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 August 31, 2002


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

<TABLE>
<CAPTION>
<S>                                      <C>                                   <C>
======================================== ===================================== =====================================
                KANSAS                                 0-21210                              84-092235
                ------                                 -------                              ---------
---------------------------------------- ------------------------------------- -------------------------------------
    (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:

                120,577,744 common shares as of October 21, 2002



<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)
<S>                                                                           <C>               <C>
ASSETS                                                                        August 31, 2002   May 31, 2002
                                                                              ---------------   ------------
CURRENT ASSETS
    Cash and cash equivalents                                                 $         3,162   $      8,689
    Receivables                                                                       123,303         39,312
    Prepaid and other                                                                   9,204         10,688
                                                                              ----------------  ------------
      TOTAL CURRENT ASSETS                                                            135,669         58,689
                                                                              ----------------  ------------


FURNITURE AND EQUIPMENT,
    net of accumulated depreciation of $78,139 and $76,776 respectively                18,715         20,078
                                                                              ----------------  ------------

      TOTAL ASSETS                                                            $       154,384   $     78,767
                                                                              ================  ============


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Current maturities of notes payable                                       $        46,193   $     50,000
    Current maturities of notes payable - related parties                             636,744        635,310
    Accounts payable                                                                  299,463        207,814
    Accrued expenses                                                                  361,283        335,571
    Other current liabilities
    Accrued interest payable                                                           41,368         33,449
                                                                              ----------------  ------------
      TOTAL CURRENT LIABILITIES                                                     1,385,051      1,262,144
                                                                              ----------------  ------------

LONG-TERM LIABILITIES
    Notes payable, less current maturities                                            150,000        100,000
    Notes payable, less current maturities - related parties                          332,562        226,681
                                                                              ----------------  ------------
      TOTAL LONG-TERM LIABILITIES                                                     482,562        326,681
                                                                              ----------------  ------------

STOCKHOLDERS' EQUITY
    Common stock, $.0001 par value par value; 500 million shares
      authorized: 120,577,744 shares issued and outstanding                            12,058         12,058
    Additional paid-in capital                                                      1,037,155      1,037,155
    Accumulated deficit                                                            (2,762,442)    (2,559,271)
                                                                              ----------------  -------------
      TOTAL STOCKHOLDERS' EQUITY                                                   (1,713,229)    (1,510,058)
                                                                              ----------------  -------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $       154,384   $     78,767
                                                                              ===============   =============

</TABLE>

                            See accompanying notes.
                                      F-1
<PAGE>
<TABLE>
<CAPTION>
NELX, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
<S>                                                                           <C>               <C>
                                                                                Three Months Ended August 31,
                                                                              -------------------------------
                                                                              ----------------  -------------
                                                                                     2002             2001
                                                                              ----------------  -------------


REVENUE                                                                       $        89,743   $     97,135
                                                                              ----------------  -------------

EXPENSES
    General and administrative                                                        263,970        240,686
    Costs attributable to unconsummated acquisition                                         -         42,883
    Interest                                                                           27,581         15,717
    Depreciation and amortization                                                       1,363          1,200
                                                                              ----------------  -------------

      TOTAL EXPENSES                                                                  292,914        300,486
                                                                              ----------------  -------------

OTHER INCOME                                                                                -         27,414
                                                                              ----------------  -------------


NET INCOME (LOSS)                                                             $      (203,171)  $   (175,937)
                                                                              ================  =============


BASIC AND DILUTIVE NET INCOME (LOSS) PER SHARE:

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

    WEIGHTED AVERAGE SHARES OUTSTANDING                                           120,577,744    120,577,744
                                                                              ================  =============

</TABLE>


















                            See accompanying notes.
                                      F-2
<PAGE>
<TABLE>
<CAPTION>
NELX, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
<S>                                                                           <C>               <C>
                                                                              Three Months Ended August 31,
                                                                              -------------------------------
                                                                              ----------------  -------------
                                                                                   2002             2001
                                                                              ----------------  -------------
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                                         $      (203,171)  $   (175,937)
    Adjustments to reconcile net income (loss) to
      net cash provided by operating activities
         Salary imputed to shareholder                                                      -              -
         Depreciation and amortization                                                  1,363          1,200
         Cancellation of accounts payable per settlement agreement                          -        (24,255)
         Changes in operating assets and liabilities:
           Receivables                                                                (83,991)        (1,663)
           Prepaid and other current assets                                             1,484         12,245
           Accounts payable                                                            91,649        108,896
           Accrued expenses and other liabilities                                      33,631        (14,267)
                                                                              ----------------  -------------
            Net cash flows from (used for) operating activites                       (159,035)       (93,781)
                                                                              ----------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase furniture and equipment                                                        -         (2,066)
                                                                              ----------------  -------------
            Net cash flows (used for) investing activities                                  -         (2,066)
                                                                              ----------------  -------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from related party debt                                                  197,048              -
    Payment of related party debt                                                    (189,733)             -
    Proceeds from debt obligations                                                    150,000              -
    Repayment of debt obligations                                                      (3,807)      (434,626)
    Repayment of term notes payable                                                         -       (105,475)
                                                                              ----------------  -------------

            Net cash flows (used for) from Financing activities                       153,508       (540,101)
                                                                              ----------------  -------------

NET DECREASE IN CASH                                                                   (5,527)      (635,948)

CASH AND EQUIVALENTS, BEGINNING OF PERIOD                                               8,689        771,886
                                                                              ----------------  -------------

CASH AND EQUIVALENTS, END OF PERIOD                                           $         3,162   $    135,938
                                                                              ================  =============


SUPPLEMENTAL DISCLOSURES:
    Interest paid                                                             $        19,662   $     84,704
    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-month  period ended August 31,
2002, are not  necessarily  indicative of the results of operations  that can be
expected for the fiscal year ending May 31, 2003. 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 on September 13, 2002.

Note B - Notes Payable

At August 31, 2002,  related party borrowings  amounted to $969,306.  During the
three month  period  ended August 31,  2002,  borrowings  from  related  parties
amounted  to  $197,048  and  repayments  of  principal  on  such  related  party
borrowings  amounted to  $189,733.  Additionally,  $150,000  was borrowed by the
Company from an unrelated party. The note is due October 2004,  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.  The  resulting  unpaid  balance of notes
payable to unrelated parties amounted to $196,193.

Note C - Subsequent Event

On October 21,  2002,  the  Company  borrowed an  additional  $150,000  from the
aforementioned  unrelated  party upon  similar  repayment  terms and  conversion
features.  The lender has the ability to demand  payment on this note on January
15, 2003.













                                       F-4

<PAGE>

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


RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED AUGUST 31, 2002
----------------------------------------------------------------------
NELX, Inc. (the "Company")  experienced a loss for the three-month  period ended
August 31, 2002 in the amount of  $203,171  as compared  with a loss of $175,937
for the corresponding period ended August 31, 2001.  Although,  revenues for the
corresponding  periods reflect growth in both the Company's  investment advisory
business   (Jacobs  &  Company)  and  in  the  Company's   surety  business  (FS
Investments,  Inc. or "FSI"),  operating expenses have also increased.  Targeted
marketing  has been put into place,  and other  expenses  have  increased as the
result of activities involving a proposed acquisition and related financing.

Net  revenues  for the  three-month  period  ended  August 31, 2002 were $89,743
versus $97,135 for the corresponding period ended August 31, 2001 representing a
7.6% decrease.  This decrease was largely  attributable  to higher  underwriting
fees paid to third parties attributable to the surety segment of the business.

Quarterly  revenues from the investment  management segment were $73,394 for the
three-month  period ended August 31, 2002 versus  $70,904 for the same period in
the previous year, an increase of $2,490. As investment  advisory fees are based
on the market value of assets under management,  some fluctuation will occur due
to overall market  conditions.  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.  Gross
revenues  for  the  quarter  from  the  investment   advisory  segment  were  up
approximately  3.5%, while investment  advisory  referral and distribution  fees
were up by approximately 1.2%.

Gross  premium  income of FSI  collected for the three month period ended August
31, 2002 was $280,361,  as compared to $268,305 for the corresponding  period in
the previous year.  Quarterly  revenues from the surety segment were $16,349 for
the three-month  period ended August 31, 2002 versus $26,231 for the same period
in the  previous  year,  a decrease of $9,882.  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  August  31,  2002 were
$292,914 as compared  with $300,486 for the  comparable  period ended August 31,
2001,  a decrease of $7,572.  Included in general and  administrative  costs are
expenses for the  marketing  programs  undertaken  with respect to the Company's
investment   advisory   business  of  approximately   $20,000  and  expenses  of
approximately $20,000 attributable to investigation and possible financing of an
acquisition target.

Increases  of  other  general  and  administrative  costs  are  attributable  to
increased market research and support  services,  increased  production costs in
the nature of travel,  marketing and promotion, as well as a general increase in
office costs attributable to the increase in business.

                                       3
<PAGE>

Interest expense for the three-month period ended August 31, 2002 was $27,581 as
compared with $15,717 for the corresponding period ended August 31, 2001, as the
result of increased indebtedness incurred to finance operations.

Other income of $27,414 for the period ended August 31, 2001 is comprised of the
cancellation of a trade account  payable in the amount of $24,255  pursuant to a
settlement  agreement first reached in May 1998 but not  consummated  until June
2001, and interest income in the amount of $3,159.

FUTURE DIRECTION OF COMPANY
---------------------------

The  Company  continues  to focus its  efforts on the  expansion  of the ongoing
business  activities of FSI and Jacobs & Company,  namely insurance (surety) and
investment management and advisory services.

Opportunities   for  increased   business  in  the  surety   markets   utilizing
collateralized  bonding  programs  remain very promising as  traditional  surety
programs continue to experience significant problems,  leading to withdrawals of
competitors  from  the  marketplace.  FSI  also  intends  to take  advantage  of
opportunities for the generation of income from consulting  services in relation
to the Company's surety business as they arise.

Additionally,  recent  conditions  in the  financial  markets have resulted in a
renewed focus by individuals  and  institutions  on safety and  preservation  of
capital,  which are the  cornerstone  of the investment  strategies  employed by
Jacobs & Company for its clients. Through its marketing activities,  the Company
is striving to increase  the number of its private  clients and to increase  the
assets of the  Jacobs & Company  Mutual  Fund.  Additionally,  the  mutual  fund
provides an ideal vehicle for the collateralized surety bonding programs offered
by FSI through its subsidiary Triangle Surety Agency, Inc. Management  continues
to believe this segment of its business holds much promise for growth.

ANALYSIS OF FINANCIAL CONDITION
-------------------------------

Management is optimistic with respect to the growth of the Company's business as
described  above,  but the rate of such growth is  difficult  to predict.  As of
August 31, 2002, a deficiency in working capital exists as the Company's current
liabilities exceeds its current assets by approximately  $1,250,000.  Management
continues to meet operating deficits through primarily short-term borrowings and
will  attempt  to  utilize  other  debt  and   non-dilutive   equity   financing
alternatives to sustain operations.  Whether such financing will be available as
needed and the ultimate form of such financing is uncertain.

                           PART II - OTHER INFORMATION

None

                                       4
<PAGE>

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:  October 21, 2002                By: /s/  John M. Jacobs
        ----------------                ------------------------------------
                                        John M. Jacobs
                                        President and Director













                                       5