SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

     For the Fiscal Year Ended June 30, 1999 Commission file number 0-15148

                          SCIENTIFIC NRG, INCORPORATED
             (Exact name of registrant as specified in its charter)
                                    Minnesota
         (State or Other Jurisdiction of Incorporation or Organization)

                         4695 MacArthur Court, Suite 530
                         Newport Beach, California 92660
                    (Address of Principal Executive Offices)

                                   41- 1457271
                      (I.R.S. Employer Identification No.)

       Registrant's telephone number, including area code: (949) 833-2094

        Securities registered pursuant to Section 12(b) of the Act: None

 Securities registered pursuant to Section 12(g) of the Act: Common Stock,
                                  No Par Value

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]

         State issuer's revenues for its most recent fiscal year: $ -0-

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.(See definition of affiliate in Rule 12b-2 of the Exchange Act)
September 1, 1999: $430,375

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. At September 1, 1999, the registrant
had 32,023,897 shares of common stock, no par value, issued and outstanding.

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                                TABLE OF CONTENTS


                                                                           Page

                                     PART I

Item 1. Description of business...............................................3

Item 2. Description of property...............................................7

Item 3. Legal proceedings.....................................................7

Item 4. Submission of matters to a vote of security holders...................7

                                     PART II

Item 5. Market for common equity and related stockholder matters..............8

Item 6. Management's discussion and analysis..................................9

Item 7. Financial statements.................................................12

Item 8. Changes in and disagreements with accountants on
 Accounting and financial disclosure.........................................12

                                    PART III

Item 9. Directors, executive officers, promoters and control persons;
 Compliance with Section 16(a) of the Securities Exchange Act of 1934........13

Item 10. Executive compensation..............................................14

Item 11. Security ownership of certain beneficial owners and
 Management..................................................................15

Item 12. Certain relationships and related transactions......................16

Item 13. Exhibits and reports on form 8-K....................................17

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                                     PART I


ITEM 1.       DESCRIPTION OF BUSINESS
(a)  General  Scientific  NRG,   Incorporated  (the  "Company")  was  originally
incorporated in the State of Minnesota on May 20, 1983 as NRG, Inc. ("NRG").  In
April,  1986,  Scientific  Component  Systems,  Inc.,  a  Minnesota  corporation
(Scientific),   a   company   engaged   in   the   commercial   lighting   and
energy-efficient  lighting  conversion  business,  was  merged  into NRG and the
combined  entity changed its name to Scientific  NRG,  Incorporated  in December
1986.

On June 29, 1999 the Company  entered  into an  agreement to sell the assets and
current lighting business acquired from Scientific.  Effective June 30, 1999 the
Company  acquired  substantially  all of the  assets  of NuVen  Capital  Limited
Partnership,  a Nevada limited partnership (NuVen Capital), and simultaneously
adopted a new business plan focused on investing in and acquiring businesses and
business interests with a view to assisting such businesses in expanding through
further  acquisitions  and internal  development.

Operating  decisions  for  the  Company's  various  businesses  are  made by the
management of the respective business units.  Investment decisions and all other
capital  allocation  decisions  for the  Company  as a whole are made by Fred G.
Luke, in consultation with  professional  advisors for Mr. Luke and the Company.
Mr. Luke is Chairman and President of the Company.

(b) Business Development

The Company was originally organized as a "blank-check"  company for the purpose
of  acquiring  or merging  into an  operating  business.  In 1986,  the  Company
acquired the business of Scientific and, until June 1999, designed, manufactured
and  marketed  custom  energy  efficient lighting  products  utilizing  compact
fluorescent lamp technology  primarily  within the United States.  The Company's
principal products were energy efficient, compact fluorescent downlight fixtures
primarily for the commercial downlight canister retrofit market.

On June 30, 1999 pursuant to the  authorization  given to the Board of Directors
at a stockholders meeting held on August 15, 1998, the Company executed an Asset
Purchase  Agreement (the  "Scientific  Agreement")  for the sale of its lighting
business  to a former  employee  of the  Company  - See  Notes to the  Financial
Statements.

Following the Scientific  Agreement,  the Company entered into an Asset Purchase
Agreement  with NuVen  Capital  (the  "NuVen  Agreement")  whereby  the  Company
acquired  the  assets of NuVen  Capital  with a book value of  $10,894,729  (the
"NuVen Assets") in exchange for 22,344,652  shares of the Company's no par value
common  stock.  As a result of this  transaction,  NuVen  Capital  acquired  80%
control of the Company.

Following  the purchase of the NuVen  Assets,  the Company  changed its business
from the  manufacturing and distribution of lighting systems to become a holding
company  which  acquires,  invests  in  and  expands  businesses,  and  provides
financial  and  management  service to such  businesses.  This new business plan
focuses on making acquisitions of or investments in what management considers to
be businesses which present the greatest opportunities for growth. The Company's
primary interest is in the leisure and
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entertainment,  communications  (including  the Internet),  financial  services,
natural resources and consumer goods industries.

The Company's current business  strategy is to provide  management and strategic
business  acquisitions,  and locate or when possible,  working capital to expand
and grow the investments and business interests acquired. The Company intends to
initially  concentrate its resources  developing the  investments  acquired from
NuVen  Capital,  and  in  the  future  to  identify  additional  businesses,  or
"turn-around" opportunities,  where management believes the Company can make the
acquisition or investment at a reasonable  price,  enhance valuation and provide
its resources to grow each of the subject businesses.

(c)  Description of Business

Through  June 1999,  the Company  historically  operated as a  manufacturer  and
distributor  of lighting  systems.  At the end of its fiscal year ended June 30,
1999,  the Company sold its  lighting  system  business and embarked  upon a new
business focused on investing in, acquiring and developing business interests in
selected industries.

The  Company  presently  intends  to act as a holding  company  owning  business
interests and subsidiaries  engaged in a number of diverse business  activities,
the most  prominent  of which,  currently,  are the  leisure  and  entertainment
industry and the  communications  industry,  with a  particular  emphasis on the
Internet- related businesses. Additionally, through the acquisition of the NuVen
Assets,  the Company  owns  interests in an upscale  youth and wome's  clothing
brand, various equity investments in inactive,  publicly held corporations which
have recently sold or wound-down their  historical  businesses and are presently
looking  for new  business  opportunities  to acquire,  merge into or  otherwise
participate in the development and future growth of such opportunities.

     Former Lighting Business

     Principal Products

Prior  to June  1999  and  the  sale of its'  lighting  business  the  Company's
principal product was the "X-18 Series" of energy-efficient  light fixtures. The
X-18  Series is  patented  and  UL-approved,  and was  offered by the Company in
several   configurations   suitable  for   downlighting,   track   lighting  and
surface-mounted  illumination  for retrofit  installation  and new  construction
applications.  The X-18  Series  used a  fluorescent  PL Lamp  developed  by the
Phillips  Corporation and integrated one or two compact PL lamps with an energy-
efficient housing in a product designed to replace incandescent lamps.

     Competitive Business Conditions

The lighting business was highly  competitive.  Companies that sold alternatives
to the Company's  products  included Janmar,  Lumatech,  Techtron,  Enertron and
Progressive  Technologies,  Inc. Most competitors carried a broader product line
than the  Company,  and Janmar,  a direct  competitor,  marketed a fixture  very
similar to the Company's best selling product under a license agreement from the
Company  which did not  require  payment of license  fees.  In  addition,  major
lighting  fixture   companies  such  as  Hubbel,   Lightolier,   Juno  and  Halo
manufactured  fixtures  using the compact  fluorescent  lamp  technology  almost
exclusively in the new construction  market,  as opposed to the retrofit market.
The new construction  market has  historically  constituted less than 15% of the
Company's sales.


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     Environmental Compliance

With the recent sale of its lighting  business  the Company does not  anticipate
that any  material  capital  expenditures  will be  required  for  environmental
compliance, or to comply with OSHA standards.

     Current Business Development and Investment Activities

     Leisure and Entertainment Industry

Thru its acquisition of the NuVen Assets,  the Company became the single largest
voting shareholder of NuOasis Resorts,  Inc., a publicly-held Nevada corporation
("NuOasis") which, thru various foreign  subsidiaries,  owns interests in gaming
casinos and hotels,  provides  casino and hotel  management  services,  and food
manufacturing and distribution.  NuOasis and its subsidiaries are active both in
the United States and  internationally.  The most  important  business  activity
conducted  by  NuOasis  is  conducted  thru a number of  subsidiaries  including
Cleopatra Palace Resorts and Casinos Limited a British subsidiary ("CPR"), which
operates  the LePalace  Hotel and Resort in Tunisia,  North Africa and has other
resort casino gaming  interests  outside of the United States.  Another  NuOasis
subsidiary,  Oasis Resorts International Inc. also owns and is in the process of
developing a destination  resort hotel and casino in the United States, in Oasis
Nevada near Wendover, Nevada.

The Company's  management intends to continue to evaluate possible expansion and
acquisition opportunites in both the domestic and international hotel and casino
gaming  markets as well as  internet  gaming and other  forms of  entertainment.
These  opportunities  may include the  ownership,  management  and  operation of
facilities  within or outside  the United  States.  These  opportunities  may be
undertaken solely thru  subsidiaries of the Company,  its subsidiaries and third
parties,  and  will be  subject  to the  Company  or its  respective  subsidiary
obtaining adequate financing to participate in such opportunities.

At the present time the  Company's  management  is  evaluating  other  potential
expansion  opportunities and sources of working capital and expansion  financing
for its leisure and  entertainment-related  investments and business  interests.
However,  as of the  date of this  report,  the  Company  has  not  entered  any
agreements  to make further  acquisitions  of or  investments  in other hotel or
gaming projects,  nor has it received financing  commitments for future projects
or funding of its present financing  commitment related to the completion of its
Cleopatra-Themed projects in North Africa and Europe.

     Communications Industry

Through its subsidiaries and equity investments,  the Company intends to develop
and  market a  variety  of  communication  and  Internet  related  products  and
services, as well as software  technologies.  These industries are characterized
by rapid technological development. The Company believes that its future success
will  depend in large  part on its  ability to  provide  capital to its  present
subsidiaries and enhance the products and services of the Company and to develop
or acquire other products and services which complement  existing ones. In order
to respond to rapidly changing  competitive and  technological  conditions,  the
Company  expects to focus on  acquisitions  of  minority  interests  in existing
businesses  with  development-stage  technology or niche market or invest in new
products through joint ventures with industry known entities.

     Non Entertainment or Communications Industry Segments

As part of the  acquisition  of the NuVen Assets the Company  acquired  minority
interests  and equity  ownership  interests in  development-stage  publicly-held
companies and Yes Licensing Partners LLC, a
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Nevada limited liability company ("YLP"). The industry segments in which YLP and
the various  publicly-  held  companies  are  presently  involved,  or intend to
pursue,  are financial  services,  natural  resource  development and brand-name
clothing licensing.

     Financial Services Industry

The Company's  present  management has experience in providing  traditional  and
creative  financing  solutions  to  development-state   enterprises  and  mature
companies seeking expansion capital. The Company intends to seek out and acquire
or  invest  in  companies  which  presently  offer  certain  financial  services
worldwide,  including  but not  limited to debt  financing,  equipment  leasing,
investment and merchant banking,  merger and acquisition services, and "workout"
firms also specializing in corporate reorganizations and financial restructuring
including "global debt swaps." To date the Company has not made any acquisitions
of or investments in any financial service-related  businesses, but has provided
management and financing for the business interests acquired from NuVen Capital.

   Brand Name Clothing Licensing

The Company owns fifty percent (50%) of YLP. YLP owns certain  clothing  brands,
one of which - YES - was  identified  in 1997 as the  eighth  most  recognized
brand name in  women's  clothing.  Through  YLP the  Company  intends to solicit
licenses for all of its exclusive  "YES"-related  brands,  each in approximately
twenty (20) clothing  categories.  Additionally,  the Company  intends to search
for, identify, acquire and license other brand names in the area of clothing and
other consumer products.

Through YIP the Company  intends to enter and develop the  business of marketing
and  licensing  trademarks,  and other  brands it may  develop or acquire in the
future.  The  Company  intends to market its brands and  trademarks  utilizing a
direct  retail  licensing  strategy  premised on the  proposition  that in North
America  nearly all  aspects of the  moderately  priced  apparel,  footwear  and
accessories business can be sourced most effectively by large retailers, who not
only command  significant  economies of scale,  but also interact daily with the
end consumer. In addition, the Company believes that retailers,  in general, may
be able to obtain  higher gross  margins on sales and increase  store traffic by
directly  sourcing,  stocking  and  selling  licensed  products  bearing  widely
recognized brand names, such as the Company's  YES-related  brands, than through
carrying  strictly  private  label  goods or branded  product  from  third-party
vendors. The Company's strategy is to capitalize on these ideas by licensing its
portfolio of brands  primarily  directly to strong and growing  retailers,  who,
working in conjunction with Company.

     Natural Resources Industry

The Company's present management has extensive experience in the area of natural
resource  financing and  development,  and management  believes that the natural
resource industry today is a candidate for  "consolidation." The Company intends
to acquire established local or regional natural resource businesses and combine
and integrate them into an effective national organization. The Company believes
that its operating and  acquisition  expertise,  address the financial  needs of
most small to medium-sized natural resource companies, together with its ability
to  support  the  needs of  management,  will  allow it to  achieve  its goal of
effecting an efficient  consolidation of this industry.

In order to  achieve  its goal,  the  Company  will  focus on:  (1)  identifying
acquisition  candidates  which meet the Company's  consolidation  criteria;  (2)
attracting and acquiring  companies through  marketing the Company's  management
and financial  services which the Company  believes will  differentiate  ti from
other consolidators;  and (3) achieving operating  efficiencies and synergies by
combining administrative functions,

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and eliminating redundant facilities with its own corporate resources.

To date,  the  Company's  efforts to effect  the  consolidation  of the  natural
resource  industry have  consisted of  organizational  activities,  research and
analysis with respect to industry consolidations and acquisition  opportunities,
efforts to refine the Company's business strategy, and meetings and negotiations
with potential acquisition candidates.

     Employees

As of September 1, 1999 the Company had two (2)  employees who are also officers
and directors of the Company.

This report may contain forward-looking  statements,  which can be identified by
the  sue  of  forward-looking  terminology  such  as  "may,"  "will,"  "expect,"
"intend,"  "plans,"  "anticipate,"  "estimate"  or  "continue"  or the  negative
thereof or other  variations  thereon or  comparable  terminology.  The  matters
described  herein and certain other factors noted  throughout this report and in
any  exhibits  to this  report  of  which  this  report  is a  part,  constitute
cautionary  statements  identifying  important  factors with respect to any such
forward-looking  statements  identifying  important  factors with respect to any
such forward-looking  statements,  in including certain risks and uncertainties,
that  could  cause  actual  results  to differ  materially,  from  those in such
forward- looking statements.


ITEM 2.       DESCRIPTION OF PROPERTY

From July 1, 1996,  through June 30, 1999, the Company maintained its operations
in  Glendora,  California,  in a facility  which was owned and operated by Parke
Industries,  Inc.  ("Parke"),  formerly an affiliated  company.  The Company and
Parke,  which also operated in the  commercial  lighting  industry,  also shared
certain officers and directors.

On June 30, 1999, the Company  relocated its executive offices to 4695 MacArthur
Court, Suite 530, Newport Beach, California 92660, where its telephone number is
(949)833-2094.  The Company occupies this facility under a month to month rental
agreement with NuVen Advisors, Inc. ("Advisors"), an affiliate of NuVen Capital,
at the rate of $500 per month.


ITEM 3.       LEGAL PROCEEDINGS

There are no material  legal  proceedings  to which the Company is a party or to
which any of the Company's properties are subject.


ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

No matter was submitted  during the fourth quarter of the fiscal year covered by
this report to a vote of security  holders,  through the solicitation of proxies
or otherwise.



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                                                                   PART II

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(a)  Market Information

The Company's  common stock trades on the NASDAQ OTC Bulletin  Board.  The named
pink sheet market  makers in the Company's  stock,  as reflected by the National
Quotation  Bureau in Jersey City,  New Jersey,  are Miller - Schroeder,  Paragon
Capital Corporation,  Wein Securities and Sharp Securities.  The following table
sets forth the range of high and low  reported  sales for the common  stock from
August 27, 1997 through June 30, 1999:

<TABLE>
<CAPTION>

                                                          Sales Price of Common Stock
<S>                                                       <C>              <C>
Fiscal 1999                                               High             Low
Quarter ended 06/30/99                                    $    .06         $    .04
Quarter ended 03/31/99                                    $    .10         $    .03
Quarter ended 12/31/98                                    $    .10         $    .062
Quarter ended 09/30/98                                    $    .093        $    .093

Fiscal 1998                                               High             Low
Quarter ended 06/30/98                                    $    .312        $    .093
Quarter ended 03/31/98                                    $    .375        $    .125
Quarter ended 12/31/97                                    $    .25         $    .125
Quarter ended 09/30/97                                    $    .312        $    .25
</TABLE>

The above prices were  obtained  from the National  Quotation  Bureau,  Inc. The
prices shown in the above table represent inter-dealer quotations without retail
mark-up,  mark-down or  commission,  and may not  necessarily  represent  actual
transactions.  There were no reported trades for the period July 1, 1996 through
August 28,  1997.  At June 30,  1999,  there were no  broker-dealers  publishing
quotes for the common stock.

(b)   Holders

As of June 30,  1999,  there  were  approximately  760  holders of record of the
Company's  common stock.  The transfer  agent for the Company is American  Stock
Transfer and Trust of New York, New York.

(c)    Dividends

The Company has never paid any cash dividends and intends during the foreseeable
future to retain any  earnings  to finance  the growth of its  business.  Future
dividend  policy will be determined by the  Company's  Board of Directors  based
upon such  considerations  as the Company's  earnings and  financial  condition,
business  conditions,  and  other  factors  as the Board of  Directors  may deem
relevant.






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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis should be read together with the financial
statements and notes thereto included elsewhere herein.

Overview  and  Recent  Developments

Through  June 30,  1999,  the Company was  primarily  engaged in the  commercial
lighting business.  It's products were designed to retrofit existing inefficient
commercial light fixtures to use  energy-efficient  flourescent lighting reduced
energy  consumption  significantly.  The Company's  operations  were  sustaining
continued  losses,  and on August 12,  1998,  the Board of  Directors  adopted a
formal plan to  discontinue  their  commercial  lighting  business  and seek new
opportunities.  In June 1999,  the Company sold all of the assets related to its
commercial  lighting  business to a former employee for $50,000 realizing a loss
of $30,363.

On June 30,  1999,  the Company  completed  the asset  purchase  agreement  (the
"Agreement") with NuVen,  which resulted in the Company acquiring certain assets
of NuVen, in exchange for 22,344,652 shares of the Compan's common stock valued
at  $10,090,793,  based  the  estimated  fair  value  of the  underlying  assets
acquired.  No liabilities were assumed in this transaction.  The assets obtained
by the Company  consisted of certain  receivables,  primarily  from  affiliates,
totaling  $403,200,  net of  allowances;  the  investment  in  NuOasis  Series D
Convertible  Preferred  Stock  totaling  $8,000,000;  marketable  securities  in
affiliates totaling $1,136,556;  and other non-current assets totaling $551,037.
As a result of this  transaction,  NuVen  obtained  control of the Company.  The
assets  acquired  were  accounted  for at  historical  bases  in the  form  of a
recapitalization of the Company.

Assets Acquired under the Agreement

During 1993, NuOasis designated a Series D voting,  convertible  preferred stock
(the "NuOasis Preferred").  The NuOasis Preferred consists of 24,000,000 shares,
which were issued to NuVen in exchange  for the  investment  securities  with an
estimated market value,  based upon independent legal and valuation  opinions at
the time, discounted  approximately 50% at the date of transfer, or $10,000,000.
In connection with the asset purchase agreement with NuVen, the Company acquired
19,200,000 shares of NuOasis Preferred on June 30, 1999 with a carrying value of
$8,000,000.  The NuOasis  Preferred is  redeemable,  in whole or in part, at the
option of the Board of Directors,  at any time,  at a redemption  price of up to
$24,000,000;  there is  currently  no intent of the Board of Directors to redeem
the  NuOasis  Preferred  due to  liquidity  issues.  The  Preferred  NuOasis  is
convertible, at the option of the holder, into shares of NuOasis common stock at
an exchange rate of .41667 per share, or convertible into shares having a market
value at the time of such  conversion  of $0.41667  per share.  Market  value is
determined based on 50% of the closing bid price for 30 days preceding notice of
conversion.  Assuming the  conversion had occurred on June 30, 1999, the Company
would be entitled to approximately  396 million shares of NuOasis,  and ultimate
control of this entity.  The right to convert the NuOasis  Preferred  expires on
December 31, 2001. Management of the Company has no plans to convert the NuOasis
Preferred due to the  substantial  dilution that  conversion will cause existing
common shareholders.  The Company's voting rights provided for under the NuOasis
Preferred,  representing  approximately  [30%] of the  common  stock  vote.  The
Company  currently  has no right to the earnings and losses of NuOasis as do the
common shareholders of NuOasis (see below).

On October 4, 1999, the Company  obtained an  independent  appraisal of the fair
value of the  NuOasis  Preferred.  The  estimated  fair  market  value was $10.9
million, based on the fair value of the underlying

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<PAGE>


common stock of NuOasis. Since the Company is required to record the asset using
the predecessor's basis,  management recorded the investment at $8,000,000.  The
Company  accounts for this  investment  under the cost method as required  under
Accounting  Principles Board Opinion No. 18 ("APB 18"),  paragraph 18. Under APB
18, the Company  does not share in the  earnings  and losses of  NuOasis,  as do
common stock holders under the equity method of accounting for investments.  The
NuOasis  Preferred is designated as a common stock  equivalent,  therefore,  the
accompanying  financial  statements do not reflect the earnings and losses under
the equity method.  APB Opinion No. 15, "Earnings per Share,"  defines a common
stock equivalent,  among others, as a convertible security, which at the time of
issuance  has  terms  that  make it for  all  practical  purposes  substantially
equivalent to a common stock.

In connection with the asset purchase agreement with NuVen, the Company acquired
equity  investments  consisting  of common  stock of Virtual  Enterprises,  Inc.
("VEI"),   Hartcourt   Industries,   Inc.   ("Hartcourt")   and  Oasis   Resorts
International, Inc. ("Oasis"), as well as investments carried at cost consisting
of  common  stock  of  Hart  Industries,  Inc.  ("Hart"),   Diversified  Land  &
Exploration  Company  ("Diversified")  and Yes Clothing Co. ("YES").  The common
stock of VEI,  Hartcourt,  Oasis and YES are traded on the OTC Bulletin Board of
the NASD. VEI,  Hartcourt,  and Oasis  investments in common stock are accounted
for as marketable  securities as defined under The Company owns less than 10% of
the outstanding common stock of all these companies,  except for YES. Due to the
relative  insignificant  value of such investment,  the Company will record this
investment under the cost method.

Marketable Securities

Marketable  securities  are accounted  for under the  provisions of Statement of
Financial  Accounting  Standards  ("SFAS")  No.  115,  "Accounting  for  Certain
Investments in Debt and Equity Securities.  The Compan's short-term investments
consisted  solely of  marketable  equity  securities,  which were  classified as
"available-for-sale"  in  accordance  with the  provisions of SFAS No. 115. Such
investments  are presented as current assets and carried at their estimated fair
values in the accompanying financial statements. Unrealized gains and losses are
excluded  from net  income  (loss)  and  reported  as a  separate  component  of
shareholders' equity (deficit), net of related deferred taxes and as a component
of comprehensive income.

Subsequent to June 30, 1999, the Company has  experienced  declines in the value
of VEI and Oasis by as much as 50%.  Management does not believe that the assets
are  permanently  impaired,  and such  unrealized  losses will be reflected as a
reduction  in  stockholders'  equity and other  comprehensive  income  (loss) as
defined under SFAS 130.

Receivables From Affiliates

Receivables from affiliates  represent  non-interest bearing amounts acquired in
connection with the Agreement with NuVen in gross amounts aggregating  $765,792.
Of  this  amount,   $652,364  is  due  from  certain  affiliated  companies  and
approximately  $113,428  is due from an officer  of the  Company.  This  officer
repaid the receivable  totaling $113,428 after June 30, 1999.  Management deemed
that approximately 50% of the receivables were uncollectible. To ensure that the
Company  would at least  realize 50% of the  receivables,  one of the  Company's
principals guaranteed payment of $382,896.

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations

As the result of the above  transactions,  the Company  presented  its  lighting
business as discontinued in the attached financial statements.  Thus, continuing
operations for the fiscal years 1999 and 1998, were

                                                            [SNRG\10-KSB:63099]7

                                       10

<PAGE>


comprised only of the costs and expenses related to the Asset Purchase agreement
with  NuVen  Capital.  The  new  business  strategy  of the  Company  is to make
acquisitions  of or  investments in what  management  considers to be businesses
which   present  the   greatest   opportunities   for   growth:   entertainment,
communications(including  the Internet),  financial services,  natural resources
and consumer goods.

Results of Operations

Year Ended June 30, 1999 Compared to Year Ended June 30, 1998

Continuing Operations

As a result  of the asset  acquisition  in June  1999,  there  were no  revenues
generated  from  continuing   operations   during  fiscal  1999  and  1998  and,
consequently, no operating revenues or cost of revenues were recorded.

Additionally, as the asset acquisition was only completed in June 1999, the only
continuing  costs  recorded  were those which related to the Agreement and legal
services  during  the  year.  These  costs  comprised  substantially  all of the
$362,182 of expenses,  of which $303,447  represented the value of the 2,793,082
common  shares  issued  to Mr.  Fred  Luke,  the  new  CEO of the  Company  as a
transaction fee and 1,000,000 common shares issued to Mr. John Forgy, the former
President of the Company as a finders fee in connection with the Agreement.  The
shares  paid were  valued at $.08 per share which was the rolling 30 day average
trading price of the common shares of the Company following the acquisition.

Discontinued Operations

Revenues from  discontinued  operations were $406,000 in fiscal 1999 as compared
to  $422,000 in fiscal  1998.  Cost of goods sold were 67% of revenues in fiscal
1999 a reduction of 14% from the 81% recorded in fiscal 1998 due to an effort by
management  to reduce  costs.  Selling  general  and  administrative  costs were
$193,000 in fiscal 1999 as compared to $262,000 in fiscal 1998,  again due to an
effort to streamline expenses.

Liquidity and Capital Resources

As of June 30, 1999, the Company had a positive  working capital of $1.4 million
primarily  due to the  assets  acquired  in the  acquisition  on June 30,  1999.
Management believes that the Company's working capital is sufficient to meet the
operating  needs  for  next 12  months.  Subsequent  to year  end,  the  Company
collected   approximately   $280,000  from  receivables   from  affiliates;   no
liquidations of marketable securities were made subsequent to year end.

Certain of the Company's assets are valued based on independent  appraisals,  as
well as estimates by the Company's  Board of Directors.  Valuations by the Board
of Directors are based on estimates,  and those estimates may materially  differ
from actual values which may realized upon sale,  liquidation or exchange.  Such
assets are subject to changes in market conditions, and accordingly, their value
is subject to  significant  volatility.  In the event market  conditions  change
adversely,  the carrying  value of these assets could have a material  impact on
the Company's financial condition, results of operations and cash flows.

The Registrant has no commitments for capital  expenditures or additional equity
or debt financing.

                                                            [SNRG\10-KSB:63099]7

                                       11

<PAGE>


Year 2000

Many computer systems used today may be unable to interpret data correctly after
December  31, 1999  because they allow only two digits to indicate the year in a
date. The Company and its subsidiaries  have been engaged in assessing this Year
2000  issue  as it  relates  to their  businesses,  including  their  electronic
interactions with banks,  vendors,  customers,  and others. This project,  along
with  developing  and  implementing   solutions  to  the  year  2000  issue,  is
continuing.   Management   currently   anticipates  that  the  project  will  be
substantially  completed  well in  advance  of year  end  1999,  and not  have a
material impact on the Company's consolidated financial results or position. The
Company's consolidated financial results could also be adversely affected if one
or more of the companies in which it has material  investments  were  materially
adversely affected by the Year 2000 issue.


ITEM 7.        FINANCIAL STATEMENTS

The Company's audited financial statements are referred to in Item 13(a), listed
in the Index to Financial  statements and included elsewhere herein as a part of
this Annual Report on Form 10-KSB.


ITEM 8.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE.

As previously reported,  on July 21, 1999, the accounting firm of Corbin & Wertz
was  replaced  as  the  Registrant's  independent  accountant.  Corbin  &  Wertz
previously  issued a report  dated  August 3, 1998,  which was  unqualified  but
modified as to the uncertainity of the Company's  ability to continue as a going
concern.  There  were no  disagreements  with  Corbin & Wertz on any  matter  of
accounting  principles or practices,  financial statement disclosure or auditing
scope or procedure  during the two year period prior covered by their report and
subsequently through July 21, 1999.

On July 21, 1999,  the  accounting  firm of McKennon,  Wilson & Morgan,  LLP was
engaged to conduct the audit of the Company's financial  statements for the year
ended June 30, 1999.

The decision to replace the accounting  firm of Corbin and Wertz was made by the
Board of Directors.  At the present time the Board of Directors does not have an
audit committee.

                                                            [SNRG\10-KSB:63099]7

                                       12

<PAGE>


                                    PART III

ITEM 9.        DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
               COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Fred G. Luke.  Mr.  Luke has been  Chairman  of the Board and  President  of the
Company since June, 1999. Mr. Luke has over twenty-nine (29) years of experience
in domestic and  international  financing  and the  management  of privately and
publicly held companies.  Since 1982, Mr. Luke has provided  consulting services
and has served,  for brief periods lasting usually not more than six months,  as
Chief Executive  Officer and/or  Chairman of the Board of various  publicly held
and privately held  companies in  conjunction  with such financial and corporate
restructuring  services.  In addition to his position with the Company, Mr. Luke
currently  serves as Chairman and Chief  Executive  Officer of NuOasis  Resorts,
Inc.,  (formerly,  Nona Morelli's II, Inc.)  ("NuOasis  Resorts"),  Chairman and
former President of Group V Corporation (formerly, NuOasis Gaming, Inc.) ("Group
V"), Chairman and President of NuVen Advisors, Inc., formerly New World Capital,
Inc.  ("NuVen  Advisors"),  Chairman  and  President  of Hart  Industries,  Inc.
"Hart"),  and Chairman and  President of  Diversified  Land &  Exploration  Co.
"DL&E").  DL&E is a publicly traded  independent  natural resource  development
company engaged in domestic oil and gas exploration, development and production.
Prior to 1995, DL&E was a 90% owned subsidiary of Basic Natural Resources,  Inc.
("BNR"). From 1991 through 1994, Mr. Luke served as the President and a Director
of BNR. Hart was formerly in the environmental services business,  respectively.
Hart is a public company which was formerly traded on NASDAQ or the OTC Bulletin
Board. Hart does not have ongoing operations.  NuOasis is a publicly traded (OTC
Bulletin  Board)  diversified  holding company with overseas gaming and domestic
pasta production subsidiaries.  NuVen Advisors provides managerial,  acquisition
and  administrative  services  to public and  private  companies  including  the
Company,  NuOasis  and Hart  pursuant to  independent  Advisory  and  Management
Agreements.  NuVen Advisors,  which is controlled by Fred G. Luke, as Trustee of
the Luke Family  Trust,  is an  affiliate of the  Company.  NuVen  Advisors is a
stockholder  of Hart,  DL&E  and  NuOasis,  and  beneficial  stockholder  of the
Company.  Mr. Luke also served from 1973  through  1985 as President of American
Energy  Corporation,  a  privately  held  oil and gas  company  involved  in the
operation  of domestic oil and gas  properties.  From 1970 through 1985 Mr. Luke
served as an officer and Director of Eurasia,  Inc., a private equipment leasing
company  specializing  in oil and gas industry  equipment.  Mr. Luke  received a
Bachelor of Arts Degree in Mathematics  from California  State  University,  San
Jose in 1969.

Jon L.  Lawver.  Mr. Jon L.  Lawver  has been  Secretary  and a Director  of the
Registrant  since June, 1999. Mr. Lawver has twenty-two (22) years of experience
in the area of bank  financing  where he has assisted  medium size companies ($5
million to $15 million) by providing expertise in documentation  preparation and
locating  financing  for  expansion  requirements.  Mr.  Lawver was with Bank of
America from 1961 to 1970,  ending his  employment as Vice President and Manager
of one of its branches.  From 1970 to present Mr. Lawver has served as President
and a Director of J.L. Lawver Corp., a financial consulting firm. Since 1988 Mr.
Lawver has served as  President  and a Director  of Eurasia,  a private  finance
equipment leasing company  specializing in oil and gas industry  equipment.  Mr.
Lawver  also  serves  as  an  executive  officer  of  Fantastic  Foods,  Inc.  a
wholly-owned subsidiary of NuOasis, Resorts, Inc..

Oliver K. Washburn, 71, resigned as Director and Treasurer of Registrant on June
30, 1999 and is the former  President  and  co-owner  of Washburn  Laboratories,
Inc., a St. Paul-based manufacturer of advertising specialty products from which
he retired in 1984.  Mr.  Washburn  holds a Bachelor of  Mechanical  Engineering
degree from the University of Minnesota.



                                                            [SNRG\10-KSB:63099]7

                                       13

<PAGE>


Daniel W.  Parke,  44,  resigned  as  Director  and Chief  Executive  Officer of
Registrant on June 30, 1999 and is the previous owner of Parke Industries,  Inc.
Parke  manages  annual  sales of over $20 million of energy  efficient  lighting
products and services.  Parke has eight divisions covering the United States and
is  considered a leader in marketing  energy  efficient  products and  solutions
since 1984.  Mr.  Parke holds a Bachelor of Business  Administration  from Azusa
Pacific University.

Jonathan  D.  Forgy,  45,resigned  as Director  and Chief  Executive  Officer of
Registrant on June 30, 1999 and is the CFO of Parke Industries since 1993. Prior
to joining  Parke  Industries,  Mr.  Forgy was a tax partner in a CPA firm.  Mr.
Forgy's  experience  includes  over 15 years of business  consulting  along with
practical  experience in the delivery of energy efficient  solutions.  Mr. Forgy
holds a dual  Bachelor  of  Business  (Accounting  and  Finance)  and a M.S.  in
Taxation from Golden Gate University.

Richard  O. Weed , 37,  resigned  as  Director  on June 30,  1999 and is Special
Project Counsel with Archer & Weed in Newport Beach,  California.  Archer & Weed
provides advice on capital  formation,  business strategy and legal matters on a
special  project  basis.  Mr.  Weed is known  for  using  analytical  firepower,
creative problem solving and resourceful  implementation to assist clients.  Mr.
Weed's  abilities are the result of his association  with prominent law firms in
California and Texas and graduate business education. Mr. Weed received a Master
of  Business  Administration  -  International   Management  in  1992  from  the
University  of  Southern  California,  Juris  Doctor  in 1987  from  St.  Mary's
University   School  of  Law,   and  Bachelor  of  Business   Administration   -
International  Business in 1984 from The University of Texas at Austin. Mr. Weed
is a member of the State Bar of California and State Bar of Texas.

John  Tastad , 32,  resigned  as  Director  on June 30,  1999 and is the  former
President and Owner of Energy  Solutions  Incorporated  (ESI),  a St. Paul based
energy services company with offices nationwide. Mr. Tastad sold ESI to Northern
States Power Company in 1997. Currently, Mr. Tastad serves as President of Pulse
Products,  Inc., a major  manufacturers  representative  firm,  and Funcepts,  a
start-up indoor family  entertainment  business.  Mr. Tastad holds a Bachelor of
Business (Marketing) from Bethel College.


ITEM 10.       EXECUTIVE COMPENSATION

The following table summarizes the  compensation  paid or accrued by the Company
during  each of the years in the three year  period  ended June 30, 1999 to that
person who, as of the applicable  year ended,  was the Company's Chief Executive
Officer or  President.  There were no officers or  Directors  of the Company who
received more than $100,000 of total compensation.  At June 30, 1999, there were
no written employment agreements with any employee of the Company.

                       TABLE 1. SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                                Restricted    Securities
                                                 Other Annual   Stock         Underlying      LTIP     All Other
      Name and         Fiscal   Salary   Bonus   Compensation   Awards        Options/SAR's   Payouts  Compensation
<S>                       <C>   <C>      <C>     <C>            <C>           <C>             <C>      <C>
Principal Position        Year  ($)      ($)     ($)            ($)           (#)             ($)      ($)
Daniel W. Parke           1999   12,000
(Former CEO)              1998   24,000
                          1997
Jonathan D. Forgy         1999   48,000
(President)               1998   48,000
                          1997
</TABLE>
                                       14
<PAGE>

The following table sets forth certain information with respect to stock options
held as of June 30,  1999 by  former  executive  officers  of the  Company.  All
options are exercisable at the price indicated and none have been exercised.  At
June 30, 1999, Mr. Fred G. Luke was the only member of executive management with
outstanding stock options.

<TABLE>
<CAPTION>

                                       Number of      Exercise or      Expiration
Name                                   Options        Price/Share      Date
<S>                                    <C>            <C>              <C>
Daniel W. Parke, Former CEO            300,000        $0.20            September 30, 2005
Jonathan D. Forgy  Former President    100,000        $0.20            September 30, 2005
Fred G. Luke, President and CEO        1,505,471      $0.07            December 31, 2004
</TABLE>

There were no  Options/SARs  exercised  in the last fiscal year and there are no
Options/SARs  outstanding  with  regard  to  Named  Executive  Officers  who are
required to be included in this  table,  and there were no  long-term  incentive
plan awards made by the Company in the last fiscal year.

Compensation of Directors

No  Director  receives  compensation  for  services  on the  Board or for  Board
meetings attended.


ITEM 11.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
               MANAGEMENT.

The following  table,  based upon figures  obtained from the Company's  transfer
agent,  sets forth  certain  information  as of June 30,  1999  relating  to the
beneficial  ownership of the Company's  common stock by (i) all persons known by
the Company to beneficially  own more than 5% of the  outstanding  shares of the
Company's  stock,  (ii) each  director of the Company and (iii) all officers and
directors  of the  Company  as a group.  As of June 30,  1999  the  Company  had
27,930,815 shares of its common stock issued or issuable and outstanding.


                                                 Amount and
                                                 Nature of
    Name and Address of                          Beneficial       Percent of
    Beneficial Owner                             Ownership        Class
---------------------------------              -------------     -----------
Beneficial owners of 5%
or more of common stock:
  NuVen Capital,L.P.(1)
  4695 MacArthur Court, Suite 530
  Newport Beach, California 92660                 22,344,652         69.8

  Fred G. Luke(2)
  4695 MacArthur Court, Suite 530
  Newport Beach, California 92660                  2,793,082          8.7

  All officers and directors as a group (Two)     25,137,735         78.5


                                     15
<PAGE>

(1)  The Luke Family Trust (the "Luke  Trust")  owns 93% of NuVen  Advisors,
     formerly  New  World.  Fred  G.  Luke,  as  Co-Trustee  of the  Luke  Trust
     determines  the voting of such shares  and,  as a result,  may be deemed to
     control the Luke Trust.

(2)  Excludes 1,505,471 common shares exercisable by Mr.Fred Luke under a stock
     option.

ITEM 12.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the last two years the Company did not enter into any  transactions  that
require disclosure under Item 404 of Regulation S-B except the following:

On August 12, 1998, the Company entered into an Advisory Agreement with Mr. Fred
G. Luke and NuVen Advisors, Inc., whereas Mr. Luke and NuVen Advisors, Inc. were
to advise and assist the  Company  in  acquiring  or merging  with a new line of
business or company.

On August 17, 1999,  Mr. Fred G. Luke,  the new President and CEO of the Company
was paid an acquisition  fee of 2,793,082  shares of common stock of the Company
effective as June 30, 1999, the date of the closing of the acquisition of assets
from NuVen Capital,  LP. These shares were paid pursuant to the above  described
Advisory  Agreement  with Mr.  Luke and  NuVen  Advisors,  Inc..  The  agreement
provided  for a fee to be paid  to Mr.  Luke  of 10% of the  outstanding  common
shares of the Company  subsequent to any acquisition that was completed pursuant
to the Advisory Agreement.  These shares were valued at $.08 per share which was
110% of the average trading price of common shares of the Company for the 30 day
period  subsequent  to the  acquisition.  Additionally,  Mr. Luke was granted an
option to purchase 1,505,471 shares of common stock at $.07 per based based upon
the 10 day moving average selling price of the common shares to the acquisition.
The option to Mr. Luke is fully  vested and expires on December  31,  2004.  The
Company  charged  general and  administrative  expense  $$238,502 for the shares
issued and stock option granted.

On August 17, 1999, Mr. John Forgy, the former President of the company was paid
a finders fee of 1,000,000  shares of common  stock of the Company  effective as
June 30, 1999,  the date of the closing of the  acquisition of assets from NuVen
Capital,  LP. These shares were paid pursuant to the  employment  agreement with
Mr. Forgy dated June 25, 1998. General and administrative  expenses were charged
$80,000  for these  shares  based  upon a value of $.08 per share  which was the
average  trading  price of common  shares of the  Company  for the 30 day period
subsequent to the acquisition

Subsequent Events

On July 1, 1999,  the Company and Mr.  Richard  Weed,  a former  director of the
Company entered into a fee agreement  whereby Mr. Weed would continue to provide
legal  services  for the  Company at the rate of $200 per hour.  It was  further
agreed that as soon as a  Registration  Statement on Form S-8 became  effective,
300,000  shares of the  Compan's  common  stock  would be placed in escrow  and
shares in a  sufficient  amount  each month  sold on the open  market to satisfy
monthly  bills for legal  services  provided by Mr.  Weed.  Additionally,  as an
incentive for Mr. Weed to represent the Company, and to increase his proprietary
interest in the success of the Company as well to encourage  him to maintain his
relationship with the Company,  Mr. Weed was granted a fully vested stock option
for  1,000,000  shares of the  Company's  common stock  exercisable  at $.30 per
share. Mr. Weed's option expires on December 31, 2004.


                                                            [SNRG\10-KSB:63099]7

                                       16

<PAGE>


ITEM 13.       EXHIBITS AND REPORTS' ON FORM 8-K

(a)  Financial Statements

     The  Financial  Statements  included  in this Item are indexed on Page F-1,
     "Index to Financial Statements."

(b)  Financial Statement Schedules

     Not applicable.

(c)  Exhibits

The following  exhibits are incorporated  herein by reference from the Company's
initial  Registration  Statement on Form 10 filing on or about November 12, 1986
or in other reports filed pursuant to the Securities Exchange Act of 1934.

Exhibit
Number         Description

3.1   Articles of  Incorporation  as in effect on the date hereof  (including
      Amendment thereto effective December 28,1988). (1)

3.3   Bylaws. (1)

4.1   Specimen of Share Certificate. (1)

10.1  Employment Agreement with John Forgy dated June 25, 1998 (Incorporated
      herein by reference to Form S-8 previously filed with the SEC on 8/17/98
      file number 333-61481).

10.2  Advisory Agreement with Fred G. Luke and NuVen Advisors, Inc. dated August
      12, 1998 (Incorporated herein by reference from Form S-8 previously filed
      with the SEC on 7/16/99 file number 333-82881).

10.3  Fee Agreement with Richard O. Weed dated July 1, 1999 (Incorporated herein
      by reference from Form S-8 previously filed with the SEC on 7/16/99 file
      number 333-82881).

10.4  Asset Purchase Agreement, June 24, 1999 with NuVen Capital Limited
      Partnership.

10.5  Asset Purchase Agreement with Juan Flores dated June 29, 1999

23.1  Consent of Independent Auditors

23.2  Consent of Independent Auditors

27.1  Financial Data Schedule
_____________________

(1)   Incorporated herein by reference from the Company's initial Registration
      Statement on Form 10 filing on or about November 12, 1986.

(d)  Reports on Form 8-K

     There were no reports on Form 8-K filed during the fourth quarter of the
     fiscal year ended June 30, 1999.

                                                            [SNRG\10-KSB:63099]7

                                       17

<PAGE>

                                   SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly

Dated: October 13, 1999                 Scientific NRG, Incorporated
                                        a Minnesota Corporation

                                        By:  /s/       Fred G. Luke
                                             ----------------------------------
                                             Name:     Fred G. Luke
                                             Title:    President

     Pursuant to the requirements of the Securities Act of 1934, this report has
been signed below by the following  persons on behalf of the  registrant  and in
the capacities and on the dates indicated.

         Signatures                   Title                     Date
---------------------------   ----------------------     -------------------
/s/  Fred G. Luke             Director and President       October 13, 1999
-------------------
     Fred G. Luke

/s/  Jon L. Lawver            Secretary and Principal      October 13, 1999
-------------------             Accounting Officer
     Jon L. Lawver

                                                            [SNRG\10-KSB:63099]7

                                       18

<PAGE>







                          INDEX TO FINANCIAL STATEMENTS



Independent Auditors' Report.................................................F-2

Independent Auditors' Report.................................................F-3

Financial Statements:

     Balance Sheet as of June 30, 1999.......................................F-4

     Statements of Operations for each of the years in the
     two-year period ended June 30, 1999.....................................F-5

     Statements of Stockholder Equity (Deficit) for each of the years in
     the two-year period ended June 30, 1999.................................F-6

     Statements of Cash Flows for each of the years in the two-year
     period ended June 30, 1999..............................................F-7

     Notes to Financial Statements...........................................F-8



                                       F-1

<PAGE>









                          INDEPENDENT AUDITORS' REPORT




Board of Directors
Scientific NRG, Incorporated (dba Scientific Component Systems)


We have audited the accompanying balance sheet of Scientific NRG,  Incorporated,
dba Scientific  Component Systems (the "Company"),  as of June 30, 1999, and the
related statements of operations,  stockholders' equity (deficit) and cash flows
for the year then ended.  These financial  statements are the  responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Scientific NRG,  Incorporated,
dba  Scientific  Component  Systems as of June 30, 1999,  and the results of its
operations  and its cash  flows  for the year  then  ended  in  conformity  with
generally accepted accounting principles.

Certain of the Company's assets are valued based on independent  appraisals,  as
well as the Company's  Board of Directors.  Valuations by the Board of Directors
are based on estimates,  and those  estimates may materially  differ from actual
values which may be realized upon sale, liquidation or exchange. Such assets are
subject to changes in market conditions, and accordingly, their value is subject
to significant volatility.  In the event market conditions change adversely, the
carrying  value of these  assets  could  have a material  adverse  impact on the
Company's financial condition, results of operations and cash flows.

McKennon, Wilson & Morgan LLP
Irvine, California
October 4, 1999



                                       F-2

<PAGE>










                          INDEPENDENT AUDITORS' REPORT




Board of Directors
Scientific NRG, Incorporated (dba Scientific Component Systems)


We have audited the accompanying statements of operations,  stockholders' equity
(deficit)  and cash  flows  of  Scientific  NRG,  Incorporated  (dba  Scientific
Component  Systems)  (the  "Company")  for the year ended June 30,  1998.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the results of operations  and cash flows of Scientific
NRG, Incorporated (dba Scientific Component Systems) for the year ended June 30,
1998 in conformity with generally accepted accounting principles.

                                              CORBIN & WERTZ

Irvine, California
August 3, 1998








                                       F-3

<PAGE>
<TABLE>
<CAPTION>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                                  BALANCE SHEET

                                  June 30, 1999

<S>                                                            <C>

ASSETS

Current assets:
   Cash                                                        $          1,659
   Marketable securities                                              1,136,556
   Current portion of receivables from affiliates                       200,000
   Note receivable                                                       50,000
   Other current assets                                                  28,601

         Total current assets                                         1,416,816

Receivables from affiliates, net of allowance of $382,896
   net of current portion                                               182,896
Other receivables, net of allowance of $20,304                           20,304
Investments, at cost                                                    519,674
Investment in NuOasis Resorts, Inc.
   Convertible Preferred Stock, at cost                               8,000,000
Property and equipment, net                                              31,363

                                                               $     10,171,053

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                            $         18,494
   Accrued professional fees                                             37,153
   Due to affiliates                                                     27,788
   Other current liabilities                                             17,647

         Total current liabilities                                      101,082

Stockholders' equity:
   Common stock, no par value; 40,000,000 shares authorized;
      31,723,897 shares issued and outstanding                       14,065,393
    Additional paid-in capital                                           27,025
    Accumulated deficit                                              (4,022,447)
         Total stockholders' equity                                  10,069,971

                                                               $     10,171,053
</TABLE>



                 See accompanying notes to financial statements

                                       F-4

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                            STATEMENTS OF OPERATIONS

                                  June 30, 1999


<TABLE>
<CAPTION>
                                                         Year ended June 30,
                                                         1999           1998
                                                     ------------   ------------
<S>                                                  <C>            <C>
Net sales                                               $    --       $    --
Cost of sales                                                --            --
Gross profit                                                 --            --

Selling, general and administrative expenses              362,182          --


Loss from continuing operations                          (362,182)         --

Discontinued operations:
   Loss from discontinued operations, net of
     income taxes of $800                                  35,562       182,552
   Loss on disposal of discontinued operations,
     net of income taxes of $0                             30,363          --

Loss before extraordinary item                           (428,107)     (182,552)

Extraordinary gain from forgiveness of debt,
   net of income taxes of none                               --          14,978

Net loss                                                $(428,107)    $(167,574)

Basic and diluted loss per share:

   Loss from continuing operations                      $   (0.06)    $    --
   Loss from discontinued operations                        (0.01)        (0.04)
   Loss on disposal of discontinued operations              (0.01)         --
   Extraordinary gain                                        --            --
   Net loss                                             $   (0.08)    $   (0.04)

Weighted average number of shares outstanding           5,657,773      4,203,423
</TABLE>




                 See accompanying notes to financial statements

                                       F-5

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)


<TABLE>
<CAPTION>




                                                      Common Stock                 Additional                       Stockholders
                                            --------------------------------       Paid-in          Accumulated     Equity
                                                Shares              Amount         Capital          Deficit         (Deficit)
                                            ---------------    -------------      ------------      -------------   ------------
<S>                                         <C>                <C>                <C>               <C>             <C>

  Balances, June 30, 1997                         4,203,423    $   3,516,607      $     11,970      $ (3,426$766)   $    101,811

  Services rendered in connection with
  common stock issued to related party                    -           30,100                 -                 -          30,100

  Net loss                                                -                -                 -          (167,574)       (167,574)

  Balances, June 30, 1998                         4,203,423        3,546,707            11,970        (3,594,340)        (35,663)

  Common stock issued in connection
  with services rendered by related
  parties                                         1,382,740          124,446                 -                 -         124,446

  Common stock issued in connection
  with asset purchase the agreement
  with NuVen Capital L.P.                        22,344,652       10,090,793                 -                 -      10,090,793

  Common stock issued in connection
  with services rendered by related
  parties                                         3,793,082          303,447                 -                 -         303,447

  Value of options granted below fair
  value                                                   -                -            15,055                 -          15,055

  Net loss                                                -                -                 -          (428,107)       (428,107)


  Balances, June 30, 1999                        31,723,897     $ 14,065,393      $     27,025      $ (4,022,447)   $ 10,069,971
</TABLE>


                 See accompanying notes to financial statements

                                       F-6

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                             Year ended June 30,

                                                             1999             1998
                                                         ------------    --------------

<S>                                                      <C>              <C>
Cash flows from operating activities:
   Net loss                                              $   (428,107)    $   (167,574)
   Adjustments to reconcile net loss to net cash
      Provided by (used in) operating activities:
      Depreciation                                              2,129            2,748
      Provision for doubtful accounts                               -            4,198
      Loss on disposition of assets                            30,363                -
      Services rendered in connection with common
        stock issued to a related party                             -           30,100
      Issuance of common stock for services rendered          427,893                -
      Options granted below fair value                         15,055                -
      Gain on extinguishments of debt                               -          (14,978)
      Changes in operating assets and liabilities:
        Decrease in inventories                                 2,594           16,097
        Decrease in other current assets                       23,528            9,662
        Decrease in accounts payable                          (21,751)               -
        Increase in accrued professional fees                  25,153                -
        (Decrease) increase in other current liabilities      (53,602)          98,814

   Net cash provided by (used in) operating activities         23,255          (20,933)


Cash flows from financing activities -
   Decrease in due to affiliate                               (35,963)               -

Net decrease in cash                                          (12,708)         (20,933)

Cash at beginning of year                                      14,367           35,300

Cash at end of year                                      $      1,659     $     14,367

Supplemental disclosure of cash flow information -
   Cash paid during the year for -

      Income taxes                                       $        800     $        800

Non-cash investing and financing activities:
   Note receivable issued for sale of business           $     50,000     $          -

   Common stock issued for services rendered             $    427,893     $          -

   Common stock issued for assets of NuVen               $ 10,090,793     $          -
</TABLE>


                 See accompanying notes to financial statements

                                       F-7

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND HISTORY

Organization and Nature of Operations

Scientific NRG, Incorporated,  dba Scientific Component Systems (the "Company"),
was  incorporated  in the state of Minnesota in 1983.  The Company  historically
designed,  manufactured and marketed custom energy efficient  lighting  products
utilizing  compact  fluorescent  lamp  technology  primarily  within  the United
States.  The  principal  products  were energy  efficient,  compact  fluorescent
downlight fixtures primarily for the downlight canister retrofit market.

During the year ended June 30, 1997,  the Company  relocated its operations to a
new  facility in Glendora,  California,  which was owned and operated by a newly
affiliated company,  Parke Industries,  Inc. ("Parke") (see Note 7). The Company
and Parke,  which  operated in the  commercial  lighting  industry,  also shared
certain  officers and  directors.  The Company  entered into certain  management
agreements with two officers, which were also directors, of Parke.

On August 15, 1998,  the Company's  Board of Directors  approved the sale of the
Company's  downlight  business,  which  constitutes  substantially  all  of  the
Company's  assets and operations.  On June 29, 1999, the Company closed an asset
purchase agreement with an employee of the Company for the sale of its downlight
business.

Effective  June 30, 1999, the Company  consummated  an asset purchase  agreement
with NuVen  Capital  L.P.  ("NuVen"),  which  resulted in the Company  acquiring
certain  assets of NuVen,  in exchange for  22,344,652  shares of the  Company's
common  stock  valued at  $10,090,793,  based the  estimated  fair  value of the
underlying assets acquired. No liabilities were assumed in this transaction. The
assets obtained by the Company consisted of Series D Convertible Preferred Stock
totaling $8,000,000; certain receivables,  primarily from affiliates, with a net
carrying  value  of  $403,200;  marketable  securities  in  affiliates  totaling
$1,136,556;  and other non-current assets totaling $551,037. As a result of this
transaction, NuVen obtained approximately 70% control of the Company. The assets
acquired were  accounted for at historical  bases similar to a  recapitalization
(see Notes 3 through 8).

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

Going Concern

During the two-year period ended June 30, 1999, the Company has discontinued its
lighting  operations.  At June 30, 1999, the Company's  operations  consisted of
managing certain investments and seeking business  opportunities.  The Company's
plan is to  liquidate or exchange  its  interests to acquire  interests in other
ventures and new operating  opportunities.  Management believes that its working
capital is sufficient to meet its working capital  requirements  for a period of
12 months from the balance sheet date.

Marketable Securities

Marketable  securities  are accounted  for under the  provisions of Statement of
Financial  Accounting  Standards  "SFAS")  No.  115,  "Accounting  for  Certain
Investments in Debt and Equity Securities. The Company's short- term investments
consisted  solely of  marketable  equity  securities,  which were  classified as
"available-for-sale"  in accordance with the provisions of SFAS No. 115 based on
its intent to continue to exchange the equity securities



                                       F-8

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)

for other assets. Accordingly,  such investments are presented as current assets
and  carried  at their  estimated  fair  values  in the  accompanying  financial
statements.  Unrealized gains and losses are excluded from net income (loss) and
reported as a separate  component  of  shareholders'  equity  (deficit),  net of
related deferred taxes and as a component of comprehensive income.

Property and Equipment

Property  and  equipment  are  recorded  at cost and are  depreciated  using the
straight-line  method over the  estimated  useful  lives of the related  assets,
ranging  from three to seven  years.  Maintenance  and  repairs  are  charged to
expense as incurred.  Significant  renewals and betterments are capitalized.  At
the time of retirement or other disposition of property and equipment,  the cost
and  accumulated  depreciation  are removed from the accounts and any  resulting
gain or loss is reflected in operations.

Fair Value of Financial Instruments

The Company has  financial  instruments  whereby the fair value of the financial
instruments  could be different than that recorded on a historical  basis on the
accompanying  balance  sheet.  The Company's  financial  instruments  consist of
receivables,  investments  and accounts  payable.  The  carrying  amounts of the
Company's financial  instruments  generally  approximate their fair values as of
June 30, 1999.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts of assets and  liabilities  and the  disclosure  of
contingent assets and liabilities at the date of the financial  statements,  and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Significant  estimates  made by management  are,  among others,  provisions  for
losses on  accounts  receivable  and  provisions  for slow  moving and  obsolete
inventories and warranty  obligations,  and in some cases,  the valuation of the
Company's common stock, as authorized by the Board of Directors.  Actual results
could materially differ from those estimates.

Loss Per Share

In February 1997, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 128,  "Earnings Per Share" ("EPS").  SFAS No. 128 requires dual presentation
of basic EPS and diluted EPS on the face of all statements of operations  issued
after December 15, 1997 for all entities with complex capital structures.  Basic
EPS is computed as net income (loss)  divided by the weighted  average number of
common  shares  outstanding  for the period.  Diluted EPS reflects the potential
dilution that could occur from common  shares  issuable  through stock  options,
warrants  and other  convertible  securities.  Common stock  equivalents,  which
relate to shares  issuable upon the exercise of common stock  purchase  warrants
and options, were not included in the per share calculations for fiscal 1999 and
1998 as their effect would be anti-dilutive.






                                       F-9

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)

Income Taxes

The Company accounts for income taxes under SFAS No. 109,"Accounting for Income
Taxes." Under SFAS 109,  deferred tax assets and  liabilities are recognized for
the future tax  consequences  attributable to differences  between the financial
statement  carrying  amounts  of  existing  assets  and  liabilities  and  their
respective  tax bases.  Deferred tax assets and  liabilities  are measured using
enacted  tax rates  expected  to apply to  taxable  income in the years in which
those temporary differences are expected to be recovered or settled. A valuation
allowance is provided for significant deferred tax assets when it is more likely
than not that such assets will not be recovered.

Comprehensive Income

In June 1997, the FASB issued SFAS No. 130,  "Reporting  Comprehensive  Income."
This   statement   establishes   standards  for  reporting  the   components  of
comprehensive  income  and  requires  that all  items  that are  required  to be
recognized under accounting  standards as components of comprehensive  income be
included in a financial  statement that is displayed with the same prominence as
other financial statements.  Comprehensive income includes net income (loss), as
well as  certain  non-shareholder  items  that are  reported  directly  within a
separate  component of  stockholders'  equity and bypass net income (loss).  The
Company had adopted the provisions of this  statement  during the current fiscal
year, with no impact on the accompanying financial statements.

Reclassifications

Certain  amounts  in  the  accompanying  1998  financial  statements  have  been
reclassified to conform to the 1999 presentation.

NOTE 3 - MARKETABLE SECURITIES

In connection with the asset purchase agreement with NuVen, the Company obtained
shares  of common  stock in  affiliated  companies  of  NuVen.  Each  investment
represents  less than 10% of the  outstanding  common  stock of the investee and
each security is  nationally  quoted on the  OTC:Bulletin  Board of the National
Association of Securities  Dealers. As such, each investment is accounted for in
accordance with the provisions of SFAS No. 115. Marketable securities consist of
the following at June 30, 1999:

<TABLE>
<CAPTION>

     Marketable Securities          Number of Shares        Fair Value

<S>                                    <C>                  <C>
     Oasis Resorts International       1,000,000            $   343,500
     Virtual Enterprises, Inc.         1,071,725                718,056
     Hartcourt Companies, Inc.           100,000                 75,000

                                       2,171,725            $ 1,136,556
</TABLE>

Management has classified these investments as  available-for-sale  based on its
intent to liquidate,  or exchange these equity securities for other interests or
operating businesses. In accordance with the provisions of SFAS No.115,



                                      F-10

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 3 - MARKETABLE SECURITIES (Continued)

these equity  securities  are  presented in the  accompanying  balance  sheet as
current  assets at their  estimated  fair values.  Management has determined the
fair market value of these investments in accordance with the provisions of SFAS
No. 115 as follows:

Oasis Resorts International

NuVen's  carrying  value of the investment in common stock of Oasis was $629,625
immediately  prior to June 30,  1999,  the  closing  date of the asset  purchase
agreement.  As of June 30,  1999,  the closing bid price of the common  stock of
Oasis was approximately $0.69 per share. The Board of Directors  determined that
as of June 30, 1999, the fair market value of such investment should be based on
a discount 50% from closing bid price due to market conditions. The Company will
continue to  discount  the quoted bid price until  market  conditions  for Oasis
common stock improve.

Virtual Enterprises, Inc.

The  market  value of the  common  stock of VEI was  $1.00 per share at June 30,
1999.  The Board of  Directors  determined  that as of June 30,  1999,  the fair
market  value of such  investment  should  be based  on a  discount  of 33% from
closing  bid  price due to market  conditions.  The  Company  will  continue  to
discount  the quoted bid price  until  market  conditions  for VEI common  stock
improve.

The Hartcourt Companies, Inc.

NuVen's carrying value of the investment in Hartcourt  immediately  prior to the
asset purchase  agreement was $22,551.  As of June 30, 1999, the market value of
the common  stock of  Hartcourt  was  approximately  $0.75 per share for a total
investment at fair market value of $75,000.


NOTE 4 - RECEIVABLES FROM AFFILIATES

Receivables From Affiliates

Receivables from affiliates  represent  non-interest bearing amounts acquired in
connection  with the  asset  purchase  agreement  with  NuVen in the  amount  of
$765,792. Of this amount,  $652,364 is due from certain affiliated companies and
approximately  $113,428  is due from an officer  of the  Company.  This  officer
repaid the receivable totaling $113,428 subsequent to year end. Upon the closing
of the  transaction,  management  had  deemed  the  collectable  portion  of the
receivables to be approximately  $382,896,  as such, the accompanying  financial
statements include an allowance for doubtful accounts.




                                      F-11

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 4 - RECEIVABLES FROM AFFILIATES (Continued)

As of June 30, 1999, receivables from affiliates include the following:
<TABLE>
<CAPTION>

    Receivable From:                                               Amount
<S>                                                           <C>
    Island Flight Services                                    $     47,378
    Casino Management of America, Inc.                             174,650
    NuOasis International, Inc.                                    222,000
    F.G. Luke                                                      113,428
    NuOasis Las Vegas, Inc.                                         47,552
    NuOasis Laughlin, Inc.                                          39,085
    ACI Asset Management, Inc.                                      39,485
    NuOasis Properties, Inc.                                        59,785
    Fantastic Foods International, Inc.                             22,429
                                                                   765,792
    Less: allowance for doubtful accounts                         (382,896)
                                                              $    382,896
</TABLE>


NOTE 5 - INVESTMENTS AT COST

In connection with the asset purchase  agreement,  the Company  acquired certain
investments  in  affiliated  companies.  Included  in  these  investments  is an
investment in the Yes license at a cost to NuVen of $389,481. In accordance with
generally accepted accounting principles, the acquisition of the Yes license was
recorded at predecessor  basis.  The Company also has an interest in 3.5 million
shares of common  stock of Yes  valued  at  approximately  $0.03 per share for a
total  investment at fair market value of $91,382.  The Company intends to carry
this investment at cost due to relatively immaterial amount of the investment.

Also included in investments at cost are investments in the common stock of Hart
and Diversified. The Company acquired 750,000 and 474,085 shares of common stock
of Hart and Diversified,  respectively.  Currently, there is no market for these
shares and thus, the fair market price per share is not readily determinable. As
such, these investments are recorded in the accompanying financial statements as
of June  30,  1999 at  predecessor  basis of  $7,500  and  $31,311  for Hart and
Diversified, respectively.


NOTE 6 - INVESTMENT IN NuOASIS RESORTS, INC.

NuOasis,  formerly  Nona  Morelli,  Inc.,  was  restructured  in 1993 to  pursue
opportunities in gaming, and food and beverage industries. From 1994 to 1997 the
Company acquired  certain gaming interests in Tunisia,  Africa and food services
in the United States. The gaming assets in Tunisia were exchanged for 51% of the
issued and outstanding common stock Oasis Resorts International,  Inc. ("Oasis")
on October 19, 1998.  NuOasis retains interests in food and beverage assets, the
51% interest in Oasis, as well as certain claim rights.





                                      F-12

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 6 - INVESTMENT IN NuOASIS RESORTS, INC. (Continued)

During 1993, NuOasis designated a Series D voting,  convertible  preferred stock
(the "D Preferred").  The D Preferred consists of 24,000,000 shares,  which were
issued to NuVen in exchange  for the  investment  securities  with an  estimated
market value,  based upon independent legal and valuation  opinions at the time,
discounted  approximately  50% at the date of transfer,  or  $10,000,000.  The D
Preferred  is  redeemable,  in whole or in part,  at the  option of the Board of
Directors,  at  any  time,  at a  redemption  price  of up to  $24,000,000.  The
Preferred D is convertible,  at the option of the holder, into shares of NuOasis
common  stock at an exchange  rate of 0.41667  per share,  or  convertible  into
shares  having a market  value at the time of such  conversion  of $0.41667  per
share.  Market value is determined  based on 50% of the closing bid price for 30
days  preceding  notice of  conversion.  The right to  convert  the D  Preferred
expires on December 31, 2001. .

In connection with the asset purchase agreement with NuVen, the Company acquired
19,200,000  shares of D  Preferred  on June 30,  1999 with a  carrying  value of
$8,000,000.  The Company obtained an independent appraisal of the D Preferred at
a fair  market  value of  approximately  $10.9  million.  Since the  Company  is
required to record the asset using the predecessor's basis, the Company recorded
the investment at $8,000,000.

In accordance with generally accepted accounting principles,  the D Preferred is
accounted  for under the cost  method,  since the Company  does not share in the
earnings and losses of NuOasis,  since  participation  in earnings and losses is
based on the shares of common stock held by an investor  without  recognition of
securities of the investee which are designated as common stock equivalents. APB
Opinion No. 15, "Earnings per Share," defines a common stock  equivalent,  among
others, as a convertible security,  which at the time of issuance has terms that
make it for all practical purposes substantially equivalent to a common stock.


NOTE 7 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of June 30, 1999:
<TABLE>
<CAPTION>
Investment contracts are due as follows:

<S>                                                 <C>
 Furniture and fixtures                             $   6,751
 Equipment                                             42,886

 Less accumulated depreciation and amortization       (18,274)

                                                    $  31,363
</TABLE>

During the years  ended June 30,  1999 and 1998,  depreciation  expense  totaled
$2,129 and $2,748, respectively.

NOTE 8 - STOCKHOLDERS' EQUITY

Common Stock Issuances

On July 1, 1998,  the Company  issued  502,740  shares of common stock valued at
$0.09 per share to a director  of the  Company  for legal  services  rendered in
connection with a registration of common stock and general corporate



                                      F-13

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 8 - STOCKHOLDERS' EQUITY (Continued)

matters.  The Company  accrued  $10,274 of the amount due to this director as of
June 30, 1998 for services rendered in the prior fiscal year.

On July 1, 1998,  the Company  issued  240,000  shares of common stock valued at
$0.09 per share to a former chief executive officer for services rendered during
fiscal  1998.  The Company  accrued the amounts due this  officer as of June 30,
1998.

During the year ended June 30, 1999, the Company issued 640,000 shares of common
stock valued at $0.09 per share to a former  executive  officer,  who was also a
director  of the  Company,  for  services  rendered.  The Company  accrued  such
liability at June 30, 1998.

In connection with an employment  agreement,  a former executive officer who was
also a director  of the Company was  entitled  to a merger and  acquisition  fee
equal to 1/2 of 1% of the  transaction  amount  involving  the  asset  purchase
agreement with NuVen. On June 30, 1999, upon the closing of the transaction, the
Company issued 1,000,000 shares of common stock at $0.08 per share, based on the
average  bid-and-asked price per share during the 30 days immediately after June
30, 1999. The Company  recorded  $80,000 of  compensation  expense in connection
with this issuance during fiscal 1999.

In connection with an advisory  agreement,  and as a result of services rendered
in connection with the asset purchase  agreement with NuVen,  the Company issued
2,793,082 shares of common stock to an officer and director of the Company.  The
Company  determined  the fair  market  price per share to be $0.08  based on the
average bid-and-asked price per share during the 30 days immediately  subsequent
to June 30,  1999.  The Company  recorded  $223,447 of  compensation  expense in
connection with this issuance during fiscal 1999.

As discussed in Note 1, pursuant to the asset purchase agreement with NuVen, the
Company  issued  22,344,652  shares of common stock valued at  $10,090,793.  The
Board of Directors valued the assets based on the underlying value of the assets
received.  NuVen  agreed to a  substantially  higher value than the value of the
Company's  common stock as determined  based on the 30-day moving average of the
closing bid price to minimize shareholder dilution.

Also, see Note 12 for subsequent events affecting shareholders' equity.

Common Stock Purchase Warrants and Options

From time to time and in the ordinary course of business, the Company's Board of
Directors  grant options to purchase its common stock.  The exercise prices have
been  determined  by the  Board of  Directors  based  on the  fair  value of the
underlying common stock at the date of grant.




                                      F-14

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 8 - STOCKHOLDERS' EQUITY (Continued)

Common stock  purchase  options and warrants  consist of the following as of the
fiscal years ended June 30, 1999 and 1998:

<TABLE>
<CAPTION>
                                                              Options/Warrants
                                           Options/Warrants        Price

<S>                                            <C>               <C>
Outstanding & exercisable, June 30, 1997         620,000         $0.20 to $0.50
Granted                                                                 -
Expired                                                                 -

Outstanding & exercisable, June 30, 1998         620,000         $0.20 to $0.50
Granted                                        1,505,471                  $0.07
Expired                                         (200,000)                 $0.50

Outstanding & exercisable, June 30, 1999       1,925,471         $0.07 to $0.50
</TABLE>

During the year ended June 30, 1998,  the Company issued no options or warrants.
In fiscal 1999,  the Company  repriced the exercise price of options to purchase
600,000 shares from $0.50 per share to $0.20 per share. Since the estimated fair
value  was less  than the  exercise  price,  no  compensation  was  recorded  in
connection with the repricing.

During  1995,  the  FASB  issued  SFAS  No.  123,  "Accounting  for  Stock-Based
Compensation,"  which  defines  a fair  value  based  method of  accounting  for
stock-based compensation.  However, SFAS No. 123 allows an entity to continue to
measure compensation cost related to stock and stock options issued to employees
using the intrinsic method of accounting  prescribed by APB No. 25, "Accounting
for Stock Issued to Employees."  Entities electing to remain with the accounting
method of APB 25 must make pro forma  disclosures of net income and earnings per
share,  as if the fair value  method of  accounting  defined in SFAS No. 123 had
been  applied.   The  Company  has  elected  to  account  for  its   stock-based
compensation to employees under APB 25.

Currently,  there is no significant  market for trading of the Company's  common
stock. The Board of Directors has generally used the pricing of cash stock sales
at or near  the  date  of the  transaction  or the  value  of the  consideration
received, whichever is more readily determinable,  to estimate the fair value of
its common stock issued for non- cash  transactions.  During the year ended June
30, 1999, the Board of Directors assigned an estimated fair market value for the
Company's  common  stock  ranging  from  $0.06 to $0.10 per  share  based on the
average bid-and-asked prices during the 30 days subsequent to June 30, 1999.

In connection  with an advisory  agreement  between the Company and an executive
officer who is also a director,  the Company  granted options to purchase shares
of common  stock  equal to four and  nine-tenths  percent  (4.9%) of the  shares
outstanding  of the Company  immediately  following the  purchase,  or 1,505,471
options, exercisable at $0.07 per share. The options are fully vested and expire
on December 31, 2004.  The fair market value of the  underlying  common stock on
the date of grant was deemed to be approximately  $0.08 per share. In accordance
with APB No. 25, the Company  recorded  non-cash  compensation  expense totaling
$15,055 related to these stock options.



                                      F-15

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 8 - STOCKHOLDERS' EQUITY (Continued)

Pro forma information  regarding net income is required by SFAS No. 123, and has
been determined as if the Company had accounted for its 1,505,471 employee stock
options issued under the fair value method pursuant to SFAS No. 123, rather than
the method pursuant to APB No. 25 as discussed herein.  The fair value for these
options was estimated at the date of grant using a Black-Scholes  option-pricing
model with the following assumptions:

<TABLE>
<CAPTION>
                                                 Year Ended June 30,
                                               1999             1998
<S>                                         <C>               <C>
Stock price per share                       $   0.08          $  0.10
Dividend yield                                    -                -
Volatility factor                               0.001            0.001
Risk-free interest rates                        5.5%             5.8%
Expected life (years)                           4.5                2
</TABLE>

The  Black-Scholes  valuation model was developed for use in estimating the fair
value  of  traded  options  which  have  no  vesting   restrictions   and  fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee's  stock  options  have  characteristics  significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

The Company's pro forma information is as follows:


<TABLE>
<CAPTION>
                                                  Year Ended June 30,
                                                 1999               1998

<S>                                         <C>                <C>
Net loss, as reported                       $ (428,107)        $  (167,574)
Additional compensation expense                      -                   -

Pro forma net loss                          $ (428,107)        $  (167,574)

Pro forma net loss per share                $    (0.08)        $     (0.04)
</TABLE>


NOTE 9 - INCOME TAXES

For the years ended June 30, 1999 and 1998,  the  provision for income taxes was
not  significant.  The current  income tax provision  differs from the amount of
income tax  determined by applying the expected U.S.  Federal income tax rate to
pretax  loss for the years  ended  June 30,  1999 and  1998,  as a result of the
Company having a 100% valuation allowance for the expected tax benefit.




                                      F-16

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 9 - INCOME TAXES (Continued)

As of June 30,  1999,  the Company has  Federal and state net  operating  losses
("NOLs")  totaling  $3.9 million and $1.2  million,  respectively,  to be offset
against  future  taxable  income.  The  Federal and state NOLs expire at various
dates  through the year 2014 and 2004,  respectively.  The Federal and state tax
codes  provide for  restrictive  limitations  on the annual  utilization  of net
operating loss  carryforwards  to offset taxable income when the stock ownership
of a  company  significantly  changes,  as  defined.  In light of the  Company's
significant stock activity,  certain of the net operating loss carryforwards are
subject to such annual limitations.

At June 30, 1999, the Company's only significant  deferred tax asset consists of
its NOL's valued at approximately $1.4 million.

During the years ended June 30, 1999 and 1998, the valuation allowance increased
by approximately $200,000 and $66,000, respectively.

NOTE 10 - DISCONTINUED OPERATIONS

As discussed in Note 1, the Board of Directors  approved the  discontinuation of
its lighting  business.  On June 29, 1999,  substantially  all of the  Company's
assets  were  sold to an  employee  for a  $50,000  promissory  note.  A loss on
disposal of $30,363 was recorded upon the completion of the sale.

Net losses from the Company's discontinued  operations have been segregated from
continuing  operations and reported as a separate line item on the statements of
operations.  Prior year  reported  results  have been  reclassified  in order to
provide for consistent presentation.

Operating results from the Company's discontinued operations are as follows:

<TABLE>
<CAPTION>

                                                   Year Ended June 30,
                                                  1999             1998
<S>                                         <C>                <C>
Revenues                                    $    406,343       $   422,224
Costs of sales                                   273,590           341,576
   Gross profit                                  132,753            80,648
Selling, general & administrative                167,195           262,400
   Loss from operations                          (34,762)         (181,752)
Provision for income taxes                           800               800
   Loss from operations                     $    (35,562)      $  (182,552)
</TABLE>


NOTE 11 - RELATED PARTIES TRANSACTIONS

Transactions with Parke

During the years ended June 30, 1999 and 1998,  the Company  sold  approximately
$101,000 and $84,717 (or 25% and 20.1%of total sales) to Parke, respectively. As
of June 30, 1999, there were no amounts due from Parke.



                                      F-17

<PAGE>

                          SCIENTIFIC NRG, INCORPORATED
                        dba SCIENTIFIC COMPONENT SYSTEMS

                          NOTES TO FINANCIAL STATEMENTS


NOTE 11 - RELATED PARTIES TRANSACTIONS (Continued)

On January  15,  1998,  the  Company  entered  into an  administrative  services
agreement with Parke. Pursuant to this agreement Parke provided the Company with
general and administrative services for $2,500 per month. During fiscal 1999 and
1998, the Company incurred $26,250 and $45,000, respectively, of certain general
and  administrative  expenses  pursuant to these  agreements.  At June 30, 1999,
$14,190 remained unpaid and is included in accounts payable.

The Company also shares employees and other general administrative services with
Parke.  During the years  ended June 30,  1999 and 1998,  the  Company  incurred
approximately $88,137 and $179,500,  respectively,  in payroll and other general
administrative expenses (exclusive of the service agreement mentioned above), of
which  $13,598  remains  unpaid  as of  year-end  and  is  included  in  accrued
liabilities.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company shares its offices with NuVen under a month-to-month  lease for $500
per month.

The Company had an  operating  lease for the use of certain  equipment at $1,500
per quarter.  The Company has stopped  paying this lease and is,  therefore,  in
default.  As of June 30, 1999,  the lessor has  demanded  $10,484 to satisfy the
breach of this  lease.  Accordingly,  such  amount  has been  included  in other
current liabilities in the accompanying balance sheet.

NOTE 13 - CANCELLATION OF INDEBTEDNESS

During the year ended June 30, 1998, the Company's  management  negotiated  with
certain  of the  Company's  vendors  in an  effort  to  reduce  amounts  owed on
delinquent debts. As a result of management negotiations, the Company recognized
$14,978 in  cancellation  of  indebtedness  income (the difference in the amount
payable  prior  to  negotiation  and post  negotiation).  Such  amount  has been
reflected as an  extraordinary  item in the statement of operations for the year
ended June 30, 1998.

NOTE 14 - SUBSEQUENT EVENTS

On July 14, 1999, the Company issued 300,000 shares of common stock to a related
party for  services  to be  rendered  in  connection  with a retainer  agreement
commencing  July 1, 1999 and expiring June 30, 2000. Such shares were registered
by  management  of the  Company  with the  Securities  and  Exchange  Commission
pursuant to Form S-8.

In  connection  with a fee  agreement  for  professional  services,  the Company
granted on July 1, 1999, options to purchase 1,000,000 shares of common stock at
an  exercise  price of $.30 per share for  future  services  to be  rendered  in
connection  with a registration  statement and other  services.  The options are
fully vested and expire on December 31, 2004.





                                      F-18

<PAGE>


                                                                    EXHIBIT 10.4
                            ASSET PURCHASE AGREEMENT

     ASSET PURCHASE  AGREEMENT,  ("Agreement")  dated as of June 24, 1999, among
Scientific NRG,  Incorporated,  a Minnesota corporation  ("Purchaser") and NuVen
Capital L.P., a Nevada limited partnership ("NuVen").

     WHEREAS,  Purchaser  desires  to acquire  the  assets of NuVen (the "NuVen
Assets") for a purchase price of $10,281.082 (the "Purchase Price");

     WHEREAS,  the NuVen Assets consist of accounts  receivable,  investments in
subsidiaries,  and  property,  plant and  equipment  set forth more fully on the
attached Exhibit A;

     WHEREAS,  NuVen  desires  to sell the  NuVen  Assets to  Purchaser  for the
Purchase Price; and

     WHEREAS,  Purchaser is a SEC reporting company whose shares of common stock
are traded on the NASDAQ OTC Bulletin Board.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this  Agreement,  and for other good and  valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

     DEFINITIONS

     Definitions.  (a) As used in this  Agreement,  the following  defined terms
shall have the meanings indicated below:

     "Actions or Proceedings" means any action, suit, proceeding, arbitration or
Governmental or Regulatory Authority investigation or audit.

     "Affiliate"  means, as applied to any Person, (i) any other Person directly
or  indirectly  controlling,  controlled by or under common  control with,  that
Person, (ii) any other Person that owns or controls five percent (5%) or more of
any class of equity securities  (including any equity  securities  issuable upon
the  exercise of any Option) of that Person or any of its  Affiliates,  or (iii)
any member,  director,  partner,  officer,  agent,  employee or relative of such
Person.  For  the  purposes  of  this  definition,   "control"  (including  with
correlative  meanings,  the terms  "controlling",  "controlled  by",  and "under
common control with") as applied to any Person,  means the possession,  directly
or  indirectly,  of the power to direct or cause the direction of the management
and policies of that Person,  whether through  ownership of voting securities or
by contract or otherwise.

     "Agreement"  means this Asset  Purchase  Agreement,  the  Exhibits  and the
Disclosure Schedule and the certificates  delivered in connection  herewith,  as
the same may be amended,  modified or restated  from time to time in  accordance
with the terms hereof.




                                        1

<PAGE>

     "Assets and  Properties"  of any Person means all assets and  properties of
every kind, nature,  character and description (whether real, personal or mixed,
whether tangible or intangible,  whether absolute, accrued, contingent, fixed or
otherwise  and  wherever  situated),  including  the goodwill  related  thereto,
operated, owned or leased by such Person, including,  without limitation,  cash,
cash  equivalents,  accounts and notes  receivable,  chattel  paper,  documents,
instruments,  general intangibles, real estate, equipment,  inventory, goods and
Intellectual Property.

     "Books and Records" means all files, documents,  instruments, papers, books
and  records  relating to the  Business,  NuVen or the  Subsidiaries,  including
without limitation financial statements, Tax Returns and related work papers and
letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds,
title  policies,  minute books,  stock  certificates  and books,  stock transfer
ledgers,  Contracts,  Permits,  customer  lists,  computer  files and  programs,
retrieval  programs,  operating  data and plans and  environmental  studies  and
plans.

     "Business  Combination"  means with  respect to any Person any (i)  merger,
consolidation  or  combination  to which such Person is a party,  (ii) any sale,
issuance  dividend,  split or other  disposition  of any capital  stock or other
equity  interests (or any security or loan  convertible into or exchangeable for
such capital stock or other equity  interests) of such Person,  (iii) any tender
offer   (including   without   limitation  a   self-tender),   exchange   offer,
recapitalization,  liquidation,  dissolution  or similar  transaction,  (iv) any
sale,  dividend or other  disposition of all or a material portion of the Assets
and  Properties  of such Person or (v) the  entering  into of any  agreement  or
understanding,  or the granting of any rights or options, with respect to any of
the foregoing.

     "Business Day" means a day other than Saturday,  Sunday or any day on which
banks located in the State of California are authorized or obligated to close.

     "Business  and/or  Condition  of  NuVen"  means  the  Business,   condition
(financial or otherwise),  results of operations, Assets and Properties of NuVen
and the Subsidiaries taken as a whole.

     "Closing Date" means June 30, 1999.

     "Code" means the Internal  Revenue Code of 1986, as amended,  and the rules
and regulations promulgated thereunder.

     "Contract" means any agreement,  lease, license,  evidence of Indebtedness,
mortgage,  indenture,  security  agreement or other contract or other commitment
(whether written or oral).

     "NuVen Assets" means  collectively  the assets listed on Exhibit A attached
hereto and as defined more fully in paragraph 3.1.

     "Disclosure  Schedule" means the schedules  delivered to Purchaser by or on
behalf  of NuVen,  containing  all  lists,  descriptions,  exceptions  and other
information  and  materials  as are  required  to be  included  therein by NuVen
pursuant to Article 3 of this  Agreement.  "Exchange  Act" means the  Securities
Exchange  Act of 1934,  as  amended,  and the rules and  regulations  of the SEC
thereunder.




                                        2

<PAGE>




     "GAAP"  means  United  States  generally  accepted  accounting  principles,
consistently applied throughout the specified period and in all prior comparable
periods.

     "Governmental  or  Regulatory   Authority"   means  any  court,   tribunal,
authority,  agency, commission,  official or other instrumentality of the United
States,  any foreign country or any domestic or foreign state,  county,  city or
other political  subdivision,  any arbitrator,  tribunal or panel of arbitrators
and, shall include,  without limitation,  any stock exchange,  quotation service
and the National Association of Securities Dealers.

     "Indebtedness" means, as to any Person: (i) all obligations, whether or not
contingent,  of such Person for borrowed money (including,  without  limitation,
reimbursement and all other obligations with respect to surety bonds, letters of
credit and bankers' acceptances,  whether or not matured),  (ii) all obligations
of such Person  evidenced by notes,  bonds,  debentures or similar  instruments,
(iii) all  obligations  of such  Person  representing  the  balance of  deferred
purchase  price of property  or  services,  except  trade  accounts  payable and
accrued  commercial  or trade  liabilities  arising  in the  ordinary  course of
business,  (iv) all interest rate and currency swaps,  caps, collars and similar
agreements or hedging  devices under which  payments are obligated to be made by
such Person,  whether  periodically or upon the happening of a contingency,  (v)
all  indebtedness  created or arising under any conditional  sale or other title
retention  agreement  with  respect to property  acquired  by such Person  (even
though the rights and remedies of the seller or lender  under such  agreement in
the event of default are limited to repossession or sale of such property), (vi)
all  obligations  of such Person  under  leases which have been or should be, in
accordance with GAAP, recorded as capital leases, (vii) all indebtedness secured
by any Lien (other than Liens in favor of lessors under leases other than leases
included in clause  (vii)) on any property or asset owned or held by that Person
regardless of whether the  indebtedness  secured thereby shall have been assumed
by that Person or is non-recourse  to the credit of that Person,  and (viii) all
Indebtedness of any other Person referred to in clauses (i) through (vii) above,
guaranteed, directly or indirectly, by that Person.

     "Intellectual Property" means all patents and patent rights, trademarks and
trademark rights,  trade names and trade name rights,  service marks and service
mark rights,  service  names and service name rights,  brand names,  inventions,
processes,  formulae, copyrights and copyright rights, trade dress, business and
product names,  logos,  slogans,  trade secrets,  industrial models,  processes,
designs,  methodologies,  computer  programs  (including  all source  codes) and
related  documentation,  technical information,  manufacturing,  engineering and
technical drawings,  know-how and all pending applications for and registrations
of patents, trademarks, service marks and copyrights.

     "IRS" means the United States Internal Revenue Service.

     "Laws" means all laws, statutes, rules,  regulations,  ordinances and other
pronouncements  having  the  effect of law of the  United  States,  any  foreign
country  or any  domestic  or foreign  state,  county,  city or other  political
subdivision or of any Governmental or Regulatory Authority.

     "Liabilities" means all Indebtedness,  obligations and other liabilities of
a Person (whether  absolute,  accrued,  contingent,  known or unknown,  fixed or
otherwise, or whether due or to become due).




                                        3

<PAGE>



     "Liens" means any mortgage, pledge,  assessment,  security interest, lease,
lien,  adverse  claim,  levy,  charge or other  encumbrance  of any kind, or any
conditional sale Contract,  title retention  Contract or Contract  committing to
grant any of the foregoing.

     "Loss" means any and all damages,  fines,  fees,  penalties,  deficiencies,
losses  and  expenses,  including,  without  limitation,   interest,  reasonable
expenses  of  investigation,  court  costs,  reasonable  fees  and  expenses  of
attorneys,  accountants  and other  experts or other  expenses of  litigation or
other proceedings or of any claim, default or assessment (such fees and expenses
to  include  without  limitation,  all fees  and  expenses,  including,  without
limitation, fees and expenses of attorneys,  incurred in connection with (i) the
investigation  or  defense  of any  third  party  claims  or (ii)  asserting  or
disputing  any  rights  under  this  Agreement   against  any  party  hereto  or
otherwise).

     "Option"   with   respect  to  any  Person  means  any   security,   right,
subscription,  warrant,  option,  "phantom"  stock right or other  Contract that
gives the right to (i) purchase or otherwise  receive or be issued any shares of
capital  stock or other  equity  interests of such Person or any security of any
kind  convertible  into or exchangeable or exercisable for any shares of capital
stock or other  equity  interest of such Person or (ii)  receive any benefits or
rights  similar to any rights  enjoyed by or accruing to the holder of shares of
capital  stock or other  equity  interest  of such  Person,  including,  without
limitation,  any rights to  participate  in the  equity,  income or  election of
directors, management committee members or officers of such Person.

     "Order" means any writ,  judgment,  decree,  injunction or similar order of
any Governmental or Regulatory  Authority (in each such case whether preliminary
or final).

     "Permits" means all licenses, permits, certificates of authority,
authorizations,   approvals,  registrations,  franchises  and  similar  consents
granted or issued by any Governmental or Regulatory Authority.

     "Permitted  Lien"  means (i) any Lien for Taxes,  governmental,  charges or
levies not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with
GAAP,  (ii) the  Liens  set forth in any  Disclosure  Schedule,  (iii) any minor
imperfection  of title,  easements,  rights of way or similar  Lien as  normally
exist with respect to property  similar in  character  to the property  affected
thereby and which  individually  or in the aggregate  with other such Liens does
not impair the value or  marketability  of the property  subject to such Lien or
interfere  with the use of such  property in the conduct of the  business of the
Company or any Subsidiary and which do not secure obligations for money borrowed
and  (iv)  Liens  imposed  by  any  law,  such  as  mechanic's,   materialman's,
landlord's, warehouseman's and carrier's Liens, securing obligations incurred in
the  ordinary  course of  business  which are not yet overdue or which are being
diligently contested in good faith by appropriate  proceedings and, with respect
to such  obligations  which are being  contested,  for which the Company has set
aside adequate reserves.

     "Person"  means  any  individual,  corporation,  joint  stock  corporation,
limited  liability  company  or  partnership,   general   partnership,   limited
partnership,  proprietorship, joint venture, other business organization, trust,
union, association or Governmental or Regulatory Authority.

     "Projections"  means the  projections  for the  NuVen  assets,  results  of
operations,  assets,  liabilities,  cash flow and other information  supplied by
NuVen.



                                        4

<PAGE>



     "Purchase Price" has the meaning ascribed to it in Section 2.1.

     "Purchaser"  has  the  meaning  ascribed  to it in  the  forepart  of  this
Agreement.

     "Securities  Act" means the  Securities  Act of 1933,  as amended,  and the
rules and regulations thereunder.

     "Subsidiary"  means  any  Person in which  NuVen,  directly  or  indirectly
through  Subsidiaries or otherwise,  beneficially owns more than fifteen percent
(15%) of either the equity interests in, or the voting control of, such Person.

     "Tax" or "Taxes"  means all federal,  state,  local or foreign net or gross
income,  gross  receipts,  net proceeds,  sales,  use, ad valorem,  value added,
franchise,  bank shares,  withholding,  payroll,  employment,  excise, property,
alternative  or  add-on  minimum,  environmental  or other  taxes,  assessments,
duties,  fees,  levies or other  governmental  charges of any  nature  whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.

     "Tax  Returns"  means any returns,  reports or  statements  (including  any
information returns) required to be filed for purposes of a particular Tax.

     "Taxing  Authority" means any governmental  agency,  board,  bureau,  body,
department  or  authority  of  any  United  States   Federal,   state  or  local
jurisdiction  or any  foreign  jurisdiction,  having or  purporting  to exercise
jurisdiction with respect to any Tax.

     "Transfer  Taxes" means  sales,  use,  transfer,  real  property  transfer,
recording, gains, stock transfer and other similar taxes and fees.

 (b)      Unless the context of this Agreement otherwise requires, (i) words
          of any gender include each other gender, (ii) words using the singular
          or  plural  number  also  include  the  plural  or  singular   number,
          respectively,   (iii)  the  terms  "hereof,"  "herein,"  "hereby"  and
          derivative or similar words refer to this entire  Agreement,  (iv) the
          terms "Article" or "Section" refer to the specified Article or Section
          of this Agreement,  and (v) the phrases  "ordinary course of business"
          and "ordinary course of business  consistent with past practice" refer
          to the business and practice of NuVen or a Subsidiary.  All accounting
          terms used  herein and not  expressly  defined  herein  shall have the
          meanings given to them under GAAP.

(3)       When used herein,  the phrase "to the  knowledge of " any Person,  "to
          the best  knowledge  of "any Person or any similar  phrase,  means (i)
          with respect to any Person who is an individual,  the actual knowledge
          of such Person,  and (ii) with respect to any other Person, the actual
          knowledge of the directors,  officers,  members,  general partners and
          other similar  Person in a similar  position or having  similar powers
          and duties; and, in the case of each of (i) and (ii), the knowledge of
          facts that such individuals should have after reasonable inquiry.





                                        5

<PAGE>


SALE OF PURCHASED INTERESTS; CLOSING

2.1      Purchase and Sale.  On the terms and subject to the conditions of this
         Agreement,

(a)      At the Closing, Purchaser shall purchase from NuVen, free and clear of
         all Liens, all of the NuVen Assets.

(b)      The Purchase Price shall be Ten Million Two Hundred Eighty One Thousand
         Eighty Two Dollars (US$10,281,082) payable at the Closing as set forth
         below.

(c)      The Purchase Price shall consist of Twenty-Two Million Three Hundred
         Forty Four Thousand Six Hundred Fifty Two (22,344,652) shares of
         Purchaser's Common Stock. (the "Shares").

2.2      Closings. The Closing will take place at the offices of Archer & Weed,
         4695 MacArthur Court,  Suite 530,  Newport Beach,  California 92660 on
         the Closing Date in accordance with the terms of this Agreement, or at
         such other place or time as Purchaser and NuVen mutually agree. At the
         Closing,  Purchaser  shall pay to NuVen the Purchase Price pursuant to
         Section 2.1.  Simultaneously,  NuVen shall deliver to Purchaser one or
         more  certificates  representing  the NuVen Assets  together  with all
         necessary  instruments of transfer,  in form and substance  reasonably
         satisfactory  to  Purchaser.  At the  Closing,  there  shall  also  be
         delivered to Purchaser and NuVen the opinions,  certificates and other
         Contracts,  documents and  instruments  required to be delivered under
         the terms of this Agreement.

REPRESENTATIONS AND WARRANTIES OF NUVEN

NuVen represents and warrants to Purchaser that the statements contained in this
Article III are true and correct as of the date of this  Agreement,  and will be
true and correct as of the Closing  Date (as though made then and as though such
Closing Date was  substituted  for the date of this  Agreement  throughout  this
Article III).  NuVen has  delivered a Disclosure  Schedule  (including  exhibits
thereto) to Purchaser setting forth certain information, the disclosure of which
is  required  or  appropriate  in  relation  to any  or  all  of  the  following
representations and warranties.

3.1       Organization  of  NuVen.  (a)  NuVen  is a  limited  partnership  duly
          organized, validly existing and in good standing under the laws of the
          State of Nevada.  The property  and business  activity of NuVen is the
          ownership  (beneficial  and of record),  on the Closing  Date,  of the
          NuVen  Assets,  that are set  forth in detail  on  Exhibit A  attached
          hereto.

(a)       NuVen is duly qualified, licensed or admitted to do business and is in
          good standing in those  jurisdictions  in which the ownership,  use or
          leasing of its Assets and Properties,  or the conduct or nature of its
          business, makes such qualification,  licensing or admission necessary.
          NuVen agrees,  prior to the Closing Date, to deliver to Purchaser true
          and complete copies of its (i) certificate of limited partnership with
          all   amendments   thereto  (the  "Charter")  and  (ii)  the  limited
          partnership  agreement with all amendments,  in each case as in effect
          on the date  hereof  and the  name of each  general  partner,  limited
          partner and officer and the position held by each of them with NuVen.




                                        6

<PAGE>



3.2       Power and  Authority.  NuVen has the requisite  power and authority to
          execute  and deliver  this  Agreement  and to perform its  obligations
          hereunder and to consummate the transactions  contemplated hereby. The
          execution and delivery by NuVen of this Agreement,  the performance by
          NuVen  of  the  obligations  hereunder  and  the  consummation  of the
          transactions contemplated hereby have been duly and validly authorized
          by all necessary  corporate  action.  This Agreement has been duly and
          validly executed and delivered by NuVen and constitutes a legal, valid
          and  binding   obligation  of  NuVen  enforceable   against  NuVen  in
          accordance with its terms.

3.3       No Conflicts.  The execution and delivery by NuVen this Agreement, the
          performance by NuVen of its obligations hereunder and the consummation
          of the transactions contemplated hereby does not and will not:
         (a)      conflict with or result in a violation or breach of any of the
                  terms, conditions or provisions of the Charter or the
                  certificate or articles of incorporation or organization
                  or by-laws (or other comparable charter documents) of NuVen,
                  or any Subsidiary;

         (b)      conflict with or result in a violation or breach of any term
                  or provision of any Law or Order applicable to NuVen, or any
                  Subsidiary or any of their respective Assets and Properties;or

         (c)      (i)      conflict with or result in a violation or breach of,

                  (ii)     constitute (with or without notice or lapse of time
                           or both) a default under,

                  (iii)    require NuVen, or any Subsidiary to obtain any
                           consent or approval, make any filing with or give any
                           notice to any Person as a result or under the terms
                           of,

                  (iv)     result in or give to any Person any right of
                           termination, cancellation, acceleration or
                           modification in or with respect to,

                  (v)      result in or give to any Person any additional rights
                           or entitlement to increased, additional, accelerated
                           or guaranteed payments under,

                  (vi)     result in the creation of any new additional or
                           increased liability of the Company or any Subsidiary
                           under or

                  (vii)    result in the creation or imposition of any Lien
                           upon, NuVen or any Subsidiary or any of their
                           respective Assets and Properties under, any Contract
                           or Permit to which NuVen, or any Subsidiary is a
                           party or by which any of their respective Assets and
                           Properties are bound.

3.4      Governmental Approvals and Filings.  No consent, approval or action of,
         filing with or notice to any Governmental or Regulatory Authority on
         the part of NuVen, or any Subsidiary is required in connection with the
         execution, delivery and performance of this Agreement, or the
         consummation of the transactions contemplated hereby.




                                        7

<PAGE>



3.5      Corporate Formalities; Books and Records.

(a)      NuVen has complied in all material respects with all corporate
         formalities required to be complied with under applicable laws.

(b)      The minute books and other similar records of NuVen and each Subsidiary
         as made available to Purchaser prior to the Closing Date under this
         Agreement contain a true and complete record, in all material respects,
         of all action taken at all meetings and by all written consents in
         lieu of meetings of directors, members, stockholders, the management
         committee or boards of directors, subcommittees and committees of the
         boards of directors of NuVen and each Subsidiary.

3.6      Financial Statements.

(a)       NuVen has furnished the Purchaser with true and complete copies of the
          unaudited consolidated balance sheets of NuVen and its Subsidiaries as
          of May 31, 1999 and the related consolidated statements of operations,
          statement  of changes in  stockholder's  equity and cash flows for the
          period then ended,  together with the notes thereto,  (the  "Financial
          Statements").  The Financial Statements fairly present in all material
          respects  the  consolidated   financial  position  of  NuVen  and  its
          Subsidiaries  as of the respective  dates thereof,  and the results of
          operations,  and cash flows for the periods set forth therein,  all in
          conformity with GAAP.

          Absence of Changes. Since December 31, 1997 except (a) as set forth in
          Section  3.7 of  the  Disclosure  Schedule  or  (b)  the  transactions
          contemplated  by this  Agreement,  there  has not  been  any  event or
          development  which,  individually  or together with other such events,
          could  reasonably be expected to have a material adverse effect on the
          NuVen Assets. In addition,  without limiting the foregoing,  except as
          disclosed in Section 3.7 of the Disclosure Schedule and except for the
          transactions contemplated by this Agreement since May 31, 1999 neither
          NuVen nor any Subsidiary:

(a)      has (i)  declared, set aside or paid any dividend or other distribution
                  in respect of the capital stock of NuVen or any Subsidiary or

         (ii)     directly or indirectly redeemed, purchased or otherwise
                  acquired any such capital stock or other equity interests;

          authorized,  issued,  sold or  otherwise  disposed  of, or granted any
          Option  with  respect to any shares of capital  stock or other  equity
          interests of NuVen or any Subsidiary, or modified or amended any right
          of any  holder of any  outstanding  shares of  capital  stock or other
          equity  interests  of NuVen or any  Subsidiary  or Option with respect
          thereto;

(c)      (i)      increased salary, wages or other compensation (including,
                  without limitation, any bonuses, commissions and any other
                  payments) of any officer, employee or consultant of NuVen or
                  any Subsidiary whose annual salary, wages and such other
                  compensation is, or after giving effect to such change would
                  be, in the aggregate, $100,000 or more per annum;




                                        8

<PAGE>



         (ii)     established or modified (A) targets, goals, pools or similar
                  provisions under any benefit plan, employment contract or
                  other employee compensation arrangement or (B) salary ranges,
                  increase guidelines or similar provisions in respect of any
                  benefit plan, employment Contract or other employee
                  compensation arrangement; or

         (iii)    adopted, entered into, amended, modified or terminated (in
                  whole or in part) any benefit plan;

(d)      (i)       incurred any Indebtedness,

         (ii)     made or agreed to make any loans to any Person or (iii) made
                  or agreed to make any voluntary purchase, cancellation,
                  prepayment or complete or partial discharge in advance of a
                  scheduled payment date with respect to, or waiver of any right
                  of NuVen or any Subsidiary under, any Indebtedness of or owing
                  to NuVen or any Subsidiary;
         (iii)    suffered any physical damage, destruction or other casualty
                  loss (whether or not covered by insurance) adversely affecting
                  any of the real or personal property or equipment of the
                  material Assets and Properties of NuVen or any Subsidiary;

         (iv)     failed to pay or satisfy when due any obligation of NuVen or
                  any Subsidiary, except when the failure would not have a
                  material adverse effect on the Business or Condition of NuVen
                  or its Subsidiaries;

         (v)      acquired any business or Assets and Properties of any Person
                  (whether by merger, consolidation or otherwise) or disposed or
                  leased, or incurred a Lien (other than a Permitted Lien) on,
                  any Assets and Properties of NuVen or any Subsidiary, in each
                  case, other than acquisitions or dispositions of products in
                  the ordinary course of business of NuVen or such Subsidiary
                  consistent with past practice;

         (vi)     entered into, amended, modified, terminated (in whole or in
                  part) or granted a waiver under or given any consent with
                  respect to any Intellectual Property;

         (vii)    commenced, terminated or changed any line of the Business;

         (viii)   entered into any transaction with any stockholder or Affiliate
                  of NuVen or any  Subsidiary, other than pursuant to any
                  Contract in effect on the Financial Statement Date;

         (ix)     made any change in the accounting methods or procedures of
                  NuVen or any Subsidiary or became subject to any conditions or
                  event which has or could reasonably be expected to have
                  a material adverse effect on the Business or Condition
                  of NuVen; or

         (x)      entered into any agreement to do any of the things described
                  in the preceding paragraphs, including, without limitation,
                  with respect to any Business Combination not otherwise
                  restricted by the preceding paragraphs.




                                        9

<PAGE>




3.8       No Undisclosed Liabilities. At Closing, NuVen will have no Liabilities
          of, relating to or affecting the NuVen Assets or any Subsidiary or any
          of their  respective  Assets and  Properties,  except (i)  Liabilities
          reflected  or  reserved  against  in the  Financial  Statements,  (ii)
          Liabilities  disclosed in Section 3.8 of the Disclosure  Schedule,  or
          (iii)  Liabilities   incurred  in  the  ordinary  course  of  business
          consistent  with past practice since the Financial  Statement Date and
          in accordance with the provisions of this Agreement.

3.9       Taxes.

(a)       All Taxes which could  constitute a lien on the Assets and  Properties
          of NuVen or the  Subsidiaries  and which were due and payable by NuVen
          or the  Subsidiaries  with respect to the Closing Date and all periods
          beginning  and ending prior thereto have been or will be paid by NuVen
          prior to delinquency.  All Tax Returns that have been filed by or with
          respect  to  NuVen or any  Subsidiary,  or any  affiliated,  combined,
          consolidated,  unitary  or  similar  group of which  NuVen is or was a
          member with any Taxing Authority correctly and completely reflects the
          income,  franchise or other Tax  liability  and all other  information
          required  to be  reported  thereon.  NuVen and the  Subsidiaries  have
          withheld and paid all Taxes required to have been withheld and paid in
          connection  with  amounts  paid or due and  payable  to any  employee,
          creditor, independent contractor or other third party.

(b)       NuVen does not expect any Taxing  Authority  to assess any  additional
          Taxes  against  or in  respect  of it or any  Subsidiary  for any past
          period.  There is no dispute or claim  concerning any Tax liability of
          NuVen or any  Subsidiary  either  (i)  claimed or raised by any Taxing
          Authority or (ii) otherwise known to NuVen,  or any Subsidiary.  NuVen
          has delivered to Purchaser, with respect to NuVen and each Subsidiary,
          complete and correct copies of all federal,  state,  local and foreign
          income  Tax  Returns  filed by,  and all  correspondence,  agreements,
          notices,  reports or statements of  deficiencies  with, from or to any
          Taxing Authority, in each case since January 1, 1999.

3.10      Legal Proceedings.

(a)      (i)      Neither NuVen nor any Subsidiary has knowledge of any Orders
                  outstanding against NuVen or any Subsidiary; and (ii) there
                  are no Actions or Proceedings pending or, to the knowledge of
                  NuVen, or any Subsidiary, threatened against, relating to or
                  affecting NuVen or any Subsidiary or any of their respective
                  Assets and Properties. Neither NuVen nor any Subsidiary is in
                  default with respect to any Order of any court or Governmental
                  or Regulatory Authority and there are no unsatisfied judgments
                  against NuVen, or any Subsidiary.





                                       10

<PAGE>



3.11      Compliance With Laws and Orders.  NuVen and the  Subsidiaries  and the
          conduct of the Business are in compliance with all applicable Laws and
          Orders,  except  where the failure to comply would not have a material
          adverse  effect on the  Business  or  Condition  of NuVen or the NuVen
          Assets.  None of NuVen, or any Subsidiary has any knowledge that it is
          not in compliance with any of such Laws or Orders where the failure to
          comply  would  have a  material  adverse  effect  on the  Business  or
          Condition  of  NuVen  or the  NuVen  Assets.  None  of  NuVen,  or any
          Subsidiary has any reasonable  basis to anticipate  that any presently
          existing  circumstances are likely to result in violations of any such
          Laws or Orders which would,  individually or in the aggregate,  have a
          material adverse effect on the Business or Condition of NuVen.

3.12      Permits.  Section 3.12 of the Disclosure  Schedule contains a true and
          complete  list of all Permits  used in and material to the business or
          operations of NuVen or any  Subsidiary,  setting forth the owner,  the
          function and the  expiration  and renewal  date of each.  Prior to the
          execution of this Agreement, NuVen has delivered to Purchaser true and
          complete  copies of all such  Permits.  Except as disclosed in Section
          3.12 of the Disclosure Schedule:  (i) NuVen and each Subsidiary own or
          validly hold all Permits that are material to the Business,  (ii) each
          Permit  listed in Section  3.12 of the  Disclosure  Schedule is valid,
          binding and in full force and effect and (iii)  neither  NuVen nor any
          Subsidiary  is, or has  received any notice that it is, in default (or
          with the  giving  of  notice  or  lapse  of time or both,  would be in
          default) under any such Permit.

3.13      Affiliate Transactions.  (a) Except as disclosed in Section 3.13(a) of
          the Disclosure  Schedule and except as contemplated by this Agreement,
          (i) there are no Liabilities  owed to NuVen or any Subsidiary,  on the
          one hand,  by any  current or former  equity  holder or  Affiliate  of
          NuVen, on the other hand, (ii) there are no liabilities  owed by NuVen
          or any  Subsidiary  on the one  hand,  to any such  current  or former
          stockholder  or  Affiliate  of  NuVen  or any  Affiliate  of any  such
          stockholder or Affiliate,  on the other hand, (iii) neither NuVen, nor
          any such current or former stockholder or Affiliate provides or causes
          to be provided any Assets and  Properties,  services or  facilities to
          NuVen or any  Subsidiary,  and (iv) neither  NuVen nor any  Subsidiary
          provides or causes to be provided any assets,  services or  facilities
          to any such current or former stockholder or Affiliate.

(b)       Except as disclosed  in Section  3.13(b) of the  Disclosure  Schedule,
          each of the Liabilities and transactions  listed in Section 3.15(a) of
          the  Disclosure  Schedule  was incurred or engaged in, as the case may
          be, on an arm's-length basis on competitive terms.

3.14      Business  Relationships.  Since May 31, 1999, no business relationship
          of NuVen or any Subsidiary with any customer, supplier or any group of
          customers or suppliers  whose  purchases or sales, as the case may be,
          are  individually  or in the  aggregate  material  to the  Business or
          Condition  of NuVen has been,  or to the  knowledge  of NuVen,  or any
          Subsidiary,  has been threatened to be, terminated,  canceled, limited
          or changed or modified  adversely,  and, to the knowledge of NuVen, or
          any Subsidiary, there exists no present condition or state of facts or
          circumstances  with respect to such business  relationship  that would
          materially  adversely  affect the Business or  Condition of NuVen,  or
          prevent NuVen from  conducting the Business after the  consummation of
          the transactions  contemplated by this Agreement, in substantially the
          same manner in which it has heretofore been conducted.



                                       11

<PAGE>


3.15      Other  Negotiations;  Brokers.  Except as set forth in Section 3.15 of
          the Disclosure  Schedule,  neither NuVen,  nor any of their respective
          Affiliates (nor any investment banker,  financial  advisor,  attorney,
          accountant  or other Person  retained by or acting for or on behalf of
          NuVen, any Subsidiary, or any such Affiliate) (i) has entered into any
          agreement that conflicts with any of the transactions  contemplated by
          this  Agreement  or (ii) has  entered  into any  agreement  or had any
          discussions  with any third party regarding any transaction  involving
          the Company or any  Subsidiary  which could result in Purchaser or its
          members,  officers,  director,  employee, agent or Affiliate of any of
          them being subject to any claim for liability to said third party as a
          result  of  entering   into  this   Agreement  or   consummating   the
          transactions contemplated hereby or thereby.

3.16      Disclosure.   This   Agreement   does  not,  and  the   documents  and
          certificates  executed  by NuVen or  otherwise  furnished  by NuVen to
          Purchaser do not contain any untrue  statement  of a material  fact or
          omit to  state  a  material  fact  necessary  in  order  to  make  the
          statements  contained herein or therein, in light of the circumstances
          under which they were made, not  misleading.  4.  Representations  and
          Warranties of Purchaser

          Purchaser represents and warrants to NuVen that:

4.1       Organization   and   Authority.   Purchaser  is  a  corporation   duly
          incorporated,  validly existing and in good standing under the laws of
          the State of  Minnesota,  with the  corporate  power and  authority to
          carry on its  business  as now  being  conducted.  The  execution  and
          delivery of this Agreement and the  consummation  of the  transactions
          contemplated in this Agreement have been, or will be prior to closing,
          duly  authorized  by all  requisite  corporate  actions on the part of
          Purchaser.  This  Agreement  has been duly  executed and  delivered by
          Purchaser  and  constitutes  the  valid,   binding,   and  enforceable
          obligation of Purchaser.

4.2       Ability to Carry Out Agreement.  To the best of Purchaser's  knowledge
          and belief,  the execution and  performance of this Agreement will not
          violate,  or result in a breach of, or  constitute  a default  in, any
          provisions of applicable  law, any  agreement,  instrument,  judgment,
          order or decree to which Purchaser is a party or to which Purchaser is
          subject.  No consents of any persons  under any  contract or agreement
          required to be disclosed  pursuant to this  Agreement are required for
          the  execution,   delivery,  and  performance  by  Purchaser  of  this
          Agreement.

4.3       The Shares. The Shares to be issued pursuant to this Agreement will be
          issued at Closing,  free and clear of liens, claims, and encumbrances,
          and Purchaser has all necessary right and power to issue the Shares to
          NuVen as provided in this Agreement without the consent or approval of
          any person, firm, corporation, or governmental authority.





                                       12
<PAGE>


4.4       Capitalization of Purchaser. The capitalization of Purchaser is, as of
          the date hereof,  comprised of forty  million  (40,000,000)  shares of
          authorized no par value common stock of which, as of the Closing Date,
          not more than Five  Million  Five  Hundred  Eighty  Six  Thousand  One
          Hundred Sixty Three (5,586,163) shares will be issued and outstanding.
          All issued and outstanding shares are legally issued,  fully paid, and
          non-assessable,  and are not issued in violation of the  preemptive or
          other  right of any person.  In  addition  to the shares  outstanding,
          there will be, as of the Closing Date, certain outstanding options and
          warrants to purchase  shares of  Purchaser's  common stock as follows:
          (i) stock  options with an exercise  price of $.20 per share  covering
          400,000 shares.

4.5       Financial  Information.  Purchaser  has  provided  to  NuVen,  or will
          provide  prior to  Closing,  copies of its Annual  Report on Form 10-K
          and/or  10-KSB  for the two (2)  years  ending at or prior to June 30,
          1998 and the interim quarterly  financial statement on Form 10-QSB for
          the quarters ended September 30, 1998 December 31, 1998, and March 31,
          1999. The quarterly financial  statements and such Annual Reports, and
          all other information  included in such reports,  shall be referred to
          as the  "Purchaser's  Financials."  Purchaser  has no  obligations  or
          liabilities  (whether  accrued,  absolute,  contingent,  liquidated or
          otherwise,  including without limitation any tax liabilities due or to
          become due) which are not fully disclosed and adequately  provided for
          in Purchaser  Financials,  excepting current liabilities  incurred and
          obligations  under  agreements  entered into in the usual and ordinary
          course of business  since the date of  Purchaser  Financials,  none of
          which  (individually  or in the  aggregate)  are  material  except  as
          expressly  indicated  in  Purchaser  Financials.  Purchaser  is  not a
          guarantor or otherwise  contingently liable for any material amount of
          such  indebtedness.  Except as indicated in  Purchaser  Financials  or
          Purchaser  Disclosure  Documents,  there  exists no default  under the
          provisions of any instrument  evidencing  such  indebtedness or of any
          agreement relating thereto.

4.6       Litigation.  To the best knowledge and belief of Purchaser,  except as
          disclosed  pursuant to this  Agreement,  there is neither  pending nor
          threatened,  any action,  suit or  arbitration  to which its property,
          assets  or  business  is or is likely  to be  subject  and in which an
          unfavorable  outcome,  ruling or  finding  will or is likely to have a
          material adverse effect on the condition,  financial or otherwise,  or
          properties,  assets,  business or  operations,  which  would  create a
          material  liability on the part of Purchaser,  or which would conflict
          with this  Agreement or any action taken or to be taken in  connection
          with it.

4.7       Tax Matters.  Purchaser has filed or will file all federal, state, and
          local  income,  excise,  property,  and other tax returns,  forms,  or
          reports,  which are due or required to be filed by it and has paid, or
          made adequate  provision for payment of all taxes,  interest,  penalty
          fees,  assessments,  or deficiencies  shown to be due or claimed to be
          due or which have or may  become due on or in respect to such  returns
          or reports.

4.8       Contracts.  Except as disclosed pursuant to this Agreement,  there are
          no   contracts,   actual  or   contingent   obligations,   agreements,
          franchises, license agreements, or other commitments between Purchaser
          and other third parties which are material to the business,  financial
          condition, or results of operation of Purchaser, taken as a whole. For
          purposes of the preceding sentence,  the term "material" refers to any
          obligation  or  liability  which  by its  terms  calls  for  aggregate
          payments of more than $25,000.

                                       13
<PAGE>



The  following  material  contracts  will be valid and  binding  obligations  of
Purchaser with third parties as of the Closing Date:

4.8.1    Advisory Agreement with NuVen Advisors Inc.

4.8.2    Stock Option Agreement with Daniel W. Parke.

4.8.3    Stock Option Agreement with Jonathan D. Forgy.

4.8.4    Stock Option Agreement with SRS (expires June 30, 1999).

4.8.5    Employment Agreement with Jonathan D. Forgy (provides for a 1/2 of 1%
         fee for any merger or acquisition).

4.9       Material  Contract  Breaches;  Defaults.  To the  best of  Purchaser's
          knowledge and belief, except as disclosed in Purchaser Financials,  it
          has not materially  breached,  nor has it any knowledge of any pending
          or  threatened  claims  or any  legal  basis  for a claim  that it has
          materially breached, any of the terms or conditions of any agreements,
          contracts, or commitments to which it is a party or is bound and which
          might give rise to a claim by anyone against Purchaser. To the best of
          its knowledge and belief,  Purchaser is not in default in any material
          respect under the terms of any outstanding contract, agreement, lease,
          or  other  commitment  which  might  give  rise  to  a  claim  against
          Purchaser, and there is no event of default or other event which, with
          notice or lapse of time or both,  would  constitute  a default  in any
          material respect under any such contract,  agreement,  lease, or other
          commitment  which  might  give rise to a claim  against  Purchaser  in
          respect of which  Purchaser  has not taken  adequate  steps to prevent
          such a default from occurring.

4.10      Securities  Laws.  Purchaser is a public company and represents  that,
          except  as  disclosed  in  Purchaser   Disclosure   Documents  and  in
          Purchaser's Financials,  it has no existing or threatened liabilities,
          claims,  lawsuits,  or basis for the same with respect to its original
          stock issuance to its founders, its initial public offering, any other
          issuance of stock, or any dealings with its stockholders,  the public,
          the brokerage community,  the SEC, any state regulatory  agencies,  or
          other  persons.  Purchaser is required to file periodic  reports under
          Section 12(g) of the '34 Act.  Purchaser  represents  that all reports
          required to be filed pursuant to the '34 Act and any  applicable  U.S.
          state "Blue Sky" laws have been filed.

4.11      Brokers.  Purchaser has not agreed to pay any brokerage fees, finder's
          fees, or other fees or  commissions  with respect to the  transactions
          contemplated  in  this  Agreement  which  could  give  rise to a claim
          against the Shares. To the best of Purchaser's knowledge, no person or
          entity,  except NuVen  Advisors Inc. is entitled,  or intends to claim
          that it is  entitled,  to  receive  any such  fees or  commissions  in
          connection  with  such  transactions.   Purchaser  further  agrees  to
          indemnify  and hold  harmless  the  other  parties  to this  Agreement
          against  liability  to any other  broker  claiming to act on behalf of
          Purchaser.





                                       14

<PAGE>


4.12      Corporate  Records.   Copies  of  all  corporate  books  and  records,
          including,  but not  limited  to, any other  documents  and records of
          Purchaser relating to the proceeding of its shareholders and directors
          will be  provided  to NuVen  prior to Closing at the request of NuVen.
          All such records and  documents  are and will be complete,  true,  and
          correct.

4.13      Approvals.   Except  as  otherwise  provided  in  this  Agreement,  no
          authorization,  consent,  or approval  of, or  registration  or filing
          with, any governmental authority or any other person is required to be
          obtained  or made by  Purchaser  in  connection  with  the  execution,
          delivery, or performance of this Agreement.

4.14      Full Disclosure.  The information  concerning Purchaser,  set forth in
          this Agreement, and in Purchaser Disclosure Documents, is, to the best
          of  Purchaser's  knowledge  and belief,  complete  and accurate in all
          material  respects  and does not  contain  any untrue  statement  of a
          material  fact or omit to state a material  fact  required to make the
          statements made, in light of the  circumstances  under which they were
          made, not misleading.

4.15      Date of Representations  and Warranties.  Each of the  representations
          and  warranties of Purchaser  set forth in this  Agreement is true and
          correct at and as of the Closing Date,  with the same force and effect
          as though  made at and as of the  Closing  Date,  except  for  changes
          permitted or  contemplated  by this  Agreement.  Without  limiting the
          generality of the foregoing,  Company  represents and warrants that as
          of the Closing Date, its payables will be $20,000 or less.

5.       Conditions Precedent to Obligations of NuVen

          All  obligations  of NuVen  under this  Agreement  are  subject to the
          fulfillment, prior to or as of the Closing Date, of each of the
          following conditions:

5.1       Representations and Warranties.  The representations and warranties by
          Purchaser set forth in this Agreement shall be true and correct at and
          as of the Closing Date,  with the same force and effect as though made
          at and  as of the  Closing  Date,  except  for  changes  permitted  or
          contemplated by this Agreement. Purchaser shall deliver on the Closing
          Date  a  certificate   to  this  effect,   referred  to  as  Purchaser
          Certificate of Representations and Warranties.

5.2       No Breach or Default. Purchaser shall have performed and complied with
          all covenants,  agreements,  and conditions required by this Agreement
          to be performed or complied with by it prior to or at the Closing.

5.3       Action to Pay Purchase Price. Purchaser shall have taken all corporate
          and  other   action   necessary   to  issue  and  deliver  the  Shares
          representing the Purchase Price to NuVen pursuant to this Agreement at
          Closing.

5.4       Company  Disclosure  Documents.  Before  Closing,  Purchaser will have
          delivered to NuVen,  or caused the delivery of,  Purchaser  Disclosure
          Documents.




                                       15

<PAGE>



5.5       Approval of Other  Instruments and Documents by NuVen. All instruments
          and documents  delivered to NuVen  pursuant to the  provisions of this
          Agreement shall be reasonably satisfactory to their legal counsel.

5.6       Opinion of Counsel. Purchaser shall have delivered to NuVen an opinion
          of counsel dated the Closing Date to the effect that:

(A)       Purchaser is duly organized,  validly  existing,  and in good standing
          under the laws of the United States, State of Minnesota. (B)

          Purchaser   has  the   corporate   power  to  conduct   business  and,
          specifically,  to carry on its business as now being  conducted and is
          duly  qualified  to  do  business  in  the  United  States,  State  of
          Minnesota.

(C)       All  corporate  actions  and  director  approvals  have been  properly
          obtained and completed by Purchaser,  to the extent, if any, that they
          are necessary,  for all actions required under this Agreement prior to
          Closing.

(D)       This Agreement has been duly  authorized,  executed,  and delivered by
          Purchaser and is a valid and binding  obligation of Purchaser  and, in
          this regard,  Purchaser  shall provide NuVen at Closing with a copy of
          the  resolution or resolutions of the Board of Directors of Purchaser,
          approving and authorizing the issuance by Purchaser of the Shares upon
          the terms and conditions herein set forth.

6.        Conditions Precedent to Obligations of Purchaser

          All  obligations of Purchaser  under this Agreement are subject to the
          fulfillment,  prior  to or as of the  Closing  Date,  of  each  of the
          following conditions:

6.1       Representations  and Warranties.  The  representations  and warranties
          executed by and on behalf NuVen set forth in this  Agreement  shall be
          true and  correct at and as of the Closing  Date,  with the same force
          and effect as though  made at and as of the Closing  Date,  except for
          changes permitted or contemplated by this Agreement. NuVen shall cause
          to be delivered on the Closing  Date the  certificate  to this effect,
          referred to in this Agreement as the  Certificate  of  Representations
          and Warranties  executed by the President and Chief Executive  Officer
          of NuVen.

6.2       No Breach or Default. NuVen shall have performed and complied with all
          covenants, agreements, and conditions required by this Agreement to be
          performed or complied with by them prior to or at the Closing.





                                       16

<PAGE>




6.3       Action to Transfer the NuVen Assets. NuVen shall have taken all action
          necessary to transfer  the NuVen Assets to Purchaser  pursuant to this
          Agreement. In this regard, the conveyance(s) of the NuVen Assets shall
          contain  such good and  sufficient  stock  powers,  and other good and
          sufficient instruments of sale, conveyance,  transfer, and assignment,
          in form and substance  reasonably  satisfactory to Purchaser's counsel
          and with all requisite  documentary  stamps, if any, affixed, as shall
          be required or as may be appropriate  in order  effectively to vest in
          Purchaser's  good,  indefeasible,  and  marketable  title to the NuVen
          Assets free and clear of all liens, mortgages,  conditional sales, and
          other title retention  agreements,  pledges,  assessments,  covenants,
          restrictions,  reservations,  easements, and all other encumbrances of
          every nature.

          In addition to the conveyance and delivery of the NuVen Assets,  NuVen
          shall  have  taken all  action  necessary  to  deliver  all of NuVen's
          corporate  books and records,  including but not limited to its files,
          documents, papers, agreements, formulas, books of account, and records
          pertaining to its business, and evidence of compliance with applicable
          securities laws, if required and requested by Purchaser's counsel.

6.4       NuVen  Financials.  Before  Closing,  NuVen  will have  delivered  the
          Financial Statements to Purchaser.

6.5       Approval  of  Other  Instruments  and  Documents  by  Purchaser.   All
          instruments  and  documents  delivered  to  Purchaser  pursuant to the
          provisions  of this  Agreement  shall be  reasonably  satisfactory  to
          Purchaser and its legal counsel.

6.6       Opinions,  Affidavits  and  Declarations  of NuVen.  NuVen  shall have
          delivered  to  Purchaser  an  opinion  of  qualified   legal   counsel
          reasonably  satisfactory  to Purchaser,  and its counsel and auditors,
          dated as at the Closing Date, that:

(A)       NuVen is duly organized,  validly existing, and in good standing under
          the laws of the State of Nevada and that the NuVen Assets are free and
          clear of any and all liens,  encumbrances  or  contingent  liabilities
          except as disclosed pursuant to this Agreement.

(B)

          NuVen has the power to carry on its  business  as now being  conducted
          and is duly qualified to do business in any other  jurisdiction  where
          required or where the  non-qualification  to do business  would have a
          material adverse affect on the value of its business.

(C)       All action and approvals required in connection to the transfer of the
          NuVen  Assets to  Purchaser  have been  properly  taken,  completed or
          obtained by NuVen, to the extent, if any, that they are necessary.

(D)       This Agreement has been duly  authorized,  executed,  and delivered by
          NuVen and is a valid and binding obligation of NuVen.




                                       17

<PAGE>


7.        Covenants and Agreements of NuVen

          Up to and including the Closing Date, NuVen covenants that:

7.1       Access and Information.  After the execution of this Agreement,  NuVen
          will permit  Purchaser to have  reasonable  access to all  information
          necessary to verify the  representations  and warranties  made herein.
          After the Closing,  NuVen will continue to permit  Purchaser access to
          such  additional   documentation  and  information  as  is  reasonably
          necessary to completion of the  transactions  contemplated  under this
          Agreement.

7.2       Conduct of Business as Usual.  Up until the Closing Date,  NuVen shall
          insure that NuVen's  operations  shall be conducted  only in the usual
          and  ordinary  course,  and  that  no  change  will  be  made  to such
          operations  which might adversely affect the value of the NuVen Assets
          to be transferred to Purchaser.

7.3       Best  Efforts.  NuVen  shall  use its  best  efforts  to  fulfill  all
          conditions  of  the  Closing  including  the  timely  solicitation  of
          affirmative consent of all third parties necessary to effect a Closing
          under this Agreement.

7.4       Assent  to Sale of NuVen  Assets.  In the  event the sale of the NuVen
          Assets is  consummated,  then the partners of NuVen agree to such sale
          and waive, surrender,  and agree not to exercise any rights which such
          partners might have concerning the sale of the NuVen Assets.

8.        Covenants and Agreements of Purchaser

          Up to and including the Closing Date, Purchaser covenants that:

8.1       Change  in  Purchaser   Directors.   Purchaser's  Board  of  Directors
          currently  consists of five (5) seats.  At Closing,  Purchaser  agrees
          that  three (3) of the five (5)  seats on  Purchaser's  Board  will be
          vacant  and may be filled by three (3) new  directors  to be chosen by
          NuVen.  Following  appointment  of the new  directors,  the  remaining
          directors will resign.

8.2       Maintenance  of  Capital  Structure.  Up until the  Closing  Date,  or
          termination  hereof,  whichever  is the  earlier,  except as disclosed
          herein or required under the terms of this Agreement,  no change shall
          be made in the Articles of  Incorporation  or Bylaws of Purchaser,  or
          the authorized capital stock of Purchaser.

8.3       Avoidance of Distributions. Up until the Closing Date, Purchaser shall
          not declare any dividends,  make any payments or  distributions to its
          stockholders  or  purchase  for cash or  redeem  any of its  shares of
          capital stock.

8.4       Conduct of Business as Usual.  Up until the  Closing  Date,  Purchaser
          shall conduct its  operations  only in the usual and ordinary  course,
          and  that no  change  will be made  to  such  operations  which  might
          adversely affect the value of Purchaser.





                                       18
<PAGE>



8.5       Access  and  Information.  After  the  execution  of  this  Agreement,
          Purchaser  will  permit  NuVen  to  have  reasonable   access  to  all
          information  necessary to verify the representations and warranties of
          Purchaser.  After the Closing, Purchaser will continue to permit NuVen
          access to such  additional  documentation  and  information  regarding
          Purchaser as is reasonably necessary to completion of the transactions
          contemplated under this Agreement.

8.6       Best  Efforts.  Purchaser  shall use its best  efforts  to  fulfill or
          obtain the fulfillment of all conditions of the Closing, including the
          timely  solicitation  of  affirmative  consent  of all  third  parties
          necessary to effect a Closing under this Agreement.

9.        Termination

9.1       Termination  Without  Cause.  This  Agreement may be terminated at any
          time  prior to the  Closing  Date  without  cost or  penalty to either
          party:

(A)       Mutual Consent.  By mutual consent of NuVen and Purchaser.

(B)       Actions or Proceedings.  By NuVen or Purchaser,  (unless the action or
          proceeding referred to is caused by a breach or default on the part of
          NuVen or Purchaser  of any of their  representations,  warranties,  or
          obligations  under this  Agreement),  if there  shall be any actual or
          threatened  action or  proceeding  by or before any court or any other
          governmental  body  which  shall  seek  to  restrain,   prohibit,   or
          invalidate the transactions  contemplated by this Agreement and which,
          in the  judgment of NuVen or  Purchaser,  made in good faith and based
          upon the advice of legal counsel, makes it inadvisable to proceed with
          the transactions contemplated by this Agreement.

9.2       Termination with Cause


          This Agreement may be  terminated,  with the  terminating  party to be
          reimbursed by the other party of all expenses and costs related to
          this Agreement, if:

(A)       Breach or  Noncompliance  by NuVen.  NuVen shall fail to comply in any
          material  aspect  with any of their  representations,  warranties,  or
          obligations under this Agreement,  or if any of the representations or
          warranties  made by NuVen under this Agreement  shall be inaccurate in
          any material respect and is not cured within ten (10) business days of
          notice of such breach.

(B)       Breach or Noncompliance  by Purchaser.  Purchaser shall fail to comply
          in any material aspect with any of its representations, warranties, or
          obligations under this Agreement,  or if any of the representations or
          warranties  made by Purchaser under this Agreement shall be inaccurate
          in any material respect and is not cured within ten (10) business days
          of notice of such breach.




                                       19

<PAGE>



10.       Securities Registration; Disclosure

10.1      Private Transaction.  NuVen understand that the Shares issued pursuant
          to this Agreement, have not been nor will they be registered under the
          Securities Act of 1933 as amended ("'33 Act"), but are issued pursuant
          to  exemptions  from   registration   including  but  not  limited  to
          Regulation D and Section 4(2) of the '33 Act, and Purchaser's reliance
          on such  exemptions in issuing the Shares is predicated in part on the
          representations of NuVen set forth herein and in the Investment Letter
          attached  hereto  as  Exhibit  "1" (the  "Investment  Letter"),  to be
          executed by NuVen and delivered to Purchaser at Closing.

10.2      Access  to  Information.  NuVen  represents  that,  by  virtue  of its
          economic  bargaining  power or otherwise,  it has had access to or has
          been furnished with, prior to or concurrently  with Closing,  the same
          kind  of  information  that  would  be  available  in  a  registration
          statement  under the '33 Act should  registration of the Shares issued
          pursuant to this Agreement have been necessary, and that they have had
          the   opportunity  to  ask  questions  of  and  receive  answers  from
          Purchaser's  officers  and  directors,  or any  party  acting on their
          behalf,  concerning  the business of Purchaser  and that they have had
          the  opportunity to obtain any additional  information,  to the extent
          that Purchaser  possesses  such  information or can acquire it without
          unreasonable  expense or effort,  necessary  to verify the accuracy of
          information obtained or furnished by Purchaser.

11.       Indemnification

          As provided herein,  NuVen and Purchaser shall each indemnify and hold
          harmless  the other  for one (1) year  following  the date of  Closing
          under this Agreement against and in respect of any liability,  damage,
          or deficiency, all actions, suits, proceedings,  demands, assessments,
          judgments,  costs and expenses resulting from any  misrepresentations,
          breach  of  covenant  or  warranty,   or  from  any  misrepresentation
          contained  in any  certificate  furnished  hereunder.  In this regard,
          NuVen agrees that  Purchaser  is held  harmless  from and  indemnified
          against any loss,  damage,  or expense  resulting  from the falsity or
          breach of any of the  representations,  warranties,  or  agreements of
          NuVen   contained   herein  under  which  the  Shares   hereunder  are
          transferred to NuVen.

12.      Confidential Information

          Notwithstanding  any termination of this Agreement,  Purchaser,  NuVen
          and their representatives, agree to hold in confidence any information
          not generally  available to the public received by them from the other
          party  pursuant to the terms of this  Agreement.  If this Agreement is
          terminated for any reason, Purchaser,  NuVen and their representatives
          will continue to hold such  information in confidence and will, to the
          extent requested by any party, promptly return to the requesting party
          all written  material and all copies or abstracts  thereof  previously
          furnished.



                                       20
<PAGE>


13.       Miscellaneous Provisions

13.1      Survival  of  Representations  and  Warranties.  All  representations,
          warranties,  and covenants made by any party in this  Agreement  shall
          survive the Closing hereunder and the consummation of the transactions
          contemplated  hereby for three (3) years from the Closing Date.  NuVen
          and Purchaser  are  executing and carrying out the  provisions of this
          Agreement  in  reliance  on  the  representations,   warranties,   and
          covenants and agreements contained in this Agreement or at the Closing
          of the  transactions  herein provided for including any  investigation
          upon  which they  might  have made or any  representations,  warranty,
          agreement, promise, or information, written or oral, made by the other
          party or any other person other than as specifically set forth herein.

13.2      Costs and  Expenses.  Subject  to  paragraph  9 herein,  all costs and
          expenses in the proposed sale and transfer described in this Agreement
          shall be borne by NuVen and Purchaser in the following manner:

(A)       Attorneys Fees and Costs.  Each party has been  represented by its own
          attorney(s)  in  this  transaction,  shall  pay  the  fees  of its own
          attorney(s),  except  as may be  expressly  set  forth  herein  to the
          contrary.

(B)       Costs of Closing.  Each party shall bear its  reasonable  share of all
          other Closing costs and expenses arising from this Agreement.

13.3      Further  Assurances.  At any  time and from  time to time,  after  the
          effective date,  each party will execute such  additional  instruments
          and take such action as may be reasonably requested by the other party
          to confirm or perfect title to any property  transferred  hereunder or
          otherwise to carry out the intent and purposes of this Agreement.

13.4      Waiver.  Any failure of any party to this Agreement to comply with any
          of its obligations,  agreements, or conditions hereunder may be waived
          in writing by the party to whom such  compliance is owed.  The failure
          of any  party  to this  Agreement  to  enforce  at any time any of the
          provisions  of this  Agreement  shall in no way be  construed  to be a
          waiver of any such  provision  or a waiver of the right of such  party
          thereafter to enforce each and every such provision.  No waiver of any
          breach of or non-compliance  with this Agreement shall be held to be a
          waiver of any other or subsequent breach or non-compliance.

13.5      Notices. All notices and other  communications  hereunder shall either
          be in writing and shall be deemed to have been given if  delivered  in
          person,  sent by  overnight  delivery  service  or  sent by  facsimile
          transmission, to the parties hereto, or their designees, as follows:





                                       21

<PAGE>




To Purchaser:

Mr. Jonathan D. Forgy
Scientific NRG, Incorporated
2246 Lindsay Way
Glendora, CA 91740
Telephone (909) 305-0322
Facsimile (909) 599-3054

To NuVen:

Mr. Fred G. Luke
NuVen Capital L.P.
4001 South Decatur Blvd., Suite 37-130
Las Vegas, NV 89103-5800
Telephone (801) 277-8755
Facsimile (801) 277-8755

13.6      Headings.  The paragraph and  subparagraph  headings in this Agreement
          are inserted for convenience  only and shall not affect in any way the
          meaning or interpretation of this Agreement.

13.7      Counterparts.  This Agreement may be executed simultaneously in two or
          more counterparts,  each of which shall be deemed an original, but all
          of which together shall constitute one and the same instrument.

13.8

          Governing  Law.  This  Agreement  shall be governed by the laws of the
          United States, State of
         California.

13.9      Binding  Effect.  This  Agreement  shall be binding  upon the  parties
          hereto  and inure to the  benefit  of the  parties,  their  respective
          heirs, administrators, executors, successors, and assigns.

13.10     Entire Agreement. This Agreement contains the entire agreement between
          the  parties  hereto  and  supersedes  any and all  prior  agreements,
          arrangements,  or  understandings  between the parties relating to the
          subject matter of this Agreement. No oral understandings,  statements,
          promises,  or  inducements  contrary  to the  terms of this  Agreement
          exist.  No  representations,  warranties,  covenants,  or  conditions,
          express or implied,  other than as set forth herein, have been made by
          any party.

13.11     Severability.   If  any  part  of  this  Agreement  is  deemed  to  be
          unenforceable the balance of the Agreement shall remain in full force
          and effect.

13.12     Amendment.  This Agreement may be amended only by a written instrument
          executed by the parties or their respective successors or assigns.





                                       22


13.13     Facsimile Counterparts. A facsimile, telecopy or other reproduction of
          this  Agreement may be executed by one or more parties hereto and such
          executed  copy may be delivered by facsimile of similar  instantaneous
          electronic  transmission  device pursuant to which the signature of or
          on behalf of such party can be seen,  and such  execution and delivery
          shall be considered valid, binding and effective for all purposes.  At
          the  request  of any party  hereto,  all  parties  agree to execute an
          original of this Agreement as well as any facsimile, telecopy or other
          reproduction hereof.

13.14     Time is of the Essence.  Time is of the essence of this  Agreement and
          of each and every provision hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

                               "Purchaser"
                               Scientific NRG, Incorporated

                               By:      /s/ JONATHAN D. FORGY

                               Name: Jonathan D. Forgy
                               Title: President

                               "NuVen"
                               NuVen Capital L.P., a Nevada limited partnership

                                By:       /s/ FRED G. LUKE

                                Name: Fred G. Luke
                                Title: President, Chief Executive Officer







                                       23

<PAGE>



                                                                    EXHIBIT 10.5
                            ASSET PURCHASE AGREEMENT

     This Asset Purchase  Agreement  ("Agreement") is made this 29th day of June
1999 by and between  Scientific  NRG,  Incorporated.,  a  Minnesota  corporation
("SNRG"),  and Juan Flores  ("Flores")  1356 W.  Washington  Avenue,  Santa Ana,
California 92706.

     WHEREAS, SNRG desires to sell certain assets from SNRG's downlight business
listed on Exhibit A to Flores; and

     WHEREAS,  Flores  desires to purchase the assets listed on Exhibit A and to
assume the liabilities set forth on Exhibit B; and

     WHEREAS,  the  shareholders  of SNRG approved the sale of SNRG's  downlight
business on August 15, 1998; and

     WHEREAS  SNRG agrees to sell and Flores  agrees to purchase  the assets and
assume the liabilities of the downlight business subject to the terms and
conditions of this Agreement.

     NOW  THEREFORE,  for good  and  valuable  consideration,  the  receipt  and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

1.       SNRG agrees to sell to Flores all of the assets listed on Exhibit A.

2.       Flores agrees to purchase all of the assets listed on Exhibit A and to
         assume all of the liabilities set forth on Exhibit B.

3.       The purchase price shall be $50,000 cash.

4.       SNRG represents and warrants to Flores that it is the owner of the
         assets conveyed.

5.       Flores represents and warrants to SNRG that he assumes all of the
         liabilities set forth in Exhibit B and further agrees to indemnify and
         hold harmless SNRG from any and all claims from the liabilities set
         forth on Exhibit B, including, but not limited to all liability for any
         warranties, royalties or accounts payable.

6.       The closing of this Agreement shall occur on or before June 30, 1999
         (the "Closing Date").

7.       All representations and warranties made by any party in this Agreement
         shall survive the Closing hereunder and the consummation of the
         transactions contemplated hereby for one (1)year from the Closing Date.




                                        1

<PAGE>



At any time and from time to time,  after the  effective  date,  each party will
execute such  additional  instruments  and take such action as may be reasonably
requested  by the  other  party to  confirm  or  perfect  title to any  property
transferred  hereunder or otherwise to carry out the intent and purposes of this
Agreement.

Any  failure  of  any  party  to  this  Agreement  to  comply  with  any  of its
obligations, agreements, or conditions hereunder may be waived in writing by the
party  to whom  such  compliance  is  owed.  The  failure  of any  party to this
Agreement to enforce at any time any of the provisions of this  Agreement  shall
in no way be construed  to be a waiver of any such  provision or a waiver of the
right of such party  thereafter  to enforce  each and every such  provision.  No
waiver of any breach of or  non-compliance  with this Agreement shall be held to
be a waiver of any other or subsequent breach or non-compliance.

This Agreement may be executed simultaneously in two or more counterparts,  each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

This  Agreement  shall be  governed by the laws of the United  States,  State of
California.

This Agreement shall be binding upon the parties hereto and inure to the benefit
of the parties, their respective heirs, administrators,  executors,  successors,
and assigns.

This  Agreement  contains the entire  agreement  between the parties  hereto and
supersedes any and all prior agreements, arrangements, or understandings between
the  parties  relating  to  the  subject  matter  of  this  Agreement.  No  oral
understandings,  statements,  promises,  or inducements contrary to the terms of
this Agreement exist. No representations,  warranties, covenants, or conditions,
express or implied, other than as set forth herein, have been made by any party.

A facsimile, telecopy or other reproduction of this Agreement may be executed by
one or more parties  hereto and such executed copy may be delivered by facsimile
of similar  instantaneous  electronic  transmission device pursuant to which the
signature  of or on behalf of such  party can be seen,  and such  execution  and
delivery shall be considered valid,  binding and effective for all purposes.  At
the request of any party  hereto,  all  parties  agree to execute an original of
this Agreement as well as any facsimile, telecopy or other reproduction hereof.

Time is of the essence of this Agreement and of each and every provision hereof.




                                        2

<PAGE>

IN WITNESS  HEREOF the parties have executed  this  agreement as of the date set
forth above.

                                            Scientific NRG, Incorporated

                                            By:      /s/ Jonathan d. Forgy
                                            Name:        Jonathan D. Forgy
                                            Title:       President

                                            Juan Flores

                                            By:      /s/ Juan Flores
                                            Name:        Juan Flores



                                        3
<PAGE>
                                                                    EXHIBIT 23.1

                        CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Scientific NRG, Incoprporated (dba Scientific Component Systems)

We hereby  consent to the  incorporation  by reference in the  previously  filed
Registration  Statement  on Form S-8 (File No.  333-82881)  of our report  dated
August 3, 1998, appearing in the Annual Report on Form 10-KSB of Scientific NRG,
Incorporated (dba Scientific Component Systems) for the year ended June 30,1999.

                                                       CORBIN & WERTZ
Irvine, California
October 12, 1999
<PAGE>

                                                                    EXHIBIT 23.2

                        CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Scientific NRG, Incoprporated (dba Scientific Component Systems)

We  hereby  consent  to the  incorporation  by  reference  in  the  Registration
Statement on Form S-8 (File No.  333-82881) of Scientific  NRG,  Incorporated of
our report dated October 4, 1999, appearing on page F-2 of this Annual Report on
Form 10-KSB. CORBIN & WERTZ Irvine, California October 12, 1999