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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the Period ended SEPTEMBER 30, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____ Commission File No. 0-3689
NRG INCORPORATED
----------------
(Exact name of registrant as specified in its charter)
Delaware 23-168248
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4433 W. Touhy Ave., Suite 310, Lincolnwood, IL 60712
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 568-9246
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 such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding September 30, 2002
----- ------------------------------
Common stock, $.10 par value 255,311 shares
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
NRG INCORPORATED
Consolidated Balance Sheet
Unaudited
September 30, December 31,
ASSETS 2002 2001
Cash $ 81 $ 81
Other assets 2,408 2,408
---------- ----------
2,489 2,489
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses 2,154 2,154
Payable to affiliates 193,489 171,737
Estimated amount payable to stockholder 1,805 1,805
---------- ----------
Total liabilities 197,448 175,696
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, par value $.10 per share-
authorized 15,000,000 shares; issued,
including shares held in treasury,
305,829 shares 30,583 30,583
Additional paid-in capital 4,541,845 4,541,845
Retained earnings (deficit) (2,685,087) (2,663,335)
Treasury stock, at cost - 50518 shares (102,980) (102,980)
---------- ----------
Total stockholders' equity 1,784,361 1,806,113
---------- ----------
Less receivable from majority
stockholder (1,979,320) (1,979,320)
---------- ----------
$ 2,489 $ 2,489
========== ==========
See Accompanying Notes
2
NRG INCORPORATED
Consolidated Statements of Operations
Unaudited
For the Three Months Ended
September 30,
2002 2001
Revenues $ -0- $ -0-
General and administrative expenses 7,250 7,250
Net Loss $ (7,250) $ (7,250)
========= =========
PER SHARE INFORMATION
Weighted average number of
common shares outstanding 255,311 255,311
========= ==========
Net Loss $ (.03) $ (.03)
===== =====
See Accompanying Notes
3
NRG INCORPORATED
Consolidated Statements of Operations
Unaudited
For the Nine Months Ended
September 30,
2002 2001
Revenues $ -0- $ -0-
General and administrative expenses 21,750 21,750
Net Loss $ (21,750) $ (21,750)
====== ======
PER SHARE INFORMATION
Weighted average number of
common shares outstanding 255,311 255,311
======= =======
Net Loss $ (.09) $ (.09)
===== =====
See Accompanying Notes
4
NRG INCORPORATED
Consolidated Statements of Cash Flows
Unaudited
For the Nine Months Ended
September 30,
OPERATING ACTIVITIES: 2002 2001
Net Loss $ (21,750) $ (21,750)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Decrease in prepaid expenses-affiliate -0- -0-
Decrease in accounts payable and
accrued expenses: -0- -0-
Increase in payable to affiliates 21,750 21,750
Net cash utilized in operating activities -0- -0-
------ ------
Increase (decrease) in cash -0- -0-
Cash at beginning of period 81 81
------ ------
Cash at end of period $ 81 $ 81
====== ======
See Accompanying Notes
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NRG INCORPORATED
Notes to Consolidated Financial Statements
1. Interim Financial Statements
The accompanying consolidated financial statements are unaudited and do not
include certain information and note disclosures required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included, which consist solely of adjustments of a normal recurring nature.
These statements should be read in conjunction with the financial statements,
and notes thereto, including in the Form 10-K of NRG Incorporated ("NRG" or
"Company") for the year ended December 31, 2001. The results of operations for
the nine months ended September 30, 2002, are not necessarily indicative of the
results that may be expected for the full fiscal year.
2. Reverse Stock Split
In December 1983, the Company's Board of Directors approved a reverse stock
split effective as of the close of business on December 19, 1983, pursuant to
which one new share of common stock, par value $.10 per share, would be issued
for every 20 shares of old common stock, par value $.005 per share, then
outstanding. No other change in the attributes of the common shares would be
made.
The Company undertook to repurchase fractional shares resulting from the
implementation of the reverse stock split at the rate of $.25 for each old
share. Through oversight, certain of the corporate actions necessary to
implement fully the reverse stock split have not yet been completed; however,
the Company intends to complete the actions as soon as practicable. All the
information relating to common shares has been adjusted to reflect the full
implementation of the reverse stock split.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Liquidity and Capital Resources
The Company has no cash generating activities. Substantially all of the
Company's cash surpluses were loaned in the 1980's to its major stockholder,
TELCO, in the form of a demand note carrying interest at the rate of 2% over
prime. This note had a balance of $1,523,441 as of September 30, 2002. Through
January,1994, administrative expenses of NRG were paid by Telco and charged
against the note and management service fees from Telco were also charged
against the note. Interest income was not received in cash during the last
years. No schedule for payment of the amounts advanced has been established and
no significant collections on the amount due, including interest, are
anticipated within the next year. Because of the uncertainty as to the period
for recovery that exists due to the illiquidity of Telco, at December 31, 1991
the Company classified the loan with stockholder's equity and effectively
January 1, 1992 suspended recognition of interest in its financial statements
with respect to the loan. The receivable balance includes accrued interest
receivable of $455,879. At September 30, 2002, interest earned but not accrued
was an additional $3,180,000.
Effective February 1994, the administrative expenses and management services
were paid for/provided by Hickory. At September 30, 2002 NRG owes Hickory
$193,489 for administrative and management service fee.
The Company has current liability of $2,154, along with a liability to Telco of
$1,805, which is payable only from actual future cash receipts realized by the
Company from the sale of the vacant land.
The Company has no plans for capital expenditures or borrowing funds.
Operating Results
The Company reported a net loss of $21,750 ($ .09 per share) for the nine months
ended September 30, 2002. This compares to a net loss of $21,750 ($ .09 per
share) for the nine months ended September 30, 2001. As explained above, the
Company no longer recognized interest income from Telco in its financial
statements and, therefore, has no revenues during either period. General and
administrative expenses were $21,750 for each nine months ended September 30,
2002 and 2001, respectively. These amounts include fees of $21,750 for both
years charged by Hickory for management services (accounting, shareholder
services, legal, etc) provided.
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ITEM 3. LEGAL PROCEEDING
There are no known legal proceedings to which the Company or any of its
subsidiaries is subject, except as follows. The Secretary of State of Delaware
has proclaimed the certificate of incorporation of the Company to be forfeited
for nonpayment of franchise tax and fees. The Company has no corporate powers
until the fees, aggregating approximately $3,000 have been paid and the
appropriate corporate reports have been filed.
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NRG INCORPORATED AND SUBSIDIARIES
PART II
Item 6. Exhibits and Reports on Form 8-K
None
Signatures
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002, the undersigned
certifies that this periodic report fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that
information contained in this periodic report fairly presents, in all material
respects, the financial condition and results of operations of the company.
NRG INCORPORATED
/s/ Clyde Wm. Engle
---------------------------------
Clyde Wm. Engle
Chairman, Chief Executive,
Financial and Accounting
Officer and Director
Date: November 11, 2002
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