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 08/31/97
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 August 31, 1997, there were 25,477,000 outstanding shares
of common stock, par value $.0001.
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NELX, INC. AND SUBSIDIARY
Consolidated Balance Sheet
(Unaudited)
August May
ASSETS 31, 1997 31, 1997
CURRENT ASSETS:
Cash and Cash Equivalents 1,491 (8,533)
Prepaid Expenses 0 0
Accounts Receivable 0 0
Accrued Interest Receivable 0 0
Total Current Assets 1,491 (8,533)
FIXED ASSETS: (Note 1)
Land 950,000 950,000
Gas Plant 100,000 100,000
Vehicles 0 0
Equipment 12,479 12,479
Apartment & Office Bldgs 82,000 82,000
1,144,479 1,144,479
Less Accumulated Depreciation (106,154) (106,154)
Total Net Fixed Assets 1,038,325 1,038,325
OTHER ASSETS:
Deposits 3,950 3,950
Lease & Royalty Interests 0 0
Notes Receivable 0 0
Investments 0 0
Total Other Assets 3,950 3,950
TOTAL ASSETS 1,043,766 1,033,742
<PAGE>
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts Payable 489,424 489,424
Advance Payable 0 0
Accrued Expenses 374,149 374,149
Current Portion LTD 812,252 812,252
Total Current Liabilities 1,675,825 1,675,825
LONG TERM DEBT
Note Payable 33,117 30,617
STOCKHOLDER'S EQUITY (DEFICIT):
Common Stock, $.0001 par value
- 500,000,000 2,548 2,548
shares authorized, 18,947,300
and 19,648,723 issued and
outstanding at August 31, 1996
and May 31, 1996
Additional Paid In Capital 7,441,162 7,441,162
Retained Earnings (8,108,886) (8,116,410)
Total Stockholder's Equity (665,176) (672,700)
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY 1,043,766 1,033,742
The accompanying notes are considered an integral part of these
financial statements.
<PAGE>
NELX, INC. AND SUBSIDIARY
Consolidated Statement of Operations
(Unaudited)
Three Months
Ended August 31,
1997 1996
OPERATING REVENUES
Sale of ORRI 25,000 0
Misc. Income 11,000 0
Cost of Sales 1,944 1,800
Gross Profit 34,056 (1,800)
OPERATING EXPENSES
Salaries 0 0
Office Expense 3,031 14,884
Travel 0 0
Professional Fees 23,700 56,312
Telephone & Utilities (199) 5,279
Depreciation & Depletion 0 12,425
Miscellaneous 0 0
Interest Expense 0 0
Total Operating Costs 26,532 88,900
Other Revenues & (Expenses)
Net Rental Expense 0 (8,158)
Interest Income 0 0
Miscellaneous Income 0 0
Total Other Revenues
& Expenses 0 (8,158)
NET INCOME (LOSS) 7,524 (98,858)
Weighted average number of
shares outstanding - see 25,477,000 19,648,723
note
Net Loss Per Share 0.00 (0.01)
<PAGE>
NELX, INC., AND SUBSIDIARY
Consolidated Statement of Cash Flows
(Unaudited)
Three Months
Ended August 31,
1997 1996
Cash Flows From
Operating Activities:
Net Profit (Loss) 7,524 (98,859)
Depreciation 12,426
Stock issued for services 51,435
(Increase) decrease in Accts
Receivable
(Increase) decrease in Prepaids
(Increase) decrease in Deposits
(Decrease) Increase in Accrued
Expenses
(Decrease) Increase in Accts
Payable (1,000)
(Decrease) Increase in Accts
Payable
Related Parties
Net Cash Flows Used for 7,524 (35,998)
Operating Activities
Cash flows from investing
activities
(Purchase) sale of fixed assets (5,476)
(Purchase) Sale of Note receivable
(Purchase) Sale of Investment
(Purchase) Sale of Lease interests
Total cash used for investing 0 (5,476)
Cash flows from financing
activities
Increase (Decrease in Note payable 2,500 12,104
Sale of common stock 0 19,575
Total cash from financing
activities 2,500 31,679
Increase (Decrease) in cash 10,024 (9,795)
Cash and cash equivalents -
beginning of period (8,533) 8,701
Cash and cash equivalents
end of period 1,491 (1,094)
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations for quarter ended August 31, 1997 compared
to same period in 1996.
The Company has experienced continuing operating expenses
for the three month period of $26,532 as compared to $88,900 in
the same period for 1996. The revenues for the period totaled
$34,056 from operations compared with $0 for same period in 1996.
The Company recorded a net loss of $(7,524) for the period as
compared to a $(98,858) loss for the same period in fiscal year
1996. Other Revenues and Expenses (Real Estate Rental) showed a
net loss for the period of $0 as compared to $(8,158) net loss
for the same period in 1996. The Company losses on operations
will continue until income from any operations can be achieved.
While the Company is seeking capital sources for investment,
there is no assurance that sources can be found. The Company has
only minimal 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
Item 1. Legal proceedings - There are presently
no material pending legal proceedings which
would result in any uninsured liability,
other than routine litigation incidental to the
business, to which the Registrant is a party
except as follows: The Company is Defendant in a
suit filed by Allan Pezoldt naming the Company as
a co-defendant in El Paso County, Colorado.
Plaintiff's counsel filed a Lis Pendens on the
Erie property, and served a complaint on the
Company in February 1997. The Company believes
any suit by Allan Pezoldt has no merit whatsoever,
and is vigorously defending the suit.
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 August 31, 1997:
July 1, 1997
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.
Date: March 2, 1998
by:/s/Charles L. Stout
Charles L. Stout, President
