UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended February 28, 2005


                                   NELX, INC.
                               -----------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
<S>                                      <C>                                   <C>
======================================== ===================================== =====================================
                Kansas                                 0-21210                              84-0922335
                ------                                 -------                              ----------
---------------------------------------- ------------------------------------- -------------------------------------
    (State or other jurisdiction of            (Commission File Number)         (IRS Employer Identification No.)
            incorporation)
======================================== ===================================== =====================================
</TABLE>


               300 Summers Street, Suite 970, Charleston WV 25301
              ---------------------------------------------------
              (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (304) 343-8171
                                                           --------------



State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

                 121,966,160 common shares as of April 15, 2005



<PAGE>






                         PART I-- FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

The following financial statements are included herein in response to Item 1:


                                                                            Page
                                                                            ----

                  Financial Statements (Unaudited)

                  Consolidated Condensed Balance Sheet                       F-1
                  Consolidated Condensed Statement of Operations             F-2
                  Consolidated Condensed Statement of Cash Flows             F-3
                  Notes to Consolidated Condensed Financial Statements       F-4
























                                       2
<PAGE>
<TABLE>
<CAPTION>
NELX, INC.
CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)

                                                                                          February 28, 2005        May 31, 2004
                                                                                          -----------------     ------------------
ASSETS

CURRENT ASSETS
<S>                                                                                       <C>                   <C>
    Cash and cash equivalents                                                             $            743      $        621
    Receivables                                                                                     33,606            41,983
    Prepaid and other                                                                                6,351             7,796
                                                                                          -----------------     ------------------
      Total current assets                                                                          40,700            50,400
                                                                                          -----------------     ------------------

FURNITURE AND EQUIPMENT,
    net of accumulated depreciation of $91,687 and $87,525, respectively                            12,397            13,509

Deposits                                                                                            37,500            15,000
                                                                                          -----------------     ------------------

      Total assets                                                                        $         90,597      $     78,909
                                                                                          =================     ==================


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Current maturities of notes payable                                                   $      1,373,432      $    971,922
    Current maturities of notes payable - related parties                                        1,385,779         1,282,020
    Accounts payable                                                                               306,033           279,333
    Accrued expenses                                                                               760,935           588,334
    Accrued interest payable                                                                       104,761            55,058
                                                                                          -----------------     ------------------
      Total current liabilities                                                                  3,930,940         3,176,667
                                                                                          -----------------     ------------------

    NOTES PAYABLE TO RELATED PARTIES, less current maturities                                        1,558            42,824
                                                                                          -----------------     ------------------
      Total Long-term liabilities                                                                    1,558            42,824
                                                                                          -----------------     ------------------

STOCKHOLDERS' EQUITY
    Common stock, $.0001 par value par value; 500 million shares
      authorized: 121,785,360 shares issued and outstanding                                         12,197            12,071
    Additional paid-in capital                                                                   1,108,821         1,080,696
    Accumulated deficit                                                                         (4,962,919)       (4,233,349)
                                                                                          -----------------     ------------------
      Total stockholders' equity                                                                (3,841,901)       (3,140,582)
                                                                                          -----------------     ------------------

      Total liabilities and stockholders' equity                                          $         90,597      $     78,909
                                                                                          =================     ==================
</TABLE>

















                            See accompanying notes.

                                      F-1
<PAGE>
<TABLE>
<CAPTION>
NELX, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)

                                                       Three Months Ended February 29,      Nine Months Ended February 29,
                                                    -------------------------------------------------------------------------
                                                          2005               2004               2005              2004
                                                    -----------------  -----------------  -----------------  ----------------

<S>                                                 <C>                <C>                <C>                <C>
REVENUE                                             $         60,844   $         73,335   $        205,280   $       244,856
                                                    -----------------  -----------------  -----------------  ----------------

EXPENSES
    General and administrative                               208,775            187,048            603,549           583,592
    Business development and financing                                                -                                    -
    Mutual fund costs                                         35,011             35,207            111,442            96,309
    Interest                                                  62,769             47,864            215,697           133,198
    Depreciation and amortization                              1,387              1,331              4,162             3,886
                                                    -----------------  -----------------  -----------------  ----------------

      Total expenses                                         307,942            271,450            934,850           816,985
                                                    -----------------  -----------------  -----------------  ----------------

NET INCOME (LOSS)                                   $       (247,098)  $       (198,115)  $       (729,570)  $      (572,129)
                                                    =================  =================  =================  ================


BASIC AND DILUTIVE NET INCOME (LOSS) PER SHARE:

    NET INCOME (LOSS) PER SHARE                     $              -   $              -   $          (0.01)  $             -
                                                    =================  =================  =================  ================


    WEIGHTED AVERAGE SHARES OUTSTANDING                  121,905,893        120,577,744        121,399,485       120,577,744
                                                    =================  =================  =================  ================
</TABLE>


















                            See accompanying notes.

                                      F-2

<PAGE>
<TABLE>
<CAPTION>

NELX, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)

                                                            Three Months Ended February 29,      Nine Months Ended February 29,
                                                         -------------------------------------------------------------------------
                                                               2005               2004               2005              2004
                                                         -----------------  -----------------  -----------------  ----------------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                      <C>                <C>                <C>                <C>
    Net income (loss)                                    $       (247,098)  $       (198,115)  $       (729,570)  $      (572,129)
    Adjustments to reconcile net income (loss) to
      net cash provided by operating activities
        Depreciation and amortization                               1,387              1,331              4,162             3,886
        Stock issued for debt forbearance and guarantees            1,354                  -             28,250                 -
        Changes in operating assets and liabilities:
          Receivables                                               7,189              4,050              8,377            (5,948)
          Prepaid and other current assets                         (1,030)               976              1,445             4,878
          Accounts payable                                        (31,336)          (247,616)            26,700            68,656
          Accrued expenses and other liabilities                   57,000            123,184            222,304            96,924
                                                         -----------------  -----------------  -----------------  ----------------
        Net cash flows from (used ) operating activities         (212,534)          (316,190)          (438,332)         (403,733)
                                                         -----------------  -----------------  -----------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase furniture and equipment                                    -                  -             (3,049)             (504)
    Deposit                                                       (12,500)                 -            (22,500)                -
                                                         -----------------  -----------------  -----------------  ----------------

        Net cash flows (used ) investing activities               (12,500)                 -            (25,549)             (504)
                                                         -----------------  -----------------  -----------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES

    Proceeds from related party debt                              284,063            368,598            589,797           790,375
    Repayment of related party debt                              (186,499)          (194,300)          (527,304)         (633,421)
    Proceeds from debt obligations                                127,910            157,000            455,860           287,000
    Repayment of debt obligations                                       -            (15,000)           (54,350)          (40,000)
                                                         -----------------  -----------------  -----------------  ----------------

        Net cash flows (used ) from financing activities          225,474            316,298            464,003           403,954
                                                         -----------------  -----------------  -----------------  ----------------

NET INCREASE IN CASH                                                  440                108                122              (283)

CASH AND EQUIVALENTS, BEGINNING OF PERIOD                             303                433                621               824
                                                         -----------------  -----------------  -----------------  ----------------

CASH AND EQUIVALENTS, END OF PERIOD                      $            743   $            541   $            743   $           541
                                                         =================  =================  =================  ================


SUPPLEMENTAL DISCLOSURES:
    Interest paid                                        $         59,738   $         63,624   $        192,893   $       147,908
    Income taxes paid                                                   -                  -                  -                 -


</TABLE>











                            See accompanying notes.

                                      F-3
<PAGE>


NELX, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The accompanying  unaudited financial statements of NELX, Inc. (the "Company" or
"NELX")  were  prepared  in  accordance  with  generally   accepted   accounting
principles for interim  financial  information and Article 10 of Regulation S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  considered  necessary for a fair
presentation  of the  results of  operations  and  financial  condition  for the
periods presented have been included. Such adjustments are of a normal recurring
nature.  The results of  operations  for the three and nine month  periods ended
February 29, 2005, are not  necessarily  indicative of the results of operations
that can be  expected  for the fiscal  year  ending May 31,  2005.  For  further
information,  refer to the Company's audited financial  statements and footnotes
thereto  included in Item 7. of Form 10-KSB filed by NELX, Inc. on September 30,
2004.

NOTE B - NEW ACCOUNTING PRONOUNCEMENTS

FASB 151 -  Inventory Costs

In November  2004,  the FASB issued FASB  Statement  No. 151,  which revised ARB
No.43,  relating to inventory costs.  This revision is to clarify the accounting
for abnormal  amounts of idle  facility  expense,  freight,  handling  costs and
wasted  material  (spoilage).  This  Statement  requires  that  these  items  be
recognized  as a current  period  charge  regardless  of  whether  they meet the
criterion  specified  in ARB  43.  In  addition,  this  Statement  requires  the
allocation of fixed production  overheads to the costs of conversion be based on
normal  capacity of the production  facilities.  This Statement is effective for
financial  statements for fiscal years  beginning  after June 15, 2005.  Earlier
application  is permitted  for  inventory  costs  incurred  during  fiscal years
beginning after the date of this Statement is issued.  Management  believes this
Statement  will have no impact on the  financial  statements of the Company once
adopted.

FASB 152 - Accounting for Real Estate Time-Sharing Transactions

In December  2004,  the FASB issued FASB  Statement  No. 152,  which amends FASB
Statement  No.  66,  Accounting  for  Sales of Real  Estate,  to  reference  the
financial  accounting  and  reporting  guidance  for  real  estate  time-sharing
transactions  that is  provided  in AICPA  Statement  of  Position  (SOP)  04-2,
Accounting for Real Estate Time-Sharing Transactions. This Statement also amends
FASB Statement No. 67,  Accounting  for Costs and Initial  Rental  Operations of
Real Estate Projects,  to state that the guidance for (a) incidental  operations
and (b)  costs  incurred  to  sell  real  estate  projects  does  not  apply  to
real-estate time-sharing  transactions.  The accounting for those operations and
costs is subject to the guidance in SOP 04-2.  This  Statement is effective  for
financial statements for fiscal years beginning after June 15, 2005.  Management
believes this Statement  will have no impact on the financial  statements of the
Company once adopted.

FASB 153 - Exchanges of Nonmonetary Assets

In December  2004,  the FASB  issued FASB  Statement  No.  153.  This  Statement
addresses the  measurement of exchanges of nonmonetary  assets.  The guidance in
APB Opinion No. 29,  Accounting for  Nonmonetary  Transactions,  is based on the
principle that  exchanges of nonmonetary  assets should be measured based on the

                                      F-4
<PAGE>
NELX, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

fair value of the assets  exchanged.  The  guidance  in that  Opinion,  however,
included certain exceptions to that principle.  This Statement amends Opinion 29
to eliminate  the  exception  for  nonmonetary  exchanges of similar  productive
assets and replaces it with a general  exception  for  exchanges of  nonmonetary
assets  that do not  have  commercial  substance.  A  nonmonetary  exchange  has
commercial  substance  if the future  cash flows of the entity are  expected  to
change  significantly  as a result of the exchange.  This Statement is effective
for financial statements for fiscal years beginning after June 15, 2005. Earlier
application is permitted for nonmonetary asset exchanges  incurred during fiscal
years beginning after the date of this Statement is issued.  Management believes
this  Statement  will have no impact on the financial  statements of the Company
once adopted.

FASB 123 (revised 2004) - Share-Based Payments

In  December  2004,  the FASB  issued a  revision  to FASB  Statement  No.  123,
Accounting for Stock Based Compensation.  This Statement  supersedes APB Opinion
No. 25, Accounting for Stock Issued to Employees, and its related implementation
guidance.   This  Statement   establishes   standards  for  the  accounting  for
transactions  in which an entity  exchanges its equity  instruments for goods or
services.  It also addresses  transactions in which an entity incurs liabilities
in  exchange  for  goods or  services  that are  based on the fair  value of the
entity's  equity  instruments  or that may be settled by the  issuance  of those
equity   instruments.   This  Statement  focuses  primarily  on  accounting  for
transactions in which an entity obtains employee services in share-based payment
transactions.  This  Statement  does not  change  the  accounting  guidance  for
share-based  payment  transactions with parties other than employees provided in
Statement 123 as originally  issued and EITF Issue No.  96-18,  "Accounting  for
Equity Instruments That Are Issued to Other Than Employees for Acquiring,  or in
Conjunction  with Selling,  Goods or Services."  This Statement does not address
the accounting for employee share  ownership  plans,  which are subject to AICPA
Statement of Position 93-6,  Employers'  Accounting for Employee Stock Ownership
Plans.

A nonpublic  entity  will  measure  the cost of  employee  services  received in
exchange for an award of equity  instruments  based on the grant-date fair value
of those instruments, except in certain circumstances.

A public entity will initially measure the cost of employee services received in
exchange for an award of liability  instruments based on its current fair value;
the fair value of that award will be re-measured  subsequently at each reporting
date through the  settlement  date.  Changes in fair value during the  requisite
service  period will be  recognized  as  compensation  cost over that period.  A
nonpublic  entity may elect to measure its liability  awards at their  intrinsic
value through the date of settlement.

The grant-date fair value of employee share options and similar instruments will
be  estimated   using  the   option-pricing   models  adjusted  for  the  unique
characteristics  of those instruments  (unless  observable market prices for the
same or similar instruments are available).

Excess tax  benefits,  as defined by this  Statement,  will be  recognized as an
addition  to  paid-in-capital.  Cash  retained  as a result of those  excess tax
benefits  will be  presented in the  statement  of cash flows as financing  cash
inflows.  The  write-off  of  deferred  tax assets  relating to  unrealized  tax
benefits  associated  with  recognized  compensation  cost will be recognized as
income tax expense  unless there are excess tax benefits  from  previous  awards
remaining in paid-in capital to which it can be offset.

                                      F-5
<PAGE>
NELX, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

The notes to the financial statements of both public and nonpublic entities will
disclose information to assist users of financial  information to understand the
nature of share-based payment transactions and the effects of those transactions
on the financial statements.

The  effective  date for  public  entities  that do not  file as small  business
issuers  will be as of the  beginning of the first  interim or annual  reporting
period that begins after June 15, 2005.  For public  entities that file as small
business  issuers and nonpublic  entities the  effective  date will be as of the
beginning  of the first  interim or annual  reporting  period that begins  after
December  15,  2005.  Management  intends to comply with this  Statement  at the
scheduled effective date for the relevant financial statements of the Company.

NOTE C - NOTES PAYABLE

At February 28, 2005,  related party borrowings  amounted to $1,387,337.  During
the nine month period ended February 28, 2005,  borrowings  from related parties
amounted  to  $589,797  and  repayments  of  principal  on  such  related  party
borrowings  amounted to $527,304.  During the three month period ended  February
28, 2005, borrowings from related parties amounted to $284,603 and repayments on
such  related  party  borrowings  amount  to  $186,499.  The  majority  of  this
additional  indebtedness and the related  repayments was incurred to further the
acquisition of an insurance company. This additional  indebtedness is personally
guaranteed  by a principal  stockholder  as well as other  outside  parties.  As
additional  consideration on the debt, shares were issued to the outside parties
to guarantee their  indebtedness.  Also included in related party borrowings for
the three month  period ended  February 28, 2005 is a note from a related  party
totaling  $12,000 that is due on demand,  carries a stated  interest rate of 10%
per annum and is  convertible  into  shares of NELX during its term at $.10 (ten
cents)  per share.  During the three  month  period,  there were also  unrelated
borrowings that amounted to $127,910.  These borrowings were also related to the
acquisition of an insurance company as described above.

During the three-month  period ended February 28, 2005,  $12,700 was borrowed by
the  Company  from an  unrelated  party.  This note is due on demand,  carries a
stated  interest  rate of 12% per annum and is  convertible  into shares of NELX
during its term at $.10 (ten cents) per share.

NOTE D - COMMON STOCK

In the  three-months  ended February 28, 2005, the Company issued 180,800 shares
of common  stock valued at $1,266 (an average of $.007 per share) to third party
guarantors on debt obligations.

NOTE E - SUBSEQUENT EVENTS

During March 2005,  the Company  borrowed a total of $175,000 from two unrelated
parties.  These  amounts were  borrowed  under demand notes  payable  carrying a
stated  interest rate of 10% per annum and are  convertible  into shares of NELX
during their term at $.10 (ten cents) per share.

NOTE F - RECLASSIFICATIONS

Certain reclassifications have been made for consistent presentation.

                                      F-6

<PAGE>


ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS
                  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated  financial statements,  which have been prepared
in accordance with accounting principles generally accepted in the United States
of America.  The preparation of these financial  statements  requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,   and  related  disclosure  of  contingent  assets  and
liabilities.  On an on-going basis,  we evaluate our estimates,  including those
related to an allowance for uncollectible receivables,  impairment of long-lived
assets and income taxes. We base our estimates on historical experience, current
and anticipated business conditions, the condition of the financial markets, and
various  other  assumptions  that are believed to be reasonable  under  existing
conditions. Actual results may differ from these estimates.

We believe  that the  following  critical  accounting  policies  affect our more
significant  judgments and estimates used in the preparation of our consolidated
financial statements:

ALLOWANCE FOR  UNCOLLECTIBLE  RECEIVABLES.  The majority of our fee revenues are
generated  by  services  provided to  companies  throughout  the Eastern  United
States.  We evaluate the need for a reserve for the amount of these  receivables
that may be uncollectible,  based upon historical  collection  activity adjusted
for current  conditions.  Based on this  evaluation,  management  believes  that
substantially  all accounts  receivable are  collectible,  and therefore has not
established an allowance for estimated uncollectible accounts.

IMPAIRMENT.  We evaluate  long-lived assets,  including our undeveloped  mineral
spring  lease,  for  impairment  annually,  or  whenever  events or  changes  in
circumstances indicate that the assets may not be recoverable. The impairment is
measured  by  calculating  the  estimated  future  cash  flows  expected  to  be
generated,  and comparing this amount to the carrying  value of the asset.  Cash
flows are calculated utilizing forecasts and projections for the estimated lives
of the assets being analyzed. Should actual results differ from those forecasted
and projected, we are subject to future impairment charges.

INCOME TAXES.  We currently have net operating loss ("NOL")  carryforwards  that
can be utilized  to offset  future  income for  federal and state tax  purposes.
These NOLs generate a significant deferred tax asset.  However, we have recorded
a valuation allowance against this deferred tax asset as we have determined that
it is more likely  than not that we will not be able to fully  utilize the NOLs.
Should our assumptions  regarding the  utilization of these NOLs change,  we may
reduce  some or all of this  valuation  allowance,  which  would  result  in the
recording of an income tax benefit.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The company has $2,760,769 of long-term debt, including current installments and
excluding  fair value  adjustments,  outstanding  at February 28,  2005.  Future
payments required under these and other obligations are as follows:

                                       3
<PAGE>

<TABLE>
<CAPTION>
<S>                                                 <C>            <C>      <C>      <C>     <C>      <C>            <C>
--------------------------------------------------- -------------- -------- -------- ------- -------- -------------- -------------
CERTAIN CONTRACTUAL OBLIGATIONS                     CURRENT        2005     2006     2007    2008     THEREAFTER     TOTAL
--------------------------------------------------- -------------- -------- -------- ------- -------- -------------- -------------
Long-term debt, including current installments      2,759,211      1,558    0        0       0         0             2,760,769
--------------------------------------------------- -------------- -------- -------- ------- -------- -------------- -------------
Operating lease commitments                               949          0    0        0       0         0                   949
--------------------------------------------------- -------------- -------- -------- ------- -------- -------------- -------------
</TABLE>

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED FEBRUARY 28, 2005

The Company  experienced a loss for the  three-month  period ended  February 28,
2005 in the amount of  $247,098  as  compared  with a loss of  $198,115  for the
corresponding period ended February 29, 2004.

Revenues  for the  three-month  period  ended  February 28, 2005 were $60,844 as
compared  to $73,335 for the  corresponding  period  ended  February  29,  2004,
representing a 17.03% decrease. This decrease is largely attributable to a 20.6%
decrease in revenues  from the  investment  management  segment of the Company's
business.

Quarterly  revenues from the investment  management segment were $56,900 for the
three-month period ended February 28, 2005 as compared with $71,618 for the same
period in the previous year, a decrease of $14,718.  As investment advisory fees
are based on the market value of assets under management,  some fluctuation will
occur due to overall  market  conditions,  especially  during periods of extreme
adjustments such as have been recently experienced.  For the most part, however,
such revenues will remain  relatively  constant from quarter to quarter with any
large  fluctuations  being  attributable  to the growth or loss of assets  under
management.

Quarterly  revenues  from the surety  segment  were  $3,944 for the  three-month
period ended February 28, 2005 versus $1,717 for the same period in the previous
year,  an increase of $2,227.  Revenue for this  segment of the business is more
"seasonable"  from quarter to quarter,  due merely to the timing of the issuance
or renewal of bonds  placed by the Company.  Due to the nature of surety  bonds,
fluctuations  in revenue  for  comparable  periods  largely  reflect the overall
growth or loss of business.

Operating  expenses  for the  three-month  period  ended  February 28, 2005 were
$307,942 as compared with $271,450 for the comparable  period ended February 29,
2004, an increase of $36,492 . Such increase was  attributable to an increase in
general and administrative  expense of $21,727,  an increase in interest expense
of $27,815 and an increase of $140 in other items.

Jacobs  &  Company  ("Jacobs"),  a  wholly  owned  subsidiary  of  NELX,  is the
investment  advisor to the Jacobs & Company Mutual Fund (the "Fund").  While the
Fund is responsible for its own operating expenses,  Jacobs, as the advisor, has
agreed to limit the Fund's aggregate  annual operating  expenses to 2.00% of the
average net assets.  Under this expense  limitation  agreement,  Jacobs absorbed
approximately  $29,400 of the Fund's  operating  expenses during the three-month
period  ended  February  28,  2005.  As the Fund grows in size (of assets  under
management),  expenses  (in  excess of the 2%  level)  absorbed  by Jacobs  will
decrease  until such time as the Fund  reaches  sufficient  size to support  its
on-going operating costs. In contrast,  as the Fund grows in size, revenues from
investment  advisory  fees  will  increase.  Additionally,   should  the  Fund's
operating  expense ratio fall below the 2.00% level,  the costs  absorbed by the
Company  are  reimbursable  to it for a  period  of up to seven  years.  For the
three-month period ended February 28, 2005, the Fund's investment  advisory fees
amounted to $17,468 as compared  to $25,301  for the  corresponding  three-month
period ended February 29, 2004.

                                       4
<PAGE>

Interest expense for the three-month  period ended February 28, 2005 was $62,769
as compared with $47,864 for the  corresponding  period ended February 29, 2004.
The  increase  in  interest  expense  is  attributable  to the  increase  in the
Company's short and long-term indebtedness incurred to fund ongoing operations.

RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED FEBRUARY 28, 2005

For the nine-month  period ended  February 28, 2005,  the Company  experienced a
loss of  $729,570  as compared  with a loss of  $572,129  for the  corresponding
period ended February 29, 2004.

Revenues for the nine-month  period ended February 28, 2005 were $205,280 versus
$244,856 for the corresponding  period ended February 29, 2004. This decrease is
comprised  of a  15.2%  decrease  in  revenues  attributable  to the  investment
management  segment and a 28.4% decrease in revenues  attributable to the surety
segment of the business.

Revenues from the investment management segment were $192,174 for the nine-month
period ended  February 28, 2005 as compared with $226,530 for the same period in
the previous year, a decrease of $34,356.  As investment advisory fees are based
on the market value of assets under management,  some fluctuation will occur due
to overall market conditions,  especially during periods of extreme  adjustments
such as have  been  recently  experienced.  For the  most  part,  however,  such
revenues will remain relatively  constant from period to period,  with any large
fluctuations   being  attributable  to  the  growth  or  loss  of  assets  under
management.

Revenues from the surety  segment were $13,106 for the  nine-month  period ended
February  28, 2005 as compared  with $18,326 for the same period in the previous
year,  a decrease  of  $5,220.  Revenue  for this  segment  of the  business  is
typically more "seasonable"  from period to period,  due merely to the timing of
the  issuance or renewal of bonds  placed by the  Company.  Due to the nature of
surety bonds,  fluctuations  in revenue for  comparable  periods would  normally
reflect  the  overall  growth or loss of  business,  but in this case is largely
attributable to a reduction in the commission rate paid by the principal  market
in which the Company places its business.

Operating  expenses  for the  nine-month  period  ended  February  28, 2005 were
$934,850 as compared with $816,985 for the comparable  period ended February 29,
2004,  an increase of  $117,865.  The  principal  elements  accounting  for this
increase are mutual fund direct costs and expenses  which were  $111,442 for the
nine-month  period  ended  February  28,  2005,  as  compared to $96,309 for the
comparable period ended February 29, 2004. There was also an increase in general
and administrative expenses, which were $603,549 for the nine month period ended
February 28, 2005,  as compared with  $583,592 for the  comparable  period ended
February  29,  2004,  an increase  of $19,957.  There was an also an increase in
interest expense of $82,499 during this period.

Interest expense for the nine-month  period ended February 28, 2005 was $215,697
as compared with $133,198 for the corresponding  period ended February 29, 2004.
The  increase  in  interest  expense  is  attributable  to the  increase  in the
Company's short and long-term  indebtedness incurred to fund ongoing operations,
and the issuance of 180,800  shares of common stock valued at $1,266  ($.007 per
share) in the third quarter to third-party guarantors of debt obligations.

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<PAGE>

FUTURE DIRECTION OF COMPANY

The  Company  intends  to focus its  efforts  on the  expansion  of the  ongoing
business  activities  of FSI and Jacobs & Co.,  namely  insurance  (surety)  and
investment  management and advisory  services.  Critical to its business plan is
the  acquisition of an insurance  company that will issue surety bonds utilizing
programs  developed  by FSI and marketed by Triangle.  The  collateral  accounts
required as a condition  of the issuance of such surety bonds will be managed by
Jacobs & Co. Thus, if an insurance company can be acquired, revenue sources will
be  created  for each of  Triangle  and  Jacobs & Company,  in  addition  to the
revenues  generated by the  insurance  company  directly  from  premiums for the
issuance of surety bonds.

The  Company  has  identified  an  insurance   company  that  is  available  for
acquisition and, on May 28, 2004, entered into an Exclusivity Agreement with the
owner granting the Company the exclusive right to acquire the insurance company.
Unless  extended,  this right will expire on June 30,  2005.  A condition of the
acquisition is that the Company arrange financing. The Company has been actively
engaged  in  discussions  with  potential  sources  of  financing  and  received
commitments for 30% of the aggregate amount targeted to complete the acquisition
and implement its business  plan for the  insurance  company.  If the Company is
able  to  secure  the  balance  of  the  financing  required  and  complete  the
acquisition,  the  opportunity  in  the  marketplace  for an  insurance  company
offering surety products  combined with the synergies created for the businesses
of Triangle and Jacobs & Co. should  dramatically  enhance the overall  business
prospects  of the  Company.  However,  if the  Company is unable to arrange  the
necessary  financing and complete the acquisition,  its prospects for growth and
viability will be significantly diminished.

ANALYSIS OF LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION

As of February 28, 2005, a deficiency in working capital exists as the Company's
current  liabilities  exceed its  current  assets by  approximately  $3,890,000.
Recognizing the cash flow shortages that the Company is facing,  management will
seek to raise  additional  funds through  private  placements of stock at prices
that will not be  dilutive  to current  shareholders.  The  Company is  actively
attempting to raise  financing for the acquisition of an insurance  company.  If
such  a  financing  is  successfully  accomplished,  holders  of  the  Company's
indebtedness who have been granted the right to convert such  indebtedness  into
common shares will be encouraged to exercise  their  conversion  rights.  If the
Company is unable to arrange financing for the acquisition, it may not survive.

Irrespective of whether the Company's cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.

Going  concern  contingency:  The Company has incurred  significant  losses from
operations  since  inception,  and such  losses are  expected  to  continue.  In
addition,  the  Company  experienced  negative  cash  flow  from  operations  of
approximately  $403,700 in fiscal  2004,  and $438,300 for the nine months ended
February 28, 2005.  Also, the Company has no significant  working  capital.  The
foregoing raises  substantial doubt about the Company's ability to continue as a
going concern. Management's plans include seeking additional capital and/or debt
financing.  There is no guarantee that additional  capital and/or debt financing

                                       6
<PAGE>

will be available when and to the extent required, or that if available, it will
be on terms acceptable to the Company. The consolidated  financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.  Management  remains  optimistic  with respect to the growth of the
Company's  business as  described  above.  However,  as of February  28, 2005, a
deficiency in working capital exists as the Company's current liabilities exceed
its current assets by approximately $3,890,000.

ITEM 3.            CONTROLS AND PROCEDURES

EVALUATION OF INTERNAL AND DISCLOSURE CONTROLS

Management  of the Company  has  evaluated  the  effectiveness  of the  issuer's
disclosure  controls  and  procedures  as of a date  within 90 days prior to the
filing  date of the  report  (evaluation  date)  and  have  concluded  that  the
disclosure  controls and procedures are adequate and effective  based upon their
evaluation  as of the  evaluation  date.  There were no  significant  changes in
internal controls or in other factors that could  significantly  affect internal
controls subsequent to the date of the most recent evaluation of such, including
any  corrective  actions with regard to  significant  deficiencies  and material
weaknesses.



                           PART II - OTHER INFORMATION


ITEM 1.           LEGAL PROCEEDINGS.

                           None.


ITEM 2.           CHANGE IN SECURITIES

                           None.


ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

                           None.


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

                           None.


ITEM 5.           OTHER INFORMATION

                           None.

                                       7

<PAGE>

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K.

31.1   Certification of Chief Executive Officer and Principal Financial
       Officer pursuant to Rule13a-146.1 promulgated under the Securities
       Exchange Act of 1934

32.1   Certification pursuant to 18 U.S.C. Section 1950, as adopted pursuant
       to Section 906 of the Sarbanes-Oxley Act of 2002



                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                     NELX, Inc.
                                     (Registrant)

Dated:  April 15, 2005               By:      /s/  John M. Jacobs
                                     ---------------------------------------
                                                   John M. Jacobs
                                                   President






















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