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Genesis Solar Corp – ‘10-Q’ for 12/31/09

On:  Tuesday, 2/16/10, at 1:15pm ET   ·   For:  12/31/09   ·   Accession #:  1000096-10-23   ·   File #:  2-87052-D

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/16/10  Genesis Solar Corp                10-Q       12/31/09    3:185K                                   Mitchell Fi… Printing/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Form 10-Q (12/31/09)                                HTML    175K 
 2: EX-31       Certification per Sarbanes-Oxley Act (Section 302)  HTML     14K 
 3: EX-32       Certification per Sarbanes-Oxley Act (Section 906)  HTML      8K 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended December 31, 2009

OR

___      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant (1) has 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 Aspen was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ¨     No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      Yes   ¨     No    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes XX      No  ¨

Indicate the number of shares outstanding of each of the Issuer's classes of common stock as of the latest practicable date.

2

GENESIS SOLAR CORPORATION
(A Development Stage Company)

INDEX

1

See accompanying notes.
2

GENESIS SOLAR CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Three Months Ended December 31, 2008 and 2009
(Unaudited)

See accompanying notes.
3

GENESIS SOLAR CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Nine Months Ended December 31, 2008 and 2009 and Cumulative Amounts
from Inception of the Development Stage (October 1, 2008) through December 31, 2009
(Unaudited)

See accompanying notes.
4

GENESIS SOLAR CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Nine Months Ended December 31, 2009
 (Unaudited)

See accompanying notes.
5

GENESIS SOLAR CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Nine Months Ended December 31, 2008 and 2009 and Cumulative Amounts
from Inception of the Development Stage (October 1, 2008) through December 31, 2009
(Unaudited)

See accompanying notes.
6

GENESIS SOLAR CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 2009

7

GENESIS SOLAR CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 2009

8

GENESIS SOLAR CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 2009

9

GENESIS SOLAR CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 2009

GENESIS SOLAR CORPORATION
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 2009

11

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The statements contained in this Report on Form 10-Q that are not purely historical are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our expectations, hopes, intentions or strategies regarding the future. Forward looking statements include: statements regarding future products or product development; statements regarding future selling, general and administrative costs and research and development spending, and our product development and marketing strategies; statements regarding future capital expenditures and financing requirements; and similar forward looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we undertake no obligation to update any such forward-looking statements. It is important to note that our actual results could differ materially from those in such forward-looking statements.

Material Changes in Financial Condition

     Effective December 7, 2009 the company changed its name from Cogenco International, Inc. to Genesis Solar Corporation (“Genesis Solar” or the “Company”) when the company’s Amended and Restated Articles of Incorporation became effective with the Colorado Secretary of State. The Company’s shareholders approved this name change at an annual meeting of shareholders held on March 30, 2009, but at that time authorized Company management to effect the name change at a later date. Based on the business operations and transactions the Company hopes to engage in, in November 2009 the Company’s Board of Directors believed it was appropriate to change the Company’s name to Genesis Solar Corporation and thereafter caused the Company to effect the name change. Genesis Solar has made the filings it believes are necessary with the Financial Industry Regulatory Authority (FINRA) to obtain a new trading symbol for the Company’s common stock and to reflect the name change with the Securities and Exchange Commission, and such filings continue to be under review and may not yet be completed or processed by the applicable regulatory agency/entity.

     Except for a series of equity financings in 2005, 2006, and 2007 and the activities related to DMI (generally described in our previous annual reports), Genesis Solar Corporation (“Genesis Solar”) has not engaged in any business operations for more than the past five years. Genesis Solar has not received any revenues from operations for more than the past ten years. We have not had an equity interest in DMI since March 2008 and we are no longer pursuing any further business opportunities with DMI. We have in effect an agreement (the “Acquisition Agreement”) which, if completed, would result in Genesis Solar acquiring from an affiliate (Genesis Energy Investments PLC (“GEI Plc”)) both Genesis Solar España, S.L. (“GSE”) and Genesis Solar Singapore Pte. Ltd. (“GSS”). Upon the completion of those acquisitions, Genesis Solar will have an option to acquire a third subsidiary of GEI Plc, Genesis Solar Hungary Kft (“GSH”).

     Although Genesis Solar originally entered into a memorandum of understanding in April 2009 with the goal of acquiring GSE and certain sister entities (Genesis Solar Singapore Pte. Ltd. (“GSS”), and a third subsidiary, Genesis Solar Hungary Kft (“GSH”)) and notwithstanding several amendments to the agreement entered into to complete the acquisition, Genesis Solar has not been able to complete the acquisition because of a lack of funding to complete the necessary due diligence and final contractual closing obligations. Although the latest amendment to the agreement for the acquisition of GSE requires delivery of a disclosure letter by March 20, 2010, but contemplates the closing to occur on “(i) March 1, 2010 or (ii) the date that is two business days following the termination of the applicable waiting period under the HSR Act (if applicable), or at such other time and place as the parties may agree.” Given the fact that Genesis Solar does not have, and has not had, the capital necessary to proceed with the necessary

12

work for the closing to take place, it is not likely that the closing will occur on March 1, 2010. Genesis Solar cannot offer any assurance that the parties will agree to extend the closing date, or that the contemplated acquisition will ever occur. The arrangement between Genesis Solar and GEI Plc has been described in a number of documents filed with the Securities and Exchange Commission since March 31, 2009, including Genesis Solar’s Form 10-Q for the quarter ended June 30, 2009, Genesis Solar’s Current Report on Form 8-K dated November 24, 2009, and Genesis Solar’s Current Report on Form 8-K dated January 19, 2010.

     Since the time Genesis Solar ceased active business operations in 1988, at times we have been seeking potential business opportunities. As a result of our lack of liquidity, lack of assets and lack of business operations, we believe the current general weakness and volatility in the capital markets are likely to make it especially difficult for us to obtain debt or equity financing. However, when we have identified an appropriate business opportunity either domestically or abroad at times we have attempted to pursue that opportunity, although in each case to date a lack of financing has prevented us from completing that acquisition.

     On December 31, 2009, we had working capital deficit of $(172,259) which represents an increase from our working capital deficit of $(84,964) on March 31, 2009. The increase in our working capital deficit is primarily a result of continuing general and administrative expenditures, a $40,000 interest-bearing loan extended to the Company by Mr. Brenman (our President) during the quarter ended September 30, 2009, our continuing operating losses, and our on-going use of cash assets to pay our general administrative obligations.

     For the nine months ended December 31, 2009, total stockholders’ equity decreased by almost $160,000 to $(172,059) as compared to $(12,137) as of March 31, 2009. The decrease in stockholders’ equity is primarily the result of the continued operating losses and the corresponding rise in our accumulated deficit.

     Currently, our only outside source of liquidity is a quarterly $25,000 note payment that is due from Genesis Capital Management Ltd. (“GCM Ltd”), and this is insufficient to maintain our general and administrative and other expenses. CGM Ltd. is a related party as a result of its control of Genesis Investment Fund Ltd., which together with its affiliates is the largest shareholder of Genesis Solar. The note issued from GCM Ltd obligates GCM Ltd to pay us $25,000 per quarter with the final payment due on December 31, 2010. The total principal and interest payments over the entire period will total $274,211. Although several of the payments have not been made timely, to date GCM Ltd has made all payments due to Genesis Solar under the note. Absent our acquisition of additional assets or outside funding, as GCM Ltd makes the remaining installment payments under the note our total assets will continue to decrease as we expect to use the funds received to pay our on-going general obligations. Our other source of funds for our general and administrative and other expenses have been loans received from our president, David Brenman.

     On March 31, 2009 our assets consisted primarily of the note receivable from GCM Ltd. This consisted of $114,347 in principal and $2,810 interest as a current asset, and $72,040 as a non-current asset. As of December 31, 2009 this note remained Genesis Solar’s largest asset, however only $118,808 of principal amount remained due. Only four more payments are due under the note. Because we expect to continue to use our limited cash on hand and the payments due under the note to fund at least a portion of our continuing general and administrative expenses (unless we are able to identify and obtain outside funding of which there can be no assurance), we expect our assets and liquidity to continue to diminish during the remainder of fiscal 2010. Although at times GCM Ltd has not timely made the payments due under the note, to date Genesis Solar has not yet imposed the 5% late fee or the 21% default interest against GCM Ltd. Genesis Solar believes that the entire note due from GCM Ltd is collectible.

13

Our largest current liabilities are those owed to our President, Mr. Brenman, for:

     With Mr. Brenman’s consent, Genesis Solar prioritizes payables owed to unrelated parties and, as additional cash is available, pays amounts due to Mr. Brenman. Although Genesis Solar has a working capital deficit, management believes that as a result of the deferrals and agreements of our President, in the near term Genesis Solar will be able to continue to pay its obligations to third parties as they become due.

     We have had significant cash flow difficulties. During recent fiscal years, we paid our operating expenses with funds raised from the issuance of common stock, the sale of marketable securities we held, as well as the funds provided by GCM Ltd as it pays down the amount owed to Genesis Solar at the rate of $25,000 per quarter. We no longer hold any marketable securities and have only limited cash on-hand. During the quarter ended December 31, 2009 Genesis Solar completed a $17,300 private placement through the sale of its common stock. However, the funds raised in this private placement are not sufficient to address our expected financial obligations and expenditures beyond the near term. Except for this $17,300 private placement, Genesis has not raised funds through the issuance of common stock since March 2007.

     Currently, we expect to use funds due to us under the GCM Ltd promissory note to help pay our general corporate expenses through the end of calendar 2010, other than the amounts due to Mr. Brenman. If GCM Ltd is unable to pay its obligations under the note as they become due it will likely have a significant negative effect on our ability to pay our general expenses and obligations. However, the funds we anticipate receiving from GCM Ltd. will not be sufficient to permit us to execute upon the transactions contemplated by the Acquisition Agreement, and as a result we expect to have to identify and execute upon an outside source of liquidity. Given the current state of the financial markets, we cannot offer any assurance that we will be able to raise any additional funds if it should become necessary. We expect to pay our other obligations to our President at least in part from any private placement funding that we receive in the future, although any such payment intention will be fully disclosed at the time and will be based on the facts and circumstances then existing.

     In April 2009 (amended in June 2009) we entered into a stock purchase agreement (the “SPA”) by which Genesis Solar anticipated receiving $2,700,000 in proceeds from the sale of common stock. After on-going discussions with the prospective investor Genesis Solar did not receive any funds under the SPA and on October 22, 2009 affirmatively terminated the SPA. Genesis Solar may consider taking actions to enforce the SPA or pursue other legal remedies against the prospective investor. However, even though the SPA provides for venue and jurisdiction in the United States, judgments obtained (if any) would still have to be enforced in the investor’s domicile in Europe. Management is considering whether

14

such action would be worth the expenditure and will likely conclude that it is not. Because we did not receive the funds we anticipated to raise through the SPA, Genesis Solar is exploring alternative sources of funding. However, especially in light of the difficulties Genesis Solar has experienced raising capital combined with the on-going general instability in the financial markets, Genesis Solar cannot offer any assurance that it will be able to raise funds through any alternative channels.

     At the present time Genesis Solar’s capital and liquidity situation (as well as its ability to complete the Acquisition Agreement) is dependent on the ability of GCM Ltd:

     Genesis Solar cannot offer any assurance that it will be able to accomplish its goals as outlined herein and unless Genesis Solar receives a substantial amount of funding, it will not be able to complete its obligations under the Acquisition Agreement.

Material Changes in Results of Operations

     We are not operating in any business at this time, although we are continuing to seek out business opportunities and have in August 2009 entered into the Acquisition Agreement. Business opportunities require working capital to investigate and complete, and at the present time we do not have the necessary working capital and especially with the current market conditions we can offer no assurance that, if the need arises, we will be able to obtain financing on reasonable terms, if at all. We have not received any revenues from operations for more than the past ten years and, therefore, we anticipate that we will continue to incur losses.

     During the nine months ended December 31, 2009, we had a net loss of $(177,222), an amount more than double our loss of $(71,307) from the same period in 2008. The increased net loss for the nine months ended December 31, 2009, was caused primarily by costs and expenses associated with the various business activities undertaken by Genesis Solar as described in this Form 10-Q, including negotiations with potential investors and the discussions with GEI Plc and GCM Ltd regarding future business possibilities, including the Acquisition Agreement. These increased expenses are indicated by the more than $31,000 increase during the period of legal fees (paid to unrelated parties) and a more than $56,000 increase in general and administrative expenses.

     Similarly, during the three months ended December 31, 2009, we had a net loss of $(38,380), an amount that was more than double our net loss of $(16,723) from the same period in 2008. The increased net loss for the three month period ended December 31, 2009 was also in large part a result of the expenses associated with the on-going discussions with GEI Plc and GCM Ltd regarding business possibilities, including the Acquisition Agreement. These activities led to significantly increased legal fees ($12,042 for the 2009 period versus $4,126 for the 2008 period) and general and administrative expenses ($19,390 for the 2009 period versus $6,978 for the 2008 period).

15

Plan of Operations

     Any future activity of Genesis Solar, whether to complete an acquisition of GSE, GSS, or GSH (pursuant to the agreements described above or otherwise) or to engage in any other business combination, is and will continue to be wholly-dependent on the ability of Genesis Solar to obtain a significant amount of additional financing. As a result of current general market conditions, it is likely that additional debt or equity financing will be more difficult for us to obtain until general market conditions improve. We have pursued several financing opportunities, none of which have come to fruition. Accordingly, we cannot offer any assurance that we will be able to obtain the funds necessary to invest in other business opportunities.

Off Balance Sheet Arrangements

     We have no off balance sheet arrangements and thus no disclosure is required. Genesis Solar has an obligation to pay rent to an affiliated party, Micro-Imaging Solutions, LLC, under an office lease at the rate of $2,300 per month. Micro-Imaging Solutions leases the office space from an unaffiliated landlord, and Genesis Solar reimburses Micro-Imaging Solutions for Genesis Solar’s proportional share (based on square footage occupied).

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4T.      CONTROLS AND PROCEDURES

     Our management, with the participation of our principal executive officer and our principal financial officer has evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of December 31, 2009 (the end of the period covered by this report). Based on that evaluation, our principal executive officer and our principal financial officer have concluded that because of the material weakness identified in our internal control over financial reporting described in our annual report for the year ended March 31, 2009 on Form 10-K, that, our disclosure controls and procedures were not effective as of December 31, 2009. Due to a lack of financial resources, we are not able to, and do not intend to, immediately take any action to remediate the material weaknesses identified.

     Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

     There were no changes in our internal control over financial reporting during the quarter ended December 31, 2009, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

16

PART II – OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS.

Not applicable.

ITEM 1A.      RISK FACTORS.

     There have been no material changes to the information included in risk factors set forth in our Annual Report on Form 10-K for the year ended March 31, 2009, except the risks related to the on-going turbulent general global economic conditions, and as related to Genesis Solar’s continuing financial difficulties and lack of adequate working capital.

ITEM 2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

     On November 18, 2009 Genesis Solar issued 1,730,000 shares of its common stock in a private placement transaction. The information required by Item 701 of Regulation S-K was previously reported in Genesis Solar’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009.

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 5.      OTHER INFORMATION.

None.

ITEM 6.      EXHIBITS

17

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

18

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing		Date		Other Filings
		12/31/10		10-Q
		3/20/10
		3/1/10
Filed on:		2/16/10
		2/12/10
		1/21/10		8-K
		1/19/10		8-K
		1/1/10
For Period End:		12/31/09
		12/7/09
		11/30/09		8-K
		11/24/09		8-K
		11/20/09		10-Q,  D
		11/18/09
		10/22/09		8-K
		9/30/09		10-Q,  NT 10-Q
		8/11/09
		7/31/09
		7/24/09
		6/30/09		10-Q,  8-K
		4/1/09
		3/31/09		10-K,  NT 10-K
		3/30/09		8-K
		12/31/08		10-Q
		10/1/08
		6/26/08
		5/28/08
		3/31/08		10KSB,  10KSB/A
		3/7/08		8-K
		12/31/07		10QSB
		6/22/07
		3/31/07		10KSB,  NT 10-K
		8/31/06
		8/15/06
		9/30/05		10QSB,  NT 10-Q
				List all Filings

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Filing Submission 0001000096-10-000023   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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