SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended 11/30/96
Commission file number 0-21210
NELX, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Kansas 84-0922335
- --------------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10200 W. 44th Ave. #400, Wheat Ridge, CO 80033
-------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(303) 422-9497
--------
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 the filing
requirements for at least the past 90 days.
Yes X No
----- -----
As of November 30, 1996, there were 20,085,619 outstanding shares of common
stock, par value $.0001 were outstanding.
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
---------------------
NELX, INC. AND SUBSIDIARY
Consolidated Balance Sheet
(Unaudited)
November May
ASSETS 30, 1996 31, 1996
---------- ----------
CURRENT ASSETS:
Cash and Cash Equivalents 1,009 8,701
Prepaid Expenses
Accounts Receivable
Accrued Interest Receivable 500 500
---------- ----------
Total Current Assets 1,509 9,201
FIXED ASSETS: (Note 1)
Land 3,711,455 3,716,801
Gas Plant 1,000,000 1,000,000
Vehicles 3,825
Equipment 8,654 8,654
Apartment & Office Buildings 678,063 678,063
---------- ----------
5,401,997 5,403,518
Less Accumulated Depreciation (157,576) (132,725)
Total Net Fixed Assets 5,244,421 5,270,793
OTHER ASSETS:
Deposits 3,950 3,950
Note Receivable
Lease & Royalty Interests
Investments 10,000 10,000
Total Other Assets 13,950 13,950
---------- ----------
TOTAL ASSETS 5,259,880 5,293,944
========== ==========
<PAGE>
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts Payable 138,649 139,649
Advance Payable 29,000 29,000
Accrued Expenses
Current Portion LTD 368,214 368,214
---------- ----------
Total Current Liabilities 535,863 536,863
LONG TERM DEBT
Note Payable 1,618,556 1,594,733
---------- ----------
STOCKHOLDER'S EQUITY (DEFICIT):
Common Stock, $.0001 par value
- 500,000,000 2,183 1,895
---------- ----------
shares authorized, 10,437,581
and 14,541,800 issued and
outstanding at May 31, 1995
and November 30, 1995
Additional Paid In Capital 7,365,964 7,183,780
Retained Earnings (4,262,686) (4,023,327)
---------- ----------
Total Stockholder's Equity 3,105,461 3,162,348
---------- ----------
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY 5,259,880 5,293,944
========== ==========
The accompanying notes are considered an integral part
these financial statements
<PAGE>
<TABLE>
<CAPTION>
NELX, INC. AND SUBSIDIARY
Consolidated Statement of Income and Expense
(Unaudited)
3 Months 6 Months
Ended November 30 Ended November 30
1996 1995 1996 1995
--------------------------- -----------------------------
OPERATING REVENUES
<S> <C> <C> <C> <C>
Oil & Gas Sales 0 10,243 0 30,916
Consulting Fees 0 1,057 0 1,057
-------- --------
11,300 31,973
OPERATING EXPENSES
Rent 0 6,618
Office 11,437 16,761 26,321 36,423
Travel 0 2,921 0 9,048
Lease expenses 0 0 0 0
Professional fees 55,030 11,093 111,342 257,868
Telephone & Utilities 2,014 3,819 7,293 8,264
Miscellaneous 0 0 0 0
Taxes & Licenses 0 0 0 0
Consultants 0 14,240
Oil & Gas Operating 50,000 14,279 51,800 30,464
Wages 0 17,910 0 32,158
Interest expense 0 1,531 0 34,089
-------- -------- -------- --------
Total Operating Expenses 118,481 89,172 196,756 408,314
OTHER REVENUES & (EXPENSES)
Rental & Miscellaneous 0 (4,008) 0 0
Interest income 2,000 (78) (2,000) 4,554
Depreciation 12,425 9,257 (24,850)
Sale of Assets 0 0 0 0
Sale of lease interests 0 0 0 0
Rental expenses 7,598 12,676 (15,756) (14,479)
-------- -------- -------- --------
Total Other Revenues & Expenses 22,023 17,847 (42,606) (42,154)
NET INCOME (LOSS) (140,504) (95,719) (418,495) (418,495)
======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NELX, Inc. AND SUBSIDIARY
Consolidated Statement of Cash Flows
(Unaudited)
Three Months Six months
Ended November 30 Ended November 30
1996 1995 1996 1995
--------- --------- --------- ----
<S> <C> <C> <C> <C>
Cash Flows From
Operating Activities:
Net Profit (Loss) (140,504) (95,719) (239,363) (418,494)
Depreciation 12,424 15,926 24,850 38,898
Stock issued for services 104,005 7,500 155,440 249,500
(Increase) decrease in Accts Receivable 55,600
(Increase) decrease in Prepaids
(Increase) decrease in Deposits
(Decrease) increase in Accrued Expenses 3,432 (17,856)
(Decrease) increase in Accts Payable (5,933) (1,000) (9,433)
(Decrease) increase in Accts Payable
Related Parties (1,700) 1,657
(Decrease) increase in advance payable
Net Cash Flows Used for
Operating Activities --------- -------- --------- ---------
(24,075) (76,494) (60,073) (100,128)
Cash Flows from investing activities
(Purchase) sale of Fixed Assets 6,997 0 1,521 (21,523)
(Purchase) sale of Note Receivable
(Purchase) Sale of Investment
(Purchase) sale of Lease Interests
Total cash used for investing --------- -------- --------- ---------
6,997 0 1,521 (21,523)
Cash flows from financing activities
Increase (Decrease) in Note Payable 11,719 17,573 23,823 47,639
Sale of Common Stock 7,464 55,132 27,037 67,257
-------- -------- -------- --------
Total cash from financing activities 19,183 72,705 50,860 114,896
Increase (Decrease) in cash 2,103 (3,789) (7,692) (6,755)
-------- -------- -------- --------
Cash and cash equivalents -
beginning of period (1,094) 8,138 8,701 11,104
-------- -------- -------- --------
Cash and cash equivalents -
end of period 1,009 4,349 1,009 4,349
======== ======== ======== ========
</TABLE>
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Results of Operations
- ---------------------
The Company has experienced continuing operating expenses for the three
month period of $118,481 compared to $89,172 in the same period in 1995. The
revenues for the period totaled $0 from oil and gas operations compared with
$11,300 for same period in 1995. The Company recorded a net loss of $239,362 for
the period as compared to a $95,719 loss for the same period in fiscal year
1995. Other Revenues and Expenses (Real Estate Rental) showed a net loss for the
period of ($22,023) as compared to ($17,847) net loss for same period in 1994.
The Company losses on operations will continue until income from oil and gas
operations and real estate sales and development can be achieved. While the
Company is seeking capital sources for investment in oil and gas wells and real
estate development, there is no assurance that sources can be found. The Company
has only minimal real estate revenues and has no other income.
Liquidity and Capital Resources
- -------------------------------
The Company had inadequate cash capital at the end of the period. The
Company will be forced to either borrow against or sell assets or make private
placements of stock in order to fund operations continuance. No assurance exists
as to the ability to achieve sales of assets or loans against the assets, or
make private placements of stock.
<PAGE>
PART II
OTHER INFORMATION
Ite 1. Legal proceedings - In November of 1996, Standard Financial,
a noteholder of a $50,000 Note commenced
foreclosure on the triplex property owned
by registrant.
Item 2. Changes in securities - None.
Item 3. Defaults upon senior securities - None.
Item 4. Submission of matters to a vote of security holders - None.
Item 5. Other information - None.
Item 6. Exhibits and reports on Form 8-K
(a) The following are filed as Exhibits to this Quarterly
Report. The numbers refer to the Exhibit Table of Item 601
of Regulation S-K:
None.
(b) Reports on Form 8-K filed during the three months ended
November 30, 1996: (incorporated by reference)
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.
NELX, Inc.
------------------------------------
(Registrant)
Date: April 17, 1997 /S/ WESLEY F. WHITING
------------------------------------
Wesley F. Whiting, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> NOV-30-1996
<CASH> 1,009
<SECURITIES> 0
<RECEIVABLES> 500
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,509
<PP&E> 5,401,997
<DEPRECIATION> 157,576
<TOTAL-ASSETS> 5,259,880
<CURRENT-LIABILITIES> 535,863
<BONDS> 1,618,556
0
0
<COMMON> 2,183
<OTHER-SE> 3,103,278
<TOTAL-LIABILITY-AND-EQUITY> 5,259,880
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 140,504
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (140,504)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
