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, 1999
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 10, 2000: $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 10, 2000, 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-Six Pages.
Exhibit Index is Located at Page Twenty Three.
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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................ 18
PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons, Compliance with
Section 16(a) of the Exchange Act....... 18
Item 10. Executive Compensation...................... 20
Item 11. Security Ownership of Certain Beneficial
Owners and Management................... 21
Item 12. Certain Relationships and Related
Transactions............................ 22
PART IV
Item 13. Exhibits and Reports of Form 8-K............ 23
SIGNATURES............................................. 24
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, whose 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
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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.
(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, 2000, 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 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
6
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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 "Part III, Item 9 - Directors, Executive
Officers, Promotors and Control Persons - Resumes."
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.
Year 2000
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 recent change in the century. If not corrected, many computer
applications were expected to fail or create erroneous results by or at the Year
2000. As a result, many companies were required to undertake major
7
<PAGE>
projects to address the Year 2000 issue. Because the Company has no assets,
including any personal property such as computers, the Company did not incur any
negative impact as a result of this problem and no problems in this regard are
anticipated in the future.
ITEM 7. FINANCIAL STATEMENTS
8
<PAGE>
GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 1999
9
<PAGE>
Michael B. Johnson & Co, LLC
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.
Denver, Colorado
We have examined the accompanying balance sheet of Genesis Companies Group, Inc.
(A Development Stage Company) as of December 31, 1999 and 1998, and the related
statements of operations, cash flows, and changes in stockholders' equity for
the period December 22, 1988 (inception), through December 31, 1999, and the
fiscal years ended December 31, 1999 and 1998. 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, 1999 and 1998, and the results of its operations and its cash
flows for the period December 22, 1988 (inception) through December 31, 1999 and
the fiscal years ended December 31, 1999 and 1998, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 1 to the
financial statements, the Company is in the development stage, conditions exist
which raise substantial doubt about the Company's ability to continue as a going
concern unless it is able to generate sufficient cash flows to meet its
obligations and sustain its operations. The financial statements do no include
any adjustment that might result from the outcome of this uncertainty.
s/Michael B. Johnson & Co., LLC
Denver, Colorado
March 22, 2000
10
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<TABLE>
GENESIS COMPANIES GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31,
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
ASSETS:
Current Assets:
Cash $ - $ -
--------- ---------
TOTAL ASSETS $ - $ -
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts Payable $ 16,456 $ 9,300
Short term Borrowing from Shareholders 16,302 13,557
--------- ---------
TOTAL LIABILITIES 32,758 22,857
--------- ---------
Stockholders' Equity (Deficit):
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 (46,258) (36,357)
--------- ---------
Total Stockholders' Deficit (32,758) (22,857)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ - $ -
========= =========
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,
1999 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
INCOME $ - $ - $ -
OPERATING EXPENSES:
Professional Fees 5,904 5,970 31,250
Registration Fees 178 0 3,668
Administrative Expenses 3,819 89 11,340
----------- ----------- -----------
Total Operating Expenses 9,901 6,059 46,258
----------- ----------- -----------
Net Loss from Operations $ (9,901) $ (6,059) $ (46,258)
=========== =========== ===========
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
The accompanying notes are an integral part of these financial statements.
</TABLE>
12
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<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,
1999 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
Cash Flows From Operating
Activities:
Adjustments to reconcile net
loss to net cash used in
operating activities:
Net Loss $ (9,901) $ (6,059) $ (46,258)
Changes in assets and
liabilities:
Increase in Accounts
Payables 7,156 4,204 16,456
Increase in Short-term
Borrowings-Shareholder 2,745 1,855 16,302
----------- ----------- ------------
9,901 6,059 32,758
----------- ----------- ------------
Net Cash Used In
Operating Activities - - (13,500)
----------- ----------- ------------
Cash Flow From Financing
Activities:
Issuance of Common Stock - - 13,500
----------- ----------- ------------
Net Cash Provided By
Financing Activities - - 13,500
----------- ----------- ------------
Increase (Decrease) in Cash - - -
Cash and Cash Equivalents,
Beginning of period - - -
----------- ----------- ------------
Cash and Cash Equivalents,
End of period $ - $ - $ -
=========== =========== ============
Supplemental Cash Flow
Information:
Interest paid $ - $ - $ -
=========== =========== ============
Taxes paid $ - $ - $ -
=========== =========== ============
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 Stock Paid-In Development
Shares Amount Capital Stage Totals
--------- ------ -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Balance -
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 -
December 31, 1989 4,500,000 45 13,455 - 13,500
W/O deferred
offering costs - - - (10,661) (10,661)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1990 4,500,000 45 13,455 (10,661) 2,839
Net loss for year - - - (1,309) (1,309)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1991 4,500,000 45 13,455 (11,970) 1,530
Net loss for year - - - (10) (10)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1992 4,500,000 45 13,455 (11,980) 1,520
Net loss for year - - - (9) (9)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1993 4,500,000 45 13,455 (11,989) 1,511
Net loss for year - - - (859) (859)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1994 4,500,000 45 13,455 (12,848) 652
Net loss for year - - - (192) (192)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1995 4,500,000 45 13,455 (13,040) 460
Net loss for year - - - (4,988) (4,988)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1996 4,500,000 45 13,455 (18,028) (4,528)
Net loss for year - - - (12,270) (12,270)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1997 4,500,000 45 13,455 (30,298) (16,798)
Net loss for year - - - (6,059) (6,059)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1998 4,500,000 $ 45 $ 13,455 $ (36,357) $ (22,857)
Net loss for year - - - (9,901) (9,901)
--------- ------ -------- ----------- ---------
Balance -
December 31, 1999 4,500,000 $ 45 $ 13,455 $ (46,258) $ (32,758)
========= ====== ======== =========== =========
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, 1999
NOTE 1 - Organization and Summary of Significant Accounting Policies:
-----------------------------------------------------------
Organization
Genesis Companies Group, Inc. (the Company) was organized as a Delaware
corporation on December 22, 1988, 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 Presentation
Development Stage Company
The Company has not earned significant revenue from planned principal
operations. Accordingly, the Company's activities have been accounted for
as those of a "Development Stage Enterprise" as set forth in Financial
Accounting Standards Board Statement No. 7 ("SFAS 7"). Among the
disclosures required by SFAS 7 are that the Company's financial statements
be identified as those of a development stage company, and that the
statements of operations, stockholders' equity (deficit) and cash flows
disclose activity since the date of the Company's inception.
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.
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GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
NOTE 1 - Organization and Summary of Significant Accounting Policies:(Continued)
-----------------------------------------------------------------------
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 Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards Number 109 ("SFAS 109"), "Accounting for
Income Taxes", which requires a change from the deferred method to the
asset and liability method of accounting for income taxes. Under the asset
and liability method, deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory rates
applicable to future years to differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities.
The Company has deferred income tax assets which have been fully reserved
as follows:
Deferred tax assets
Net operating loss carryforwards $46,258
Valuation allowance for deferred tax assets (46,258)
-------
Net deferred tax assets $ -
=======
At December 31, 1999, the Company had net operating loss carryforwards of
approximately $46,258 for federal income tax purposes. These carryforwards,
if not utilized to offset taxable income will expire at the end of the
indicated years:
2003-$10,661, 2004-$1,309, 2005-$10, 2006-$9, 2007-$859, 2008-$859,
2009-$192, 2010-$4,988, 2011-$12,270, 2012-$6,059, 2013-$9,901
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, 19998.
Notes payable to officers are unsecured and bear interest at 8%.
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GENESIS COMPANIES GROUP, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1999
NOTE 3 - Going Concern:
--------------
The Company is a development stage company, and as such is dependent upon
its ability to raise capital through private and public funding. In view of
these matters, realization of a major portion of the assets in the
accompanying balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to meet its
financial requirements, and the success of its future operations.
Management believes that actions presently being taken to revise the
Company's operating and financial requirements provide the opportunity for
the Company to continue as a going concern.
17
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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 61 President and Director
Harry G. Titcombe, Jr. 69 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. From December 1991
through December 1999, he was also the President and director of Yaak River
Resources, Inc., a publicly traded 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. From December 1997 until March 1999, Mr. Simmons was 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 May 1998, Mr. Simmons was Director-
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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. Additionally, from September 1995 through December 1999, he was also
an officer and director of Yaak River Resources, Inc., a publicly traded 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, 1999, 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.
19
<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, 1999 and 1998 of the chief
executive officer of the Company.
SUMMARY COMPENSATION TABLE
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 ($) ($) ($) ($) (#) ($) ($)
- ---------- ---- ------ ----- ------ -------- ------- ------- ------
Wm. Ernest 1999 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Simmons,
President &
Director 1998 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
- -------------------------
It is not anticipated that any executive officer of the Company will
receive compensation exceeding $100,000 during the fiscal year ending December
31, 2000, except in the event the Company successfully consummates a business
combination, of which there is no assurance.
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 1999 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, 1999.
20
<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
21
<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 $16,302 to cover general and administrative costs
incurred by the Company. This loan is expected to be repaid when the Company
successfully consummates a merger or acquisition, if such funds are available.
The loan accrues interest at the rate of 8% per annum and is due upon demand.
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.
22
<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, 1999.
23
<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 10, 2000.
GENESIS COMPANIES GROUP, INC.
(Registrant)
By:s/ Wm. Ernest Simmons
------------------------
Wm. Ernest Simmons, President
By:s/ Harry G. Titcombe, Jr.
-------------------------
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 10, 2000.
s/ Wm. Ernest Simmons
- ---------------------
Wm. Ernest Simmons,
President and Director
s/ Harry G. Titcombe, Jr.
- -------------------------
Harry G. Titcombe, Jr.,
Secretary-Treasurer and Director
24
<PAGE>
GENESIS COMPANIES GROUP, INC.
EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-KSB
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
EXHIBITS Page No.
EX-27 Financial Data Schedule . . . . . . . . . . . . . . . . . . 26
25
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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