UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
|X| Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarter year ended December 31, 1999
Nu Electric Corp.
(Name of Small Business Issuer in its charter)
Delaware
(State or other jurisdiction of incorporation organization)
23-2426437
(I.R.S. Employer Identification No.)
624 East Tarpon Avenue, Tarpon Springs, FL 34689
(Address of principal executive offices) (Zip Code)
(727) 942-4938
(Issuer's telephone number)
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 registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|
As of December 31, 1999, registrant had one class of common stock, of which
3,812,855 shares were outstanding.
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NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND SEPTEMBER 24, 1999
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NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND SEPTEMBER 24, 1999
TABLE OF CONTENTS
Page
----
Accountants' Compilation Report 1
Consolidated Financial Statements:
Balance Sheets 2
Statements of Operations 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6-8
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[Letterhead of Acquavella, Chiarelli, Shuster & Co]
To The Stockholders and Directors
Nu Electric Corporation & Subsidiaries
Tarpon Springs, Florida
We have compiled the accompanying consolidated balance sheets of NU ELECTRIC
CORPORATION & as of December 3l, 1999 and September 24, 1999 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the 26 and 13 weeks then ended, respectively, in accordance With
standards established by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
/s/ Acquavella, Chiarelli, Shuster & Co
Iselin, New Jersey
January 7, 2000
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Page 2
NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 3l, September 24,
1999 1999
-------- --------
ASSETS
Cash $ 15,670 $ 16,132
Deposits 925 925
Property and equipment, net 11,058 11,848
-------- --------
$ 27,653 $ 28,905
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY
Liability:
Due to officer $ 15,000 $ 15,000
-------- --------
Stockholders' equity and deficiency
Common stock par value $.001
Authorized 50,000,000 shares
Issued and outstanding 61,543 61,543
Additional paid in capital 763,158 763,158
Accumulated deficit (812,O48) (810,796)
-------- --------
Total stockholders' equity 12,653 $ 13,905
-------- --------
$ 27,653 $ 28,905
======== ========
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Page 3
NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Twenty-six Thirteen
Weeks Ended Weeks Ended
December 31, 1999 September 24, 1999
----------------- ------------------
Revenues: -0- -0-
-------- --------
Operating Expenses:
Depreciation and amortization 1,580 790
Selling, general and administrative 979 510
-------- --------
Total operating expenses 2,559 1,300
-------- --------
Net (loss) from operations (2,559) (1,300)
Interest and dividend income 166 159
-------- --------
Net (loss) ($ 2,393) ($ 1,141)
======== ========
Net income per common share ($.00063) ($.00030)
======== ========
See accountants' compilation report and notes to financial statements.
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Page 4
NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
TWENTY SIX WEEKS ENDED DECEMBER 31, 1999 AND
THIRTEEN WEEKS ENDED SEPTEMBER 24, 1999
Common Stock
--------------------- Additional
Number of Par Paid-In Accumulated
Shares Value Capital Deficit
--------- --------- --------- ---------
Balance-June 28, 1999 2,917,855 $ 61,543 $ 763,158 ($809,655)
Issuance of additional shares 893,000
Net (loss) -- -- -- (1,141)
--------- --------- --------- ---------
Balance - September 24, 1999 3,810,855 61,543 763,158 (810,796)
Issuance of additional shares 2,000
Net (loss) -- -- -- (1,252)
--------- --------- --------- ---------
Balance - December 31, 1999 3,812,855 $ 61,543 $ 763,158 ($812,048)
========= ========= ========= =========
See accountants compilation report and notes to financial statements.
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Page 5
NIT ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twenty-six Thirteen
Weeks Ended Weeks Ended
December 31, 1999 September 24, 1999
----------------- ------------------
Cash flows from operating activities:
Net income/(loss) ($ 2,393) ($ 1,141)
Adjustment to reconcile net loss to
net cash used in operations:
Depreciation and amortization 1,580 790
-------- --------
Net cash (used) by operating activities (813) (351)
Cash - beginning 16,483 16,483
-------- --------
Cash - ending $ 15,670 $ 16,132
======== ========
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Page 6
NU ELECTRIC, CORPORATION & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND SEPTEMBER 24, 1999
1. Organization and Nature of Business:
Escalator, Inc. was incorporated under the General Corporation laws of the State
of Delaware on April 17, 1986. On April 22, 1998, a certificate of amendment was
filed to change the name of the Corporation to Nu Electric Corporation. The
Company is publicly traded under the symbol NRGE. The Company owns 100% of Frank
Communications Corp., Escalator, Inc. (Pennsylvania) and Clean Water
Technologies (see note 5).
2. Summary of Significant Accounting Policies:
a. Principles of Consolidation:
The consolidated financial statements include the accounts of Nu
Electric Corporation (Delaware), its wholly-owned subsidiaries of
Frank Communications Corp. Escalator, Inc. (Pennsylvania) and Clean
Water Technologies Inc. All significant intercompany transactions
and balances have been eliminated.
b. Property, Equipment, Depreciation and Amortization:
Property and equipment are stated at cost. Depreciation and
amortization are provided using the straight-line and declining
balance method over the estimated useful lives of the assets.
c. Income/(Loss) Per Common Share:
The income or loss per common share is based on the weighted average
number of shares outstanding. Fully diluted incomes per share
amounts are not presented because the exercise of the stock option
and the conversion of the 10% convertible notes payable are
anti-dilutive.
d. Statement of Cash Flows:
For purposes of the statement of cash flows, the Company considers
all highly liquid accounts with a maturity of three months or less
as cash equivalents.
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Page 7
NU ELECTRIC CORPORATION & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND SEPTEMBER 24, 1999
2. Summary of Significant Accounting Policies (Continued):
e. Concentrations of Credit Risk:
Financial instruments which potentially subject the Company to
concentrations of credit risk consist of cash and cash equivalents.
The Company places its temporary cash investments with a quality,
high credit financial institution. At times, such investments, along
with the Company's cash balances with this institution, exceeded the
current insured amount under the Federal Deposit insurance
Corporation.
f. Use of Estimates in Preparation of Financial Statements:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
3. Income Taxes.
For income tax reporting, the Company and its subsidiaries have net
operating loss carry forwards, and investment tax credit carry forwards
available to reduce future Federal income taxes. If not used, the carry
forwards will expire as follows:
Year Ending Federal Net Investment
In June Operating Loss Tax Credits
-------------------------------------------------------------------
1999 $2,100
2000 700
2001 $ 32,835
2002 54,000
2003 71,000
2004 183,000
2005 160,000
2008 33,713
2010 13,569
2011 121,290
2012 24,798
-------- ------
$694,205 $2,800
======== ======
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Page 8
NU ELECTRIC CORPORATION & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND SEPTEMBER 24,1999
4. Capital Stocks
As of June 27,1999, the Company issued an additional 750,000 shares of
stock in connection with $30,00O expenses paid on behalf of Nu Electric
Corporation & Subsidiaries by an entity owned by one of the majority
shareholders. In addition, in lieu of cash repayment of a $10,000 officer
loan payable was converted to 250,000 shares of common stock
5. Business Combination:
On June 30, 1999, Nu Electric Corporation & Subsidiaries, a Delaware
Corporation entered into a merger agreement with Clean Water Technologies
Inc., (CWT) a Florida Corporation. The merger was accounted for by the
pooling of Interests method, where the 10,000 shares of outstanding common
stock of CWT were converted to 893,000 shares of common stock of Nu
Electric Corporation & Subsidiaries. CWT had no assets, liabilities or
income of any kind, character or description at the time of the merger,
and accordingly there was no effect on the revenues and earnings reported.
CWT holds a license for a technology developed at USF (University of South
Florida) to remove arsenic from drinking water.
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Page 9
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.
NU ELECTRIC CORPORATION
By: /s/ Howard A. Scala
-----------------------
Howard A. Scala
(Vice President)
Date: February 11, 2000
NU ELECTRIC CORPORATION
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 15,670
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 27,653
<PP&E> 0
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<TOTAL-ASSETS> 11,058
<CURRENT-LIABILITIES> 27,653
<BONDS> 0
0
0
<COMMON> 61,543
<OTHER-SE> 763,158
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<EXTRAORDINARY> 0
<CHANGES> 0
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