SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
[ ] Transitional Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1997
Commission File No. 0-25562
GENESIS COMPANIES GROUP, INC.
-----------------------------
(Name of small business issuer in its charter)
Delaware 72-1175963
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification
Number
830 S. Kline Way
Lakewood, Colorado 80226
(303) 985-3972
--------------
(Address, including zip code and telephone number, including area
code, of registrant's executive offices)
Securities registered under Section 12(b) of the Exchange Act:
none
Securities registered under to Section 12(g) of the Exchange Act:
Common Stock
------------
(Title of class)
Check whether the issuer (1) 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
Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
---- -----
Check 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.
-----
Issuer's revenues for its most recent fiscal year: $ -0-
(Continued on Following Page)
<PAGE>
State the aggregate market value of the voting stock held by non-
affiliates, computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of
a specified date within the past 60 days: As of March 27, 1998: $0.
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of
March 27, 1998 there were 4,500,000 shares of the Company's common
stock issued and outstanding.
Documents Incorporated by Reference: None
This Form 10-KSB consists of Twenty-Four Pages.
Exhibit Index is Located at Page Twenty Three.
2
<PAGE>
TABLE OF CONTENTS
FORM 10-KSB ANNUAL REPORT
GENESIS COMPANIES GROUP, INC.
PAGE
----
Facing Page
Index
PART I
Item 1. Description of Business..................... 4
Item 2. Description of Property..................... 5
Item 3. Legal Proceedings........................... 5
Item 4. Submission of Matters to a Vote of
Security Holders........................ 5
PART II
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters......... 6
Item 6. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 6
Item 7 Financial Statements........................ 8
Item 8. Changes in and Disagreements on Accounting
and Financial Disclosure................ 16
PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons, Compliance with
Section 16(a) of the Exchange Act....... 16
Item 10. Executive Compensation...................... 18
Item 11. Security Ownership of Certain Beneficial
Owners and Management................... 19
Item 12. Certain Relationships and Related
Transactions............................ 20
PART IV
Item 13. Exhibits and Reports of Form 8-K............ 21
SIGNATURES............................................. 22
3
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Genesis Companies Group, Inc. (the "Company" or "Registrant"),
was incorporated under the laws of the State of Delaware on
December 22, 1988, for the purpose of engaging in any lawful
activity. On or about March 29, 1990, the Company filed a
registration statement on Form S-18 with the Securities and
Exchange Commission, wherein the Company attempted to register
20,000 Units, each Unit consisting of 100 shares of the Company's
Common Stock and 100 Class A, Class B and Class C Common Stock
Purchase Warrants. This registration statement was subsequently
voluntarily abandoned by the Company prior to effectiveness due to
adverse market conditions. Other than filing and abandoning of the
aforesaid registration statement, the only activities undertaken by
the Company since its inception has been the issuing of 4,500,000
shares of the Company's common stock to its original shareholders,
which stock was issued in exchange for aggregate cash consideration
of $13,500 (average price of $0.003 per share) and which shares are
presently held by 8 persons. As such, the Company can be defined
as a "shell" company, who's sole purpose at this time is to locate
and consummate a merger or acquisition with a private entity.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules and regulations limiting the sale of securities of
"blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan
described herein. Relevant thereto, each shareholder of the
Company has executed and delivered a "lock-up" letter agreement,
affirming that they shall not sell their respective shares of the
Company's common stock until such time as the Company has
successfully consummated a merger or acquisition and the Company is
no longer classified as a "blank check" company. In order to
provide further assurances that no trading will occur in the
Company's securities until a merger or acquisition has been
consummated, each shareholder has agreed to place their respective
stock certificate with the Company's legal counsel, who will not
release these respective certificates until such time as legal
counsel has confirmed that a merger or acquisition has been
successfully consummated. However, while management believes that
the procedures established to preclude any sale of the Company's
securities prior to closing of a merger or acquisition will be
sufficient, there can be no assurances that the procedures
established relevant herein will unequivocally limit any
shareholder's ability to sell their respective securities before
such closing.
4
<PAGE>
Management of the Company is of the opinion that the business
objectives of the Company remain viable, despite the Company's
failure to merge with or acquire another business entity to date.
Management of the Company continues to review potential merger
candidates and acquisition opportunities.
Employees
The Company has no full time employees. The Company's
officers and directors have agreed to allocate a portion of their
time to the activities of the Company, without compensation. These
officers and directors anticipate that the business plan of the
Company can be implemented by their devoting an aggregate of
approximately 20 hours per month to the business affairs of the
Company and, consequently, conflicts of interest may arise with
respect to the limited time commitment by such officers. See "Part
III, Item 9, Directors, Executive Officers, Promoters and Control
Persons."
ITEM 2. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no
agreements to acquire any properties. The Company intends to
attempt to acquire assets or a business in exchange for its
securities which assets or business is determined to be desirable
for its objectives.
The Company's principal place of business is located at 830 S.
Kline Way, Lakewood, Colorado 80226, which offices are provided by
Wm. Ernest Simmons, an officer, director and shareholder of the
Company, on a rent free basis pursuant to an oral agreement. Mr.
Simmons has advised the Company that he is agreeable to maintain
this situation until the Company successfully consummates an
acquisition or merger. It is anticipated that this arrangement
will be suitable for the needs of the Company for the foreseeable
future.
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings which are pending or
have been threatened against the Company of which management is
aware.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
5
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
(a) Market Information. There is presently no trading market
for the common or preferred equity of the Company.
(b) Holders. There are eight (8) holders of the Company's
Common Stock.
As of the date of this report all 4,500,000 shares of the
Company's Common Stock are eligible for sale under Rule 144
promulgated under the Securities Act of 1933, as amended, subject
to certain limitations included in said Rule. In general, under
Rule 144, a person (or persons whose shares are aggregated), who
has satisfied a one year holding period, under certain
circumstances, may sell within any three-month period a number of
shares which does not exceed the greater of one percent of the then
outstanding Common Stock or the average weekly trading volume
during the four calendar weeks prior to such sale. Rule 144 also
permits, under certain circumstances, the sale of shares without
any quantity limitation by a person who has satisfied a two-year
holding period and who is not, and has not been for the preceding
three months, an affiliate of the Company.
(c) Dividends.
(1) The Company has not paid any dividends on its Common
Stock. The Company does not foresee that the Company will have the
ability to pay a dividend on its Common Stock in the fiscal year
ended December 31, 1998, unless the Company successfully
consummates a merger or acquisition. There can be no assurances
that a dividend will be issued even if a merger or acquisition is
so consummated.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the Company's audited financial statements and notes thereto
included herein. In connection with, and because it desires to
take advantage of, the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the
following discussion and elsewhere in this report and in any other
statement made by, or on the behalf of the Company, whether or not
in future filings with the Securities and Exchange Commission.
Forward looking statements are statements not based on historical
information and which relate to future operations, strategies,
financial results or other developments. Forward looking
statements are necessarily based upon estimates and assumptions
6
<PAGE>
that are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the Company's control and many of which, with respect to
future business decisions, are subject to change. These
uncertainties and contingencies can affect actual results and could
cause actual results to differ materially from those expressed in
any forward looking statements made by, or on behalf of, the
Company. The Company disclaims any obligation to update forward
looking statements.
(a) Plan of Operation.
The Company intends to seek to acquire assets or shares of an
entity actively engaged in business which generates revenues, in
exchange for its securities. The Company has no particular
acquisitions in mind and has not entered into any negotiations
regarding such an acquisition. None of the Company's officers,
directors, promoters or affiliates have engaged in any preliminary
contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between the
Company and such other company as of the date of this registration
statement.
The Company's Board of Directors intends to provide the
Company's shareholders with complete disclosure documentation
concerning a potential business opportunity and the structure of
the proposed business combination prior to consummation of the
same, which disclosure is intended to be in the form of a proxy
statement. While such disclosure may include audited financial
statements of such a target entity, there is no assurance that such
audited financial statements will be available. The Board of
Directors does intend to obtain certain assurances of value of the
target entity assets prior to consummating such a transaction, with
further assurances that an audited statement would be provided
within sixty days after closing of such a transaction. Closing
documents relative thereto will include representations that the
value of the assets conveyed to or otherwise so transferred will
not materially differ from the representations included in such
closing documents, or the transaction will be voidable.
The Company has no full time employees. The Company's
President and Secretary-Treasurer have agreed to allocate a portion
of their time to the activities of the Company, without
compensation. These officers anticipate that the business plan of
the Company can be implemented by their devoting approximately 20
hours per month to the business affairs of the Company and,
consequently, conflicts of interest may arise with respect to the
limited time commitment by such officers. See "Management -
Resumes."
Because the Company presently has nominal overhead or other
material financial obligations, management of the Company believes
7
<PAGE>
that the Company's short term cash requirements can be satisfied by
management injecting whatever nominal amounts of cash into the
Company to cover these incidental expenses. There are no
assurances whatsoever that any additional cash will be made
available to the Company through any means.
Year 2000 Disclosure
Many existing computer programs use only two digits to
identify a year in the date field. These programs were designed
and developed without considering the impact of the upcoming change
in the century. If not corrected, many computer applications could
fail or create erroneous results by or at the Year 2000. As a
result, many companies will be required to undertake major projects
to address the Year 2000 issue. Because the Company has no assets,
including any personal property such as computers, it is not
anticipated that the Company will incur any negative impact as a
result of this potential problem. However, it is possible that
this issue may have an impact on the Company after the Company
successfully consummates a merger or acquisition. Management
intends to address this potential problem with any prospective
merger or acquisition candidate. There can be no assurances that
new management of the Company will be able to avoid a problem in
this regard after a merger or acquisition is so consummated.
ITEM 7. FINANCIAL STATEMENTS
8
<PAGE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1997
9
<PAGE>
Michael B. Johnson & Co, P.C.
(A Professional Corporation)
Certified Public Accountants
9175 East Kenyon Ave., Suite 100
Denver, Colorado 80237
Michael B. Johnson C.P.A. Telephone: (303) 796-0099
Member: A.I.C.P.A. Fax: (303) 796-0137
Colorado Society of C.P.A.'s
Board of Directors
Genesis Companies Group, Inc.
We have examined the accompanying balance sheet of Genesis Companies Group, Inc.
(A Development Stage Company) as of December 31, 1997 and December 31, 1996, and
the related statements of operations, cash flows, and changes in stockholders'
equity for the period December 22, 1988 (inception), through December 31, 1997,
and the fiscal years ended December 31, 1997 and 1996. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are 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 statements
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Genesis Companies Group, Inc.
at December 31, 1997 and December 31, 1996, and the results of its operations
and its cash flows for the period December 22, 1988 (inception), through
December 31, 1997, and the fiscal years ended December 31, 1997 and 1996, in
conformity with generally accepted accounting principles.
s/Michael B. Johnson & Co., P.C.
Denver, Colorado
March 20, 1998
10
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31,
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
ASSETS:
Current Assets:
Cash $ - $ -
--------- ---------
TOTAL ASSETS $ - $ -
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Accounts Payable $ 5,090 $ 4,522
Shareholder Loans 11,708 6
--------- ---------
TOTAL LIABILITIES 16,798 4,528
--------- ---------
Stockholders' Equity:
Common stock, $.00001 par value, 100,000,000
shares authorized, 4,500,000 shares issued and
outstanding 45 45
Preferred stock, $.00001 par value, 10,000,000
shares authorized - -
Additional paid-in capital 13,455 13,455
Deficit accumulated during the
development stage (30,298) (18,028)
--------- ---------
Total Stockholders' Equity (16,798) (4,528)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ - $ -
========= =========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
11
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
<CAPTION>
For the For the December 22, 1988
Year Ended Year Ended (Inception) thru
December 31, December 31, December 31,
1997 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
INCOME $ - $ - $ -
OPERATING EXPENSES:
Professional Fees 6,290 4,772 19,376
Registration Fees 250 50 3,490
Administrative Expenses 5,730 166 7,432
----------- ----------- -----------
Total Operating Expenses 12,270 4,988 30,298
----------- ----------- -----------
Net Loss from Operations $ (12,270) $ (4,988) $ (30,298)
=========== =========== ===========
Weighted average number of
shares outstanding 4,500,000 4,500,000 4,500,000
Net Loss Per Share $ (*) $ (*) $ (*)
* Less than $0.01 per share
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
12
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
INDIRECT METHOD
<CAPTION>
For the For the December 22, 1988
Year Ended Year Ended (Inception) thru
December 31, December 31, December 31,
1997 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Cash Flows From Operating
Activities:
Net Profit (Loss) $ (12,270) $ (4,988) $ (30,298)
Increase (Decrease) in
Accounts Payables 568 4,522 5,090
Shareholder Note Payable 11,702 6 11,708
----------- ----------- ------------
12,270 4,528 16,798
Net Cash Provided (Used)
by Operating Activities - (460) (13,500)
----------- ----------- ------------
Cash Flow From Financing
Activities:
Issuance of Common Stock - - 13,500
----------- ----------- ------------
Net Cash Provided (Used) in
Financing Activities - - 13,500
----------- ----------- ------------
Increase (Decrease) in Cash - (460) -
Cash and Cash Equivalents -
Beginning of Period - 460 -
----------- ----------- ------------
Cash and Cash Equivalents -
End of Period $ - $ - $ -
=========== =========== ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
13
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<CAPTION>
Deficit
Accumulated
Additional During the
Common Paid-In Development
Shares Stock Capital Stage Totals
--------- ------ -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Balance at
December 22, 1988 - $ - $ - $ - $ -
Stock issued for cash
April 14, 1989 113,000 1 149 - 150
Stock issued for cash
May 12, 1989 1,315,000 13 3,987 - 4,000
Stock issued for cash
November 10, 1989 2,622,000 26 7,974 - 8,000
Stock issued for cash
December 5, 1989 450,000 5 1,345 - 1,350
--------- ------ -------- ----------- ---------
Balance at
December 31, 1989 4,500,000 45 13,455 - 13,500
W/O deferred
offering costs - - - (10,661) (10,661)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1990 4,500,000 45 13,455 (10,661) 2,839
Net loss for year ended
December 31, 1991 - - - (1,309) (1,309)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1991 4,500,000 45 13,455 (11,970) 1,530
Net loss for year ended
December 31, 1992 - - - (10) (10)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1992 4,500,000 45 13,455 (11,980) 1,520
Net loss for year ended
December 31, 1993 - - - (9) (9)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1993 4,500,000 45 13,455 (11,989) 1,511
Net loss for year ended
December 31, 1994 - - - (859) (859)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1994 4,500,000 45 13,455 (12,848) 652
Net loss for year ended
December 31, 1995 - - - (192) (192)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1995 4,500,000 45 13,455 (13,040) 460
Net loss for year ended
December 31, 1996 - - - (4,988) (4,988)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1996 4,500,000 45 13,455 (18,028) (4,528)
Net loss for year ended
December 31, 1997 - - - (12,270) (12,270)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1997 4,500,000 $ 45 $ 13,455 $ (30,298) $ (16,798)
========= ====== ======== =========== =========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
14
<PAGE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1997
Note 1 - Organization:
------------
Organization - The Company was organized as a Delaware Corporation on
December 22, 1988.
Basis of Presentation - The Company is in the development stage and is
primarily engaged in raising capital. On or about March 29, 1990, the
Company filed a registration statement on Form S-18 with the Securities
and Exchange Commission, wherein the Company attempted to register 20,000
Units, each Unit consisting of 100 shares of the Company's Common Stock
and 100 Class A, Class B and Class C Common Stock Purchase Warrants.
This registration statement was subsequently voluntarily abandoned by the
Company prior to effectiveness. Other than filing of the aforesaid
registration statement, the only activities undertaken by the Company
since its inception has been the issuing of 4,500,000 shares of the
Company's Common Stock to its original shareholders, which stock was
issued in exchange for aggregate cash consideration of $13,500. Each
shareholder of the Company has executed and delivered a "lock-up" letter
agreement, affirming that they shall not sell their respective shares of
the Company's Common Stock until such time as the Company has
successfully consummated a merger or acquisition has been consummated,
and each shareholder has agreed to place their respective stock
certificate with the Company's legal counsel who will not release these
respective certificates until such time as legal counsel has confirmed
that a merger or acquisition has been successfully consummated.
Cash Equivalents:
-----------------
For purposes of the statement of cash flows, the Foundation considers all
cash and other highly liquid investments with initial maturities of three
months or less to be cash equivalents.
Estimates:
----------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Note 2 - Summary of Significant Accounting Policies:
-------------------------------------------
Revenue is recognized when earned and expenses are recognized when they
occur.
Loss Per Share - Net loss per common share is based upon the weighted
average common share outstanding during each period.
Note 3 - Income Taxes:
-------------
The Company has made no provision for income taxes because there have
been no operations to date causing income for financial statements or tax
purposes. The Company had net operating loss carryforwards of
approximately $18,000 for financial statement and tax purposes, which
begin to expire in 2003.
15
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors are elected for one-year terms or until the next
annual meeting of shareholders and until their successors are duly
elected and qualified. Officers continue in office at the pleasure
of the Board of Directors.
The Directors and Officers of the Company as of the date of
this report are as follows:
Name Age Position
Wm. Ernest Simmons 59 President and Director
Harry G. Titcombe, Jr. 67 Secretary-Treasurer and
Director
All Directors of the Company will hold office until the next
annual meeting of the shareholders and until successors have been
elected and qualified. Officers of the Company are elected by the
Board of Directors and hold office until their death or until they
resign or are removed from office.
There are no family relationships among the officers and
directors. There is no arrangement or understanding between the
Company (or any of its directors or officers) and any other person
pursuant to which such person was or is to be selected as a
director or officer.
(b) Resumes:
Wm. Ernest Simmons currently is, and has been since inception
of the Company in 1988, the President and a Director of the
Company. He is also the President, a director and a controlling
shareholder of Yaak River Resources, Inc., a public reporting
company engaged in the mining business. In addition to his service
to the Company, Mr. Simmons is also currently a consultant for the
ER-SHI-JU Company, Ltd., Mongolia and the "Bornuur" Company, both
of which have common interests in a large agricultural project in
north central Mongolia. Mr. Simmons is also president and a
director to Itec Minerals, a Canadian firm employing advanced
technology to purge mined sites and waste disposal areas of their
contaminants. From January 1995 through May 1998, Mr. Simmons was
Director-General of the "Bumbat" Company Ltd., Zaamar Sum,
16
<PAGE>
Mongolia, a Mongolian-Canadian joint venture mining operation where
his responsibilities included acquisitions and mobilization of all
equipment and supplies, preparation and construction of mill sites
and mining site operations and other managerial matters associated
with the exploration and development of hard rock gold mines.
From February 1991 through July 1994, Mr. Simmons was a life and
health insurance agent in Denver, Colorado with New York Life
Insurance Company. From 1978 to 1990, Mr. Simmons served as Manager
of U.S. Operations for Mining Corporation, Inc., of Lakewood,
Colorado. From February 1987 through December 1989 Mr. Simmons was
president and a director of Bluestone Capital, Inc., a publicly
held "blind pool" Colorado corporation. From March, 1986 through
July, 1994, Mr. Simmons was president and a director of Yaak River
Mines, Ltd., a Colorado corporation also defined as a public
"shell" company. Mr. Simmons received a Bachelor's of Science
Degree in Business Administration from Regis University, Denver,
Colorado in 1987 and received the Degree of Mining Technologist
from Haileybury School of Mines in 1973. Mr. Simmons devotes
approximately 20 hours per month to the business of the Company.
Harry G. Titcombe, Jr. has been Treasurer and a director of
the Company since November, 1989. In January 1995, Mr. Titcombe
was also appointed as Secretary of the Company. Since 1984, Mr.
Titcombe has engaged in the practice of law as a sole practitioner
in Denver, Colorado. Prior to that, Mr. Titcombe was a partner and
associate at the Denver law firm of Burnett, Horan & Hilgers and
was a Deputy District Attorney in the offices of the Denver County
District Attorney. He is also an officer and director of Yaak
River Resources, Inc., a public reporting company engaged in the
mining business. Mr. Titcombe received a degree of L.L.B. in 1960
from the University of Denver College of Law. Mr. Titcombe devotes
only such time as necessary to the business of the Company.
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers, directors and person who own more than 10%
of the Company's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission.
All of the aforesaid persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they
file. There were no changes in the securities holdings of any
person during the fiscal year ended December 31, 1997, as all
issued and outstanding share certificates issued by the Company are
presently held in escrow with the Company's legal counsel, until
such time as the Company successfully consummates a merger or
acquisition.
17
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION.
Remuneration
The following table reflects all forms of compensation for
services to the Company for the fiscal years ended December 31,
1996 and 1997 of the chief executive officer of the Company.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
____________________________
Annual Compensation Awards Payouts
_____________________ ____________________ _______
Securities
Other Under- All
Name Annual Restricted lying Other
and Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Award(s) SARs Payouts sation
Position Year ($)(1) ($) ($) ($) (#) ($) ($)
__________ ____ ______ _____ ______ ________ _______ _______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wm. Ernest 1996 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0
Simmons,
President &
Director 1997 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0
_________________________
<FN>
(1) It is not anticipated that any executive officer of the Company will
receive compensation exceeding $100,000 during 1998, except in the event
the Company successfully consummates a business combination, of which there
is no assurance.
</TABLE>
The Company maintains a policy whereby the directors of the
Company may be compensated for out of pocket expenses incurred by
each of them in the performance of their relevant duties. The
Company did not reimburse any director for such expenses during
fiscal years 1996 or 1997.
In addition to the cash compensation set forth above, the
Company reimburses each executive officer for expenses incurred on
behalf of the Company on an out-of-pocket basis. The Company
cannot determine, without undue expense, the exact amount of such
expense reimbursement. However, the Company believes that such
reimbursements did not exceed, in the aggregate, $1,000 during the
fiscal year ended December 31, 1997.
18
<PAGE>
Incentive Stock Option Plan
The Company has adopted an incentive stock option plan for key
employees, including officers and directors (the "Plan"). The
Company has reserved a maximum of 2,500,000 Common Shares to be
issued upon the exercise of options granted under the Plan. The
Plan is intended to qualify as an "incentive stock option plan"
under Section 422A of the Internal Revenue Code of 1986, as
amended. Accordingly, options will be granted under the Plan at
exercise prices at least equal to the fair market value per share
of the Common Stock on the respective dates of grant and will be
subject to the limitations provided by the Code. However, options
may be granted to officers and/or directors or others who own more
than 10% of the outstanding Common Stock only at an option price
which, on the date granted, is at least 110% of the fair market
value of the Common Stock. With respect to options granted
pursuant to Section 422A, employees will not recognize taxable
income upon either the grant or exercise of such options. The
Company will not be entitled to any compensating deduction with
respect to such options unless disqualifying dispositions, as
defined by such law, are made. The Plan is administered by the
Board of Directors. No options have been granted under the Plan as
of the date of this report and no options will be granted until
such time as the Company has successfully consummated a business
combination.
No other retirement, pension, profit sharing, stock option or
insurance programs or other similar programs have been adopted by
the Company for the benefit of its employees.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) and (b) Security Ownership of Certain Beneficial Owners
and Management.
The table below lists the beneficial ownership of the
Company's voting securities by each person known by the Company to
be the beneficial owner of more than 5% of such securities, as well
as by all directors and officers of the issuer. Unless otherwise
indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
Common Wm. Ernest Simmons(1) 1,206,000 26.8%
830 S. Kline Way
Lakewood, CO 80226
19
<PAGE>
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Title of Class Owner Owner Class
Common Harry G. Titcombe, Jr.(1) 1,206,000 26.8%
3003 E. 3rd Ave., #201
Denver, CO 80206
Common Susan K. Sunsvold 1,000,000 22.2%
5121 S. Ironton Way
Englewood, CO 80111
Common Heather E. Nutting 315,000 7.0%
9035 W. 5th Place
Lakewood, CO 80226
Common John D. Brasher, Jr. 283,500 6.3%
3773 Cherry Creek No. Dr.
Suite 615
Denver, CO 80209
Common All Officers & 2,412,000 53.6%
Directors as a Group
(2 persons)
- ---------------------
(1) Officer and/or director of the Company.
The balance of the Company's outstanding Common Shares are
held by 3 persons.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Wm. Ernest Simmons, the President and a director of the
Company, has loaned the Company an aggregate of $9,704 to cover
general and administrative costs incurred by the Company. This
loan is expected to be repaid on an interest free basis when the
Company successfully consummates a merger or acquisition, if such
funds are available.
There were no other related party transactions which occurred
during the past two years and which are required to be disclosed
pursuant to the requirements included under Item 404 of Regulation
SB.
20
<PAGE>
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3.1* Certificate and Articles of Incorporation and Amendments
thereto.
3.2* Bylaws
4.1* Copies of All Lock-up Agreements by the Company's
Shareholders
EX-27 Financial Data Schedule
* Filed with the Securities and Exchange Commission in the Exhibits
to Form 10-SB, filed on February 15, 1995, and are incorporated by
reference herein.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
last calendar quarter of the fiscal year ended December 31, 1997.
21
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on
March 27, 1998.
GENESIS COMPANIES GROUP, INC.
(Registrant)
By:/s/ Wm. Ernest Simmons
--------------------------------
Wm. Ernest Simmons, President
By:/s/ Harry G. Titcombe
--------------------------------
Harry G. Titcombe, Jr.,
Secretary-Treasurer
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities indicated on March 27, 1998.
/s/ Wm. Ernest Simmons
- ------------------------------
Wm. Ernest Simmons,
President and Director
/s/ Harry G. Titcombe
- ------------------------------
Harry G. Titcombe, Jr.,
Secretary-Treasurer and Director
22
<PAGE>
GENESIS COMPANIES GROUP, INC.
Exhibit Index to Annual Report on Form 10-KSB
For the Fiscal Year Ended December 31, 1997
EXHIBITS Page No.
EX-27 Financial Data Schedule . . . . . . . . . . 24
23
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
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QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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