SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB

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


                     For the quarterly period ended 11/30/97
                         Commission file number 0-21210


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




         Kansas                                              84-0922335
--------------------------------                         ------------------
(State or other jurisdiction                              (I.R.S. Employer
of incorporation or organization)                        Identification No.)


                      Rt. #1, Box 4-J, Bridgeport, WV 26330
                      -------------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code:(304) 622-9599
                                                            -------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                             Yes   X       No   
                                 -----        -----

As of November  30, 1997,  there were  46,352,042  outstanding  shares of common
stock, par value $.0001.



<PAGE>



PART 1. FINANCIAL INFORMATION

     ITEM 1. Financial Statements

                            NELX, INC. AND SUBSIDIARY
                           Consolidated Balance Sheet
                                   (Unaudited)

ASSETS                                       November 30, 1997      May 31, 1997
--------------------------------------------------------------------------------

 Current Assets:

 Cash on Hand                                   $        35                   0

 Bank Accounts                                       25,731                   0

 C.S. Inc. Acct                                         294                   0
                                                -----------         -----------

Total Current Assets                                 26,060                   0

Fixed Assets

 Equipment                                            6,000               6,000

 Shale Processing                                   100,000             100,000
 Equipment

 Land                                               951,000             950,000

 Buildings                                           31,000              31,000
                                                -----------         -----------

                                                  1,088,000           1,087,000

 Accumulated Depreciation                          (106,154)           (106,154)
                                                -----------         -----------

Total Fixed Assets                                  981,846             980,846

Other Assets

 Boat & Motor                                         3,825               3,825

 Crystal Mountain                                    51,000              51,000

 Misc. Equipment                                      2,654               2,654

 Deposits                                                 0               3,950

 Investments                                              0              10,000
                                                -----------         -----------

Total Other Assets                                   57,579              71,429

Total Assets                                    $ 1,065,385         $ 1,052,275
                                                ===========         ===========




<PAGE>



LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)


                                               November 30, 1997   May 31, 1997
                                               ---------------------------------

Current Liabilities

 Bank Overdraft                                  $         0        $     8,533

 Accounts Payable - Trade                            362,722            489,424

 Accrued Interest Payable                            374,149            374,149

 Current Portion of Long-                            904,406            812,252
Term Debt

 Notes Payable                                             0
                                                 -----------        -----------

Total Current Liabilities                          1,641,277          1,684,358

Long-Term Liabilities

  Notes Payable                                            0             30,617
                                                 -----------        -----------

Total Long-Term Liabilities                                0             30,617

Total Liabilities                                $ 1,641,277        $ 1,714,975

Stockholders' Equity

 Common Stock, $.0001 par                              4,635              2,548
value 500,000,000 shares
authorized, 46,352,042 and
25,477,042 issued and
outstanding at November 30,
1997 and May 31, 1997,
respectively

 Additional Paid-In Capital                        7,465,975          7,441,162

 Retained Earnings (Deficit)                      (8,046,502)        (8,106,410)
                                                 -----------        -----------

Total Stockholders' Equity                          (575,892)          (662,700)
                                                 -----------        -----------

Total Liabilities & Capital                      $ 1,065,385        $ 1,052,275
                                                 ===========        ===========



               The accompanying notes are considered an integral
                       part of these financial statements


<PAGE>
<TABLE>
<CAPTION>
                                    NELX, INC. AND SUBSIDIARY
                           Consolidated Statement of Income and Expense
                                             (Unaudited)

                                          3 Months Ended                          6 Months Ended
                                            November 30                             November 30
                                      1996               1997                 1996                1997
                                   ---------------------------------------------------------------------
OPERATING
REVENUES

<S>                                       <C>                 <C>                  <C>                 <C>
Oil & Gas Sales                           0                   0                    0                   0

Consulting Fees                           0                   0                    0                   0

Discounts Negotiated                      0                   0                    0              11,000

Misc. Income                              0              72,723                    0              95,779
                                   --------            --------             --------            --------

Total Revenues                            0              72,723                    0             106,779

OPERATING
EXPENSES

Rent                                      0                 560                    0                 560

Bank Charge                               0                  28                    0                  28

Office                               11,437               1,496               26,321               4,527

Commissions & Fees                        0               2,300                    0               2,300

Travel                                    0                   0                    0                   0

Consulting Fees                           0              (1,000)                   0              22,700

Lease Expenses                            0               2,049                    0               2,049

Dues & Subscriptions                      0                 491                    0                 491

Professional Fees                    55,030                   0              111,342                   0

Insurance                                 0              (1,375)                   0              (1,375)

Telephone & Utilities                 2,014               4,795                7,293               4,596

Postage                                   0                 636                    0                 636

Miscellaneous                             0                   0                    0                   0

Taxes & Licenses                          0                 170                    0                 170

Other Expenses                            0                 189                    0                 189

Oil & Gas Operating                  50,000                   0               51,800                   0

Wages                                     0                   0                    0                   0

Interest expense                          0                   0                    0                   0
                                   --------            --------             --------            --------

Total Operating Expenses            118,481              10,339              196,756              36,871
</TABLE>



<PAGE>
<TABLE>
<CAPTION>




OTHER REVENUE &                        3 Months            3 Months             6 Months            6 Months
(EXPENSES)                             ended               ended                ended               ended
                                       November            November             November            November
                                       30, 1996            30, 1997             30, 1996            30, 1997
                                     -----------------------------------------------------------------------------------

<S>                                          <C>                  <C>                 <C>                  <C>
Rental & Miscellaneous                       0                    0                   0                    0

Interest Income                          2,000                    0              (2,000)                   0

Depreciation                            12,425                    0             (24,850)                   0

Sale of Assets                               0                    0                   0                    0

Sale of Lease interests                      0                    0                   0                    0

Rental Expenses                          7,598                    0             (15,756)                   0
                                     ---------            ---------           ---------            ---------

Total Revenues &                        22,023                    0             (42,606)                   0
Expenses

NET INCOME (LOSS)                    $(140,504)              62,384           $(239,362)           $  69,908
                                     =========            =========           =========            =========


</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                      NELX, Inc. AND SUBSIDIARY
                                Consolidated Statement of Cash Flows
                                             (Unaudited)

                                                   Three Months Ended                            Six Months Ended
                                                      November 30                                     November 30
                                                 1996             1997                   1996                1997
                                           -------------------------------------------------------------------------
Cash Flows From
Operating Activities:

<S>                                           <C>                   <C>               <C>                   <C>   
Net Profit (Loss)                             (140,504)             62,384            (239,363)             69,908

Depreciation                                    12,424                   0              24,850                   0

Stock issued for services                      104,005                   0             155,440                   0

(Increase) decrease in Accts                         0                   0                   0                   0
Receivable

(Increase) decrease in Prepaids                      0                   0                   0                   0

(Increase) decrease in Deposits                      0               3,950                   0               3,950

(Decrease) increase in Accrued                       0                   0                   0                   0
Expenses

(Decrease) increase in Accts                         0             (34,548)             (1,000)            (34,548)
Payable

(Decrease) increase in Accts                         0                   0                   0                   0
Payable Related Parties

(Decrease) increase in advance                       0                   0                   0                   0
payable
                                              --------            --------            --------            --------

Net Cash Flows Used for                        (24,075)             31,786             (60,073)             39,310
Operating Activities

Cash Flows from investing
activities

(Purchase) sale of Fixed Assets                  6,997              (1,000)              1,521              (1,000)

(Purchase) sale of Note                              0                   0                   0                   0
Receivable

(Purchase) Sale of Investment                        0                   0                   0                   0

(Purchase) sale of Lease                             0                   0                   0                   0
Interests
                                              --------            --------            --------            --------

Total cash used for investing                    6,997              (1,000)              1,521              (1,000)


<PAGE>


Cash flows from financing
activities

Increase (Decrease) in Note                     11,719            (33,117)             23,823             (30,617)
Payable

Sale of Common Stock                             7,464             26,900              27,037              26,900
                                              --------           --------            --------            --------

Total cash from financing                       19,183             (6,217)             50,860              (3,717)
activities

Increase (Decrease) in cash                      2,103             24,569              (7,692)             34,593
                                              --------           --------            --------            --------

Cash and cash equivalents -                      1,094              1,491               8,701              (8,533)
beginning of period                           --------           --------            --------            --------
                                                        

Cash and cash equivalents -                   $  1,009             26,060            $  1,009              26,060
end of period                                 ========            =======            ========            ========


</TABLE>



<PAGE>



                                   NELX, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
         -------------------------------------------

          The  following  is a summary  of NELX,  Inc.'s  (Company)  significant
          accounting policies:

          Organization
          ------------

          The Company was  incorporated  March 25, 1983 under the laws of Kansas
          for the purpose of acquiring, dealing in and, if warranted, developing
          oil  and  gas  properties.  The  Company  may  also  engage  in  other
          businesses  or  activities   unrelated  to  natural   resources  which
          management  believes hold  potential for profit.  On October 25, 1983,
          the Company  amended  its  Articles of  Incorporation  increasing  its
          authorized shares of 0.0001 par value common stock from 200,000,000 to
          500,000,000 shares.

          On October  30,  1993,  a special  meeting of  Shareholders  was held.
          Stockholders  approved  a name  change  of  the  Company  from  Nelson
          Exploration, Inc., to NELX, Inc.

          On  November  30,  1993 the Board  approved a  "reverse  split" of the
          issued and  outstanding  shares of common stock based upon issuance of
          one (1) new  common  share in  exchange  for each 30  shares  of (old)
          common stock issued and outstanding effective as of December 31, 1993.

          Cash and Cash Equivalents:
          --------------------------

          For purposes of the statement of cash flows, cash and cash equivalents
          include cash in banks and money market accounts.

          Fixed Assets and Depreciation/Depletion:
          ----------------------------------------

          The useful lives of property,  plant, equipment, and operating leases,
          for purposes of computing depreciation/depletion are:

             Buildings                    31.5 - 39.5 years
             Machinery &                          6.0 years
             equipment
             Plant                               27.5 years


          In 1997 and 1996, respectfully,  depreciation and depletion expense of
          $19,103 and $75,207 was charged to operations.


<PAGE>

                                   NELX, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CON'T:
         --------------------------------------------------

          Income taxes:
          -------------

          The Financial  Accounting  Standards Board (FASB) has issued Statement
          of Financial Accounting Standards Number 109 ("SFAS 109"), "Accounting
          for Income Taxes", which requires a change from the deferred method to
          the asset and liability  method of accounting for income taxes.  Under
          the asset and liability  method,  deferred income taxes are recognized
          for  the tax  consequences  of  "temporary  differences"  by  applying
          enacted  statutory tax rates applicable to future years to differences
          between the financial  statement carrying amounts and the tax basis of
          existing assets and liabilities.

          At May 31, 1997, the Company had net operating loss  carryforwards  of
          approximately  $8,091,780  for  federal  income  tax  purposes.  These
          carryforwards, if not utilized to offset taxable income will expire at
          the end of the indicated years: 

                           2001               $   20,180 
                           2002                      - 
                           2003                   19,735
                           2004                   22,537
                           2005                    2,401
                           2006                    6,447 
                           2007                    2,487 
                           2008                   67,274 
                           2009                      - 
                           2010                  964,067
                           2011                2,903,569
                           2011                4,083,083
                                               ---------
                                              $8,091,780
                                              ==========

          There was no provision or benefit for income taxes in fiscal 1997.

          Reclassifications:
          ------------------

          Certain   amounts  in  the  1996   financial   statements   have  been
          reclassified to conform to the 1997 presentation.

          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  amount  of  assets  and
          liabilities  and  disclosures of contingent  assets and liabilities at
          the date of the  financial  statements  and the  reported  amounts  of
          revenues and expenses  during the  reporting  period.  Actual  results
          could differ from those estimates.


<PAGE>



                                   NELX, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - LONG-TERM DEBT:

Following is a summary of long-term debt at November 30, 1997
                                                                     1997
                                                                     ----
7.6%            Note payable to CNETCO,
                Inc., payable at $359 per
                month, due 10/05, secured by                        31,875
                4th mortgage on property

8%              Note payable to Meheen
                Engineering Corp. Profit
                Sharing Plan Trust, due 09/98,
                secured by first deed of trust on                  500,000
                land in Brighton, Colorado

14%             Note payable to DBL Mortgage
                Corp., payable at $2,800 per
                month secured by first deed of                     240,000
                trust on land in Weld County,
                Colorado.  Note is in default,
                interest escalates to 38% on
                unpaid balance.

Various         Unsecured notes payable to
%               others, due on various dates
                through 1998 at interest rates                      70,994
                from 8% - 10%

NOTE 3 - GOING CONCERN:
         --------------

          The Company incurred a net loss of $4,083,083 for fiscal year 1997 and
          has retained  earnings  (losses) of ($8,046,502) at November 30, 1997.
          At November 30, 1997,  current  liabilities  exceed  current assets by
          $575,892.  These  factors  indicate  that the Company has  substantial
          doubt  about its  ability to  continue  in  existence.  The  financial
          statements   do  not   include   any   adjustments   relating  to  the
          recoverability  and  classification of recorded assets, or the amounts
          and classification of liabilities that might be necessary in the event
          the company cannot continue in existence.

NOTE 4 - ASSET DISSOLUTION:
         ------------------

          In  November  of 1992  the  company  issued  7,400,000  shares  of the
          company's common stock for a 3 unit apartment  building,  subject to a
          promissory  note of  $57,000  to  Chrysler  First  Financial  Services
          Corporation. During the 1997 fiscal year the company was in default on
          this note and the property was foreclosed.


<PAGE>




                                   NELX, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 4 - ASSET DISSOLUTION CON'T:
         ------------------------

          In November  1993 the company  exchanged  37,600,000  shares of common
          stock and  acquired  an  industrial  building  and office  facility in
          Provo,  Utah subject to a promissory note and trust deed for $420,000.
          During the 1997  fiscal  year the  company was in default on this note
          and the  trust  deed  was  foreclosed  on the  property  and the  note
          satisfied.

          In November 1993 the company issued  20,000,000 shares of common stock
          for two separate  five  acreage  parcels of land subject to a $400,000
          note and trust  deed.  During the 1997  fiscal year the company was in
          default on this note and the properties were relinquished and the debt
          was extinguished via a deed in lieu of foreclosure.

NOTE 5 - ASSET REVALUATION:
         ------------------

          In November of 1992 the company issued  60,000,000 shares of stock for
          240 acres of land upon which the company borrowed  $240,000 via a note
          and deed of trust.  The company is in default on this  mortgage and it
          has been foreclosed.  The company believes it has reached an agreement
          to settle a lawsuit surrounding this property. At year end the company
          has  written  the  property  down  to  $450,000,  the  amount  of  the
          outstanding mortgage accrued interest and penalties.

          In October of 1993,  the  company  issued  6,200,000  shares of common
          stock in exchange for 320 acres of land  subject to a promissory  note
          and  deed of trust in the  amount  of  $500,000.  The  company  was in
          default on this mortgage at year end and subsequently gave the deed in
          lieu of foreclosure to the note holder.

          In September of 1995 the company  exchanged  350,000  shares of common
          stock for a mini mall located in Kansas subject to a note for $31,875.
          The company is in default on this note and the  company  has  revalued
          this  property  down to the  amount  of the  outstanding  mortgage  of
          $31,000.

          In 1996 and 1997, the company wrote off certain costs  associated with
          contracts to purchase  land because the company could not perform upon
          the purchase  contracts within the time requirements of the contracts.
          The purchase  contracts  were for land in Central  City,  Colorado and
          Elbert County, Colorado.

NOTE 6 - CHANGE OF CONTROL - ISSUANCE OF STOCK
         --------------------------------------

          On October  9, 1997,  the Board of  Directors  accepted  an offer from
          Charles  Stout to acquire 20 million  shares of common  stock of NELX,
          Inc., in  consideration  for his  agreement to  contribute  $20,000 in
          immediate  cash  and  to  contribute  such  additional  funding  up to
          $250,000 to settle accounts payable and commitments.  Subsequently, on
          October 17, 1997, the initial cash  contribution  of $20,000 was made.
          The 20 million shares represents 46% of the outstanding stock of NELX,
          Inc. Mr. Charles Stout was appointed President on October 9, 1997.


<PAGE>



ITEM 2.

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


Results of Operations  for six month period ended  November 30, 1997 compared to
same period in 1996.
--------------------------------------------------------------------------------

     The Company has experienced continuing operating expenses for the six month
period of $36,871  compared to $196,756 in the same period in 1996. The revenues
for the period totaled $0 from oil and gas operations  compared with $0 for same
period in 1996.  Miscellaneous revenues from discounts and liquidations totalled
$106,779 in the period in 1997.  The Company  recorded net income of $69,908 for
the period as compared to a  ($239,362)  loss for the same period in fiscal year
1996. Other Revenues and Expenses (Real Estate Rental) showed a net loss for the
period of ($0) as compared to  ($42,606)  net loss for same period in 1996.  The
Company  losses  on  operations  will  continue  until  income  from oil and gas
operations  and real estate sales and  development  can be  achieved.  While the
Company is seeking  capital sources for investment in oil and gas wells and real
estate development, there is no assurance that sources can be found. The Company
has no real estate revenues and has no other income,  except income attributable
to discounts and liquidation.

Results of  Operations  for the three  month  period  ended  November  30,  1997
compared to same period in 1996.
--------------------------------------------------------------------------------

     The Company has  experienced  continuing  operating  expenses for the three
month  period of $10,339  compared to  $118,481 in the same period in 1996.  The
revenues for the period totaled $0 from oil and gas operations  compared with $0
for same  period in 1996.  In the three  month  period in 1997,  the Company had
miscellaneous  income of $72,723 from liquidation and no miscellaneous income in
1996. The Company recorded a net income of $62,384 for the period as compared to
a ($69,908)  loss for the same period in fiscal year 1996.  Other  Revenues  and
Expenses  (Real Estate Rental) showed a net income (loss) for the period of ($0)
as compared to $22,023 net loss for same period in 1996.  The Company  losses on
operations  will continue  until income from any operations or real estate sales
can be achieved.  While the Company is seeking  capital  sources for investment,
there is no assurance that sources can be found.  The Company has no real estate
revenues and has no other income.


Liquidity and Capital Resources
-------------------------------

     The  Company had  inadequate  cash  capital at the end of the  period.  The
Company will be forced to either  borrow  against or sell assets or make private
placements of stock in order to fund operations continuance. No assurance exists
as to the ability to achieve  sales of assets or loans  against  the assets,  or
make private placements of stock.


<PAGE>

Analysis of Financial Condition
-------------------------------

     At  November  30,  1997,  there  were trade  accounts  payable in excess of
$362,722. The Company was also in default on all notes payable and had no source
of income.  The current portion of the long term debt was in excess of $904,406.
The Company had, at period end,  $26,060 in current  assets,  and the deficit in
current assets to current debts and liabilities was ($1,240,618).


<PAGE>



PART II


                                OTHER INFORMATION


Item 1. Legal proceedings -

          NELX, Inc. has been named as a Defendant in a case captioned:

          Allan E. Pezoldt and the Allan E. Pezoldt  Revocable  Living Trust vs.
          NELX,  Inc.,  f/k/a Nelson  Exploration,  Inc., a Kansas  corporation,
          Goodnight/Lowery, Inc., a Colorado corporation, Enviro Research Group,
          Inc., a Colorado corporation, William L. Goodnight,  Individually, and
          Dennis H. Skelton, Individually.

          The case  involves  240  acres of land  owned  by NELX,  Inc.  in Weld
          County,  Colorado.  A Lis Pendens has been filed against the property.
          Claims against NELX,  Inc.  include  breach of contract,  interference
          with contractual  relations,  misrepresentation/fraud,  and claims are
          made  for  rescission  and   restitution.   NELX,  Inc.  has  filed  a
          counterclaim  against the Plaintiffs for slander of title.  NELX, Inc.
          believes  it has valid  defenses  to the claims in this  case,  and is
          having  settlement  discussions  with the Plaintiff.  A trial date has
          been set for June 1998.  Although  NELX,  Inc.  believes  it has valid
          defenses,  in the event a judgment were rendered  against the Company,
          it could result in loss of an asset on its books of up to  $1,200,000,
          a very material loss.  Outcome of the litigation  cannot be predicted.
          Settlement negotiations are being conducted.

          Item 2.  Changes in securities - None.
          Item 3.  Defaults upon senior securities - None.
          Item 4.  Submission of matters to a vote of security holders - None.
          Item 5.  Other information -

          On October 9,  1997,  Charles  Stout  purchased  20,000,000  shares of
          Restricted Stock for $20,000.00 cash and an agreement to negotiate the
          settlement of up to $250,000.00 of the payables.

          Immediately   after  October  9,  1997,   funds  were   deposited  and
          negotiations were commenced to decrease the trade accounts payable. As
          of November 30, 1997,  trade accounts payable has been decreased about
          $126,000.00 and discounts negotiated are in excess of $95,000.00.



<PAGE>


Item 6. Exhibits and reports on Form 8-K

          (a)  The following are filed as Exhibits to this Quarterly Report. The
               numbers refer to the Exhibit Table of Item 601 of Regulation S-K:

                        None.

          (b)  Reports on Form 8-K filed during the three months ended  November
               30, 1997: (incorporated by reference)

                        September 26, 1997



                                   Signatures

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                            NELX, Inc.

                                            (Registrant)


Date: May 7, 1998                           /s/  Charles L. Stout
                                            ------------------------------------
                                            Charles L. Stout, President