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, 1998
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 April 26, 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 April 26, 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-Five Pages.
Exhibit Index is Located at Page Twenty Four.
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................ 17
PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons, Compliance with
Section 16(a) of the Exchange Act....... 17
Item 10. Executive Compensation...................... 19
Item 11. Security Ownership of Certain Beneficial
Owners and Management................... 20
Item 12. Certain Relationships and Related
Transactions............................ 21
PART IV
Item 13. Exhibits and Reports of Form 8-K............ 22
SIGNATURES............................................. 23
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, 1998
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, 1998 and December 31, 1997, and
the related statements of operations, cash flows, and changes in stockholders'
equity for the period December 22, 1988 (inception), through December 31, 1998,
and the fiscal years ended December 31, 1998 and 1997. 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.
As shown in the financial statements, the company incurred a net loss of $6,059
for 1998 and had incurred substantial losses in the prior years. At December 31,
1998, current liabilities exceed current assets by $22,857. These factors
indicate that the company has substantial doubt about the ability to continue as
a going concern. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the company cannot continue in existence.
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, 1998 and December 31, 1997, and the results of its operations
and its cash flows for the period December 22, 1988 (inception), through
December 31, 1998, and the fiscal years ended December 31, 1998 and 1997, in
conformity with generally accepted accounting principles.
s/Michael B. Johnson & Co., P.C.
Denver, Colorado
April 14, 1999
10
<PAGE>
<TABLE>
GENESIS COMPANIES GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
<CAPTION>
December 31, December 31,
1998 1997
--------- ---------
<S> <C> <C>
ASSETS:
Current Assets:
Cash $ - $ -
--------- ---------
Total Current Assets - -
--------- ---------
TOTAL ASSETS $ - $ -
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts Payable $ 9,300 $ 5,090
Short term Borrowing from Shareholders 13,557 11,708
--------- ---------
Total Current Liabilities 22,857 16,798
--------- ---------
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 (36,357) (30,298)
--------- ---------
Total Stockholders' Equity (22,857) (16,798)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ - $ -
========= =========
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,
1998 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
INCOME $ - $ - $ -
OPERATING EXPENSES:
Professional Fees 5,970 6,290 25,346
Registration Fees 0 250 3,490
Administrative Expenses 89 5,730 7,521
----------- ----------- -----------
Total Operating Expenses 6,059 12,270 36,357
----------- ----------- -----------
Net Loss from Operations $ (6,059) $ (12,270) $ (36,357)
=========== =========== ===========
Weighted average number of
shares outstanding 4,500,000 4,500,000 4,500,000
Net Loss Per Share $ 0.001 $ 0.003 $ 0.008
=========== =========== ===========
* Less than $0.01 per share
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,
1998 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Cash Flows From Operating
Activities:
Net Loss Accumulated During
the Development Stage $ (6,059) $ (12,270) $ (36,357)
Increase (Decrease) in
Accounts Payables 4,204 568 9,300
Increase (Decrease) in
Shareholder Note Payable 1,855 11,702 13,557
----------- ----------- ------------
6,059 12,270 22,857
----------- ----------- ------------
Net Cash Provided by (Used In)
Operating Activities - - (13,500)
----------- ----------- ------------
Cash Flow From Financing
Activities:
Issuance of Common Stock - - 13,500
----------- ----------- ------------
Net Cash Flows Provided by
Financing Activities - - 13,500
----------- ----------- ------------
Increase (Decrease) in Cash - - -
Cash and Cash Equivalents,
beginning of period - - -
----------- ----------- ------------
Cash and Cash Equivalents,
end of period $ - $ - $ -
=========== =========== ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
13
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<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 - $ - $ - $ - $ -
Issuance of common stock:
April 14, 1989
(for cash) 113,000 1 149 - 150
May 12, 1989 1,315,000 13 3,987 - 4,000
November 10, 1989 2,622,000 26 7,974 - 8,000
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)
Net loss for year ended
December 31, 1998 - - - (6,059) (6,059)
--------- ------ -------- ----------- ---------
Balance at
December 31, 1998 4,500,000 $ 45 $ 13,455 $ (36,357) $ (22,857)
========= ====== ======== =========== =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
14
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GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------------------
Organization
Genesis Companies Group, Inc. (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. The
company prior to effectiveness subsequently voluntarily abandoned this
registration statement. Other than filing of the aforesaid registration
statements, 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. Also, 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.
Basis of Accounting:
The accompanying financials statements have been prepared on the
accrual basis of accounting in accordance with generally accepted
accounting principles.
The Company's fiscal year end is December 31.
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.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considered all
cash and other highly liquid investments with initial maturities of
three months or less to be cash equivalents.
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
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GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
NOTE 2 - RELATED PARTY TRANSACTIONS:
--------------------------
Short term borrowing from shareholders
The Chairman and other executive officers of the Company provided
services and advanced cash to the Company for operations. Certain of
these transactions resulted in notes being issued to the Chairman and
certain executive officers which were still outstanding at December 31,
1998. Notes payable to officers are unsecured and bear interest at 8%.
NOTE 3 - GOING CONCERN:
--------------
The company incurred a net loss of $6,059 for 1998 and had incurred
substantial losses in the prior years. At December 31, 1998, current
liabilities exceed current assets by $22,857. These factors indicate
that the company has substantial doubt about its ability to continue in
existence. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets,
or the amounts and classification of liabilities that might be
necessary in the event the company cannot continue in existence.
16
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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 60 President and Director
Harry G. Titcombe, Jr. 68 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 a consultant/operations manager to Itec Minerals, a Canadian
firm employing advanced technology to purge mined sites and waste disposal areas
of their contaminants. From January 1995 through
17
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May 1998, Mr. Simmons was Director-General of the "Bumbat" Company Ltd., Zaamar
Sum, 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, 1998, 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.
18
<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, 1997 and 1998 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 1997 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0
Simmons,
President &
Director 1998 $ 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 1999, except in the
event the Company successfully consummates a business combination, of
which there is no assurance.
</FN>
</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 1997 or 1998.
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, 1998.
19
<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
20
<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 $13,557 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.
Mr. Simmons also provides the Company with its principal office space,
which space is provided to the Company on rent free basis.
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.
21
<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, 1998.
22
<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 April 26, 1999.
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 April 26, 1999.
/s/ Wm. Ernest Simmons
- ------------------------------
Wm. Ernest Simmons,
President and Director
/s/ Harry G. Titcombe
- ------------------------------
Harry G. Titcombe, Jr.,
Secretary-Treasurer and Director
23
<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 . . . . . . . . . . 25
24
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-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> 22,857
<BONDS> 0
0
0
<COMMON> 45
<OTHER-SE> (22,902)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,059
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,059)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,059)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,059)
<EPS-PRIMARY> (.001)
<EPS-DILUTED> 0
</TABLE>
