March,  1988 Impact  contributed  all its
     producing oil and gas  properties to Southwest  Sites Inc. and  distributed
     the Ownership of Southwest to Impact's shareholders.  After the disposition
     of  the  oil  and  gas   properties,   Impact  began  pursuing   investment
     opportunities in the financial services industry.

          Impact made  public  announcements  during 1988  stating its intent to
     pursue the  acquisition  of failed Banks and Savings and Loans in the state
     of Texas. No acquisitions were made in 1988 although Impact did provide the
     financing  for the  recapitalization  of one Texas  bank and  provided  the
     capital to refinance the control group of another.

          The Company went inactive in 1989 and has been dormant ever since.

          On April 23, 1998, the Company merged with Impact Energy, Inc. a Texas
     corporation with the Texas corporation being the survivor. Then on the same
     date, the Company merged with Colonial Industries, Inc. a Texas corporation
     on  April  22,  1998  and  changed  the  name of the  Company  to  Colonial
     Industries,  Inc.  Colonial has 75,000,000 no par value shares  authorized,
     and a share for share exchange took place. A reorganization  adjustment was
     made on the books and records and the retained deficit was eliminated.

     b.   Accounting Method

          The Company  recognizes  income and  expenses on the accrual  basis of
     accounting.

     c.   Earnings (Loss) Per Share

          The  computation of earnings per share of common stock is based on the
     weighted average number of shares  outstanding at the date of the financial
     statements.


<PAGE>



                            Colonial Industries, Inc.
                          (a Development Stage Company)
                 Notes to the Consolidated Financial Statements
                           September 30, 1999 and 1998

NOTE I - Summary of Significant Accounting Policies (Continued)

     d.   Cash and Cash Equivalents

          The Company considers all highly liquid investments with maturities of
     three months or less to be cash equivalents.

     e.   Provision for Income Taxes

          No provision  for income taxes has been  recorded due to net operating
     loss carryforwards  totaling  approximately  $1,700,000 that will be offset
     against future taxable income.  These NOL carryforwards  have already begun
     to expire.  No tax benefit has been  reported in the  financial  statements
     because  the  Company  believes  there  is a  50%  or  greater  chance  the
     carryforward will expire unused.

          Deferred  tax  assets  and the  valuation  account  is as  follows  at
     September 30, 1999 and December 31, 1998 and 1997.  September 30,  December
     31,

                                          1999           1998            1997
                                        ---------      ---------      ---------
           Deferred tax asset:
             NOL carrryforward          $ 578,000      $ 578,000      $ 578,000
           Valuation allowance           (578,000)      (578,000)      (578,000)
                                        ---------      ---------      ---------
           Total                              -0-            -0-            -0-
                                        =========      =========      =========

     f.   Use of estimates

          The  preparation  of  financial   statements  is  in  conformity  with
     generally  accepted  accounting  principles  requires  management  to  make
     estimates  and  assumptions  that  affect  reported  amounts  of assets and
     liabilities, disclosure of contingent assets and liabilities at the date of
     the  financial  statements  and revenues and expenses  during the reporting
     period.  In  these  financial  statements,  liabilities  involve  extensive
     reliance on management's estimates.  Actual results could differ from those
     estimates.


<PAGE>



                            Colonial Industries, Inc.
                          (a Development Stage Company)
                 Notes to the Consolidated Financial Statements
                           September 30, 1999 and 1998

NOTE I - Summary of Significant Accounting Policies (Continued)

     g.   Principles of Consolidation

          The Consolidated Financial Statements include the accounts of Colonial
     Industries, Inc (formerly Impact Energy, Inc.) a Colorado corporation,  its
     wholly owned  subsidiary  Impact Energy,  Inc. a Texas  corporation and its
     wholly owned subsidiary Colonial Industries, Inc. All intercompany accounts
     and transactions have been eliminated in the consolidation.

NOTE 2 - Going Concern

          The accompanying financial statements have been prepared assuming that
     the Company will continue as a going concern. The Company has no assets and
     no  operating   activity  and  is  dependent  upon  financing  to  continue
     operations,  The financial  statements do not include any adjustments  that
     might result from the outcome of this uncertainty.  It is management's plan
     to find an operating  company to merge with providing  necessary  operating
     capital.

NOTE 3 - Development Stage Company

          The Company is a  development  stage  company as defined in  Financial
     Accounting   Standards   Board   Statement  No.  7.  It  is   concentrating
     substantially  all of its  efforts in raising  capital and  developing  its
     business operations in order to generate significant  revenues.  Management
     has  elected  to use  January  1,  1990 as the date the  Company  began the
     development stage.

NOTE 4 - Liens and Judgments

          The Company has two tax liens and one outstanding judgment.  Taxes are
     owed  to the IRS and the  State  of  Texas  in the  amount  of  $9,812.  An
     outstanding  judgment of $39,120 is also  outstanding on the records of the
     County Clerk of Dallas County,  Texas.  These  liabilities are reflected on
     the records as accounts payable and accrued on these  obligations have also
     been recorded through September 30, 1999.