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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 September 29, 2000
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 September 29, 2000 registrant had one class of common stock, of which
4,712,855 shares were outstanding.
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NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 29, 2000
NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 29, 2000
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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To The Stockholders and Directors
Nu Electric Corporation & Subsidiaries
Tarpon Springs, Florida
We have compiled the accompanying consolidated balance sheets of NU ELECTRIC
CORPORATION & SUBSIDIARIES, as of September 29, 2000 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the 13 weeks then ended, 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.
Iselin, New Jersey
October 20, 2000
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Page 2
NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 29, 2000
A S S E T S
Cash $14,065
Deposits 925
Property and equipment, net 8,688
License agreement 15,000
------
$38,678
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $8,500
Due to officer 15,000
--------
Total liabilities 23,500
Stockholders' equity and deficiency
Common stock - par value $.001
Authorized 50,000,000 shares
Issued and outstanding 4,712,855 shares 61,543
Additional paid in capital 778,158
Accumulated deficit (824,523)
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Total stockholders' equity (deficit) 15,178
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$38,678
See accountants' compilation report and notes to financial
statements
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Page 3
NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Thirteen
Weeks Ended
September 29, 2000
Revenues: -0-
-------
Operating Expenses:
Depreciation and amortization 790
Selling, general and administrative 1,487
-----
Total operating expenses 2,277
-----
Net (loss) from operations (2,277)
Interest and dividend income -
---------
Net (loss) ($2,277)
=====
Net income per common share ($.00048)
======
See accountants' compilation report and notes to
financial statements.
<PAGE>
Page 4
NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
THIRTEEN WEEKS ENDED SEPTEMBER 29, 2000
<TABLE>
<CAPTION>
C o m m o n S t o c k
-----------------------
Additional
Number of Par Paid-In Accumulated
Shares Value Capital Deficit
------------ ------- ------------ -----------
<S> <C> <C> <C> <C>
Balance - June 30, 2000 4,112,855 $61,543 $763,158 ($822,246)
Issuance of additional shares 600,000 15,000
Net (loss) - - - ( 2,277)
--------------- ---------- ------------ ---------
Balance - September 29, 2000 4,712,855 $61,543 $778,158 ($824,523)
========= ====== ======= =======
</TABLE>
See accountants' compilation report and notes to
financial statements.
<PAGE>
Page 5
NU ELECTRIC CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Thirteen
Weeks Ended
September 29, 2000
Cash flows from operating activities:
Net income/(loss) ($ 2,277)
Adjustment to reconcile net loss to
net cash used in operations:
Depreciation and amortization 790
Increase in accounts payable and accrued expenses 1,000
-------
Net cash (used) by operating activities (487)
Cash - beginning 14,552
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Cash - ending $14,065
======
Supplemental disclosures:
Non-cash transaction:
Acquisition of ZORAX resulted in an increase in License agreement and
increase in additional paid in capital.
See accountants' compilation report and notes to
financial statements.
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Page 6
NU ELECTRIC, CORPORATION & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 29, 2000
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.
d.. Statement of Cash Flows:
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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.
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.
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Page 7
NU ELECTRIC CORPORATION & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 29, 2000
2. Summary of Significant Accounting Policies (Continued):
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, available to reduce future Federal
income taxes. If not used, the carry forwards will expire as follows:
Year Ending
In Federal Net
June Operating Loss
-------- --------
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 24,259
2013 22,798
2014 12,591
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$729,055
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Page 8
NU ELECTRIC CORPORATION & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 29, 2000
4. Business Combinations:
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
10,000,000 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. As of October 1999 Nu
Electric granted GSA Resources, Inc. an exclusive sublicense to use
an market the technology to remove arsenic from drinking water.
Minimum royalty payments under this agreement are as follows:
2001 5,000
2002 6,000
2003 7,200
2004 8,640
2005 (and until termination) 10,368
As of September 21, 2000 the Company merged with Zorax, Inc. and the
exclusive worldwide license to manufacture and market a proprietary
process technology that improves the extraction of crytosparedium and
giardia from drinking water. A US patent has been filed by John
Hopkins University, the owners' of the technology. Zorax, Inc. has no
assets or liabilities other than as relates to its license of the
technology and research agreement with John Hopkins University. Nu
Electric acquired Zorax, Inc. by way of tax free merger whereby Nu
Electric issued 600,000 shares of its common stock in exchange for
all outstanding shares of Zorax, Inc.
As a result of the merger the Company acquired the license agreement
which had a book value of $15,000.
