SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
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November 30, 2000 000-21210
NELX, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 84-0922335
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(State of incorporation) (I.R.S. Employer
Identification No.)
10525 W. 23rd Place, Lakewood, CO 80215
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (304) 622-9599
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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
45,802,042 common shares as of November 30, 2000
<PAGE>
I. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NELX, INC.
CONSOLIDATED BALANCE SHEET
<S> <C> <C>
November 30, May 31,
2000 2000
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ASSETS
CURRENT ASSETS
Cash $ 27,158 $ 1,521
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Total current assets 27,158 1,521
INVESTMENT IN UNDEVELOPED MINERAL LEASE,
net of accumulated amortization of $12,097 and $9,517, respectively 119,078 121,658
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Total assets $ 146,236 $ 123,179
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Settlement payable $ 24,254 $ 24,254
Advances from shareholder 52,150 66,650
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Total current liabilities 76,404 90,904
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STOCKHOLDERS' EQUITY
Common Stock $0.0001 par value, 500,000,000 shares
authorized, 45,802,042 issued and outstanding 4,580 4,580
Additional paid-in capital 7,718,330 7,718,330
Accumulated Deficit (7,653,078) (7,690,635)
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Total stockholders' equity 69,832 32,274
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Total liabilities and stockholders' equity $ 146,236 $ 123,178
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</TABLE>
See accompanying notes.
F-1
<PAGE>
<TABLE>
<CAPTION>
NELX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
November 30, November 30,
2000 1999 2000 1999
REVENUE $ - $ - $ - $ -
--------- ---- --------- ----
EXPENSES
General and administrative 15,198 4,467 16,513 5,416
Amortization 2,580 - 2,580 -
Interest - 500 - 500
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Total expenses 17,778 4,967 19,093 5,916
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NET INCOME (LOSS) $ 17,778 $ (4,967) ($ 19,093) $ (5,916)
========= ========= ========= =========
Extraordinary gain on sale of scurities 56,650 - 56,650 -
========= ========= ========= =========
Net income after extraordinary gain 38,872 - 37,557 -
BASIC AND DILUTIVE INCOME (LOSS) PER SHARE $ - $ - $ - $ -
==== ==== ==== ====
WEIGHTED AVERAGE SHARES OUTSTANDING 45,802,042 46,352,042 45,802,042 46,352,042
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
F-2
<PAGE>
<TABLE>
<CAPTION>
NELX, INC.
Consolidated Statement of Cash Flows
<S> <C> <C>
Six Months Ended
November 30,
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2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 37,557 $ (5,916)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Depreciation and amortization 2,580 -
Gain on sale of securities (56,650) -
Changes in operating assets and liabilities:
(Decrease) increase in accounts payable - (1,000)
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Net cash flows (used for) operating activities (16,513) (6,916)
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of securities 56,650 -
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Net cash from investing activities 56,650 -
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CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of advances from shareholder (14,500) 1,000
Sale of common stock - 7,500
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Net cash from (used for) financing activities (14,500) 8,500
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NET INCREASE (DECREASE) IN CASH 25,637 1,584
CASH AT BEGINNING OF PERIOD 1,521 254
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CASH AT END OF PERIOD $ 27,158 $ 1,838
========= ========
See accompanying notes.
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NELX, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C>
Common Stock Additional
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Paid-In Accumulated
Shares Amount Capital Deficit
--------------- ----------- --------------- ----------------
Balance, May 31, 2000 45,802,042 $ 4,580 $ 7,718,330 $ (7,690,635)
Net income - - - 37,557
----------- ------- ----------- ----------
Balance, November 30, 2000 45,802,042 $ 4,580 $ 7,718,330 $ (7,653,078)
=========== ======== ============ =============
</TABLE>
See accompanying notes.
F-4
<PAGE>
NELX, INC.
Notes to Condensed Consolidated Financial Statements
Note A - Organization and Business
NELX, INC. (the "Company") was incorporated in Kansas on March 25,
1983. As of November 30, 2000, the Company had no business operations.
Its principal asset is a leasehold interest in undeveloped mineral
spring in Arkansas. On July 26, 2000 the Company acquired all of the
stock of a West Virginia corporation in the business of producing
dimensional lumber, crossties and landscaping timber. As of November
3, 2000, the acquisition has not been consummated.
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-QSB and do not
include all the information and notes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all material adjustments, consisting of only
normal recurring adjustments considered necessary for a fair
presentation, have been included. These statements should be read in
conjunction with the financial statements and notes thereto included
in the Company's Form 10-KSB for the year ended May 31, 2000.
The financial statements include the accounts of Crystal Mountain
Water, Inc., a wholly owned subsidiary. All intercompany transactions
and balances have been eliminated.
The results of operations for the six months ended November 30, 2000
are not necessarily indicative of the results for the remainder of
fiscal 2001.
Note B - Earnings (Loss) Per Share
Basic earnings (loss) per share of common stock are computed using the
weighted average number of shares outstanding during each period plus
common equivalent shares (in periods in which they have a dilutive
effect).
Note C - Sale of Securities
During the second quarter of fiscal 2001, the Company sold all its
shares of common stock in a corporation which did not have any
carrying cost.
F-5
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED NOVEMBER 30, 2000 COMPARED
TO SAME PERIOD ENDED NOVEMBER 30, 1999
The Company has experienced $16,513 expenses for the six month period in 2000
and $5,916 for the six month period in 1999. The Company had no revenues in 2000
or 1999. The Company had a loss of ($19,093) on operations in the period in 2000
compared to a loss of ($5,916) in the same period in 1999. The Company had an
extraordinary gain on the sale of shares of a former subsidiary of $56,650 in
the period in 2000 which resulted in net income of $38,872 for the six month
period in 2000. Gain or loss per share for the periods in 2000 and 1999 were
less than $.01 in 2000 and ($.01) in 1999 in the period. The Company will
continue to have losses until adequate income can be achieved to meet expenses.
While the Company is seeking capital sources for investment; there is no
assurance that sources can be found.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED NOVEMBER 30, 2000 COMPARED TO
QUARTER ENDED NOVEMBER 30, 1999
The Company had no operating revenues in the quarter in 2000 or 1999. The
Company had a loss on operations of ($17,778) in the quarter in 2000 compared to
a loss on operations in the quarter in 1999 of ($4,967). The Company had an
extraordinary gain in the quarter of $56,650 on the sale of shares of a former
subsidiary, Mind2Market, Inc., which resulted in net income for the quarter of
$38,872, due to the extraordinary gain. Gain or loss per share in the period was
less than $.01 in 2000 and ($.01) in 1999.
LIQUIDITY AND CAPITAL RESOURCES
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The Company had $27,158 in cash capital at the end of the period and current
liabilities exceeded current assets by $49,247. The Company will be forced to
either borrow or make private placements of stock in order to fund operations.
No assurance exists as to the ability to achieve loans or make private
placements of stock.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT 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
Reports on Form 8-K were made for the period for which
this report is filed: October 10, 2000
<PAGE>
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.
Date: January 18, 2000
NELX, INC.
/s/ Charles L. Stout
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Charles L. Stout, President
