It was not exactly produced by Nu Image but by the COVER-UP producer Jacob Kotzky and a German company called Silverline Pictures. Avi Lerner / Nu Image came in to the rescue during post-production to complete the picture.
From my interview with Sheldon Lettich (2007):
To make a long story short, by the time we were in post-production, Kotzky was out of money. Desperate, he asked his old friend, Avi Lerner, to drop by our editing room in Jaffa to take a look at the rough cut. Avi apparently liked what he saw, knew he could sell it, and subsequently came to Kotzky’s rescue and took over the film. That’s why it was mixed at Avi’s sound facility in Los Angeles (Ground Control), and that’s why you see the Nu Image logo at the beginning of the movie.
(Note: only on the US version you see Nu Image's logo, it's not on any of the previously released international editions I own)