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 March 31, 2003
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
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(Exact name of registrant as specified in its charter)
Delaware 23-168248
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4433 W. Touhy Ave., Suite 310, Lincolnwood, IL 60712
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(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 be 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 March 31, 2003
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Common stock, $.10 par value 255,311 shares
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
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NRG INCORPORATED
Consolidated Balance Sheet
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Unaudited
March 31, December 31,
ASSETS 2003 2002
------ ---- ----
Cash $ 81 $ 81
Other assets 2,408 2,408
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Total Assets 2,489 2,489
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
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Accounts payable and accrued expenses 2,154 2,154
Payable to affiliates 207,987 200,737
Estimated amount payable to stockholder 1,805 1,805
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Total liabilities 211,946 204,696
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STOCKHOLDERS' EQUITY
Common stock, par value $.10 per share-
authorized 15,000,000 shares; issued,
including shares held in treasury,
305,829 shares 30,583 30,583
Additional paid-in capital 4,541,845 4,541,845
Retained earnings (deficit) (2,699,585) (2,692,335)
Treasury stock, at cost - 50518 shares (102,980) (102,980)
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Total stockholders' equity 1,769,863 1,777,113
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Less receivable from majority
stockholder (1,979,320) (1,979,320)
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$ 2,489 $ 2,489
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See Accompanying Notes
2
NRG INCORPORATED
Consolidated Statements of Operations
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Unaudited
For the Three Months Ended
March 31,
---------
2003 2002
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Revenues $ -0- $ -0-
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General and administrative expenses 7,250 7,250
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Net Loss $ (7,250) $ (7,250)
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PER SHARE INFORMATION
Weighted average number of
common shares outstanding 255,311 255,311
======== ========
Net Loss $ (.03) $ (.03)
======== ========
See Accompanying Notes
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NRG INCORPORATED
Consolidated Statements of Cash Flows
-------------------------------------
Unaudited
For the Three Months Ended
March 31
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OPERATING ACTIVITIES: 2003 2002
---- ----
Net Loss $ (7,250) $ (7,250)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Increase in payable to affiliates 7,250 7,250
Net cash utilized in operating activities -0- -0-
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Increase (decrease) in cash -0- -0-
Cash at beginning of period 81 81
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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, 2002. The results of operations for
the three months ended March 31, 2003, 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
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OF OPERATIONS.
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Liquidity and Capital Resources
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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 March 31, 2003. 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 10
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 March 31, 2003, interest earned but not accrued was
an additional $3,330,000.
Effective February 1994, the administrative expenses and management services
were paid for/provided by Hickory. At March 31, 2003 NRG owes Hickory $207,987
for administrative expenses and management service fees.
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 $7,250 ($ .03 per share) for the three months
ended March 31, 2003. This compares to a net loss of $7,250 ($ .03 per share)
for the three months ended March 31, 2002. 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 $7,250 for the three months ended March 31, 2003 and 2002,
respectively. These amounts include fees of $7,250 for both years charged by
Hickory for management services (accounting, shareholder services, legal, etc)
provided.
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ITEM 3. LEGAL PROCEEDING
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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
- -----------------------------------------
Reports on Form 8-K. NONE
Exhibits.
99.1 Certification of Chief Executive Officer
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.
NRG INCORPORATED
/s/ Clyde Wm. Engle
-------------------
Clyde Wm. Engle
Chairman, Chief Executive,
Financial and Accounting
Officer and Director
Date: May 12, 2003
CERTIFICATION
I, Clyde Wm. Engle, Chief Executive, Financial and Accounting Officer of
NRG, Incorporated, certify that:
1. I have reviewed this quarterly report on Form 10-Q of NRG, Inc;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Registrant and I have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
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b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the audit
committee of Registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 12, 2003
/s/ CLYDE WM. ENGLE
----------------------
Clyde Wm. Engle
Chief Executive,Financial and
Accounting Officer
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