SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X]Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2000.
[ ]Transition report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the transition period from to .
Commission file number: 0-27831
-------
GENESIS CAPITAL CORPORATION OF NEVADA
--------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 91-1947658
-------- -----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11701 South Freeway, Burleson, Texas 76028
------------------------------------------
(Address of principal executive office) (Zip Code)
(817) 293-9334
----------------------
(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 XX No
----
The number of outstanding shares of the issuer's common stock, $0.001
par value, as of March 31, 1999 was 2,217,911 and the total number of the
issuer's preferred stock, $.001 par value, was 77,755.
<PAGE>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.................................................3
Report of Independent Accountant...................................F-2
Condensed Balance Sheets as of March 31, 2000 and
September 30, 1999..............................................F-3
Condensed Statements of Operations
for the Three Month Periods Ended March 31, 2000 and 1999.......F-4
Condensed Statements of Cash Flows
for the Six Month Periods Ended March 31, 2000 and 1999.........F-5
Condensed Statements of Stockholder's Equity
for the Three Month Period Ended March 31, 2000.................F-6
Notes to Unaudited Condensed Financial Statements..................F-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.................................4
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS.....................................................5
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS.............................5
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................6
ITEM 5 OTHER INFORMATION.....................................................7
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K......................................7
2
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to Genesis Capital Corporation of
Nevada., a Nevada corporation, and its subsidiaries and predecessors unless
otherwise indicated. Consolidated, unaudited, condensed interim financial
statements including a balance sheet for the Company as of the quarter ended
March 31, 2000 and statements of operations, statements of shareholders equity
and statements of cash flows for the interim period up to the date of such
balance sheet and the comparable period of the preceding year are attached
hereto as Pages F-1 through F-10 and are incorporated herein by this reference.
The consolidated financial statements for Genesis Capital Corporation of Nevada
(the Company) included herein are unaudited but reflect, in management's
opinion, all adjustments, consisting only of normal recurring adjustments, that
are necessary for a fair presentation of the Company's financial position and
the results of its operations for the interim periods presented. Because of the
nature of the Company's business, the results of operations for the three months
ended March 31, 2000 are not necessarily indicative of the results that may be
expected for the full fiscal year. The financial statements included herein
should be read in conjunction with the financial statements and notes thereto
included in the Form 10SB for the year ended September 30, 1999.
The consolidated financial statements included herein have been subjected to a
limited review by Clyde Bailey P.C., independent accountant for the Company,
whose report is included herein.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
3
<PAGE>
GENESIS CAPITAL CORPORATION
OF NEVADA
March 31, 2000
Clyde Bailey, P.C.
Certified Public Accountant
10924 Vance Jackson #404
San Antonio, Texas 78230
F-1
<PAGE>
[Letterhead of Clyde Bailey, P.C.]
REPORT OF INDEPENDENT ACCOUNTANT
To the Board of Directors
Genesis Capital Corporation of Nevada
(a Nevada corporation)
We have made a review of the consolidated balance sheet of Genesis Capital
Corporation of Nevada as of March 31, 2000,and the related consolidated
statements of operations and cash flows for the three months period ended March
31, 2000 and 1999, in accordance with the standards established by the American
Institute of Certified Public Accountants. These financial statements are the
responsibility of the Company's management.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the consolidated financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of September 30, 1999, and the
related consolidated statements of operations, cash flows and changes in common
shareholders' equity (deficit) for the year then ended (not presented herein);
and in our report dated October 20, 1999, we expressed a qualified opinion on
those financial statements. In our opinion , the information set forth in the
accompanying balance sheet as of March 31, 2000, is fairly stated in all
material respects in relation to the balance sheet from which it has been
derived.
/s/ Clyde Baily P.C.
Clyde Bailey P.C.
San Antonio, Texas
May 12, 2000
F-2
<PAGE>
<TABLE>
Genesis Capital Corporation of Nevada
Balance Sheet
<CAPTION>
As of March 31, As of September
2000 30, 1999
------------------- ------------------
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Current Assets:
Cash in Bank $ - $ -
------------- ------------
Total current assets - -
Investments - -
Marketable Securities, at Market Value 1,755,000 600,000
Deferred Tax Benefit - 4,619
------------- ------------
Total Assets $ 1,755,000 $ 604,619
============= ============
LIABILITIES
Current Liabilities: $ $
Deferred Tax payable - Investments 392,700 32,158
------------- ------------
Total Current Liabilities 392,700 32,158
Commitment and Contingencies - -
STOCKHOLDERS' EQUITY
Preferred stock ($.001 par value, 10,000,000
shares authorized; with 77,755 and 932,755
shares issued and outstanding 78 933
Common stock ($.001 par value 50,000,000
shares authorized; with 2,217,911 and
2,067,911 shares issued and outstanding 2,218 2,068
Accumulated Other Comprehensive Income 762,300 -
Additional paid in capital 9,195,579 9,194,829
Accumulated Deficit (8,597,875) (8,625,369)
------------- ------------
Total Stockholders' Equity 1,362,300 572,461
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,755,000 $ 604,619
============= ============
</TABLE>
See accompanying summary of accounting principles and notes to
consolidated financial statements.
F-3
<PAGE>
<TABLE>
Genesis Capital Corporation of Nevada
Statement of Operations
For the Three Months Ended For the Six Months Ended
March 31, March 31,
2000 1999 2000 1999
-------------------- ------------------- ------------------- ------------------
REVENUES
<S> <C> <C> <C> <C>
Revenues $ - $ - $ - $ -
--------------- -------------- -------------- -------------
Total Revenues - - - -
--------------- -------------- -------------- -------------
General and Administrative Expenses 45 4,231 45 8,462
--------------- -------------- -------------- -------------
Total Expenses 45 4,231 45 8,462
--------------- -------------- -------------- -------------
Net Income Before Tax (45) (4,231) (45) (8,462)
Other Income (Expense)
Property Taxes (Net of Income Tax
Benefit) 30,777 - 27,539 -
--------------- -------------- -------------- -------------
Net Income $ 30,732 $ (4,231) $ 27,494 $ (8,462)
=============== ============== ============== =============
Earnings Per Share - Basic
Net Income (Loss) per Share $ 0.014 $ (1.530) $ (0.013) $ (3.059)
Earnings Per Share - Diluted
Net Income (Loss) per Share $ 0.011 $ (0.001) $ 0.009 $ (0.003)
Weighted Average Shares Outstanding 2,142,000 2,766 2,117,910 2,766
Weighted Average Shares Outstanding
(Diluted) (Retroactively Restated) 2,845,461 3,347,290 2,895,460 3,347,290
</TABLE>
See accompanying summary of accounting principles and notes to
consolidated financial statements.
F-4
<PAGE>
<TABLE>
Genesis Capital Corporation of Nevada
Statements of Cash Flows
<CAPTION>
For the Six Months Ended
March 31,
2000 1999
--------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 30,732 $ (8,462)
Adjustments:
Accrued Property Taxes (35,967) 8,462
Deferred Income Tax Benefit 5,190
Accounts Receivable -
------------------ ------------------
Total from Operating Activities $ (45) $ -
------------------ ------------------
Cash Flows - Investing Activities
Fixed assets - -
------------------ ------------------
Total for Investing Activities $ - $ -
------------------ ------------------
Cash Flows - Financing Activities
Common Stock/Paid-In-Capital 45 -
Other - -
------------------ ------------------
Total From Financing Activities $ 45 $ -
------------------ ------------------
Increase in Cash - -
Cash Balance, Begin of Year - -
------------------ ------------------
Cash Balance, End of Year - -
================== ==================
Supplement Disclosure:
Cash paid during year for:
Interest - -
Income taxes - -
</TABLE>
See accompanying summary of accounting principles and notes to
consolidated financial statements.
F-5
<PAGE>
<TABLE>
Genesis Capital Corporation of Nevada
Statement of Stockholders' Equity
<CAPTION>
Common Stock Preferred Stock Additional Accumulated Accumulated
Shares At Par Shares At Par Paid-in-Capital Other Deficit Total
Comprehensive
Income (Loss)
___________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance October 1, 1999 2,067,911 $ 2,068 932,755 $ 933 $ 9,194,829 - $ (8,625,369) $ 572,461
------------ ---------- ----------- --------- -------------- ----------- -------------- -------------
Stock Cancellation (750,000) $ (750) $ 750 -
------------ ---------- ----------- --------- -------------- ----------- -------------- -------------
Net Income (Loss) $ (3,238) $ (3,238)
------------ ---------- ----------- --------- -------------- ----------- -------------- -------------
Balance December 31, 1999 2,067,911 $ 2,068 182,755 $ 183 $ 9,195,579 - $ (8,628,607) $ 569,223
============ ========== =========== ========= ============== =========== ============== =============
Comprehensive Income:
Net Income $ 30,732 $ 30,732
Unrealized Gain on
Securities $ 762,300 $ 762,300
------------ ---------- ----------- --------- -------------- ----------- -------------- -------------
$ 793,032
Stock Issuance 150,000 $ 150 (150,000) $ (105) - - - $ 45
------------ ---------- ----------- ---------- ------------- ----------- -------------- -------------
Balance March 31, 2000 2,217,911 $ 2,218 77,755 $ 78 $ 9,195,579 $ 762,300 $ (8,597,875) $ 1,362,300
</TABLE>
See accompanying summary of accounting principles and notes to
consolidated financial statements.
F-6
<PAGE>
GENESIS CAPITAL CORPORATION OF NEVADA
Notes to Financial Statements
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
NATURE OF BUSINESS
Genesis Capital Corporation (the "Company") was incorporated in the State of
Colorado in 1983. The Company had no revenues or expenses for the years ended
September 30, 1998 and 1997. In the fiscal year ended September 30, 1999 only
minimal activity has been recorded. In March of 1999 the Company filed an
Articles of Merger in the State of Nevada to change the name to Genesis Capital
Corporation of Nevada and to change the par value of the common stock. In
December 1997, the Company merged with Lincoln Health Fund Inc. which owned land
in Tarrant County Texas. The company has a total of 50,000,000 authorized common
shares (par value of $.001) with 2,217,911 shares issued and outstanding, and
10,000,000 authorized preferred stock (par value of $.001) with 77,755 shares
issued outstanding as of March 31, 2000.
MARKETABLE SECURITIES
In accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," (SFAS 115),
the Company classifies its investment portfolio according to the provisions of
SFAS 115 as either held to maturity, trading, or available for sale. At March
31, 2000, the Company classified its investment portfolio as available for sale
and held to maturity. Securities available for sale are carried at fair value
with unrealized gains and losses included in stockholders' equity.
Gain or losses from the sale or redemption of the investments are determined
using the specific identification method calculating deferred income taxes. The
asset and liability approach requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of temporary
differences between the carrying amounts and the tax basis of assets and
liabilities.
ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual method of
accounting. Revenues are recognized when earned and expenses when incurred.
Fixed assets are stated at cost. Depreciation and amortization using the
straight-line method for financial reporting purposes and accelerated methods
for income tax purposes. The Company does not have any fixed assets at this
time.
F-7
<PAGE>
GENESIS CAPITAL CORPORATION OF NEVADA
Notes to Financial Statements
EARNINGS PER COMMON SHARE
The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods.
Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.
Diluted earnings per share are computed on the basis of the weighted average
number of common shares and dilutive securities outstanding. Dilutive securities
having an anti-dilutive effect on diluted earnings per share are excluded from
the calculation.
UNINSURED CASH BALANCES
The Company maintains its cash balances at several financial institutions.
Accounts at the institutions are secured by the Federal Deposit Insurance
Corporation up to $100,000. Periodically, balances may exceed this amount. At
March 31, 2000, there were no uninsured cash balances.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure on
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.
YEAR 2000 CONCERNS
The Company has addressed the concerns of potential year 2000 computing
problems, both internally and with external parties and believes that
significant additional costs will not be incurred because of this circumstance.
The Company has performed an evaluation of its computer hardware and software
and has determined that recent enhancements and upgrades have brought it's
systems significantly into compliance with the year 2000 phenomenon and that
existing support agreements are adequate to cope with any remaining issues.
Based upon equipment evaluations and analysis by consulting parties, management
does not believe that significant operational equipment modifications are
necessary.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of financial instruments including marketable securities,
notes and loans receivables, accounts payable and notes payable approximate
their fair values at March 31, 2000 and September 30, 1999.
F-8
<PAGE>
GENESIS CAPITAL CORPORATION OF NEVADA
Notes to Financial Statements
LONG-LIVED ASSETS
Statement of Financial Accounting Standards No. 121 "Accounting for Impairment
of Long-Lived Assets to be Disposed of " requires, among other things,
impairment loss of assets to be held and gains or losses from assets that are
expected to be disposed of be included as a component of income from continuing
operations before taxes on income.
STOCK BASED COMPENSATION
Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" SFAS No. 123 established a fair value method for accounting for
stock-based compensation plans either through recognition or disclosure. The
Company did not adopt the fair value based method but instead discloses the
effects of the calculation required by the statement.
COMPREHENSIVE INCOME
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No.130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information, supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
establishes standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance.
F-9
<PAGE>
GENESIS CAPITAL CORPORATION OF NEVADA
Notes to Financial Statements
NOTE 2 - Acquisition Agreement
In February of 2000, an acquisition agreement was completed between the Company
and Power Exploration, Inc. ("Power") for 100% of the issued and outstanding
shares of the Lincoln Health Fund, Inc. a Delaware Corporation ("Lincoln"), a
wholly owned subsidiary of the Company, for 600,000 shares of Power's common
stock. The major asset of Lincoln was 10.687 acres of vacant land in Ft Worth,
Texas. The value of stock received is being classified as a marketable security,
available for sale.
As a result of this transaction the property taxes that had been accrued for the
land was included in the acquisition agreement and assumed by Lincoln. The
accrued property taxes are being reversed in these financial statements net of
income tax benefit of $5,190.
NOTE 3- Common Stock
The Company filed a plan of merger in the State of Nevada with an effective date
of March 9, 1999. As part of the agreement, the Board of Directors approved a
2000 to 1 reverse stock split be recorded with any fractional shares rounded up.
Also, the par value of the Nevada corporation was changed to $.001 par value. In
the quarter ended March 31, 2000, 150,000 shares of stock were issued. A total
of 105,000 shares was issued as conversion of preferred stock and 45,000 shares
for legal services.
NOTE 4- Preferred Stock
The Company's preferred stock contains a designation of $.60 cumulative
convertible Preferred Stock. A total of 10,000,000 shares are authorized with
77,755 and 932,755 issued and outstanding as of March 31, 2000 and September 30,
1999. The holders of the Convertible Preferred Stock shall be entitled to
receive, when declared by the Board of Directors, dividends of $.60 per share
and no more. Also, the preferred stock is eligible to be converted to common
stock at the rate of 10 shares of common share for each share of preferred
stock. In the quarter ended March 31, 2000, a total of 105,000 shares of
preferred stock was converted into common stock.
Note 5- Marketable Securities
The carrying amounts of marketable securities as shown in the accompanying
balance sheet and their approximate market values at March 31, 2000 are as
follows:
Gross Gross
Unrealized Unrealized Market
Cost Gains Losses
Value
Available for sale:
Securities $ 600,000 $ 1,155,000 $ - $ 1,755,000
Unrealized gains on securities available for sale at March 31, 2000 are shown
net of income taxes as a component of stockholders' equity.
NOTE 6- Subsequent Events
No other material subsequent events have occurred that warrants disclosure since
the balance sheet date.
F-10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Quarterly Report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that all
forward- looking statements involve risks and uncertainty, including (without
limitation) the ability of the Company to continue its expansion strategy,
changes in costs of raw materials, labor, and employee benefits, as well as
general market conditions, competition and pricing. Although the Company
believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
included in this Quarterly Report will prove to be accurate. In light of the
significant uncertainties inherent in the forward- looking statements including
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
As used herein the term "Company" refers to Genesis Capital Corporation of
Nevada, a Nevada corporation, and its predecessors, unless the context indicates
otherwise. The Company is currently a shell company whose purpose will be to
acquire operations through an acquisition, merger or beginning its own start-up
business.
The Company is in the process of attempting to identify and acquire a favorable
business opportunity. The Company has reviewed and evaluated a number of
business ventures for possible acquisition or participation by the Company. The
Company has not entered into any agreement, nor does it have any commitment or
understanding to enter into or become engaged in a transaction as of the date of
this filing. The Company continues to investigate, review, and evaluate business
opportunities as they become available and will seek to acquire or become
engaged in business opportunities at such time as specific opportunities
warrant.
Results of Operations
The Company had no sales revenues for the three months ended March 31, 2000 or
1999. The Company had no sales for the three months ended March 31, 2000 or 1999
because it is a shell company that has not had any business operations for the
past three years.
The Company had no costs of sales revenues for the three months ended March 31,
2000 or 1999 because it is a shell company that has not had any business
operations for the past three years.
The Company had general and administrative expenses of $45 for the three month
period ended March 31, 2000, compared to $0.00 general and administrative
expenses for the same period in 1999.
The Company recorded net income of $30,732 for the three months ended March 31,
1999, compared to a $4,231 net loss for the same period in 1999.
Capital Resources and Liquidity
At March 31, 2000, the Company had total current assets of $0.00 and total
assets of $1,755,000, as compared to $0 current assets and $604,619 total assets
at September 30, 1999. The Company had a net working capital deficit of $392,700
at March 31, 2000 as compared to a working capital deficit of $32,158 at
September 30,1999.
4
<PAGE>
Net stockholders' equity in the Company was $1,362,300 as of March 31, 2000, as
compared to $572,461 as of September 30, 1999.
PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On September 30, 1999, Biorelease Corporation filed a petition in the district
court of Harris County, Texas, 269th judicial district, involving a March 1994
contract with Genesis by which 150,000 shares of Genesis preferred stock were
given to Biorelease in exchange for 1.5 million shares of its common stock.
Biorelease sought relief in the form of an injunction preventing transfer of its
1.5 million shares, or rescission of the contract, or damages of $1,300,000. As
part of a settlement and stipulation by the parties on or about January 13,
2000, a Final Judgement was entered rescinding the contract, and the parties
gave back to each other the shares which had been the subject of the contract.
No other relief was granted by the Final Judgment, and in fact all other claims
for relief sought in the complaint were dismissed with prejudice.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
By resolution dated on or about February 2, 2000, the Company issued a total of
105,000 shares of its common stock, restricted under Rule 144, to Global
Universal, Inc. in exchange for services rendered. The issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, based on
the following facts: (1) the issuance was a private transaction by the issuer
not involving any public offering; (2) there was only one offeree; (3) a
restrictive legend was placed on the certificate; (4) the recipient had a
special relationship with the issuer as a business consultant who had access to
all of the issuer's financial and corporate information; (5) the stock
certificate was not broken down into smaller denominations; (6) the stock has
not been resold, but the recipient continues to hold the stock to this day; (7)
there were no subsequent or contemporaneous public offerings of the stock; (8)
negotiations for the sale of the stock took place directly between the offeree
and the company.
By resolution dated on or about February 3, 2000, the Company canceled a total
of 100,000 shares of its restricted common stock as follows:
No. of Shares
Name Canceled
- ----------------------------------------------------------------------
Charles Barnhill 5,000
Paul Cash 10,000
Nina Cash 10,000
Camille Welborn 10,000
5
<PAGE>
Ronald Welborn 10,000
Susan Welborn 10,000
Victoria Welborn 10,000
England's Tea & Coffee Exchange Ltd. 25,000
J.R. Reeves 10,000
By resolution dated on or about February 3, 2000, the Company issued a total of
15,000 shares of common stock, restricted under Rule 144, to Charles Barnhill,
in exchange for services rendered. The issuance was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, based on the following
facts: (1) the issuance was a private transaction by the issuer not involving
any public offering; (2) there was only one offeree; (3) a restrictive legend
was placed on the certificate; (4) the recipient had a special relationship with
the issuer as an attorney and business consultant who had access to the issuer's
financial and corporate information; (5) the stock certificate was not broken
down into smaller denominations; (6) the stock has not been resold, but the
recipient continues to hold the stock to this day; (7) there were no subsequent
or contemporaneous public offerings of the stock; (8) negotiations for the sale
of the stock took place directly between the offeree and the company.
By resolution dated on or about February 28, 2000, the Company issued a total of
100,000 shares of common stock, restricted under Rule 144, to Larry Austin. The
resolution was dated to reflect that beneficial ownership began on or about
February 11, 2000. The issuance was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933, based on the following facts: (1) the
issuance was a private transaction by the issuer not involving any public
offering; (2) there was only one offeree; (3) a restrictive legend was placed on
the certificate; (4) the recipient had a special relationship with the issuer as
a past shareholder of the Company; (5) the stock certificate was not broken down
into smaller denominations; (6) the stock has not been resold, but the recipient
continues to hold the stock to this day; (7) there were no subsequent or
contemporaneous public offerings of the stock; (8) negotiations for the sale of
the stock took place directly between the offeree and the company.
By resolution dated on or about March 17, 2000, the Company converted 15,000
shares of preferred stock, held in the name of Crestline since 1995, into 30,000
shares of common stock (a conversion ration of 1:2), which were newly issued on
that date. Simultaneously, the 30,000 newly issued shares of Crestline's common
stock were transferred into the name of Dennis Hoerr. The 15,000 shares of
preferred stock were canceled. The issuance was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, based on the following
facts: (1) the issuance was a private transaction by the issuer not involving
any public offering; (2) there was only one offeree; (3) there were no
subsequent or contemporaneous public offerings of the stock; (4) negotiations
for the sale of the stock took place directly between the offeree and the
company.
By resolution dated on or about March 18, 2000, the Company canceled a total of
90,000 shares of its preferred stock, held in the following names: Mountaineer
Electronics (25,000 shares of preferred); Larry Austin (15,000 shares of
preferred); and Sureco Ltd. (50,000 shares of preferred).
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
6
<PAGE>
ITEM 5. OTHER INFORMATION
Subsequent Events
On April 12, 2000, the Company announced that it had signed an agreement to
acquire all of the capital stock of RBSI, Inc., a Dallas, Texas based ATM
machine company, in exchange for 8 million shares of Genesis' restricted common
stock. This agreement, upon closing, would essentially transfer control of the
Company to RBSI's current sole shareholder, Randy Coleman. The closing of the
acquisition was expected to occur on or about April 15, 2000, but it had not
closed by the date of this report's filing. Currently, the closing is awaiting
the satisfaction of certain conditions precedent (including, but not limited to,
receiving information and disclosure about the financial condition of the
acquired entity), and there can be no assurances that these conditions will be
met, nor that the acquisition will close successfully.
The Company has issued a total of 9,371,000 shares of restricted stock
(including 8,000,000 in the name of Randy Coleman) in connection with these
negotiations, and these shares are currently held in escrow pending the closing
of the acquisition. They will not be issued out to their recipients unless and
until the acquisition closes.
ITEM 6. EXHIBITS
(a) Exhibits. Exhibits required to be attached by Item 601 of Regulation S-B
are listed in the Index to Exhibits on page 8 of this Form 10-QSB, and are
incorporated herein by reference.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the period
covered by this Form 10-QSB.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 19th day of May, 2000.
GENESIS CAPITAL CORPORATION OF NEVADA
/s/Reginald Davis May 19, 2000
- ----------------------------
President/ CEO and Director
7
<PAGE>
EXHIBIT INDEX
Exhibit No. Page No. Description
27 9 Financial Data Schedule "CE"
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY]
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2000 THAT
WERE WERE FILED WITH THE COMPANY'S REPORT ON FORM 10-QSB AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001083383
<NAME> Genesis Capital Corporation of Nevada
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-1-1999
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,755,000
<CURRENT-LIABILITIES> 392,700
<BONDS> 0
0
78
<COMMON> 2,218
<OTHER-SE> 1,360,004
<TOTAL-LIABILITY-AND-EQUITY> 1,755,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 45
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (45)
<INCOME-TAX> 27,539
<INCOME-CONTINUING> 27,494
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,494
<EPS-BASIC> (.013)
<EPS-DILUTED> 0.009
</TABLE>
