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 June 30, 1998
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 June 30, 1998, 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 June 30, 1998, as Exhibit
QF #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. 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.
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.
Item 6. Exhibits and Reports on Form 8-K
Exhibit QF #3 Financial Statements (Un-Audited) June 30, 1998
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-Qsb Report for the Quarter ended June 30, 1998, has been signed below by
the following person on behalf of the Registrant and in the capacity and on the
date indicated.
June 30, 1998
Impact Energy, Inc.
A COLORADO CORPORATION
by
/s/ Jack Wells /s/ Joe Kane
- ------------------------- ---------------------------
Jack Wells Joe Kane
PRESIDENT/DIRECTOR SECRETARY/TREASURER
3
<PAGE>
Exhibit QF #3
UN-AUDITED FINANCIAL STATEMENTS
for the Three Months Ended
June 30, 1998
4
<PAGE>
IMPACT ENERGY, INC.
BALANCE SHEETS (UNAUDITED)
for the fiscal years ended December 31, 1996 and 1997
and for the period ended June 30, 1998
<TABLE>
<CAPTION>
December 31,
June 30, --------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ -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 36,699 34,252 29,359
------------ ------------ ------------
Total Current Liabilities 85,631 83,184 78,291
------------ ------------ ------------
STOCKHOLDERS' EQUITY
Common Stock, $0.01 par value; authorized 75,000,000
shares; issued and outstanding, 74,955,530 shares, 0 749,555 749,555
Additional paid-in Capital (48,932) 12,360,560 12,360,560
Accumulated Surplus (Deficit) (36,699) (13,193,299) (13,188,406)
------------ ------------ ------------
Total Stockholders' Equity (85,631) (83,184) (78,291)
------------ ------------ ------------
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, 1996 and 1997
and for the period ended June 30, 1998
<TABLE>
<CAPTION>
For the
Six Months
Ended December 31,
June 30, -------------------------------- Cumulative
1998 1997 1996 Amounts
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES $ -0- $ -0- $ -0- $ -0-
------------ ------------ ------------ ------------
EXPENSES
Interest Expense 2,447 4,893 4,893 36,710
------------ ------------ ------------ ------------
Total Operating Expense 2,447 4,893 4,893 36,710
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 2,447 $ 4,893 $ 4,893 $ 36,710
============ ============ ============ ============
NET (LOSS) PER SHARE $ (0.00003) $ (0.00007) $ (0.00007) $ (0.00049)
============ ============ ============ ============
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, 1996 and 1997
and for the period ended June 30, 1998
<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 December 31, 1997 (4,893)
------------ ------------ ------------ ------------
Balance December 31, 1997 74,955,530 749,555 12,360,560 (13,193,299)
Reorganization - April 28, 1998 -- (749,555) (12,311,628) 13,159,047
Net (Loss) for the six months ended
June 30, 1998 (2,447)
------------ ------------ ------------ ------------
Balance at June 30, 1998 74,955,530 0 (48,932) (36,699)
</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, 1996 and 1997
and for the period ended June 30, 1998
<TABLE>
<CAPTION>
For the
Six Months
Ended December 31,
June 30, -------------------------- Cumulative
1998 1997 1996 Amounts
-------- -------- -------- --------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (2,447) $ (4,893) $ (4,893) $(36,710)
Add item not requiring the use of cash 2,447 4,893 4,893 36,710
-------- -------- -------- --------
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
June 30, 1998, December 31, 1997 and 1996
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.
On April 23, 1998, the Company merged with Impact Energy, Inc. a Texas
corporation organized on April 22, 1998. The Texas corporation 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.
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
June 30, 1998, December 31, 1997 and 1996
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
September 30, 1998 and December 31, 1997 and 1996.
June 30, December 31,
1998 1997 1996
--------- --------- ---------
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.
g. Principles of Consolidation
The Consolidated Financial Statements include the accounts of Impact
Energy, Inc. a Colorado corporation and its wholly owned subsidiary Impact
Energy, Inc. a Texas corporation- All intercompany accounts and
transactions have been eliminated in the consolidation.
<PAGE>
Impact Energy, Inc.
(a Development Stage Company) Notes
to the Consolidated Financial Statements
September 30, 1998, December 31, 1997 and 1996
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 June 30, 1998.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 85,631
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (85,631)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,223
<INCOME-PRETAX> (1,223)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,223)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
