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, 1999
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, 1999, was 4,500,000 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the nine month period ended
September 30, 1999, 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, 1999. 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.
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 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.
Plan of Operation
The Company intends to seek to acquire assets or shares of an entity
actively engaged in business, in exchange for its securities. As of the date of
this report, management of the Company has had preliminary discussions with
potential merger or acquisition candidates, but there is no definitive agreement
between the Company and any third party relevant thereto. In the event the
Company does enter into an agreement with such a third party, 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
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audited financial 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 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.
Because the Company presently has nominal overhead or other material
financial obligations, management of the Company believes 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.
Liquidity and Capital Resources
The Company presently has nominal cash or cash equivalents. 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.
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.
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
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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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<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited
Balance Sheet
<CAPTION>
Unaudited Audited
September 30, December 31,
1999 1998
--------- -----------
<S> <C> <C>
ASSETS
Current Assets - Cash $ 0 $ 0
--------- -----------
TOTAL ASSETS $ 0 $ 0
========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Current Liabilities -
Accounts Payable $ 15,692 $ 9,300
Short Term Borrowings from
Shareholders 14,979 13,557
--------- -----------
Total Current Liabilities 30,671 22,857
Long-Term Liabilities 0 0
--------- -----------
Total Long-Term Liabilities 0 0
--------- -----------
Total Liabilities $ 30,671 $ 22,857
Shareholder's Equity
Common Stock, Par Value $.00001 Per
Share; 100,000,000 Shares Authorized,
4,500,000 Issued and Outstanding at
September 30, 1999, and December 31,
1998, 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 (44,171) (36,357)
--------- -----------
Total Shareholders' Equity $ (30,671) $ (22,857)
--------- -----------
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
Nine Months For the (Inception)
Ended Year Ended Thru
September 30, December 31, September 30,
1999 1998 1999
------------ ------------ -----------------
<S> <C> <C> <C>
Income $ 0 $ 0 $ 0
Operating Expenses
Professional Fees 4,380 5,970 29,726
Registration Fees 139 0 3,629
Administrative Expenses 3,296 89 10,816
------------ ------------ -----------------
Total Operating Expenses 7,815 6,059 44,171
Net Loss from Operations $ (7,815) $ (6,059) $ (44,171)
============ ============ =================
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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<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited
Statement of Operations
<CAPTION>
For the For the
Three Months Three Months
Ended Ended
September 30, September 30,
1999 1998
------------ ------------
<S> <C> <C>
Income $ 0 $ 0
Operating Expenses
Professional Fees 1,568 412
Registration Fees 0 139
Administrative Expenses 569 0
------------ ------------
Total Operating Expenses 2,137 551
------------ ------------
Net Loss from Operations $ (2,137) $ (551)
============ ============
Weighted Average Number of
Shares Outstanding 4,500,000 4,500,000
Net Loss Per Share $ (*) $ (*)
*Less than $0.01 Per Share.
</TABLE>
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<TABLE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Unaudited Cash Flow Statement
<CAPTION>
For the December 22, 1988
Nine Months For the (Inception)
Ended Year Ended Thru
September 30, December 31, September 30,
1999 1998 1999
------------ ------------ --------------
<S> <C> <C> <C>
Cash Flows From
Operating Activities:
Net Profit (Loss) $ (7,815) $ (6,059) $ (44,171)
Increase (Decrease) in
Accounts Payable 5,110 4,204 14,409
Shareholder Note Payable 2,705 1,855 16,262
------------ ----------- -------------
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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GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
(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.
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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: November 9, 1999
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 SEPTEMBER 30, 1999
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 NINE MONTH PERIOD ENDED SEPTEMBER 30,
1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 30,671
<BONDS> 0
0
0
<COMMON> 45
<OTHER-SE> (30,716)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,815
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,815)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,815)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,815)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
