U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1998
Commission File Number: 0-25562
GENESIS COMPANIES GROUP, INC.
(Exact name of small business issuer as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
72-1175963
(IRS Employer Identification No.)
830 S. Kline Way
Lakewood, Colorado
(Address of principal executive offices)
80226
(Zip Code)
(303) 985-3972
(Issuer's Telephone Number)
(Former name, former address and former fiscal year, if changed
since last report)
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 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
__X__ No ____.
The number of shares of the registrant's only class of common stock
issued and outstanding, as of September 30, 1998, was 4,500,000
shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the nine month period
ended September 30, 1998, are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the Financial Statements and notes thereto included herein.
The Company generated no revenues during the nine month period
ended September 30, 1998. Management of the Company anticipates
that the Company will not generate any significant revenues until
the Company accomplishes its business objective of merging with a
nonaffiliated entity or acquiring assets from the same.
The Company's securities are currently not liquid. There are
no market makers in the Company's securities and it is not
anticipated that any market will develop in the Company's
securities until such time as the Company successfully implements
its business plan of engaging in a business opportunity, either by
merger or acquisition of assets. The Company presently has no
liquid financial resources to offer such a candidate and must rely
upon an exchange of its stock to complete such a merger or
acquisition.
Because the Company is not required to pay rent or salaries to
any of its officers or directors, management believes that the
Company has sufficient funds to continue operations through the
foreseeable future.
Forward Looking Statements
This report contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") concerning the Company's operations, economic
performance and financial conditions, including, in particular, the
likelihood of the Company's ability to acquire another existing
business or assets. These statements are based upon a number of
assumptions and estimates which are inherently subject to
significant uncertainties and contingencies, many of which are
beyond the control of the Company and reflect future business
decisions which are subject to change. Some of these assumptions
inevitably will not materialize and unanticipated events will occur
which will affect the Company's results. Consequently, actual
results will vary from the statements contained herein and such
variance may be material. Prospective investors should not place
undue reliance on this information.
2
<PAGE>
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 nominal
assets, including no 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.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - None
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
NONE.
ITEM 5. OTHER INFORMATION - NONE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
None
3
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited
Balance Sheet
<CAPTION>
Unaudited Audited
September 30, December 31
1998 1997
_________ ___________
<S> <C> <C>
ASSETS
Current Assets - Cash $ 0 $ 0
_________ ___________
TOTAL ASSETS $ 0 $ 0
========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Current Liabilities -
Accounts Payable $ 8,807 $ 5,090
Shareholder Loans 11,708 11,708
_________ ___________
Total Current Liabilities 20,515 16,798
Long-Term Liabilities 0 0
_________ ___________
Total Long-Term Liabilities 0 0
_________ ___________
Total Liabilities $ 20,515 $ 16,798
Shareholder's Equity
Common Stock, Par Value $.00001 Per
Share; 100,000,000 Shares Authorized,
4,500,000 Issued and Outstanding at
September 30, 1998, and December 31,
1997, respectively $ 45 $ 45
Preferred Stock, Par Value $.00001 Per
Share; 10,000,000 Shares Authorized 0 0
Additional Paid-in Capital 13,455 13,455
Deficit Accumulated During
the Development Stage (34,015) (30,298)
_________ ___________
Total Shareholders' Equity $ (20,515) $ (16,798)
_________ ___________
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 0 $ 0
========= ===========
</TABLE>
4
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited
Statement of Operations
<CAPTION>
For the For the December 22, 1988
Nine Months Nine Months (Inception)
Ended Ended Thru
September 30, September 30, September 30,
1998 1997 1998
____________ ____________ _________________
<S> <C> <C> <C>
Income $ 0 $ 0 $ 0
Operating Expenses
Professional Fees 3,578 2,622 22,954
Registration Fees 0 0 3,490
License Fees 139 0 139
Administrative Expenses 0 0 7,432
____________ ____________ _________________
Total Operating Expenses 3,717 2,622 34,015
Net Loss from Operations $ (3,717) $ (2,622) $ (35,015)
============ ============ =================
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.
</TABLE>
5
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited
Cash Flow Statement
<CAPTION>
For the For the December 22, 1988
Nine Months Nine Months (Inception)
Ended Ended Thru
September 30, September 30, September 30,
1998 1997 1998
____________ ____________ ______________
<S> <C> <C> <C>
Cash Flows From
Operating Activities:
Net Profit (Loss) $ (3,717) $ (2,622) $ (34,015)
Increase (Decrease) in
Accounts Payable 3,717 2,622 8,807
Shareholder Note Payable 0 0 11,708
____________ ___________ _____________
Net Cash Provided (Used)
By Operating Activities 0 0 (13,500)
Cash Flows From
Financing Activities:
Issuance of Common Stock 0 0 13,500
____________ ___________ _____________
Net Cash Provided (Used)
in Financing Activities 0 0 13,500
____________ ___________ _____________
Increase (Decrease) in Cash 0 0 0
Cash and Cash Equivalents -
Beginning of Period 0 0 0
____________ ___________ _____________
Cash and Cash Equivalents -
End of Period $ 0 $ 0 $ 0
============ =========== =============
</TABLE>
6
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage)
Unaudited
Statement of Shareholders' Equity
<CAPTION>
Deficit
Accumulated
Number of Additional During the
Shares Common Paid In Development
Common Stock Stock Capital Stage Total
____________ ______ __________ _________ ________
<S> <C> <C> <C> <C> <C>
Balance at
December 22, 1988 0 $ 0 $ 0 $ 0 $ 0
Stock issued for cash
April 14, 1989 113,000 1 149 0 150
Stock issued for cash
May 12, 1989 1,315,000 13 3,987 0 4,000
Stock issued for cash
November 10, 1989 2,622,000 26 7,974 0 8,000
Stock issued for cash
December 5, 1989 450,000 5 1,345 0 1,350
____________ ______ __________ _________ ________
Balance at
December 31, 1989 4,500,000 45 13,455 0 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
7
<PAGE>
<CAPTION>
Deficit
Accumulated
Number of Additional During the
Shares Common Paid In Development
Common Stock Stock Capital Stage Total
____________ ______ __________ _________ ________
<S> <C> <C> <C> <C> <C>
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)
Net Loss for nine
months ended
September 30, 1998 (3,717) (3,717)
____________ ______ __________ _________ ________
Balance at
September 30, 1998 4,500,000 $ 45 $ 13,455 $ (34,015) $(20,515)
============ ====== ========== ========= ========
</TABLE>
8
<PAGE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(Unaudited)
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.
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.
9
<PAGE>
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 statement 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.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
and Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
GENESIS COMPANIES GROUP, INC.
(Registrant)
Dated: November 19, 1998
By: s/Wm. Ernest Simmons
--------------------------------
Wm. Ernest Simmons
President
11
<PAGE>
GENESIS COMPANIES GROUP, INC.
Exhibit Index to Quarterly Report on Form 10-QSB
For the Quarter Ended September 30, 1998
EXHIBITS Page No.
EX-27 Financial Data Schedule . . . . . . . . . . . . 13
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30,
1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 20,515
<BONDS> 0
0
0
<COMMON> 45
<OTHER-SE> (20,560)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,717
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,717)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,717)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
