UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the Period ended SEPTEMBER 30, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File No. 0-3689
NRG INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 23-168248
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4433 W. Touhy Ave., Suite 310, Lincolnwood, IL 60712
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 568-9246
Indicate by check mark whether the Registrant (1) has filed all reports 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.
Yes X No
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding September 30, 2000
----------------------------- ---------------------------------
Common stock, $.10 par value 255,311 shares
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PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
NRG INCORPORATED
Consolidated Balance Sheet
Unaudited
September, 30 December 31,
ASSETS 2000 1999
------ ------ ------
Cash $ 81 $ 81
Other assets 2,408 2,408
----------- -----------
2,489 2,489
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses 2,154 2,154
Payable to affiliates 135,489 113,737
Estimated amount payable to stockholder 1,805 1,805
----------- -----------
Total liabilities 139,448 117,696
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, par value $.10 per share-
authorized 15,000,000 shares; issued,
including shares held in treasury,
305,829 shares 30,583 30,583
Additional paid-in capital 4,541,845 4,541,845
Retained earnings (deficit) (2,627,087) (2,605,335)
Treasury stock, at cost - 50518 shares (102,980) (102,980)
----------- -----------
Total stockholders' equity 1,842,361 1,864,113
----------- -----------
Less receivable from majority
stockholder (1,979,320) (1,979,320)
----------- -----------
$ 2,489 $ 2,489
=========== ===========
See Accompanying Notes
2
<PAGE>
NRG INCORPORATED
Consolidated Statements of Operations
Unaudited
For the Three Months Ended
September 30,
2000 1999
Revenues $ -0- $ -0-
--------- ---------
General and administrative expenses 7,250 7,250
--------- ---------
Net Loss $ (7,250) $ (7,250)
========= =========
PER SHARE INFORMATION
Weighted average number of
common shares outstanding 255,311 255,311
========= =========
Net Loss $ (.03) $ (.03)
========= =========
See Accompanying Notes
3
<PAGE>
NRG INCORPORATED
Consolidated Statements of Operations
Unaudited
For the Nine Months Ended
September 30,
2000 1999
Revenues $ -0- $ -0-
--------- ---------
General and administrative expenses 21,750 21750
--------- ---------
Net Loss $ (21,750) $ (21,750)
========= =========
PER SHARE INFORMATION
Weighted average number of
common shares outstanding 255,311 255,311
========= =========
Net Loss $ (.09) $ (.09)
========= =========
See Accompanying Notes
4
<PAGE>
NRG INCORPORATED
Consolidated Statements of Cash Flows
Unaudited
For the Nine Months Ended
September 30
OPERATING ACTIVITIES: 2000 1999
----- ----
Net Loss $ (21,750) $ (21,750)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Decrease in prepaid expenses-affiliate -0- -0-
Decrease in accounts payable and
accrued expenses: -0- -0-
Increase in payable to affiliates 21,750 21,750
Net cash utilized in operating activities -0- -0-
-------- --------
Increase (decrease) in cash -0- -0-
Cash at beginning of period 81 81
-------- --------
Cash at end of period $ 81 $ 81
======== ========
See Accompanying Notes
5
<PAGE>
NRG INCORPORATED
Notes to Consolidated Financial Statements
1. Interim Financial Statements
The accompanying consolidated financial statements are unaudited and do not
include certain information and note disclosures required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included, which consist solely of adjustments of a normal recurring nature.
These statements should be read in conjunction with the financial statements,
and notes thereto, including in the Form 10-K of NRG Incorporated ("NRG" or
"Company") for the year ended December 31, 1999. The results of operations for
the nine months ended September 30, 2000, are not necessarily indicative of the
results that may be expected for the full fiscal year.
2. Reverse Stock Split
In December 1983, the Company's Board of Directors approved a reverse stock
split effective as of the close of business on December 19, 1983, pursuant to
which one new share of common stock, par value $.10 per share, would be issued
for every 20 shares of old common stock, par value $.005 per share, then
outstanding. No other change in the attributes of the common shares would be
made.
The Company undertook to repurchase fractional shares resulting from the
implementation of the reverse stock split at the rate of $.25 for each old
share. Through oversight, certain of the corporate actions necessary to
implement fully the reverse stock split have not yet been completed; however,
the Company intends to complete the actions as soon as practicable. All the
information relating to common shares has been adjusted to reflect the full
implementation of the reverse stock split.
Cancellation of Pending Merger
Telco Capital Corporation ("Telco"), NRG's majority stockholder, has advised NRG
that its announced plan to merge NRG into a wholly owned subsidiary of Telco has
had to be abandoned owing to financial reversals experienced at Telco's
principal, indirect subsidiary, Coronet Insurance Company.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Liquidity and Capital Resources
The Company has no cash generating activities. Substantially all of the
Company's cash surpluses were loaned in the 1980's to its major stockholder,
TELCO, in the form of a demand note carrying interest at the rate of 2% over
prime. This note had a balance of $1,523,441 as of September 30, 2000. Through
January,1994, administrative expenses of NRG were paid by Telco and charged
against the note and management service fees from Telco were also charged
against the note. Interest income was not received in cash during the last
years. No schedule for payment of the amounts advanced has been established and
no significant collections on the amount due, including interest, are
anticipated within the next year. Because of the uncertainty as to the period
for recovery that exists due to the illiquidity of Telco, at December 31, 1991
the Company classified the loan with stockholder's equity and effectively
January 1, 1992 suspended recognition of interest in its financial statements
with respect to the loan. The receivable balance includes accrued interest
receivable of $455,879. At September 30, 2000, interest earned but not accrued
was an additional $2,387,000.
Effective February 1994, the administrative expenses and management services
were paid for/provided by Hickory. At September 30, 2000 NRG owes Hickory
$135,489 for administrative and management service fee.
The Company has current liability of $2,154, along with a liability to Telco of
$1,805, which is payable only from actual future cash receipts realized by the
Company from the sale of the vacant land.
The Company has no plans for capital expenditures or borrowing funds.
Operating Results
The Company reported a net loss of $21,750 ($ .09 per share) for the nine months
ended September 30, 2000 and 1999, respectively. As explained above, the Company
no longer recognized interest income from Telco in its financial statements and,
therefore, has no revenues during either period. General and administrative
expenses were $21,750 for each nine months ended September 30, 2000 and 1999,
respectively. These amounts include fees of $21,750 for both years charged by
Hickory for management services (accounting, shareholder services, legal, etc)
provided.
7
<PAGE>
NRG INCORPORATED AND SUBSIDIARIES
PART II
Item 6. Exhibits and Reports on Form 8-K
None
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.
NRG INCORPORATED
/s/ Clyde Wm. Engle
----------------------
Clyde Wm. Engle
Chairman, Chief Executive,
Financial and Accounting
Officer and Director
Date: November 14, 2000
