SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

              ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year
                               Ended May 31, 1999

                         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.)

              10525 W. 23rd Place, Lakewood, CO        80215
              -------------------------------          -----
              (Address of principal executive offices) (Zip Code)

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

Securities Registered Pursuant to Section 12(b) of the Act:

                                      NONE

Securities Registered Pursuant to Section 12(g) of the Act

                          COMMON STOCK $.0001 PAR VALUE

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
                                  --         --


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

                             Yes          No   X
                                 --            --

<PAGE>

Registrants gross revenues for its most  recent fiscal  year were  $16,524,  and
operations expenses totaled ($21,634) for a net loss of ($15,110).

State the aggregate market value of the voting stock held by  non-affiliates  of
the Registrant: $850,561 as of May 31, 1999 (a $.03/share average bid at May 31,
1999).

Indicate the number of shares outstanding of each of the Registrant's classes of
common stock: 44,352,042 common shares as of May 31, 1999.

<PAGE>

                                TABLE OF CONTENTS

                                     PART I
                                                                        Page

Item 1.               Business ..................................       1

Item 2.               Properties ................................       3

Item 3.               Legal Proceedings..........................       3

Item 4.               Submission of Matters to a Vote of
                      Security Holders..........................        3

                                     PART II

Item 5.               Market for Registrant's Common Stock and
                      Security Holder Matters ..................        4

Item 6.               Management's Discussion and Analysis of
                      Financial Condition and Results of
                      Operations ...............................        5

Item 7.               Financial Statements and Supplementary Data..     6

Item 8.               Changes in and Disagreements with Accountants
                      on Accounting and Financial Disclosure.....       6

                                           PART III

Item 9.               Directors and Executive Officers of the
                      Registrant.................................       7

Item 10.              Executive Compensation......................      9

Item 11.              Security Ownership of Certain Beneficial
                      Owners and Management......................       11

Item 12.              Certain Relationships and Related
                      Transactions...............................       11

                                            PART IV

Item 13.              Exhibits, Financial Statement Schedule
                      and Reports on Form 8-K....................       12

<PAGE>

PART I


ITEM 1.        BUSINESS

General
--------
               The Registrant was  incorporated  in the State of Kansas in March
1983 as Nelson  Exploration,  Inc.  In October  1991,  the  Registrant  acquired
Westwind  Production   Company,  a  Nevada  corporation,   which  owned  certain
non-producing  oil  and  gas  properties  and  related  assets.  The  Registrant
currently has no business  operations and it has been  unsuccessful in achieving
any oil or gas  production.  All mineral leases have been sold or terminated and
written  off.  The company  has  divested  all real estate held for  investment,
development and resale,  except for a small commercial  property in Kansas.  For
financial information see "Financial Statements and Supplementary Data."

Parent (Registrant)
-------
NELX, Inc.

Wholly owned Subsidiaries
--------------------------

        None

Oil and Gas Producing Activities.
----------------------------------
        None.  All attempts at production activities were terminated.

Patents, Trademarks, Licenses, Etc.
------------------------------------
        The Registrant does not hold any patents,  trademarks,  licenses,  etc.,
with  respect to, nor are  patents  significant  in regard to, the  Registrant's
activities.

Governmental Regulation
------------------------
     General  -  The  Registrant's   activities  may  be  subject  to  extensive
regulation by numerous federal, state and local governmental authorities, if the
Company engages in either the oil and gas or real estate business. Regulation of
the  Registrant's  development  activities,  if they ever  develop,  will have a
significant effect on the Registrant and its operating results.

<PAGE>

               Oil and Gas Activities - The Company currently has no oil and gas
               ----------------------
activities or operations.

Real Estate Business
---------------------
     The Company  originally  acquired  real estate as capital  assets to form a
base from which to grow. Due to the continuing lack of capital  partners for oil
and gas exploration,  the Company,  in 1997,  turned its attention to efforts to
liquidate its real estate  capital  assets and has done so. The Company now owns
only one small commercial property in Kansas.

     Market  factors:  Real estate  markets are greatly  influenced  by economic
cycles, availability of development, construction loans, competitive properties,
oversupply  and  other  matters  over  which  the  registrant  has  no  control.
Registrant  intends to maintain these market factors in perspective  and develop
on a basis that would allow the company and  properties  to be  liquidated  in a
cyclical market, to reduce debt.

     Capital:  The Company has no  commitments  for capital at this time for any
projects.

Competition and Markets
------------------------
     There  are many  companies  and  individuals  engaged  in the  real  estate
business. Some are very large and well established with substantial capabilities
and long earnings records. The registrant is at a competitive  disadvantage with
other firms and individuals in marketing real properties since they have greater
financial  resources  and  larger  technical  staffs  than  the  Registrant.  In
addition,  in recent  years a number of small  companies  have been formed which
have objectives similar to those of the Registrant and which present substantial
competition to the Registrant.

     A number of  factors,  beyond the  Registrant's  control  and the effect of
which cannot be accurately  predicted,  affect the  development  of real estate.
These factors include area growth,  interest rates,  transportation  routes, the
marketing of competitive properties and other matters affecting the availability
of a ready market, such as fluctuating supply and demand.

Industry Segments
------------------

Real Estate Rental Income & Expense - (Operations discontinued)
------------------------------------
Income                              $ 0
Expenses                            $ 0
Net Income (Loss)                   $ 0

<PAGE>

Oil & Gas Income and Expense                (Operations discontinued)
-----------------------------
Income                              $ 0
Cost of Sales                       $ 0
Expenses                            $ 0
Net Income                          $ 0

Employees
----------
     The Registrant retains consultants with respect to any activities for which
consulting  services may be necessary.  The Registrant from time to time retains
independent  engineering  and  geological  consultants  in  connection  with its
operations. The company President,  Charles L. Stout, is on a part time basis as
President of NELX, Inc.

ITEM 2.        PROPERTIES

Oil and Gas Properties
-----------------------
        None

REAL PROPERTY
--------------
        None

ITEM 3.        LEGAL PROCEEDINGS

        There are presently no material  pending legal  proceedings  which would
result in any uninsured liability,  other than routine litigation  incidental to
the business, to which the Registrant is a party.


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

        In March  1999,  the  shareholders elected  new directors and approved a
reverse split of  the issued and  outstanding shares in a ratio of one new share
for each ten shares outstanding.


                                           PART II

ITEM 5.        MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
               HOLDER MATTERS

               (a)    The Registrant's common stock is traded in the over-the-

<PAGE>

counter  market under the symbol NLXI (OTC  Bulletin  Board  Symbol).  The table
below sets forth the high and low bid prices of the  Registrant's  common  stock
for the periods indicated. Such prices are inter-dealer prices, without mark-up,
mark-down or commissions and do not necessarily represent actual sales.

FY 1998 (Ended May 31, 1999):
                                                   High Bid      Low Bid
                                                   --------      -------
          1st quarter                                .10           .03
          2nd quarter                                .03           .025
          3rd quarter                                .045          .03
          4th quarter                                .03           .03

FY 1997 (Ended May 31, 1998):

                                                   High Bid      Low Bid
                                                   --------      -------

        1st quarter                                .06           .025
        2nd quarter                                .075          .03
        3rd quarter                                .06           .03
        4th quarter                                .045          .03

                                                   High Bid      Low Bid
                                                   --------      -------
FY 1996:
        1st quarter                                .24           .09
        2nd quarter                                .125          .055
        3rd quarter                                .13           .045
        4th quarter                                .11           .03125

        The  above  quotations  reflect  inter-dealer  prices,   without  retail
mark-up,  mark-down,  or commission  and may not  necessarily  represent  actual
transactions.

        The Company has not  declared or paid any cash  dividends  on its common
stock and does not anticipate paying dividends for the foreseeable future.

     (b)  As of  May  31,  1999,  there  were  749  holders  of  record  of  the
Registrant's common stock.

     (c) The Registrant has neither  declared nor paid any cash dividends on its
common stock,  and it is not anticipated that any such dividend will be declared
or paid in the foreseeable future.

<PAGE>

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

        The Registrant was unable to satisfy all of its general  working capital
requirements  with  cash  flow  generated  from  oil  and gas  and  real  estate
operations  during the current fiscal year.  This deficit in working capital was
financed by loans, and capital contributions through private placement of stock.

In view of the current  economic  conditions  within the industries in which the
Registrant  participates,   the  Registrant  anticipates  that  cash  flow  from
operations  for fiscal 1999 will be  insufficient  to satisfy all of its general
working capital  requirements  necessitating  additional  capital infusions from
affiliates,  from sale of assets,  borrowing,  equity  participation or Fairmout
Agreements.

        The Registrant will continue a deficit  working capital  position in the
future if  sustaining  revenues  and growth  capital  are not  generated  by the
Registrant.

        Changes in Financial Conditions - None
        -------------------------------

        Results of Operations for 1997  Ended May 31, 1998  Fiscal Year Compared
        -----------------------------------------------------------------------
        to 1996 Fiscal Year
        -------------------

        NELX,  Inc.  incurred  operating  expenses  for fiscal  year 1997 in the
amount of $184,932 as compared  with  operating  expenses of $786,976 for fiscal
year 1996. In fiscal year 1996,  the Company  determined,  that due to defaulted
mortgage  obligations on its real estate,  it would write down its assets to the
balance  outstanding  on its mortgage  obligations,  since there  appeared to be
sufficient equity in the real estate to satisfy the obligations.  In fiscal year
1996,  the Company wrote off a note  receivable and returned real estate held to
the  senior  mortgage  holder  on two of its real  estate  parcels,  since  both
mortgages  were in default.  In fiscal year 1996, an apartment  triplex owned by
the Company was lost in foreclosure,  but it resulted in the  extinguishment  of
approximately  $111,000  in debt.  1996  write-offs  of real  estate  and a note
receivable totaled $3,266,994. In the 1997 fiscal year, the Company conveyed two
undeveloped  acreage  tracts  to  settle  debt and  lawsuits  resulting  in over
$1,000,000  in debt  elimination.  The  property  conveyed had  previously  been
written  down.  The  Registrant   expects  that  its  operating   expenses  will
substantially decrease in fiscal year 1998 over 1997. The net loss on operations
for year ended May 31, 1998 was  ($184,932)  compared to ($826,089) for year end
May 31, 1997. The Company's  total net loss after  write-offs on assets for year
ended May 31, 1998,  was  ($184,932)  as compared to  ($4,093,083)  for the year
ended May 31,  1997.  The per share loss for year ended May 31, 1997 was ($.004)
compared to ($.20) for the year ended May 31, 1996.

<PAGE>

        Registrant had no oil and gas operating revenues in fiscal year 1998 and
no oil and gas operating revenues in fiscal year 1997.

        Registrants  monthly revenue for operations is insufficient to cover its
normal operating costs and debt service.


        Liquidity and Capital Resources
        -------------------------------
     Registrant's  liquidity is limited by its  ownership of only one parecel of
real estate and some equipment not producing any revenues,  which is not readily
marketable. The Company has no cash flow from any other source.

     Registrant will be forced to seek venture  partners for capital,  or in the
alternative,  borrow  money upon its real  estate,  which may not be possible or
practical under current market conditions.

     Registrant  had no  significant  cash reserves or deposits at year end, and
was totally illiquid and without any operating funds.

     Registrant will be forced to and will seek private  placements of its stock
and loans to make up the lack of operating revenues.


ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The  response  to this Item is  included  as a separate  Exhibit to this
report. Please see pages F-1 through F-12.

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

     a) No changes in accountants have been made.

     b) In  connection  with  audits  of two most  recent  fiscal  years and any
interim period preceding  resignation,  no  disagreements  exist with any former
accountant  on any  matter of  accounting  principles  or  practices,  financial
statement disclosure, or auditing scope of procedure, which disagreements if not
resolved to the  satisfaction of the former  accountant would have caused him to
make  reference  in  connection  with his  report to the  subject  matter of the
disagreement(s).

     c) The principal  accountant's  report on the financial  statements for the
past two years  contained no adverse  opinion or a disclaimer of opinion nor was
qualified as to uncertainty,  audit scope, or accounting  principles  except for
the "going concern" qualification.

<PAGE>

                                    PART III

ITEM 9.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

               (a) The names of the  directors  and  information  about them, as
furnished by the directors themselves, are set forth below:


        Name               Age  Relationship     Term of
        ----               ---  ------------     -------
                                With Company     Office          Since
                                ------------     ------          -----

Charles L. Stout ..........49   President &      Annual    Oct. 1997
                                Director

Bruce Bowler ..............58   Director         Annual    Oct. 1998

John L. Cowan .............51   Director/        Annual    Oct. 1997
  (resigned July 1999)          Secretary

Vice President and Directo, Harry Bullock died in January 1999.

Officers and Directors

     The term of office  for each  director  is one (1) year,  or until  his/her
successor is elected at the Company's annual meeting and qualified.  The term of
office  for each  officer  of the  Company  is at the  pleasure  of the board of
directors.

     The  board  of  directors  has no  nominating,  auditing,  or  compensation
committee.  Therefore,  the  selection  of  person or  election  to the board of
directors was neither independently made nor negotiated at arm's length.

        Business Experience
        -------------------

Bruce Bowler, age 58

         Director of the  Registrant,  received his education at Colorado  State
University from 1959 to 1961 and University of Denver from 1961 to 1963 where he
received a BSBA in Building  Industry and Real Estate. He has been a Real Estate
Broker in Colorado  since 1973. In the lending  industry,  he was: a) Designated
FNMA  Underwriter;  b) Designated VA Automatic  Underwriter;  c) Designated  FHA
Underwriter for FHA Coinsurance program; d) Designated FHA Underwriter under HUD
Direct  Endorsement  Program;  and e) Certified FHA 203(k)  Rehabilitation  Loan
Program  Trainer.  From 1984 to July 31, 1998 was CEO and Chairman and principal
in Universal Lending  Corporation,  a mortgage banker.  From 1982 to 1984 he was
Senior Vice  President/Director  of Mortgage  Banking  Division of Van Schaack &
Company.  From 1980 to 1982 he was Senior Vice President of Secondary  Marketing
for Moore Mortgage Company. From 1979 to 1980 Mr. Bowler was a Vice President at
Western Bancorp Mortgage Corp. From 1975 to 1979 he advanced from Branch Manager
to Assistant Vice President to Vice President in Mortgage Banking at Van Schaack
& Company.


<PAGE>


John Cowan, age 51

         Director and Secretary of Registrant,  is a Professional Engineer and a
practicing  attorney.  He received a BA in Math in 1980 from Metropolitan  State
College, a BS in Civil Engineering in 1983 and a Juris Doctorate from University
of Denver in 1988. From 1988 to 1991 he was an attorney in the firm of Welborne,
Dufford,  Brown, and Tooley in Denver. From 1991 to 1992 he was a staff attorney
with CDM Federal Programs Corp., an EPA contractor. In 1992 until 1993 he was an
associate with the Musick & Associates,  a law firm in Boulder,  Colorado.  From
1993 to 1995 he was Special  Counsel to Welborn  Sullivan  Meck & Tooley,  a law
firm in Denver,  Colorado.  From 1995 to present he has been a sole practitioner
attorney.

Charles L. Stout, age 48

     President  and  Director,   obtained  a  B.S.  in  Mechanical   Engineering
Technology  from Fairmont  State  College.  He has post  graduate  study at West
Virginia  University.   He  is  President  and  Director  of  Applied  Mechanics
Corporation which he founded in 1983, a West Virginia Oil and Gas producer. From
1984 to  present,  he has been  President  of  Appalachian  Labor  and  Economic
Development  Corps., Ltd. He is a director of Square Roots, Inc. and is owner of
Applied Machining, Inc., a tool and die shop.

        Family Relationships
        --------------------
        There are no family  relationships  among any of the company's  officers
and directors.

        Involvement in Certain Legal Proceedings
        ----------------------------------------
        During the past five years there have been no filing of petitions  under
the federal  bankruptcy  laws, or any state  insolvency  laws, by or against any
partnership  in which any  director or  executive  officer of  Registrant  was a
general partner or executive  officer at the time or within two years before the
time of such a filing.

        No director or executive officer of Registrant has, during the past five
years,  been  convicted in a criminal  proceeding  or is the named  subject of a
pending  criminal  proceeding  (excluding  traffic  violations  and other  minor
offenses).

        During  the  past  five  years  no  director  or  executive  officer  of
Registrant  has  been  the  subject  of  any  order,  judgment  or  decree,  not
subsequently   reversed,   suspended  or  vacated  by  any  court  of  competent
jurisdiction  permanently or temporarily enjoining him from or otherwise limited
in his involvement in any type of business, securities or banking activities.

        During  the  past  five  years  no  director  or  executive  officer  of
Registrant  has  been  found  by a court of  competent  jurisdiction  in a civil
action, nor by the Securities and Exchange  Commission nor the Commodity Futures
Trading  Commission  to  have  violated  any  federal  or  state  securities  or
commodities law, which judgment or finding has not been  subsequently  reversed,
suspended or vacated.

<PAGE>

        The Executive  Officers of the Registrant are elected  annually for term
terminating  at  such  time as  their  respective  successors  are  elected  and
qualified.

        Compliance with Section 16(a) of the Exchange Act.
        --------------------------------------------------
        Section  16(a) of the  Securities  Exchange  Act of 1934 (the  "Exchange
Act") requires the Company's directors and officers and any persons who own more
than  ten  percent  of the  Company's  equity  securities,  to file  reports  of
ownership and changes in ownership with the  Securities and Exchange  Commission
(the "SEC").  Directors,  officers and greater than ten-percent shareholders are
required by SEC  regulation  to furnish  the Company  with copies of all Section
16(a) report files.

        The  Company  has   requested   that  its  officers  and  directors  and
greater-than-ten-percent  shareholders  comply with the Section  16(a) by filing
Form 5.

        The following persons had not filed Form 5 as of May 31, 1999:

        Charles L. Stout
        John L. Cowan
        Bruce Bowler

ITEM 10.       EXECUTIVE COMPENSATION

        Summary

     a)  Set  forth  in the  following  table  is  information  as to  the  cash
compensation  paid or set aside  directly or  indirectly  during the fiscal year
ended May 31, 1997,  to or for the benefit of any  executive  officer whose cash
compensation exceeded $60,000.00, and all executive officers as a group:

Name of Individual                          Capacities in               Salary
or Number of Group                          Which Served                and fees
-------------------                         --------------              --------
Charles L. Stout                            President & Director        $0
Harry Bullock                               Vice President              $0
John L. Cowan                               Director/Secretary          $0
Bruce Bowler                                Dirctor                     $0

All Executive Officers
as a Group (3 persons)                      -                           $0

               b)  Compensation paid  by the Company  for all  services provided
during  the  fiscal  year  ended  May 31,  1999,  (1) to  each of the  Company's
directors whose cash compensation exceeded $60,000 and (2) to all directors as a
group is set forth below:

<PAGE>

                                  ANNUAL COMPENSATION ($$)
                                  ------------------------
Name and Position                  Year              Fees                  Bonus
------------------                 ----              -----                 -----
Charles L. Stout, President & Dir. 1997              $0                    $0

Harry Bullock, Vice President      1997              $0                    $0

John L. Cowan                      1997              $0                    $0

Kenneth L. Curry, Director*        1997              $0                    $0

Bruce Bowler                       1997              $0                    $0

Directors                          1997              $0                    $0
Aggregate

*  Resigned in October 19998
                                  LONG TERM COMPENSATION
                                  ----------------------
                                       Options
                        Restricted     & SARs
                        Stock          LTIP          LTIP           Other
                        Awards         Payouts       Payouts        Compensation

Charles L. Stout        None           None          None           None

Harry Bullock           None           None          None           None

Kenneth L. Curry        None           None          None           None

     All  directors  and  officers as a group  received no shares as  additional
compensation

        Option/SAR Granted During the Last Fiscal Year
        ----------------------------------------------
        Registrant  does not have a stock  option or stock  appreciation  rights
plan. Therefore this section is not applicable.

        Long Term Incentive Plans/Awards in Last Fiscal Year

        Registrant has no long-term incentive plans and consequently has made no
such awards, except as set forth under Long Term Compensation above.

        Compensation of Directors
        -------------------------
        (1)  Standard Arrangements.  None
        (2)  Other  Arrangements.  There  are  no  other  arrangements  for  the
compensation of directors of the Registrant.

     Employment  Contracts and  Termination of Employment and  Change-in-Control
     ---------------------------------------------------------------------------
Arrangements. None.
------------

<PAGE>

        Report on Repricing of Options/SARs
        -----------------------------------

        No options or stock appreciation rights are outstanding or were repriced
during the fiscal year ended May 31, 1999, or subsequently.

        Employee Stock Compensation Plan - No open plans.
        -------------------------------------------------

ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

               (a) The  following  table sets  forth,  as of May 31,  1999,  the
beneficial  ownership  (as defined by the rules of the  Securities  and Exchange
Commission) of common stock of the Registrant by each person owning more than 5%
of  Registrants  Common  Stock and each officer and director and by all officers
and directors as a group, together with the percentage of the outstanding shares
of such class which such ownership represents.  Unless otherwise indicated, such
persons have sole voting and investment power with respect to such shares.

                                             Amount and Nature           Percent
                                             of Beneficial               of
Name of Beneficial Owner                     Ownership                   Class
-------------------------                     ---------                   -----
Charles L. Stout                             14,000,000                  31.5%

John L. Cowan                                1,000,000                    2.2%

Bruce Bowler                                 1,000,000                    2.2%

Kenneth L. Curry                             0                           0%

Total owned by Officers and Directors        16,100,000                  36%

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Certain Transactions
        --------------------

     None.

ITEM 13.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) Financial Statements and Schedules.  The following financial statements
and schedules for NELX,  Inc., as of May 31, 1999, and 1998 are filed as part of
this report.

<PAGE>
                                                                      Page
                                                                      ----
        (1)    Financial statements of NELX, Inc:
               Reports of Independent Accountants
               Report of Michael B. Johnson & Co.
               years ended May 31, 1999 and May 31, 1998              F-2
               Balance Sheets                                         F-3
               Statements of Operations                               F-4
               Statements of Cash Flow                                F-5 - F-6
               Statements of Shareholders' Equity                     F-7
               Notes to Financial Statements                          F-8 - F-12

        (2)    Financial Statement Schedules:
               (a)    None
               (b)    Reports on Form 8-K:

                                                   Incorporated by reference as
                                                   filed with Securities and
                                                   Exchange Commission

                                                   Incorporated by reference as
                                                   filed with Securities and
                                                   Exchange Commission

                                                   Incorporated by reference as
                                                   filed with Securities and
                                                   Exchange Commission
               (c)    Exhibits
Item No.
(under 601)

4.1*   Articles of Incorporation and By-Laws:
       Incorporated by Reference as filed with Form 10 with the
       Securities and Exchange Commission
13.1*  Quarterly Report of NELX, Inc. 10-QSB for Period ended August 31, 1998.
13.2*  Quarterly Report of NELX, Inc. 10-QSB for Period ended November 30, 1998.
13.3*  Quarterly Report of NELX, Inc. 10-QSB for Period ended February 28, 1999.
22.1*  Subsidiaries of Registrant
* Previously filed


<PAGE>

                                   SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) 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.

DATE                                               NELX, INC.

           4                                          /s/ Charles L. Stout
November -------, 1999                             by:--------------------------
                                                     Charles L. Stout, President

        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Charles L. Stout                                                    4
______________________                      President         November ___, 1999
Charles L. Stout                            and Director

/s/ Denis Iler                                                          4
______________________                      Vice President    November ___, 1999
Denis Iler

/s/ Bruce Bowler                                                        4
______________________                      Director          November ___, 1999
Bruce Bowler


<PAGE>

                                   NELX, INC.

                              FINANCIAL STATEMENTS

                        For the Year Ended May 31, 1999

<PAGE>


                          INDEPENDENT AUDITORS' REPORT


Board of Directors
NELX, Inc.


We have audited the accompanying  balance sheet of NELX, Inc. as of May 31, 1999
and  the  related   statements  of   operations,   cash  flows  and  changes  in
stockholders' equity for the year then ended. These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

As shown in the financial statements,  the company incurred a net loss of $5,110
for 1999 and had incurred  substantial losses in the prior years. At May May 31,
1999,  current  liabilities  exceed  current  assets by $92,650.  These  factors
indicate that the company has substantial doubt about the ability to continue as
a going  concern.  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 ncessary in the event
the company cannot continue in existence.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of NELX, Inc. as of May 31, 1999,
and the results of their  operations,  cash flows,  and changes in stockholders'
equity for the year then ended in conformity with generally accepted  accounting
principles.


/s/ Michael Johnson & Co., LLC

Denver, Colorado
October 13, 1999


                                      F-1

<PAGE>
<TABLE>
<CAPTION>


                                   NELX, Inc.
                                 Balance Sheet
                                    May 31,


ASSETS:                                                1999           1998
-------                                                ----           ----
<S>                                                    <C>            <C>

Current Assets:
  Cash and cash equivalents                            $      254     $     1,662
                                                       ----------     -----------
     Total Current Assets                              $      254     $     1,662

Fixed Assets:
  Plant & Plant Equipment                                 100,000         100,000
  Equipment                                                     -           8,654
  Buildings                                                54,175          82,000
                                                       ----------     -----------
                                                          154,175         190,654
Less Accumulated Depreciation                            (104,411)       (114,266)
                                                       ----------     -----------
  Next Fixed Assets                                        49,764          76,388

TOTAL ASSETS                                           $   50,018     $    78,050
                                                       ==========     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current Liabilities:
  Accounts Payable                                         24,254     $    78,765
  Accrued Expenses                                              -          10,036
  Current Portion of long-Term Debt                        68,650         158,984
                                                       ----------     -----------
     Total Current Liabilities                             92,904         247,785

TOTAL LIABILITIES                                          92,904         247,785

STOCKHOLDERS' EQUITY:
  Common Stock $.0001 par value 500,000,000
   shares authorized, 44,352,042 and 46,352,042
   issued and outstanding at May 31, 1999
   and 1998, respectively                                   4,435           4,635
  Additional paid-in capital                            7,623,975       7,465,975
  Prior Year Adjustment                                         -         635,156
  Retained Deficit                                     (7,671,296)     (8,301,342)
                                                       -----------    ------------
TOTAL STOCKHOLDERS' EQUITY                                 42,886         195,576
                                                       -----------    ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                                   $   50,018     $    52,209


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

</TABLE>

                                      F-2

<PAGE>
<TABLE>
<CAPTION>


                                   NELX, INC.
                       FINANCIAL STATEMENTS OF OPERATIONS
                           For the Year Ended May 31,


REVENUES:                          1999           1998
---------                          ----           ----
<S>                              <C>              <C>

  Revenue                        $   16,524       $         -
                                 ----------       -----------
Gross Profit                         16,524                 -

EXPENSES:
---------
  Accounting & Legal                  5,250                 -
  Consulting                            200            39,662
  Office Expense                      5,700             4,527
  Travel                                700             3,939
  Lease Expense                           -             2,049
  Professional Fees                       -            33,872
  Telephone & Utilities                 598             6,323
  Depreciation & Depletion            4,411             8,112
  Miscellaneous                           -             5,708
  Taxes                                 233             2,318
  Interest Expense                    4,542            78,422
                                -----------       -----------

Total Expenses                       21,634           184,932
                                -----------       -----------
NET LOSS                             (5,110)         (184,932)
                                ===========       ===========
Net Loss Per Share                   (0.001)            (0.01)
                                -----------       -----------

Weighted Average Number of
Shares Outstanding               44,352,042        21,327,974


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

</TABLE>

                                      F-3

<PAGE>
<TABLE>
<CAPTION>


                                   NELX, INC.
                       STATEMENT OF STOCKHOLDERS' EQUITY
                                  May 31, 1999


                                                  Common Stock             Additional                    Total
                                                                           Paid-In        Accumulated    Stockholders
                                             # of Shares    Amount         Capital        Deficit        Equity
                                             ------------------------------------------------------------------------
<S>                                          <C>            <C>            <C>            <C>            <C>

Balance at May 31, 1995                      10,437,581     $ 1,044        $5,195,578     $(1,119,758)   $ 4,076,864

Issuance of Common Stock for Cash             1,520,100         152           382,086               -        382,238
Issuance of Common Stock for Service          4,058,619         406           917,520               -        917,926
Issuance of Common Stock for Assets
  Acquired or Reduction in Liabilities        2,931,000         293           688,596               -        688,889
May 31, 1996 Net Loss                                 -           -                 -      (2,903,569)    (2,903,569)
                                             ------------------------------------------------------------------------
Balance at May 31, 1999                      18,947,300       1,895         7,183,780      (4,023,327)     3,162,348


Issuance of Common Stock for Cash               185,280          19             9,245               -          9,264
Issuance of Common Stock for Services         6,344,462         634           248,137               -        248,771
May 31, 1997 Net Loss                                 -           -                 -      (4,093,083)    (4,093,083)
                                             ------------------------------------------------------------------------
Balance at May 31, 1997                      25,477,042       2,548         7,441,162      (8,116,410)      (672,700)

Issuance of Common Stock for Cash            20,875,000       2,087            24,813               -         26,900
Adjustment for Prior Year                             -           -                 -         635,156        635,156
May 31, 1998 Net Loss                                 -           -                 -        (184,932)      (184,932)
                                             ------------------------------------------------------------------------
Balance at May 31, 1998                      46,352,042       4,635         7,465,975      (7,666,186)      (195,576)


Returned for Reissuance                      (6,000,000)       (600)                -               -           (600)
Issuance of Common Stock for Cash             4,000,000         400           158,000               -        158,400
May 31, 1999 Net Loss                                 -           -                 -          (5,110)        (5,110)
                                             ------------------------------------------------------------------------
Balance at May 31, 1999                      44,352,042     $ 4,435        $7,623,975     $(7,671,296)    $  (42,886)
                                             ========================================================================


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

</TABLE>

                                      F-4

<PAGE>
<TABLE>
<CAPTION>


                                   NELX, INC.
                            STATEMENT OF CASH FLOWS
                           For the Year Ended May 31



Cash Flows from Operating Activities:                       1999           1998
                                                            ----           ----
<S>                                                    <C>            <C>

  Net Profit (Loss)                                    $  (5,110)     $ (184,932)
  Amortiztion and Depreciation                             4,411           8,112
  (Decrease) Increase in Accounts Payable               (188,752)       (635,156)
  (Decrease) Increase in Bank Draft                            -          (8,533)
  (Decrease) Increase in Accrued Expenses                (10,036)        (66,177)
  (Increase) Decrease in Accrued Interest Recevable            -          (3,950)
                                                       ----------     -----------
Net Cash Flows Used for Operating Activities            (199,487)       (890,636)

Cash Flows from Investing Activities:
  Purchase of Fixed Assets                                     -         (55,081)
  Retirements/Repossesion of Fixed Assets                 36,479         953,825
                                                       ---------      -----------
Net Cash Flow Used for INvesting Activities               36,479         898,744

Cash Flows From Financing Activities:
  Issuance of Common Stock:                              161,600           2,087
                                                       ---------      -----------
Net Cash Flows Provided by Financing Activities:         161,600           2,087

Increase (Decrease) in cash                               (1,408)         10,195
                                                       ---------      -----------
Cash and Cash Equivalents - Beginning of Year              1,662          (8,533)
                                                       ---------      -----------
Cash and Cash Equivalents - End of Year                $     254      $    1,662
                                                       =========      ===========
Supplmental Disclosure of Cash Flow
  Information Cash Paid During the Year for:
  Interest                                             $   4,542      $   20,327
  Income Taxes                                         $       -      $        -



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

</TABLE>

                                       F-5

<PAGE>


                                   NELX, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 1999



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 law 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.

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                39.5 years
Plant                    27.5 years

In 1999 and 1998, respectfully, depreciation and depletion expense of $4,411 and
$8,112 was charged to operations.

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.


                                      F-6

<PAGE>


                                   NELX, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 1999


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,  1999,  the  Company  had  net  operating  loss   carryforwards  of
approximately  $8,306,452 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               24,904
     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
     2012            4,272,851
                    ----------

                    $8,306,452
                    ----------

There was no provision or benefit for income taxes in fiscal 1999.


NOTE 2 - NOTES PAYABLE:
         --------------

Following is a summary of notes payable at May 31,

                                                             1999
                                                             ----

     Various   Unsecured notes payable to
     8%        Shareholder, due on various dates            65,650

     8%        Unsecured note payable to Stan Jensen,
               due in 1998 at an interest rate of 8%         3,000
                                                           $68,650


                                      F-7

<PAGE>



                                   NELX, INC.
                         NOTES TO FINANCIAL STATEMENTS
                                  May 31, 1999


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

The Company incurred a net loss of $5,110 for 1999 and has incurred  substantial
net losses in the prior  years.  At May 31,  1999,  current  liabilities  exceed
current  assets  by  $92,650.   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  classifications  of
liabilities  that might be necessary in the event the Company cannot continue in
existence.

NOTE 4 - RELATED PARTY TRANSACTION:
         --------------------------

An  officer  and  director  has  loaned  the  company  funds  on many  different
occassions.


                                      F-8