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: March 31, 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 March 31, 1998, was 4,500,000 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three month period ended March
31, 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 three month period ended March
31, 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.
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
2
<PAGE>
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.
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<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited
Balance Sheet
<CAPTION>
Unaudited Audited
March 31, 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 $ 6,574 $ 5,090
Shareholder Loans 11,708 11,708
_________ ___________
Total Current Liabilities 18,282 16,798
Long-Term Liabilities 0 0
_________ ___________
Total Long-Term Liabilities 0 0
_________ ___________
Total Liabilities $ 18,282 $ 16,798
Shareholder's Equity
Common Stock, Par Value $.00001 Per
Share; 100,000,000 Shares Authorized,
4,500,000 Issued and Outstanding at
March 31, 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 (31,782) (30,298)
_________ ___________
Total Shareholders' Equity $ (18,282) $ (16,798)
_________ ___________
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 0 $ 0
========= ===========
</TABLE>
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<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited
Statement of Operations
<CAPTION>
For the December 22, 1988
Three Months For the (Inception)
Ended Year Ended Thru
March 31, December 31, March 31,
1998 1997 1998
____________ ____________ _________________
<S> <C> <C> <C>
Income $ 0 $ 0 $ 0
Operating Expenses
Professional Fees 1,484 6,290 20,860
Registration Fees 0 250 3,490
Administrative Expenses 0 5,730 7,432
____________ ____________ _________________
Total Operating Expenses 1,484 12,270 31,782
Net Loss from Operations $ (1,484) $ (12,270) $ (31,782)
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>
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<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited
Cash Flow Statement
<CAPTION>
For the December 22, 1988
Three Months For the (Inception)
Ended Year Ended Thru
March 31, December 31, March 31,
1998 1997 1998
____________ ____________ ______________
<S> <C> <C> <C>
Cash Flows From
Operating Activities:
Net Profit (Loss) $ (1,484) $ (12,270) $ (31,782)
Increase (Decrease) in
Accounts Payable 1,484 568 6,574
Shareholder Note Payable 0 11,702 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>
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<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
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<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 three
months ended
March 31, 1998 (1,484) (1,484)
____________ ______ __________ _________ ________
Balance at
March 31, 1998 4,500,000 $ 45 $ 13,455 $ (31,782) $(18,282)
============ ====== ========== ========= ========
</TABLE>
8
<PAGE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 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.
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.
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<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: May 14, 1998
By: s/Wm. Ernest Simmons
-------------------------------------
Wm. Ernest Simmons
President
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<PAGE>
GENESIS COMPANIES GROUP, INC.
Exhibit Index to Quarterly Report on Form 10-QSB
For the Quarter Ended March 31, 1998
EXHIBITS Page No.
EX-27 Financial Data Schedule . . . . . . . . . . . . . . . . . . 12
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1998,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 18,282
<BONDS> 0
0
0
<COMMON> 45
<OTHER-SE> (18,327)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,484
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,484)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,484)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
