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 08/31/96
                                                    ---------

                         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.)


                 10200 W. 44th Ave. #400, Wheat Ridge, CO 80033
                -------------------------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code:(303) 422-9497
                                                                 --------


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 August 31, 1996, there were 18,367,507 outstanding shares of common stock,
par value $.0001 were outstanding.



<PAGE>



PART 1. FINANCIAL INFORMATION

     ITEM 1. Financial Statements
             ---------------------

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

                                                     August             May
ASSETS                                              31, 1996          31, 1996
                                                   ----------        ----------
CURRENT ASSETS:
     Cash and Cash Equivalents                         (1,094)            8,701
     Prepaid Expenses                                       0                 0
     Accounts Receivable                                    0                 0
     Accrued Interest Receivable                          500               500
                                                   ----------        ----------
          Total Current Assets                           (594)            9,201

FIXED ASSETS: (Note 1)
     Land                                           3,718,452         3,716,801
     Gas Plant                                      1,000,000         1,000,000
     Vehicles                                           3,825                 0
     Equipment                                          8,654             8,654
     Apartment & Office Bldgs                         678,063           678,063
                                                   ----------        ----------
                                                    5,408,994         5,403,518
     Less Accumulated Depreciation                   (145,151)         (132,725)
                                                   ----------        ----------
          Total Net Fixed Assets                    5,263,844         5,270,793

OTHER ASSETS:
     Deposits                                           3,950             3,950
     Lease & Royalty Interests                              0                 0
     Notes Receivable                                       0                 0
     Investments                                       10,000            10,000
                                                   ----------        ----------
          Total Other Assets                           13,950            13,950

       TOTAL ASSETS                                 5,277,199         5,293,944
                                                   ==========        ==========





<PAGE>

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

CURRENT LIABILITIES:
     Accounts Payable                                    138,649        139,649
     Advance Payable                                      29,000         29,000
     Accrued Expenses                                          0              0
     Current Portion LTD                                 368,214        368,214
                                                      ----------     ----------
          Total Current Liabilities                      535,863        536,863

LONG TERM DEBT
     Note Payable                                      1,606,837      1,594,733
                                                      ----------     ----------

STOCKHOLDER'S EQUITY (DEFICIT):
     Common Stock, $.0001 par value
          - 500,000,000                                    1,965          1,895
      shares authorized, 18,947,300
         and 19,648,723 issued and
         outstanding at August 31, 1996
         and May 31, 1996
     Additional Paid In Capital                        7,254,717      7,183,780

     Retained Earnings                                (4,122,183)    (4,023,327)
                                                      ----------     ----------

     Total Stockholder's Equity                        3,134,499      3,162,348
                                                      ----------     ----------

     TOTAL LIABILITIES &
         STOCKHOLDER'S EQUITY                          5,277,199      5,293,944
                                                      ==========     ==========

             The accompanying notes are considered an integral part
                           these financial statements


<PAGE>

                            NELX, INC. AND SUBSIDIARY
                      Consolidated Statement of Operations
                                   (Unaudited)

                                                   Three Months
                                                 Ended August 31,
                                                      1996              1995
                                                 ---------------    -----------

OPERATING REVENUES
   Oil & Gas Sales                                           0           20,673

Cost of Sales                                            1,800          150,359
                                                   -----------      -----------

Gross Profit                                            (1,800)        (129,686)

OPERATING EXPENSES
   Salaries                                                  0           14,248
   Office Expense                                       14,884           13,043
   Travel                                                    0            6,127
   Professional Fees                                    56,312           98,361
   Telephone & Utilities                                 5,279            4,446
   Depreciation & Depletion                             12,425           22,972
   Miscellaneous                                             0
   Interest Expense                                          0           32,558
                                                   -----------      -----------
     Total Operating Costs                              88,900          191,755

Other Revenues & (Expenses)
   Net Rental Expense                                   (8,158)          (5,811)
   Interest Income                                           0            4,476
   Miscellaneous Income                                      0                0
                                                   -----------      -----------
     Total Other Revenues & Expenses                    (8,158)          (1,335)

NET INCOME (LOSS)                                      (98,859)        (322,776)
                                                   ===========      ===========

Weighted average number of
  shares outstanding - see note                     19,648,723       13,745,413

Net Loss Per Share                                       (0.01)           (0.02)


<PAGE>

                           NELX, INC., AND SUBSIDIARY
                      Consolidated Statement of Cash Flows
                                   (Unaudited)

                                               Three Months
                                             Ended August 31,  
                                                   1996                 1995
                                             ----------------        ----------

Cash Flows From
 Operating Activities:

Net Profit (Loss)                                 (98,859)             (322,775)

 Depreciation                                      12,426                22,972
 Stock issued for services                         51,435               242,000
 (Increase) decrease in Accts Receivable                                 55,600
 (Increase) decrease in Prepaids
 (Increase) decrease in Deposits
 (Decrease) Increase in Accrued Expenses                                (21,288)
 (Decrease) Increase in Accts Payable              (1,000)               (3,500)
 (Decrease) Increase in Accts Payable
  Related Parties                                                         3,357
                                                 --------              --------
Net Cash Flows Used for                           (35,998)              (23,634)
 Operating Activities

Cash flows from investing activities
  (Purchase) sale of fixed assets                  (5,476)              (21,523)
  (Purchase) Sale of Note receivable
  (Purchase) Sale of Investment
  (Purchase) Sale of Lease interests
                                                 --------              --------
Total cash used for investing                      (5,476)              (21,523)

Cash flows from financing activities
   Increase (Decrease) in Note payable             12,104                30,066
   Sale of common stock                            19,575                12,125
                                                 --------              --------
Total cash from financing activities               31,679                42,191

Increase (Decrease) in cash                        (9,795)               (2,966)
                                                 --------              --------

Cash and cash equivalents -
 beginning of period                                8,701                11,104
                                                 --------              --------

Cash and cash equivalents
  end of period                                    (1,094)                8,138
                                                 ========              ========


<PAGE>



ITEM 2.

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


Results of Operations
---------------------

     The Company has  experienced  continuing  operating  expenses for the three
month  period of $88,900 as compared to 1995  expenses of $191,755  for the same
period. The revenues for the period totaled $0 from oil and gas operations.  The
Company  recorded a net loss of $98,859 for the period as compared to a $322,775
loss for the same period in fiscal year 1995.  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 some
assurance that sources can be found.

     The Company had only minimal  revenue from real estate  rental and no other
revenue.

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>


PART II

                                OTHER INFORMATION


 Item 1.  Legal proceedings - None.
 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 - None.
 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 August 31,
             1996:

                  None.


                                   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: April 17, 1997                        /s/  WESLEY F. WHITING
                                           ------------------------------------
                                            Wesley F. Whiting, President