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, 1997

                                       AND

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


                         Commission File Number: 0-9562

                               Impact Energy, Inc.

             (Exact name of Registrant as specified in its charter)


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

PO Box 980459, Houston Texas                           77098-0459
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code:
(713) 526-8224

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

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

Yes [] No [X] (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, 1997, the number of shares  outstanding of the  Registrant's
Common Stock was 74,955,530.


<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, 1997, as
Exhibit QF #97-3.

     Item 2. Management's Discussion and Analysis or 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. The Issuer has no assets or revenue, and has accrued liabilities of
$81,961.  The  Issuer  has  no  present  capital  resource  and  accordingly  no
liquidity.

     (b) Plan of Operation

      The Issuer has no alternative but to pursue the possibility of one or more
potential business combinations to achieve profitability for its shareholders.



             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

                                        2

<PAGE>


                           PART II: OTHER INFORMATION

                            Item 5. Other Information

     Impact  Energy,  Inc. is a Colorado  corporation  organized  April 1, 1980,
originally formed to engage in exploration for, development and sale of, oil and
gas.  During March of 1988,  Impact  contributed  all its  producing oil and gas
properties to Southwest Sites,  Inc., and distributed the ownership of Southwest
to the  shareholders  of Impact.  After the  disposition,  Impact began pursuing
investment opportunities in the financial services industry.  Impact made public
announcements  during 1988 of its intention 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 funding with respect to two Texas Banks.  The
Company became inactive in 1989 and has remained so to date.

           SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS AND 5% OWNERS

<TABLE>
<CAPTION>
==========================================================================================================================
                 Name and Address of Beneficial Owner                                Amount and Nature             Percent
                                                                                       of Ownership               of Class
--------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                                    <C>                       <C>   
Jack Wells                                        president/director                           -0-                  0.00
PO Box 980459
Houston TX 77098-0459
--------------------------------------------------------------------------------------------------------------------------
Joe Kane                                          secretary/director                           -0-                  0.00
PO Box 980459
Houston TX 77098-0459
==========================================================================================================================
All Officers and Directors as a Group                                                            0                  0.00
==========================================================================================================================
T.M. Skillern  (1)                                                                      14,400,000                 19.21
PO Box 980459
Houston TX
--------------------------------------------------------------------------------------------------------------------------
R. Ray Rankin (1)                                                                       16,046,996                 21.41
5700 Bentree
Coreyville TX 76034
--------------------------------------------------------------------------------------------------------------------------
James S. Clifton (1)                                                                    10,576,804                 14.11
5335 Desota-D
Houston TX 77091
==========================================================================================================================
Total Shares Issued and Outstanding                                                     74,955,530                100.00
==========================================================================================================================
</TABLE>


(1)  For purposes of this Report the share  ownership of family members with the
     same surnames have been attributed to the named shareholder, without regard
     to same or separate  addresses,  and without  any  investigation  of actual
     relationship or current affiliation.


                    Item 6. Exhibits and Reports on Form 8-K

       Exhibit QF #3 Financial Statements (Un-Audited) September 30, 1997


                                        3

<PAGE>


                                   SIGNATURES


      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
Form 10-Qsb  Report for the Quarter ended  September  30, 1997,  has been signed
below by the following  person on behalf of the  Registrant  and in the capacity
and on the date indicated.


September 30, 1997.


                               Impact Energy, Inc.
                             A COLORADO CORPORATION


                                       by


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


                                        4

<PAGE>


                                Exhibit QF #97-3

                         UN-AUDITED FINANCIAL STATEMENTS

                           for the Three Months Ended

                               September 30, 1997


                                        5

<PAGE>


                               IMPACT ENERGY, INC.
                           BALANCE SHEETS (UNAUDITED)
              for the fiscal years ended December 31, 1995 and 1996
                   and for the period ended September 30, 1997

<TABLE>
<CAPTION>
                                                                                     December 31,
                                                             September 30,    ---------------------------
                                                                 1997            1996            1995  
                                                             -------------   ------------    ------------
<S>                                                           <C>             <C>             <C>         
                                     ASSETS
CURRENT ASSETS

Cash                                                         $        -0-    $        -0-    $        -0- 
                                                                      -0-             -0-    $        -0- 
      Total Current Assets                                   ------------    ------------    ------------ 
TOTAL ASSETS                                                          -0-             -0-    $        -0- 
                                                             ============    ============    ============ 
                                                             
                       LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES

Accounts payable                                             $     48,932    $     48,932    $     48,932
Accrued interest                                                   33,029          29,359          24,466
                                                             ------------    ------------    ------------
      Total Current Liabilities                                    81,961          78,291          73,398
                                                             ------------    ------------    ------------
STOCKHOLDERS' EQUITY

     Common Stock, $0.01 par value; authorized 75,000,000
        shares; issued and outstanding, 74,955,530 shares,        749,555         749,555         749,555

     Additional paid-in Capital                                12,360,560      12,360,560      12,360,560

     Accumulated Surplus (Deficit)                            (13,192,076)    (13,188,406)    (13,183,513)
                                                             ------------    ------------    ------------
Total Stockholders' Equity                                        (81,961)        (78,291)        (73,398)
                                                             ------------    ------------    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $          0    $          0    $          0
                                                             ============    ============    ============
</TABLE>


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

                                    page F-1


                                       
<PAGE>


                              IMPACT ENERGY, INC.
             STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
    for the fiscal years ended December 31, 1995 and 1996 and for the period
                            ended September 30, 1997

<TABLE>
<CAPTION>
                                                       
                                                     For the     
                                                    Nine Months 
                                                       Ended                         December 31,                     
                                                    September 30,      --------------------------------------       Cumulative
                                                       1997                 1996                 1995                 Amounts
                                                 ------------------    -----------------    -----------------   ------------------
<S>                                              <C>                   <C>                  <C>                 <C>        
REVENUES                                         $             -0-     $            -0-     $            -0-    $             -0-
                                                 ------------------    -----------------    -----------------   ------------------

EXPENSES
     Interest Expense                                        3,670                4,893                4,893               33,029
                                                 ------------------    -----------------    -----------------   ------------------

        Total Operating Expense                              3,670                4,893                4,893               33,029
                                                 ------------------    -----------------    -----------------   ------------------

NET INCOME (LOSS)                                 $          3,670     $          4,893     $          4,893     $         33,029
                                                 ==================    =================    =================   ==================

NET (LOSS) PER SHARE                              $       (0.00005)    $       (0.00007)    $       (0.00007)    $       (0.00044)
                                                 ==================    =================    =================   ==================

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


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

                                    page F-2


<PAGE>

                               IMPACT ENERGY, 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, 1995 and 1996
                   and for the period ended September 30, 1997

<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                            74,955,530        $    749,555       $ 12,360,560       $(13,159,047)

Net Loss December 31, 1990-1994                                                                                             (19,573)

Net Loss December 31, 1995                                                                                                   (4,893)

Net Loss December 31, 1996                                                                                                   (4,893)
                                                             ------------        ------------       ------------       ------------
Balance December 31, 1996                                      74,955,530             749,555         12,360,560        (13,188,406)

Net (Loss) for the nine months ended
     September 30, 1998                                                                                                      (3,670)
                                                             ------------        ------------       ------------       ------------
Balance September 30, 1997                                     74,955,530             749,555         12,360,560        (13,192,076)
</TABLE>


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

                                    page F-3


<PAGE>

                               IMPACT ENERGY, INC.
                       STATEMENTS OF CASH FLOW (UNAUDITED)
              for the fiscal years ended December 31, 1995 and 1996
                   and for the period ended September 30, 1997


<TABLE>
<CAPTION>
                                                                 
                                                            For the        
                                                          Nine Months      
                                                              Ended                   December 31,
                                                          September 30,   -----------------------------------       Cumulative
                                                              1997               1996              1995               Amounts
                                                       -----------------  ----------------  -----------------   -----------------
<S>                                                    <C>                 <C>              <C>                 <C>              
     CASH FLOWS FROM OPERATING ACTIVITIES

        Net Income (Loss)                              $         (3,670)   $       (4,893)  $         (4,893)   $        (33,029)
        Add item not requiring the use of cash                    3,670             4,893              4,893              33,029
                                                       -----------------  ----------------  -----------------   -----------------

     Net use of cash from operating activities                        0                 0                  0                   0
                                                       -----------------  ----------------  -----------------   -----------------

     CASH FLOWS FROM INVESTING ACTIVITIES
        Organization costs

     NET INCREASE IN CASH

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

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


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

                                    page F-4


<PAGE>



                               Impact Energy, Inc.
                          (a Development Stage Company)
                 Notes to The Consolidated Financial Statements
                 September 30, 1997, December 31, 1996 and 1995

NOTE I - Summary of Significant Accounting Policies

     a.   Organization

          Impact  Energy,   Inc.,  ("the  Company)  is  a  Colorado  corporation
     organized  on April 1,  1980.  Impact  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.

     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.

     d.   Cash and Cash Equivalents

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


<PAGE>


                               Impact Energy, Inc.
                          (a Development Stage Company)
                 Notes to the Consolidated Financial Statements
                 September 30, 1997, December 31, 1996 and 1995

NOTE I - Summary of Significant Accounting Policies (Continued)


     c.   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 March
     31, 1997 and December 31, 1997 and 1996.

                                September 30,      December 31,
                                   1997         1996          1995    
                                 ---------    ---------    ---------
           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>



                               Impact Energy, Inc.
                          (a Development Stage Company)
                 Notes to the Consolidated Financial Statements
                 September 30, 1997, December 31, 1996 and 1995

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, 1997.