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Genesis Solar Corp – ‘10-Q’ for 9/30/08

On:  Thursday, 11/13/08, at 4:41pm ET   ·   For:  9/30/08   ·   Accession #:  1000096-8-362   ·   File #:  2-87052-D

Previous ‘10-Q’:  ‘10-Q’ on 8/19/08 for 6/30/08   ·   Next:  ‘10-Q’ on 2/17/09 for 12/31/08   ·   Latest:  ‘10-Q’ on 8/15/11 for 6/30/11

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

11/13/08  Genesis Solar Corp                10-Q        9/30/08    3:163K                                   Mitchell Fi… Printing/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Form 10-Q (09/30/08)                                HTML    149K 
 2: EX-31       Certification per Sarbanes-Oxley Act (Section 302)  HTML     16K 
 3: EX-32       Certification per Sarbanes-Oxley Act (Section 906)  HTML      6K 

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

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

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act 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 ___

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 by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:

The number of shares outstanding of the issuer's classes of common stock, as of November 4, 2008 is 1,233,000 shares, $.01 par value.

2

See accompanying notes.
2

COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Three Months Ended September 30, 2007 and 2008
(Unaudited)

See accompanying notes.
3

COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 2007 and 2008 and Cumulative Amounts
from Inception of the Development Stage (July 26, 1990) Through September 30, 2008
(Unaudited)

See accompanying notes.
4

See accompanying notes.
5

COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Six Months Ended September 30, 2007 and 2008 and Cumulative Amounts
from Inception of the Development Stage (July 26, 1990) Through September 30, 2008
(Unaudited)

See accompanying notes.
6

COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2008

7

COGENCO INTERNATIONAL, INC.

(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS September 30, 2008

8

COGENCO INTERNATIONAL, INC.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2008

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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

Except for a series of equity financings in 2005, 2006, and 2007 and the activities related to DMI (described in our annual report on Form 10-KSB, as amended, for the year ended March 31, 2008), Cogenco has not engaged in any business operations for more than the past five years. Cogenco has not received any revenues from operations for more than the past ten years. Since the time Cogenco ceased active business operations in 1988, we seek potential business opportunities. However, we believe that as a result of the recent abnormal volatility of the global markets, a general tightening of lending standards and a general decrease in equity financing (and similar type) transactions it likely will be more difficult for us to directly or indirectly obtain funding to allow us to seek business opportunities until market conditions improve. 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.

On September 30, 2008, we had working capital deficit of $(92,581) which represents a decrease of $8,803 from our working capital deficit of $(83,778) on March 31, 2008. The increase to our working capital deficit is primarily a result of our continuing operating losses and our use of cash assets to pay our general administrative obligations.

On March 31, 2008 our assets included a certificate of deposit in the amount of $84,727 which was then pledged as collateral on a letter of credit in the amount of $70,000 securing the lease for our office space. On May 28, 2008 the certificate of deposit then in the amount of $85,436 was redeemed. Cash proceeds of $37,560 from the redemption were used to prepay our office rent through December 2008 and release Cogenco from the $70,000 letter of credit securing the lease. The prepayment of the rent contributed significantly to the increase in our prepaid expenses from March 31, 2008 to September 30, 2008, but we expect such amount to decrease during our third quarter because of the lapse of time and our continued use of our office space.

The primary reasons that our cash assets increased from March 31, 2008 to September 31, 2008 were:

§ The remaining funds realized from the redemption of the certificate of deposit after the prepayment of our rent and the release of the letter of credit as described above; and

§ Our receipt of $25,000 on June 26, 2008 pursuant to a promissory note due to us from Genesis Capital Management Limited (“Genesis”) (an affiliate of our 97% shareholder).

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As of September 30, 2008 our cash assets had decreased by $29,636 from June 30, 2008 as we used our cash assets to fund our general administrative and operating expenses. The note issued from Genesis obligates Genesis to pay us $25,000 per quarter with the final payment due on December 31, 2010, with total principal and interest payments totaling $275,000. Although it did not make the payment by September 30, 2008 as required under the note, Genesis made the second payment of $25,000 on November 11, 2008. As of September 30, 2008 $110,976 of the note is classified as current (versus $85,803 as of March 31, 2008) as we expect this amount to be paid to us by September 30, 2009.

Our largest current liability is the accrued salary to our president, amounting to $241,750 at September 30, 2008. Effective March 31, 2008 our president orally agreed to suspend any further accrual of the salary due to him until we are adequately financed. Accordingly, the line item for our liability for “accrued salary – officer” on our balance did not change from March 31, 2008 to September 30, 2008. Our other significant current liability is an $11,426 accounts payable owed to our president and fees accrued to his father, a former Cogenco director. In both cases, our president and his father have orally agreed to defer collecting any salary or fee amounts owed to them until Cogenco is, in the Board’s opinion, adequately financed. Although Cogenco has a working capital deficit, management believes that as a result of the deferrals and agreements of our president and his father, Cogenco will be able to continue to pay its obligations to third parties as they become due.

We have had significant cash flow difficulties and, as discussed above, we were unable to pay our obligations to DMI. Except for a salary payment of $2,000 that was made in June 2007, we have deferred payment of related party salaries and fees. During recent fiscal years, we paid our operating expenses with funds raised from the issuance of common stock and the sale of marketable securities we held. However, we no longer hold any marketable securities and have not raised funds through the issuance of common stock since March 2007. Currently, we expect to use funds due to us under the promissory note due to us from Genesis to help pay our general corporate expenses, not including the amounts due to our president. If Genesis 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. 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.

Material Changes in Results of Operations

We are not operating in any business at this time, although at times we seek out business opportunities. 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 six months ended September 30, 2008, we had a net loss of $(54,584). This represents a $131,978 decrease from our net loss of $(186,562) for the six months ended September 30, 2007. The net loss for the six months ended September 30, 2008 was caused primarily by costs and expenses consisting of rent and storage of $33,640, general and administrative expenses of $18,500, and consulting and traveling expenses of $17,350, with minimal offsetting interest income of $8,959 and rental income of $16,380. Our loss for the six months ended September 30, 2008 was significantly less than that realized during the comparable period in 2007 primarily as a result of our president agreeing to suspend the accrual of his salary on March 31, 2008 (whereas in the comparable period in 2007 we accrued $75,000 for his salary) and a decrease of $39,394 in legal costs ($49,435 during the six months ended September 30, 2007 versus $10,041 for the six months ended September 30, 2008).

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Our net loss for the quarter ended September 30, 2008 was $18,908 as compared to a loss of $76,693 during the quarter ended September 30, 2007. This decrease in net loss is the result of our decreased costs and expenses in the quarter ended September 30, 2008 as compared to the comparable period in 2007. Our decreased costs in 2008 in large part were the result of our president’s agreement to suspend accrual of his salary (whereas in the quarter ended September 30, 2007 we accrued $37,500 for his salary), and decreases in our general administrative expenses ($11,446 in 2007 compared to $3,968 in 2008) and our legal fees ($11,471 in 2007 as compared to $3,968 in 2008).

For the six months ended September 30, 2008, total stockholders’ equity decreased $54,584 to $27,405 as compared to $81,989 as of March 31, 2008. The decrease in stockholders’ equity is primarily the result of the continued operating losses experienced by the Company and the corresponding rise in our accumulated deficit.

Plan of Operations

Cogenco is not engaged in any business operations at the present time. Although at times we receive proposals for business opportunities from third parties and we may seek out business opportunities with others, we have not actively pursued any such business opportunity in more than the past two years except for the business transactions with DMI that were discussed in our annual report on Form 10-KSB for the year ended March 31, 2008. Although our agreements with DMI have been terminated, we may continue to pursue business possibilities with or through DMI. None of these possibilities will be achieved unless we are able to obtain a significant amount of additional capital, either directly or as a condition of a business combination. We will continue reviewing other opportunities in the biotechnology industry and in other industries as we become aware of appropriate opportunities.

We likely will not be able to pursue any business opportunity without a substantial amount of additional funding provided from third parties. As noted above, as a result of current general market conditions, it is likely that additional debt or equity financing will be especially difficult for us to obtain until general market conditions improve. Accordingly, we cannot offer any assurance that we will be able to obtain the funds necessary to invest in other business opportunities. Going forward, we plan to use the payments due us under the note issued by Genesis to help pay for our routine legal and administrative expenses. As noted above, if Genesis is unable to make such payments as they become due it will have a significant negative effect on our ability to make such payments and remain a going concern. The next $25,000 payment under the note is due on or before December 31, 2008.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements and thus no disclosure is required. Cogenco has an obligation to pay rent to an unaffiliated party under an office lease through December 2008 at the rate of $5,350 per month. This obligation is not reflected on Cogenco’s balance sheet, although our rent expense is recognized on our Statement of Operations. As described above, in May 2008 we prepaid the rent through December 2008.

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

12

Act Rule 13a-15(b) as of September 30, 2008 (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, 2008 on Form 10-KSB/A-1, that, our disclosure controls and procedures were not effective as of September 30, 2008. Due to a lack of financial resources, we are not able to, and do not intend to, 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 September 30, 2008, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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-KSB/A-1 for the year ended March 31, 2008 except the risks related to the nation’s general economic conditions.

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

Not applicable.

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.

During the quarter ended September 30, 2008 there were no material changes to the procedures by which security holders may recommend nominees to the Company’s board of directors. Shareholders may recommend nominees to the board of directors by addressing correspondence to the President.

13

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.

14

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing		Date		Other Filings
		12/31/10		10-Q
		9/30/09		10-Q,  NT 10-Q
		12/31/08		10-Q
Filed on:		11/13/08
		11/11/08
		11/4/08
For Period End:		9/30/08
		6/30/08		10-Q,  10KSB,  NT 10-Q
		6/26/08
		5/28/08
		3/31/08		10KSB,  10KSB/A
		3/7/08		8-K
		12/31/07		10QSB
		9/30/07		10QSB
		6/22/07
		3/31/07		10KSB,  NT 10-K
		1/1/07
		8/31/06
		8/15/06
		9/30/05		10QSB,  NT 10-Q
				List all Filings

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Filing Submission 0001000096-08-000362   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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