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


                                  FORM 10-QSB/A

                 ----------------------------------------------

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                  For The Quarterly Period Ended June 30, 2006

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

             For The Transition Period from __________ To _________

                          Commission file number 027831

                      Genesis Capital Corporation of Nevada
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


         Nevada                                            91-1947658
--------------------------------------------------------------------------------
(State or Other Jurisdiction                        (I.R.S. Employer Identifi-
      of Incorporation                                    cation Number)

              One NE First Avenue, Suite 306, Ocala, Florida 34470
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (352) 867-5183
--------------------------------------------------------------------------------
                            Issuer's telephone number


--------------------------------------------------------------------------------
              (Former Name, former address and former fiscal year,
                          if changed since last report)

Check whether the Registrant (1) has filed all reports required 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  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 [X] No [ ]












<PAGE>
          APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                         DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required by Section
12, 13, or 15(d) of the Exchange Act after the  distribution of securities under
a plan confirmed by a court

Yes [ ]    No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number shares  outstanding  of each of the issuer's  classes of common
stock, as of the latest practicable date:

         As of August 8, 2006, there were 84,355,220  shares of the Registrant's
Common Stock, $0.001 par value per share, outstanding.

Transitional Small Business Disclosure Format Yes |_| No |X|









































                                        2
<PAGE>
                      Genesis Capital Corporation of Nevada

                  FOR THE QUARTERLY PERIOD ENDED June 30, 2006

                                TABLE OF CONTENTS

                          PART I FINANCIAL INFORMATION

Item 1. Financial Statements. ............................................... 4

Item 2. Management's Discussion and Analysis or Plan of
Operation....................................................................20

Item 3. Controls and Procedures..............................................33

                            PART II OTHER INFORMATION

Item 1. Legal Proceedings....................................................34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..........34

Item 3. Defaults upon Senior Securities......................................34

Item 4. Submission of Matters to a Vote of Securities Holders................34

Item 5. Other Information....................................................34

Item 6. Exhibits and Reports on Form 8K......................................34































                                        3
<PAGE>
THIS  REPORT   CONTAINS   FORWARDLOOKING   STATEMENTS  THAT  INVOLVE  RISKS  AND
UNCERTAINTIES.  SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS,  ASSUMPTIONS,
ESTIMATES AND  PROJECTIONS  ABOUT THE COMPANY AND ITS  INDUSTRY.  FORWARDLOOKING
STATEMENTS  ARE  SUBJECT TO KNOWN AND  UNKNOWN  RISKS,  UNCERTAINTIES  AND OTHER
FACTORS  THAT  MAY  CAUSE  ACTUAL  RESULTS,  LEVELS  OF  ACTIVITY,  PERFORMANCE,
ACHIEVEMENTS  AND PROSPECTS TO BE MATERIALLY  DIFFERENT FROM THOSE  EXPRESSED OR
IMPLIED BY SUCH FORWARDLOOKING  STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION
TO UPDATE  PUBLICLY  ANY  FORWARDLOOKING  STATEMENTS  FOR ANY REASON EVEN IF NEW
INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.

                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements


                      GENESIS CAPITAL CORPORATION OF NEVADA
             CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                             JUNE 30, 2006 AND 2005








































                                        4
<PAGE>



                      GENESIS CAPITAL CORPORATION OF NEVADA

        INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)










CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

Balance Sheet as of June 30, 2006 (Unaudited)                                 6

Statements of Operations for the Nine and Three Months
ended June 30, 2006 and 2005 (Unaudited)                                      7

Statement of Changes in Stockholders' (Deficit) for the Nine Months
ended June 30, 2006 and 2005 (Unaudited)                                      8

Statement of Changes in Temporary Equity for the Nine months ended June
30, 2006 and 2005 (Unaudited)                                                 9

Statements of Cash Flows for the Nine months ended
June 30, 2006 and 2005 (Unaudited)                                           10

Notes to Condensed Consolidated Financial Statements (Unaudited)             11


























                                        5
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
                CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
                                  JUNE 30, 2006


                                     ASSETS
                                     ------

                                                                     2006
                                                               -----------------

CURRENT ASSETS
  Cash and cash equivalents                                              54,751
  Accounts receivable                                                   277,500

TOTAL ASSETS                                                            332,251
                                                               =================


            LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' (DEFICIT)
            ---------------------------------------------------------

CURRENT LIABILITIES
  Accounts payable and accrued expenses                                 149,479
  Debentures payable                                                    453,720
  Loans payable - Officers                                               25,540
                                                               -----------------

      TOTAL CURRENT LIABILITIES                                         628,739
                                                               -----------------

TEMPORARY EQUITY                                                        266,377
                                                               -----------------


STOCKHOLDERS' (DEFICIT)
  Preferred Stock, $.001 Par Value; 10,000,000 shares
     authorized and 5,000,000 shares issued and outstanding,              5,000
  Common Stock, $.001 Par Value; 500,000,000
    shares authorized and 84,355,220 shares issued
    and outstanding.                                                     84,355
  Additional Paid-in Capital                                            244,745
  Deficit                                                              (896,965)
                                                               -----------------

      TOTAL STOCKHOLDERS' (DEFICIT)                                    (562,865)
                                                               -----------------

TOTAL LIABILITIES, TEMPORARY EQUITY AND
   STOCKHOLDERS' (DEFICIT)                                      $       332,251
                                                               =================








                                        6
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
           FOR THE NINE AND THREE MONTHS ENDED JUNE 30, 2006 AND 2005


<TABLE>
<CAPTION>
                                                                 NINE MONTHS ENDED                 THREE MONTHS ENDED
                                                             JUNE 30,          JUNE 30,        JUNE 30,         JUNE 30,
                                                               2006              2005            2006             2005
                                                           --------------    -------------   --------------   --------------
<S>                                                         <C>               <C>             <C>              <C>
CONSULTING REVENUE                                          $          -      $         -     $          -     $          -
                                                           --------------    -------------   --------------   --------------

OPERATING EXPENSES
   Professional Fees and Compensation Expenses                       976           11,675                -            9,564
    Administrative Expenses                                      121,872          120,891           82,698          106,714
    Bad debt                                                     135,654                -                -
   Interest Expense                                               23,574           27,223                -            9,074
                                                           --------------    -------------   --------------   --------------

          TOTAL OPERATING EXPENSES                               282,076          159,789           82,698          125,352
                                                           --------------    -------------   --------------   --------------

(LOSS) BEFORE OTHER (EXPENSES)                                  (282,076)        (159,789)         (82,698)        (125,352)

NET (LOSS) BEFORE PROVISION
  FOR INCOME TAXES                                              (282,076)        (159,789)         (82,698)        (125,352)
   Provision for Income Taxes                                          -                -                -                -
                                                           --------------    -------------   --------------   --------------

NET (LOSS) APPLICABLE TO COMMON SHARES                      $   (282,076)     $  (159,789)    $    (82,698)    $   (125,352)
                                                           ==============    =============   ==============   ==============

NET (LOSS) PER BASIC AND DILUTED SHARES                     $   (0.00076)     $  (0.00189)    $   (0.00018)    $   (0.00022)
                                                           ==============    =============   ==============   ==============

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING                                   84,355,220       84,355,220       84,355,220       84,355,220
                                                           ==============    =============   ==============   ==============
</TABLE>

















                                        7
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
     CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT)
                                   (UNAUDITED)  FOR THE NINE  MONTHS  ENDED JUNE
                30, 2006 AND 2005





<TABLE>
<CAPTION>
                                                                                                  ADDITIONAL
                                                       PREFERRED STOCK         COMMON STOCK        PAID-IN
                                                      SHARES     AMOUNT     SHARES      AMOUNT     CAPITAL    (DEFICIT)     TOTAL
                                                   ----------- --------- ------------ ---------- ----------- ----------- -----------
<S>                                                <C>         <C>       <C>          <C>        <C>         <C>         <C>
Balance, September 30, 2004                         5,000,000   $ 5,000   84,355,220   $ 84,355   $ 244,745   $(812,039)  $(481,384)
                                                   ----------- --------- ------------ ---------- ----------- ----------- -----------

Net (loss) for the nine months ended June 30, 2005          -         -            -          -           -    (159,789)   (159,789)
                                                   ----------- --------- ------------ ---------- ----------- ----------- -----------

Balance, June 30, 2005                              5,000,000   $ 5,000   84,355,220   $ 84,355   $ 244,745   $(971,828)  $(641,173)
                                                   =========== ========= ============ ========== =========== =========== ===========

Balance, September 30, 2005                         5,000,000   $ 5,000   84,355,220   $ 84,355   $ 244,745   $(614,889)  $(280,789)
                                                   ----------- --------- ------------ ---------- ----------- ----------- -----------

Net (loss) for the nine months ended June 30, 2006          -         -            -          -           -   $(282,076)  $(282,076)
                                                   --------------------------------------------------------- ----------- -----------

Balance, June 30, 2006                              5,000,000   $ 5,000   84,355,220   $ 84,355   $ 244,745   $(896,965)  $(562,865)
                                                   =========== ========= ============ ========== =========== =========== ===========
</TABLE>

























                                        8
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
  CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY EQUITY (UNAUDITED)
                FOR THE NINE MONTHS ENDED JUNE 30, 2006 AND 2005





<TABLE>
<CAPTION>
                                                                                        ADDITIONAL
                                                                   COMMON STOCK          PAID-IN
                                                              SHARES         AMOUNT      CAPITAL      (DEFICIT)      TOTAL
                                                           -------------  -----------  ------------  -----------  -----------

<S>                                                         <C>            <C>          <C>           <C>          <C>
Balance, September 30, 2004                                 383,594,468    $ 383,594    $ (244,745)   $ 127,528    $ 266,377

Activity for the nine months ended June 30, 2005                      -            -             -            -            -
                                                           -------------  -----------  ------------  -----------  -----------

Balance, June 30, 2005                                      383,594,468    $ 383,594    $ (244,745)   $ 127,528    $ 266,377
                                                           =============  ===========  ============  ===========  ===========

Balance, September 30, 2005                                 383,594,468    $ 383,594    $ (244,745)   $ 127,528    $ 266,377

Activity for the nine months ended June 30, 2006                      -            -             -            -            -
                                                           -------------  -----------  ------------  -----------  -----------

Balance, June 30, 2006                                      383,594,468    $ 383,594    $ (244,745)   $ 127,528    $ 266,377
                                                           ==================================================================
</TABLE>



























                                        9
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                FOR THE NINE MONTHS ENDED JUNE 30, 2006 AND 2005



<TABLE>
<CAPTION>
                                                                  2006         2005
                                                              ------------ ------------
<S>                                                            <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                    $ (282,076)  $ (159,789)
                                                              ------------ ------------
   Adjustments  to  reconcile  net  (loss)  to net cash  provided  by (used  in)
   operating activities:

   Bad debt                                                       135,654

   CHANGES IN ASSETS AND LIABILITIES:
   Net Advances                                                     4,000       (4,388)
   Receivables                                                    160,000      150,000
   Increase in Accounts Payable and Accrued Expenses               23,950       27,223
                                                              ------------ ------------
          TOTAL ADJUSTMENTS                                       323,604      172,835
                                                              ------------ ------------
          NET CASH PROVIDED BY(USED IN) OPERATING ACTIVITIES       41,528       13,046
                                                              ------------ ------------


NET INCREASE IN CASH AND
   CASH EQUIVALENTS                                            $   41,528   $   13,046

CASH AND CASH EQUIVALENTS
   BEGINNING OF PERIOD                                             13,223          145
                                                              ------------ ------------

CASH AND CASH EQUIVALENTS
   END OF PERIOD                                               $   54,751   $   13,191
                                                              ============ ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

CASH PAID DURING THE YEAR FOR:
   Interest Expense                                            $        -   $        -
                                                              ============ ============
</TABLE>











                                       10
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                       JUNE 30, 2006 AND 2005 (UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
         --------------------------------------

         The  condensed  consolidated  unaudited  interim  financial  statements
         included  herein have been  prepared,  without  audit,  pursuant to the
         rules and  regulations of the Securities and Exchange  Commission.  The
         condensed  consolidated financial statements and notes are presented as
         permitted on Form 10-QSB and do not contain information included in the
         Company's annual condensed consolidated unaudited statements and notes.
         Certain  information  and  footnote  disclosures  normally  included in
         condensed  consolidated  unaudited  financial  statements  prepared  in
         accordance with accounting  principles generally accepted in the United
         States of America have been condensed or omitted pursuant to such rules
         and regulations, although the Company believes that the disclosures are
         adequate  to make  the  information  presented  not  misleading.  It is
         suggested  that  these  condensed   consolidated   unaudited  financial
         statements be read in  conjunction  with the September 30, 2005 audited
         consolidated  financial  statements and the accompanying notes thereto.
         While  management  believes the procedures  followed in preparing these
         condensed  consolidated  unaudited financial statements are reasonable,
         the  accuracy of the amounts are in some  respects  dependent  upon the
         facts that will exist,  and procedures that will be accomplished by the
         Company later in the year.

         These condensed consolidated unaudited financial statements reflect all
         adjustments,  including  normal  recurring  adjustments  which,  in the
         opinion of  management,  are necessary to present  fairly the condensed
         consolidated  operations,  changes  in  permanent  stockholders  equity
         (deficit),  changes in temporary  equity and cash flows for the periods
         presented.

         Genesis Capital  Corporation of Nevada (the "Company") was incorporated
         in  the  State  of  Colorado  in  1983.  The  Company  has a  total  of
         500,000,000  authorized  common  shares  at June  30,  2006  and  2005,
         respectively,  (par value  $.001) with  467,949,688  shares  issued and
         outstanding  at June 30, 2006 and 2005,  respectively,  and  10,000,000
         shares  authorized  preferred stock (par value of $.001) with 5,000,000
         shares  issued  and  outstanding  as of June 30,  2006 and 2005.  . The
         Company  may be in  violation  of  Section 5 under the  Securities  and
         Exchange  Commission  Act as  amended.  The  Company  has  reclassified
         certain  common  shares issued to a temporary  equity  account from its
         permanent deficit (See Note 6).

         In December,  1997, the Company  merged with Lincoln Health Fund,  Inc.
         which is the  company  that  owned land in Tarrant  County,  Texas.  In
         March,  1999,  the Company  filed an Articles of Merger in the State of
         Nevada and to change the par value of its common stock.








                                       11
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       JUNE 30, 2006 AND 2005 (UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
         --------------------------------------------------

         The Company entered into a Stock Acquisition Agreement with Christopher
         Astrom,  Hudson Consulting  Group,  Inc. and Global Universal,  Inc. of
         Delaware dated August 30, 2001,  which closed on October 30, 2001. This
         Stock Acquisition Agreement enabled Senior Lifestyle Communities,  Inc.
         to  acquire  95% of the  issued  and  outstanding  shares of common and
         preferred stock of the Company for $315,000.  For accounting  purposes,
         the transaction has been accounted for as a reverse acquisition,  under
         the purchase method of accounting.

         In addition to the Stock Acquisition Agreement,  the Company and Senior
         Lifestyle Communities, Inc. entered into a Share Exchange Agreement and
         Plan of Reorganization.

         Upon these  agreements  with Senior  Lifestyle  Communities,  Inc., the
         Company on November 1, 2001 assumed by  assignment,  the  obligation of
         certain 8% Series SPA Senior Subordinated Convertible Debentures in the
         face amount of $1,000,000  received by assignment from Senior Lifestyle
         Communities, Inc. and Sea Lion Investors, LLC, Equity Planners LLC, and
         Myrtle  Holdings,  LLC  (collectively  "Purchasers"),  each a  Colorado
         limited  liability  company,  issue the Company's  debentures of Senior
         Lifestyle Communities, Inc.

         Senior Lifestyle  Communities,  Inc. is a Nevada Corporation engaged in
         the  development of senior adult  residences,  incorporated  in August,
         2001. In addition to Senior  Lifestyle  Communities,  Inc., the Company
         has Senior Adult Lifestyles,  Inc. a wholly-owned  subsidiary effective
         October 30, 2001.

         As  additional  consideration  for  the  conveyance  to  Senior  of the
         Connecticut  Properties,  the  Company  agreed  to  issue  to  National
         Residential Properties,  Inc., a related company with common ownership,
         20,000,000  shares of the Company`s  common stock ("Shares") based on a
         value of $0.10 per share  (determined  on the basis of the  average bid
         price of the Company`s common stock during the week  immediately  prior
         to  the  effective   date  of  October  31,  2001)  towards  an  agreed
         consideration  of  $2,000,000  for a land  deposit.  In  addition,  the
         Company  agreed that on the earlier of (a) the  expiration of three (3)
         years  from the date of the  conveyance  if the  value on that date was
         below  $2,000,000,  or  (b)  at  the  time  that  National  Residential
         Properties,  Inc.  has  sold  all of the  shares,  if the  gross  sales
         proceeds  realized by National  Residential  Properties,  Inc. from the
         sale of the shares is less than $2,000,000, the Company was required to
         issue to National Residential  Properties,  Inc. such additional shares
         of common  stock in an amount  based on the closing bid price as quoted
         on the OTC Bulletin Board on the day before the date of such additional
         share issuance as to make up the difference between said value or gross
         sales proceeds and $2,000,000. The Company issued the 20,000,000 shares
         on February 1, 2002 and an  additional  5,230,000 on February 12, 2002.
         The value of the common stock  February 1, 2002 was  $180,000  ($.009).
         The agreement for additional  consideration  subsequently defaulted and
         was rescinded.

                                       12
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       JUNE 30, 2006 AND 2005 (UNAUDITED)


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         PRINCIPLES OF CONSOLIDATION

         The condensed consolidated financial statements include the accounts of
         the Company and all of its wholly-owned  subsidiaries.  All significant
         intercompany   accounts  and  transactions   have  been  eliminated  in
         consolidation.

         USE OF ESTIMATES

         The  preparation  of condensed  consolidated  financial  statements  in
         conformity with accounting  principles generally accepted in the United
         States of America requires management to make estimates and assumptions
         that  affect  the  reported  amounts  of  assets  and  liabilities  and
         disclosures  of contingent  assets and  liabilities  at the date of the
         financial  statements and the reported amounts of revenues and expenses
         during the  reporting  period.  Actual  results could differ from those
         estimates.

         REVENUE AND COST RECOGNITION

         The Company's condensed  consolidated financial statements are prepared
         using the accrual method of accounting.  Under this method,  revenue is
         recognized when earned and expenses are recognized  when incurred.  The
         Company performed consulting services and earned $0 for the Nine months
         ended June 30, 2006.

         CASH AND CASH EQUIVALENTS

         The Company  considers  all highly  liquid debt  instruments  and other
         short-term investments with an initial maturity of three months or less
         to be cash equivalents.

         INCOME TAXES

         The  Company  has  adopted  the  provisions  of  Financial   Accounting
         Standards  Board  Statement No. 109,  Accounting for Income Taxes.  The
         Company  accounts for income taxes  pursuant to the  provisions  of the
         Financial  Accounting Standards Board Statement No. 109, Accounting for
         Income  Taxes,  which  requires  an asset  and  liability  approach  to
         calculating  deferred  income taxes.  The asset and liability  approach
         requires the recognition of deferred tax liabilities and assets for the
         expected future tax consequences of temporary  differences  between the
         carrying amounts and the tax basis of assets and liabilities.








                                       13
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       JUNE 30, 2006 AND 2005 (UNAUDITED)


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         ------------------------------------------------------

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying  amount  reported in the  condensed  consolidated  balance
         sheet  for cash and cash  equivalents,  accounts  payable  and  accrued
         expenses  approximate fair value because of the immediate or short-term
         maturity of these condensed consolidated financial instruments.

         EARNINGS (LOSS) PER SHARE OF COMMON STOCK

         Historical  net income per common share is computed  using the weighted
         average number of common shares outstanding. Diluted earnings per share
         (EPS) includes additional dilution from common stock equivalents,  such
         as  stock  issuable  pursuant  to the  exercise  of stock  options  and
         warrants. Common stock equivalents were not included in the computation
         of diluted  earnings per share when the Company reported a loss because
         to do so would be antidilutive for periods  presented.  The Company has
         used the issued and weighted  average shares  reported in the permanent
         stockholders' schedule (See Note 6).


         EARNINGS (LOSS) PER SHARE OF COMMON STOCK (CONTINUED)

         The  following is a  reconciliation  of the  computation  for basic and
         diluted EPS:

                                                    2006             2005
                                              ----------------  ----------------

Net (Loss)                                     $     (282,076)   $     (159,789)
                                              ----------------  ----------------

Weighted-average common shares outstanding         84,355,220        84,355,220
(Basic)

Weighted-average common stock equivalents:
  Stock Options
  Warrants                                                  -                 -
                                              ----------------  ----------------

Weighted-avereage common shares outstanding
(Diluted)                                          84,355,220        84,355,220
                                              ================  ================









                                       14
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       JUNE 30, 2006 AND 2005 (UNAUDITED)


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         ------------------------------------------------------

         RECENT ACCOUNTING PRONOUNCEMENTS

         In January 2003, the FASB issued  Interpretation No. 46, "Consolidation
         of Variable Interest Entities, an interpretation of Accounting Research
         Bulletin No. 51", ("FIN 46"). FIN 46 requires certain variable interest
         entities to be consolidated by the primary beneficiary of the entity if
         the   other   equity   investors   in  the   equity  do  not  have  the
         characteristics  of a  controlling  financial  interest  or do not have
         sufficient  equity at risk for the  entity to  finance  its  activities
         without additional  subordinated  financial support from other parties.
         The disclosure and  consolidation  requirements  of FIN 46 for variable
         interest  entities  created or acquired  subsequent to January 31, 2003
         became  effective  for  financial  statements  issued  by  the  Company
         beginning in the second quarter of fiscal 2003.  For variable  interest
         entities   created  or  acquired   prior  to  February  1,  2003,   the
         consolidation  requirements of FIN 46 became  effective for the Company
         in the first  quarter of fiscal 2004. In December  2003,  FASB issued a
         revised  interpretation of FIN 46 ("FIN 46-R"), which supersedes FIN 46
         and  clarifies  and expands  current  accounting  guidance for variable
         interest entities. The Company adopted the new requirements of FIN 46-R
         as of March 31, 2004.  The adoption of FIN 46 and FIN 46-R did not have
         a material effect on the Company's  condensed  consolidated  results of
         operations, financial position or cash flows.

         In May 2003,  the FASB  issued SFAS No.  150,  "Accounting  for certain
         Financial  Instruments  with  Characteristics  of both  Liabilities and
         Equity" ("SFAS No. 150").

         SFAS No. 150 requires that certain financial  instruments issued in the
         form of shares that are mandatorily redeemable as well as certain other
         financial  instruments  be classified as  liabilities  in the financial
         statements. SFAS No. 150 is effective for financial instruments entered
         into or modified  after May 31, 2003.  The adoption of SFAS No. 150 did
         not have a material effect on the Company's reported financial results.

















                                       15
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       JUNE 30, 2006 AND 2005 (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         ------------------------------------------------------

         RECLASSIFICATIONS

         Certain  amounts  for the nine  months  ended  June 30,  2005 have been
         reclassified  to conform  with the  presentation  of the June 30,  2006
         amounts. The reclassifications have no effect on the net income for the
         nine months ended June 30, 2006 and 2005.

NOTE 3 - ACCOUNTS RECEIVABLE
         -------------------

         The Company entered into an agreement with Wahoo Funding LLC, a Florida
         limited  liability  company  that is owned by common  owners on July 1,
         2004.

         During  the  term of this  Agreement,  Genesis  shall  render  to Wahoo
         Funding,  LLC through  such of Genesis'  officers,  employees,  agents,
         representatives  and  affiliates  as Genesis,  in its sole  discretion,
         shall  designate  from  time to time,  advisory,  consulting  and other
         services (the  "Oversight  Services") in relation to the  operations of
         the Company,  strategic planning,  domestic and international marketing
         and financial oversight and including, without limitation, advisory and
         consulting  services  in  relation  to  the  selection,  retention  and
         supervision  of  independent  auditors,  the  selection,  retention and
         supervision  of outside legal  counsel,  the  selection,  retention and
         supervision  of  investment  bankers  or other  financial  advisors  or
         consultants   and  the  structuring   and   implementation   of  equity
         participation  plans,   employee  benefit  plans  and  other  incentive
         arrangements for certain key executives of the Company.

NOTE 4 - LOANS PAYABLE - OFFICERS
         ------------------------

         This represents  amounts advanced to the company by the officers of the
         Company.  These  amounts have no specific  payment terms and are due on
         demand.  No interest  has been  recorded on these  amounts,  due to the
         relative short-term repayments on them.
















                                       16
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       JUNE 30, 2006 AND 2005 (UNAUDITED)


NOTE 5 - DEBENTURES PAYABLE
         ------------------

         The Company has outstanding convertible debentures at June 30, 2006 and
         2005 in the amount of $453,720.  The debentures are  convertible at the
         investors'  discretion pursuant to the convertible debenture agreement.
         These  debentures  were to mature  along with the  related  interest on
         November 1, 2003, and are in default (See Note 6).

         Interest  expense  and  accrued on these  debentures  were  $18,149 and
         $18,148 for the nine months ended June 30, 2006 and 2005, respectively.
         The  company  has  stopped  accruing  interest on this loan since it is
         anticipated that it will be written off at September 30, 2006.

         The interest rate is approximately 8% per annum.

NOTE 6 - TEMPORARY EQUITY
         ----------------

         The Company has  recorded  on its balance  sheet as a temporary  equity
         account for those securities  issued that may not be in compliance with
         the registration provisions of Section 5 of the Securities Act of 1933,
         as amended  and for shares  issued in  conversion  with the  debentures
         payable  that the  Company  relied  upon Rule 504 of  Regulation  D and
         Section 3 (a)(a) which may not be available to the Company.

         Temporary equity at June 30, 2006 and 2005 was $266,377.  Substantially
         all the shares issued in connection  with the  conversion of debentures
         have  been  reclassified  as  temporary  equity.  The  Company  has not
         recorded  any  additional  liabilities  associated  with  the  possible
         violations.

NOTE 7 - STOCKHOLDERS' (DEFICIT)
         -----------------------

         COMMON AND PREFERRED STOCK

         In October 2001, the Company  completed the  recapitalization  whereby,
         the Company had authorized two classes of stock; preferred stock with a
         par value of $.001 and 10,000,000 shares  authorized,  and common stock
         with a par value of $.001, and 500,000,000 shares authorized.


         As of June 30, 2006, the Company had issued  5,000,000 of its preferred
         stock.

         The Company  had also issued as of June 30, 2006 and 2005,  467,949,688
         of  its  common  shares,   of  which   383,594,468   shares  have  been
         reclassified  to  temporary  equity  (See Note 6).  There  have been no
         issuances  of  preferred or common stock for the nine months ended June
         30, 2006.



                                       17
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       JUNE 30, 2006 AND 2005 (UNAUDITED)

NOTE 7 - STOCKHOLDERS' (DEFICIT) (CONTINUED)
         -----------------------------------

         OPTIONS AND WARRANTS

         The Company had no options or warrants outstanding at June 30, 2006.

NOTE 8 - GOING CONCERN
         -------------

         The Company has incurred substantial deficits through June 30, 2006.

         There is no  guarantee  whether  the  Company  will be able to generate
         enough revenue and/or raise capital to support those  operations.  This
         raises  substantial  doubt about the Company's ability to continue as a
         going concern.

         Management  states that they are  confident  that they can initiate new
         operations and raise the  appropriate  funds to continue in its pursuit
         of a reverse merger or similar transaction.

         The Company may have  violated  certain  provisions of Section 5 of the
         Securities  Act of 1933 (See Notes 6 and 10). The Company  reclassified
         $266,377 into temporary equity from permanent equity. The Company plans
         to resolve this issue.

         The  condensed  consolidated  financial  statements  do not include any
         adjustments that might result from the outcome of these uncertainties.

NOTE 9 - INCOME TAXES
         ------------

         The net deferred tax assets in the accompanying  condensed consolidated
         balance sheet includes the following components at June 30, 2006:

                                                                    2006
                                                               ---------------

Deferred tax assets                                             $     268,800
Deferred tax valuation allowance                                     (268,800)
                                                               ---------------

Net deferred tax assets                                         $           -
                                                               ===============


         Due to the  uncertainty  of utilizing the  approximate  $896,965 in net
         operating  losses at June 30, 2006,  and  recognizing  the deferred tax
         assets, an offsetting valuation allowance has been established.






                                       18
<PAGE>
                      GENESIS CAPITAL CORPORATION OF NEVADA
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       JUNE 30, 2006 AND 2005 (UNAUDITED)

NOTE 10 - CONTINGENCY/UNCERTAINTY
          -----------------------

         The Company during the year ended  September 30, 2002 became aware that
         some  or  all  of  the  stock  issuances   relating  to  the  debenture
         conversions may have not been in compliance without compliance with the
         registration  provisions of Section 5 of the  Securities Act of 1933 as
         amended.  The full impact of this is unknown at this time. As a result,
         the Company has  reclassified  $266,377 to temporary  equity as of June
         30, 2006 and 2005.  This account acts as a reserve for capital that the
         Company may be required to pay.

         Additionally,  the Company has not renewed the  corporate  charters for
         Senior Lifestyle  Communities,  Inc. and Senior Adult Lifestyles,  Inc.
         The Company has transferred all assets and liabilities  associated with
         these companies into the parent Genesis Capital Corporation of Nevada.

         The company recorded an allowance for doubtful  accounts of $135,654 in
         March 31, 2006 for related receivables that may not be collectible.

NOTE 11 - PRIOR PERIOD ADJUSTMENT AND RESTATEMENT
          ---------------------------------------

         There were no adjustments effecting the nine months ended June 30, 2006
         and 2005.  The  Company  restated  its  September  30,  2002  financial
         statements  to  correct  the  amortization  expense of loan fees and to
         reclassify the activity  associated  with the debenture  conversions to
         temporary  equity.  The effect of this change was to  increase  the net
         (loss) and (deficit) in 2002 by $127,528.

         Accordingly,  the  deficit is  restated  as it was  carried  through to
         reflect the restated beginning balance at October 1, 2002.

NOTE 12 - RELATED PARTY RECEIVABLES
          -------------------------

         The Company has advanced  certain related  companies funds that are due
         on demand with 8% interest accruing beginning on October 1, 2005.

















                                       19
<PAGE>
Item 2.  Management's Discussion and Analysis or Plan of Operation.

THE  FOLLOWING  DISCUSSION  SHOULD  BE READ IN  CONJUNCTION  WITH THE  COMPANY'S
FINANCIAL  STATEMENTS  AND THE NOTES TO THOSE  STATEMENTS  AND  OTHER  FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS REPORT.

                                     History

         The Company was formed as a Colorado corporation on September 19, 1983,
under the name Bugs,  Inc., for the purpose of using microbial and other agents,
including  metallurgy,  to  enhance  oil  and  natural  gas  production  and  to
facilitate the recovery of certain metals.  Its initial  capitalization  was 100
million  shares of $.001 par value  common  stock.  In July  1989,  the  Company
approved Articles of Amendment  changing its name to Genesis  Services,  Inc. In
September 1990, the Company approved  additional  Articles of Amendment changing
its name to Genesis Capital Corporation  (sometimes referred to as the "Colorado
Corporation").  In July 1993, the Company decreased its authorized  capital from
100 million  shares of $.001 par value common stock to 10 million shares of $.01
par value common  stock.  At that same time,  the Company  created a class of 10
million shares of no par value preferred stock.

         Since 1994, the activities of the Company have been limited, because it
sold its wholly owned subsidiary, U.S. Staffing, Inc., during the 1994-95 fiscal
year. In January 1996 after its sale, U.S.  Staffing,  Inc. filed for bankruptcy
and restrained the Colorado  Corporation from collecting its note receivable and
claimed to own stock in the Colorado Corporation through its U.S. Benefit Trust.
The Company itself has never declared bankruptcy. In December 1997, the Colorado
Corporation's  shareholders  voted  unanimously  to settle this claim by issuing
4,500,000  shares  of  its  common  stock,  restricted  under  Rule  144  of the
Securities Act of 1933, to be held in trust for U.S. Benefit Trust (these shares
were eventually  reduced to 113 shares due to a 1:20 reverse stock split in 1997
and a 1:2000  reverse stock split in 1999 and were  disposed of by U.S.  Benefit
Trust sometime  after 1999).  Also at this time, the Company merged with Lincoln
Health Fund, Inc. (which owned land in Tarrant County,  Texas,  which it planned
to use in building a retirement  center),  increased its  authorized  capital to
50,000,000 shares of common stock, and authorized a post-merger reverse split of
its common  stock on a 1:20  basis.  Since  1999,  the  Company  has had minimal
activity. The Company is a shell corporation seeking a business to acquire.

         On December 22, 1998, Genesis Capital  Corporation of Nevada (sometimes
referred  to as the "Nevada  Corporation")  was  incorporated  in Nevada for the
purpose of merging with the Colorado  Corporation  so as to effect a re-domicile
to  Nevada  and a  reverse  split of the  Company's  common  stock.  The  Nevada
Corporation was authorized to issue 50,000,000  shares of $.001 par value common
stock and 10,000,000  shares of $.001 par value preferred  stock. As part of the
Company's  plan to seek an  acquisition  candidate,  on January  11,  1999,  the
Company paid a total of 600,000 shares of preferred  stock to 5 persons,  Ronald
Welborn,  Henry  Simon,  David  Newren,  Richard  Surber,  and  AZ  Professional
Consultants, Inc., for consulting services related to the redomicile and reverse
split of the Company's  stock.  All 600,000  shares were returned to the Company
and cancelled in October 2001.

         On  March  9,  1999,  both  the  Colorado  Corporation  and the  Nevada
Corporation  signed  Articles  of  Merger by which  the  Colorado  Corporation's
shareholders  received  one share of new  (Nevada)  common stock for every 2,000
shares of old  (Colorado)  common  stock they owned.  The  shareholders  of both
corporations had previously approved this proposal on due notice, and all


                                       20
<PAGE>
outstanding shares of the Colorado  Corporation's common stock were purchased by
the new Nevada Corporation,  effectively  merging the Colorado  Corporation into
the Nevada  Corporation,  reverse  splitting the Company's stock, and making the
Nevada  Corporation the surviving entity.  Holders of preferred stock in the old
Colorado Corporation received preferred stock in the new Nevada Corporation on a
1:1 basis. In March 1999, the Company  entered into  Consulting  Agreements with
Hudson Consulting  Group,  Inc. and Global Universal,  Inc. to obtain additional
assistance in finding and completing an acquisition.

         Later in March 1999,  the Company  began  discussions  about  acquiring
Motor  Sports on Dirt,  Inc.  ("Motor  Sports"),  which  claimed  to own  NASCAR
racetracks  in the South.  The parties  reached a  preliminary  agreement on the
terms of  acquisition,  in  anticipation  of  which,  on March 25,  the  Company
authorized an offering for  10,000,000  shares of common stock under Rule 504 of
Regulation  D. The shares were offered at Ten Cents ($.10) per share to raise up
to but not more than $1,000,000,  and a Form D to that effect was filed with the
SEC on March 26, 1999.  Proceeds were to be used to pay expenses  related to the
acquisition  of Motor  Sports and to pay off the  Company's  debts.  By April 6,
1999, the Company had sold 4,100,000  shares to five  investors.  215,000 shares
were sold for a $100,000 check delivered before April 6, 1999 (this check was to
buy  1,000,000  shares;  it was later  dishonored,  but not before the purchaser
absconded with 215,000 shares. The Company canceled the remaining 785,000 shares
and considered legal action which it did not pursue as it could not afford to do
so).  3,885,000  shares  were  paid  toward  debts  owed  to  consultants,  Arce
International, Inc., Hudson Consulting Group, Inc., Chartwell Investments, Inc.,
and Global Universal,  Inc., incurred for services rendered before April 6, 1999
by  introducing  Motor  Sports to the Company and handling  various  accounting,
corporate cleanup, and compliance issues.

         On April 6, 1999,  the Company  signed an  Acquisition  Agreement  with
Motor  Sports  which would have  effected  the  Company's  acquisition  of Motor
Sports.  According to the Acquisition Agreement, a total of 11,790,000 shares of
the  Company's  common  stock  were to be issued to Motor  Sports  shareholders.
However,  Motor  Sports  and/or its  financial  backers did not perform  certain
conditions of the  Acquisition  Agreement,  which led to extensive  negotiations
between  the  parties.   These  negotiations  yielded  an  Addendum  #1  to  the
Acquisition  Agreement dated May 10, 1999 a Debt Settlement Agreement dated June
11,  1999  (relating  to matters  raised in the  Acquisition  Agreement),  and a
Settlement  Agreement dated July 19, 1999 (which the parties intended to resolve
all outstanding  issues). As a result of these negotiations and agreements,  the
contemplated merger with Motor Sports was finally canceled on or about September
28, 1999. As a result of the canceled  merger,  all 11,790,000  shares of common
stock,  as well as all but 502,360  shares of the stock  issued  under Rule 504,
were canceled on September 28, 1999.

         Also on September 28, 1999,  the Company  issued  250,000 shares of its
common stock, restricted under Rule 144, to Donald Walker as a settlement of all
claims under the  Settlement  Agreement  dated July 19, 1999;  550,000 shares of
common  stock,  restricted  under Rule 144 to Global  Universal for new services
relating to new acquisition  opportunities;  and 532,640 shares of common stock,
restricted under Rule 144, to Hudson  Consulting  Group, Inc. for new assistance
in preparing  the  documents  necessary to become a reporting  company under the
Securities  Exchange  Act  of  1934  as  well  as  assistance  relating  to  new
acquisition opportunities.

         On August 30, 2001, the Company entered into a Stock Acquisition
Agreement ("Acquisition Agreement") with Christopher Astrom (Purchaser); Hudson


                                       21
<PAGE>
Consulting Group, Inc. (Seller); and Global Universal, Inc (Seller), of Delaware
pursuant to which Mr. Astrom was granted the right to purchase 54,110,309 shares
of common stock and 1,477,345 shares of preferred stock. Under the Acquisition
Agreement, Mr. Astrom was to pay $315,000 to the Company for the common and
preferred stock and tender to the Company all of the issued and outstanding
common stock of Senior Lifestyle Communities, Inc. ("Communities"). The
Acquisition Agreement closed October 30, 2001. At the time of Closing, the
purchased shares represented 95% of the issued and outstanding common and
preferred stock of the Company.

         On  October  30,  2001,  the  Company  entered  into a  Share  Exchange
Agreement and Plan of Reorganization  ("Exchange Agreement") with Mr. Astrom and
Communities, the purpose of which was to accommodate the financing by Mr. Astrom
of his obligations under the Acquisition Agreement.  To provide the financing on
behalf of Mr. Astrom,  Communities issued its 8% Series SPA Senior  Subordinated
Convertible  Debentures  in the initial  amount of  $360,000 to a  nonaffiliated
private source of financing.  At the close of the Acquisition  Agreement and the
Exchange Agreement, Communities became a wholly owned subsidiary of the Company.
Communities owns all of the issued and outstanding  common stock of Senior Adult
Lifestyle, Inc. ("Senior").

         Pursuant to an Agreement  executed on December 26, 2001, made effective
as of October 31, 2001 and a Statutory Warranty Deed dated October 30, 2001, the
Company,  through Senior,  acquired from National Residential  Properties,  Inc.
k/n/a National Realty & Mortgage,  Inc.("National")  all of the right, title and
interest  of  National  in (i) a certain  parcel  of real  property  in  Hebron,
Connecticut;  and (ii)  four  contracts  to  purchase  certain  parcels  of real
property in Watertown,  New Milford, Granby and East Windsor,  Connecticut.  The
Hebron  property  was subject to two  mortgages  having an  aggregate  principal
balance of $315,000.00, which mortgages Senior assumed and agreed to pay as part
of the consideration for the conveyance.

         National and the Company  have the same  officers  and  directors  and,
accordingly, they may be deemed "affiliates".

         As  additional  consideration  for  the  conveyance  to  Senior  of the
Connecticut  Properties,  the  Company  agreed to issue to  National,  a related
company with common  ownership,  20,000,000 shares of the Company's common stock
("Shares")  based on a value of $0.10 per share  (determined on the basis of the
average bid price of the  Company's  common  stock  during the week  immediately
prior to the effective date of October 31, 2001) towards an agreed consideration
of $2,000,000  for a land deposit.  In addition,  the Company agreed that on the
earlier of (a) the expiration of three (3) years from the date of the conveyance
if the value on that date was below $2,000,000, or (b) at the time that National
has sold all of the  Shares,  if the gross sales  proceeds  realized by National
from the sale of the Shares is less than $2,000,000, the Company was required to
issue to National such  additional  shares of common stock in an amount based on
the closing bid price as quoted on the OTC Bulletin  Board on the day before the
date of such additional share issuance as to make up the difference between said
value or gross sales proceeds and $2,000,000.  The Company issued the 20,000,000
shares on February 1, 2002 and an additional 5,230,000 on February 12, 2002. The
value of the common stock February 1, 2002 was $180,000  ($.009).  The agreement
for additional consideration subsequently defaulted and was rescinded.

         In March,  2002,  the  Company  sold its  interest  in the  Connecticut
Properties to Nathan Kahn and CT Adult Condominiums, LLC for $630,216.



                                       22
<PAGE>
         In  June  2002,  the  Company  issued  3,522,655  shares  of  Series  A
Convertible  Preferred  Stock to  Christopher  Astrom and  designated the entire
5,000,000  shares  of  Preferred  Stock  then  owned by Mr.  Astrom  as Series A
Convertible Preferred Stock.

         On July 1, 2004, the Company entered into a two (2) year agreement with
Wahoo Funding LLC, an affiliated Florida limited liability company,  whereby the
Company shall render to Wahoo certain financial and business consulting services
in exchange for a total of $750,000.

         Except for the  foregoing  contract  with  Wahoo,  the  Company has not
engaged in any operations and has been virtually dormant for several years.

         Additionally,  the Company has not renewed the  corporate  charters for
Senior Lifestyle Communities, Inc. and Senior Adult Lifestyles, Inc. The Company
has transferred all assets and liabilities  associated with these companies into
the parent Genesis Capital Corporation of Nevada.

         On or near  February 19, 2006,  the  Company's  registration  statement
filed with the SEC on Form 10-SB became effective.  Accordingly, the Company has
resumed  the  filing  of  reporting  documentation  in  an  effort  to  maximize
shareholder  value.  The best use and  primary  attraction  of the  Company as a
merger partner or acquisition  vehicle will be its status as a reporting  public
company.  Any business  combination or transaction may  potentially  result in a
significant  issuance of shares and substantial dilution to present stockholders
of the Company.

General Business Plan and Plan of Operations


         The Company is a shell company in that it has no or nominal  operations
and either no or nominal assets. At this time, the Company's purpose is to seek,
investigate and, if such investigation warrants, acquire an interest in business
opportunities  presented  to it by persons or firms who or which  desire to seek
the perceived advantages of an Exchange Act registered corporation.  The Company
will not restrict its search to any specific business, industry, or geographical
location and the Company may participate in a business  venture of virtually any
kind or nature. This discussion of the proposed business is purposefully general
and  is  not  meant  to be  restrictive  of the  Company's  virtually  unlimited
discretion  to  search  for and enter  into  potential  business  opportunities.
Management  anticipates that it may be able to participate in only one potential
business  venture  because the Company has nominal assets and limited  financial
resources.  This lack of diversification should be considered a substantial risk
to  shareholders of the Company because it will not permit the Company to offset
potential losses from one venture against gains from another.


         The Company may seek a business  opportunity  with entities  which have
recently commenced  operations,  or which wish to utilize the public marketplace
in order to raise  additional  capital in order to expand  into new  products or
markets,  to develop a new product or service,  or for other corporate purposes.
The  Company may acquire  assets and  establish  wholly  owned  subsidiaries  in
various businesses or acquire existing businesses as subsidiaries.

         The Company intends to advertise and promote the Company privately. The
Company  has  not  yet  prepared  any  notices  or  advertisement.  The  Company
anticipates that the selection of a business opportunity in which to participate
will be complex and extremely risky. Due to general economic  conditions,  rapid
technological  advances being made in some industries and shortages of available
capital, management believes that there are numerous firms seeking the perceived


                                       23
<PAGE>
benefits of a publicly  registered  corporation.  Such  perceived  benefits  may
include facilitating or improving the terms on which additional equity financing
may be  sought,  providing  liquidity  for  incentive  stock  options or similar
benefits to key  employees,  providing  liquidity  (subject to  restrictions  of
applicable  statutes),  for all  shareholders  and other  factors.  Potentially,
available business  opportunities may occur in many different  industries and at
various  stages of  development,  all of which will make the task of comparative
investigation and analysis of such business  opportunities  extremely  difficult
and complex.

         The Company has, and will  continue to have,  little or no capital with
which to provide the owners of business  opportunities with any significant cash
or other assets. However,  management believes the Company will be able to offer
owners of  acquisition  candidates  the  opportunity  to  acquire a  controlling
ownership  interest in a publicly  registered company without incurring the cost
and time  required  to  conduct an initial  public  offering.  The owners of the
business  opportunities  will,  however,  incur significant legal and accounting
costs in connection with  acquisition of a business  opportunity,  including the
costs of preparing Form 8K's,  10K's or 10KSB's,  agreements and related reports
and documents. The Securities Exchange Act of 1934 (the "34 Act"),  specifically
requires that any merger or  acquisition  candidate  comply with all  applicable
reporting requirements,  which include providing audited financial statements to
be included within the numerous  filings relevant to complying with the `34 Act.
Nevertheless,  the  officers and  directors  of the Company  have not  conducted
market  research and are not aware of  statistical  data which would support the
perceived  benefits of a merger or acquisition  transaction  for the owners of a
business opportunity.

         The analysis of new business  opportunities  will be undertaken  by, or
under the supervision of, the officers and directors of the Company.  Management
intends  to  concentrate  on  identifying   preliminary   prospective   business
opportunities,   which  may  be  brought  to  its  attention   through   present
associations of the Company's officers and directors.  In analyzing  prospective
business  opportunities,  management will consider such matters as the available
technical,  financial  and  managerial  resources;  working  capital  and  other
financial requirements; history of operations, if any; prospects for the future;
nature of present  and  expected  competition;  the quality  and  experience  of
management services which may be available and the depth of that management; the
potential  for further  research,  development,  or  exploration;  specific risk
factors  not now  foreseeable  but which then may be  anticipated  to impact the
proposed activities of the Company;  the potential for growth or expansion;  the
potential  for  profit;  the  perceived  public  recognition  of  acceptance  of
products, services, or trades; name identification;  and other relevant factors.
Officers and directors of the Company expect to meet  personally with management
and key personnel of the business opportunity as part of their investigation. To
the  extent  possible,  the  Company  intends  to utilize  written  reports  and
investigation  to evaluate  the above  factors.  The Company will not acquire or
merge with any company for which audited financial statements cannot be obtained
within a reasonable period of time after closing of the proposed transaction.

         The  Officers  of the  Company  have  limited  experience  in  managing
companies  similar to the  Company  and shall rely upon  their own  efforts,  in
accomplishing the business purposes of the Company. The Company may from time to
time utilize outside consultants or advisors to effectuate its business purposes
described   herein.  No  policies  have  been  adopted  regarding  use  of  such
consultants or advisors,  the criteria to be used in selecting such  consultants
or advisors, the services to be provided, the term of service, or regarding the


                                       24
<PAGE>
total amount of fees that may be paid. However, because of the limited resources
of the Company,  it is likely that any such fee the Company  agrees to pay would
be paid in stock and not in cash.

         The  Company  will not  restrict  its search for any  specific  kind of
firms,  but may acquire a venture  which is in its  preliminary  or  development
stage,  which is  already  in  operation,  or in  essentially  any  stage of its
corporate  life.  It is  impossible  to  predict  at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional  capital,  may desire to have its shares publicly traded,  or
may seek other perceived  advantages which the Company may offer.  However,  the
Company  does not intend to obtain funds in one or more  private  placements  to
finance the operation of any acquired  business  opportunity  until such time as
the Company has successfully consummated such a merger or acquisition.

         It is anticipated  that the Company will incur nominal  expenses in the
implementation  of its business plan described  herein.  The Company has limited
capital with which to pay these anticipated expenses.

Acquisition of Opportunities

         In implementing a structure for a particular business acquisition,  the
Company  may become a party to a merger,  consolidation,  reorganization,  joint
venture,  or licensing agreement with another corporation or entity. It may also
acquire  stock or assets  of an  existing  business.  On the  consummation  of a
transaction,  it is probable that the present management and shareholders of the
Company will no longer be in control of the Company. In addition,  the Company's
directors may, as part of the terms of the acquisition  transaction,  resign and
be replaced by new directors without a vote of the Company's shareholders or may
sell  their  stock in the  Company.  Any and all such sales will only be made in
compliance  with the  securities  laws of the United  States and any  applicable
state.

         It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from  registration  under  applicable
federal  and  state  securities  laws.  In  some  circumstances,  however,  as a
negotiated element of its transaction,  the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter.  If such registration  occurs, of which there can be
no assurance,  it will be  undertaken by the surviving  entity after the Company
has successfully consummated a merger or acquisition.

         As part of the Company's  investigation,  officers and directors of the
Company may personally  meet with  management  and key personnel,  may visit and
inspect  material  facilities,  obtain  analysis  and  verification  of  certain
information provided, check references of management and key personnel, and take
other reasonable  investigative measures, to the extent of the Company's limited
financial  resources and management  expertise.  The manner in which the Company
participates in an opportunity will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the management of
the  opportunity and the relative  negotiation  strength of the Company and such
other management.

         With  respect to any merger or  acquisition,  negotiations  with target
company  management are expected to focus on the percentage of the Company which
the target  company  shareholders  would  acquire in  exchange  for all of their
shareholdings in the target company. Depending upon, among other things, the


                                       25
<PAGE>
target company's assets and liabilities,  the Company's shareholders will in all
likelihood  hold a substantially  lesser  percentage  ownership  interest in the
Company  following any merger or  acquisition.  The percentage  ownership may be
subject to  significant  reduction  in the event the  Company  acquires a target
company  with  substantial  assets.  Any merger or  acquisition  effected by the
Company can be expected to have a significant  dilutive effect on the percentage
of shares held by the Company's then shareholders.

         The Company will  participate in a business  opportunity only after the
negotiation and execution of appropriate written agreements.  Although the terms
of such agreements  cannot be predicted,  generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify  certain  events of  default,  will  detail the terms of closing and the
conditions  which must be  satisfied  by each of the parties  prior to and after
such  closing,  will  outline  the  manner of  bearing  costs,  including  costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.

         The Company does not intend to provide the Company's  security  holders
with any complete disclosure documents,  including audited financial statements,
concerning an  acquisition  or merger  candidate  and its business  prior to the
consummation of any acquisition or merger transaction.

COMPETITION

         The Company will remain an  insignificant  participant  among the firms
which  engage  in the  acquisition  of  business  opportunities.  There are many
established  venture  capital and financial  concerns  which have  significantly
greater  financial and personnel  resources  and  technical  expertise  than the
Company. In view of the Company's combined extremely limited financial resources
and  limited  management  availability,  the  Company  will  continue to be at a
significant competitive disadvantage compared to the Company's competitors

EMPLOYEES

         The Company  currently  has no  employees.  The business of the Company
will be managed by its officer and  directors,  who may become  employees of the
Company. The Company does not anticipate a need to engage any fulltime employees
at this time. The need for employees and their availability will be addressed in
connection with the proposed development of the Company's real property.

REPORTING

         From 1999  through  February  2002,  the Company  was an SEC  reporting
company  obligated to file reports under Section 13 and 15(d) of the  Securities
Exchange Act of 1934, as amended.  In February  2002, the Company filed with the
SEC a Form 15 terminating the above reporting obligations.  In February 2006 the
Company's registration statement on Form 10-SB became effective again subjecting
the  Company  to the  reporting  obligations  under  Section 13 and 15(d) of the
Securities Exchange Act of 1934, as amended.

POTENTIAL VIOLATIONS OF THE SECURITIES' LAWS

         In a comment letter from the Securities and Exchange  Commission  dated
May 31, 2002,  the SEC commented on the Company's  Form 10KSB for the year ended
September 30, 2001 and Form 10QSB for the quarter ended December 31, 2001.



                                       26
<PAGE>
         The Company during the year ended  September 30, 2002 became aware that
some or all of the stock  issuances  relating to debenture  conversions may have
not been in  compliance  with the  registration  provisions  of Section 5 of the
Securities  Act of 1933 as  amended.  The full impact of this is unknown at this
time. As a result, the Company  reclassified  $266,377 to temporary equity as of
September 30, 2004 and 2003. This account acts as a reserve for capital that the
Company may be required to pay.

         The specific circumstances surrounding said potential violations are as
follows:

         On or about  October  30,  2001,  Senior  Lifestyle  Communities,  Inc.
("Communities") issued 8% Senior Subordinated  Convertible Redeemable Debentures
("Debentures")  in the  aggregate  principal  amount of $ 1,000,000  to Sea Lion
Investors LLC; Equity Planners LLC; and Myrtle Holdings LLC. The Debentures were
issued  pursuant to Regulation D Rule  504(b)(iii).  The  Debentures  permit the
holders  thereof to convert all or any amount over  $5,000.00  of the  principal
face amount of the Debentures into shares of common stock at a conversion  price
of 70% of the per share price  valued in  accordance  with the book value of the
common  stock  or 70% of the  lowest  closing  bid  price as  quoted  on the OTC
Bulletin, if the shares of Communities, or its successors or assigns, are quoted
in the  OTC  Bulletin  Board.  Subsequent  to the  issuance  of the  Debentures,
Communities became a wholly owned subsidiary of the Company. The Company assumed
all of the obligations of Communities under the Debentures.

         On December 13, 2001, the Company entered into an Escrow Agreement with
Sroya  Holdings  LLC, as escrow agent  ("Sroya"),  and Sea Lion  Investors  LLC;
Equity  Planners LLC; and Myrtle Holdings LLC, the purpose of which was to amend
the October 30, 2001  agreement  among  Communities  and the Debenture  holders.
Pursuant to the Escrow Agreement,  the Company deposited  100,000,000  shares of
its common stock ("Escrow  Shares") with Sroya to ensure the timely  delivery of
the Company's common stock upon the exercise of the conversion privileges by the
Debenture  holders under the  Debentures  issued on October 31, 2001. The Escrow
Shares were deposited with Sroya pursuant to Regulation D Rule  504(b)(iii)  and
Section 3 (a)(9) of the  Securities Act of 1933 as a result of the assumption by
the  Company of all of the  obligations  of  Communities  under the  Debentures,
including the  obligation to repay the principal and interest and the conversion
privileges.  All the Escrow Shares were issued upon conversion of the Debentures
by the Debenture Holders.

         Section 5 of the Securities Act prohibits the public sale of securities
absent an effective  registration  statement being filed with the SEC, unless an
exemption from registration  applies. The above transactions were performed in a
manner thought to be exempt from the  registration  requirements of Section 5 of
the Securities Act. However, the requirements of the exemptions relied on do not
appear to have been  satisfied.  The Company was exposed to possible  litigation
under  Section  12(a)(1)  of the  Securities  Act.  However,  Section  13 of the
Securities  Act  provides  that no action  shall be  maintained  for offering or
selling  securities  in  violation  of Section 5 unless  that  action is brought
within one year of the date of the violation. Upon completion of its 2006 fiscal
year end the Company expects to reclassify all remaining  amounts from temporary
equity to permanent stockholder equity.

         While more than one year has passed from the initial  placement  of the
Debentures  and the partial  conversion of said  Debentures,  there have been no
actions  filed  against the Company based upon a violation of Section 5. Because
the statute of limitations has run, it is unlikely that these holders of Company


                                       27
<PAGE>
Common  Stock will file an action  against  the  Company.  However,  some of the
Debentures  remain  unconverted  and, as such, any potential  action  maintained
against the Company could have a  substantial  impact on the Company and capital
resources.

         The following  presentation of management's  discussion and analysis of
the Company's  financial  condition and results of operations  should be read in
conjunction  with  the  Company's   consolidated   financial   statements,   the
accompanying notes thereto and other financial  information  appearing elsewhere
in  this  report.   This  section  and  other  parts  of  this  report   contain
forward-looking  statements that involve risks and uncertainties.  The Company's
actual  results  may differ  significantly  from the  results  discussed  in the
forward-looking statements.

                              RESULTS OF OPERATIONS

                  THREE MONTHS ENDED JUNE 30, 2006 COMPARED TO
                        THREE MONTHS ENDED JUNE 30, 2005

Revenues

Revenues  were $0.00 for the three months  ended June 30,  2006,  as compared to
$0.00 for the three months ended June 30, 2005.

Cost of Revenues

Cost of revenues was $0.00 for the three months ended June 30, 2006, as compared
to $0.00 for the three months ended June 30, 2005.

Operating Expenses

         Operating  expenses  for the  three  months  ended  June 30,  2006 were
$82,698  compared to $125,352 for the three  months  ended June 30,  2005.  This
decrease in  operating  expenses  was the result of a decrease in all  expenses,
including  administrative,  professional and interest as a result of the limited
operations of the Company.

Loss From Operations

         Loss from  operations  for the three  months  ended  June 30,  2006 was
$82,698 compared to $125,352 for the three months ended June 30, 2005.

Interest Expense

         Interest  expense was $-0- and $9,074 for the three  months  ended June
30, 2006 and 2005, respectively.  The decrease in interest expense is the result
of the Company's  determination  to cease accruing  interest on the  outstanding
convertible debentures and to write off such debentures at the end of its fiscal
year end September 20, 2006.

Net Loss Applicable To Common Stock

         Net loss per share  applicable  to Common  Stock was  $0.00018  for the
three  months  ended June 30,  2006,  compared to $0.00022  for the three months
ended June 30, 2005.




                                       28
<PAGE>
                   NINE MONTHS ENDED JUNE 30, 2006 COMPARED TO
                         NINE MONTHS ENDED JUNE 30, 2005

Revenues

         Revenues  were  $0.00  for the nine  months  ended  June 30,  2006,  as
compared to $0.00 for the nine months ended June 30, 2005.

Cost of Revenues

         Cost of revenues was $0.00 for the nine months ended June 30, 2006,  as
compared to $0.00 for the nine months ended June 30, 2005.

Operating Expenses

         Operating  expenses  for the  nine  months  ended  June 30,  2006  were
$282,076  compared to $159,789  for the nine months  ended June 30,  2005.  This
increase in operating expenses was the result of a non-recurring  write off of a
bad debt in the amount of $135,654  representing  accounts  receivable which are
not likely to ever be collected.

Loss From Operations

Loss from  operations  for the nine  months  ended  June 30,  2006 was  $282,076
compared to $159,789 for the nine months ended June 30, 2005.

Interest Expense

Interest expense was $23,574 and $27,223 for the nine months ended June 30, 2006
and 2005,  respectively.  The decrease in interest  expense is the result of the
Company's   determination   to  cease  accruing   interest  on  the  outstanding
convertible debentures and to write off such debentures at the end of its fiscal
year end September 20, 2006.

Net Loss Applicable To Common Stock

Net loss per share  applicable  to Common Stock was $0.00076 for the nine months
ended June 30,  2006,  compared to $0.00189  for the nine months  ended June 30,
2005.

                         LIQUIDITY AND CAPITAL RESOURCES

         The Company  currently plans to satisfy its cash  requirements  for the
next 12 months by borrowing from affiliated  company's with common  ownership or
control and believes it can satisfy its cash  requirements so long as it is able
to obtain  financing  from these  affiliated  companies.  The Company  currently
expects  that money  borrowed  will be used during the next 12 months to satisfy
the  Company's  operating  costs,  professional  fees and for general  corporate
purposes. The Company has also been exploring alternative financing sources. The
Company  currently  has no plans to conduct any  research  and  development,  to
purchase or sell any significant equipment or to make any significant changes in
its number of employees.

         The Company will use its limited  personnel and financial  resources in
connection  with  seeking  new  business  opportunities,  including  seeking  an
acquisition  or  merger  with an  operating  company.  It may be  expected  that
entering into a new business opportunity or business combination will involve


                                       29
<PAGE>
the issuance of a substantial  number of restricted  shares of common stock.  If
such additional  restricted shares of common stock are issued,  the shareholders
will  experience a dilution in their  ownership  interest in the  Company.  If a
substantial number of restricted shares are issued in connection with a business
combination, a change in control may be expected to occur.

         As of June 30,  2006,  the  Company had current  assets  consisting  of
$332,251 of which $54,751  consisted of cash and cash  equivalents  and $277,500
consists of accounts receivables.

         In connection with the plan to seek new business  opportunities  and/or
effecting a business  combination,  the Company may  determine  to seek to raise
funds from the sale of restricted stock or debt  securities.  The Company has no
agreements to issue any debt or equity  securities  and cannot  predict  whether
equity or debt financing will become available at acceptable terms, if at all.

         There are no limitations in the  certificate  of  incorporation  on the
Company's  ability  to borrow  funds or raise  funds  through  the  issuance  of
restricted common stock to effect a business combination.  The Company's limited
resources and lack of recent  operating  history may make it difficult to borrow
funds or raise  capital.  Such  inability to borrow funds or raise funds through
the  issuance of  restricted  common  stock  required to effect or  facilitate a
business  combination  may  have a  material  adverse  effect  on the  Company's
financial  condition and future  prospects,  including the ability to complete a
business combination.  To the extent that debt financing ultimately proves to be
available, any borrowing will subject the Company to various risks traditionally
associated with indebtedness,  including the risks of interest rate fluctuations
and insufficiency of cash flow to pay principal and interest,  including debt of
an acquired business.

RECENT DEVELOPMENTS

         On January 19, 2006, the Company filed an amendment to the registration
statement  filed on Form 10SB.  The SEC has  indicated  no further  comments and
accordingly the registration  statement became effective on or near February 19,
2006. The Company has resumed the filing of reporting documentation in an effort
to  maximize  shareholder  value.  The best use and  primary  attraction  of the
Company  as a merger  partner  or  acquisition  vehicle  will be its status as a
reporting   public  company.   Any  business   combination  or  transaction  may
potentially result in a significant  issuance of shares and substantial dilution
to present stockholders of the Company.

RECENT ACCOUNTING PRONOUNCEMENTS

         The  Company  continues  to  assess  the  effects  of  recently  issued
accounting  standards.  The impact of all recently adopted and issued accounting
standards has been disclosed in the Notes to the audited Consolidated  Financial
Statements.

CRITICAL ACCOUNTING ESTIMATES

         The  Company is a shell  company  and, as such,  the  Company  does not
employ critical  accounting  estimates.  Should the Company resume operations it
will employ critical accounting  estimates and will make any and all disclosures
that are necessary and appropriate.

OFF BALANCE SHEET TRANSACTIONS


                                       30
<PAGE>
         The Company has no off balance sheet  arrangements  and has not entered
into any transactions involving unconsolidated, limited purpose entities.

RISK FACTORS

IN  ADDITION  TO OTHER  INFORMATION  IN THIS  REPORT,  YOU SHOULD  CONSIDER  THE
FOLLOWING RISK FACTORS CAREFULLY. THESE RISKS MAY IMPAIR THE COMPANY'S OPERATING
RESULTS AND  BUSINESS  PROSPECTS  AS WELL AS THE MARKET  PRICE OF THE  COMPANY'S
COMMON STOCK.

                    RISKS RELATED TO THE COMPANY'S FINANCIAL
                          CONDITION AND BUSINESS MODEL

 THE COMPANY'S LIQUIDITY IS LIMITED AND IT MAY NOT BE ABLE TO OBTAIN SUFFICIENT
                           FUNDS TO FUND ITS BUSINESS

         The Company's  cash is currently very limited and may not be sufficient
to fund future operations.  These factors may make the timing, amount, terms and
conditions of additional financing  unattractive for the Company. If the Company
is unable to raise additional  capital,  any future operations could be impeded.
If the Company obtains  additional  funding,  the issuance of additional capital
stock may be dilutive to the Company's stockholders.

       THE COMPANY HAS RECEIVED A GOING CONCERN OPINION FROM ITS AUDITORS

         The Company's  consolidated  financial statements have been prepared on
the assumption that the Company will continue as a going concern.  The Company's
independent auditors have issued a report that includes an explanatory paragraph
stating the Company's  lack of revenue  generating  activities  and  substantial
operating  deficits,  among  other  things,  raise  substantial  doubt about the
Company's ability to continue as a going concern.

THE COMPANY CURRENTLY HAS NO OPERATIONS

The Company has had no or limited operations since March 2002.

IT MAY BE DIFFICULT TO CONSUMMATE A MERGER OR ACQUISITION WITH A PRIVATE ENTITY

         The Company expects its purpose will include  locating and consummating
a merger or acquisition with a private entity. The Company  anticipates that the
selection of a business  opportunity in which to participate will be complex and
extremely  risky.  The Company  has,  and will  continue  to have,  little or no
capital  with  which  to  provide  the  owners  of  business  opportunities  any
significant cash or other assets. However,  management believes the Company will
be able to offer owners of acquisition  candidates the  opportunity to acquire a
controlling   ownership  interest  in  a  publicly  registered  company  without
incurring the cost and time required to conduct an initial public offering. Such
an acquisition  candidate will, however,  incur significant legal and accounting
costs in connection  with an acquisition of the Company,  including the costs of
preparing current and periodic reports, various agreements and other documents.

                      RISKS RELATED TO LEGAL UNCERTAINTIES

              THE COMPANY VIOLATED SECTION 5 OF THE SECURITIES ACT

         In a comment letter from the Securities and Exchange  Commission  dated
May 31, 2002, the SEC commented on the Company's Form 10KSB for the year ended


                                       31
<PAGE>
September 30, 2001 and Form 10QSB for the quarter ended December 31, 2001.

         The Company during the year ended  September 30, 2002 became aware that
some or all of the stock  issuances  relating to the debenture  conversions  may
have not been in compliance with the registration provisions of section 5 of the
Securities  Act of 1933 as  amended.  The full impact of this is unknown at this
time. As a result, the Company has reclassified  $266,377 to temporary equity as
of June 30,  2006.  This  account acts as a reserve for capital that the Company
may be required to pay.

         Section 5 of the Securities Act prohibits the public sale of securities
absent an effective  registration  statement being filed with the SEC, unless an
exemption from registration  applies. The above transactions were performed in a
manner thought to be exempt from the  registration  requirements of Section 5 of
the Securities Act. However, the requirements of the exemptions relied on do not
appear to have been  satisfied.  The Company was exposed to possible  litigation
under  Section  12(a)(1)  of the  Securities  Act.  However,  Section  13 of the
Securities  Act  provides  that no action  shall be  maintained  for offering or
selling  securities  in  violation  of Section 5 unless  that  action is brought
within one year of the date of the violation. Upon completion of its 2006 fiscal
year end the Company expects to reclassify all remaining  amounts from temporary
equity to permanent stockholder equity.

         While more than one year has passed from the initial  placement  of the
Debentures  and the partial  conversion of said  Debentures,  there have been no
actions  filed  against the Company based upon a violation of Section 5. Because
the statute of limitations has run, it is unlikely that these holders of Company
Common  Stock will file an action  against  the  Company.  However,  some of the
Debentures  remain  unconverted  and, as such, any potential  action  maintained
against the Company could have a  substantial  impact on the Company and capital
resources.

THE COMPANY MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL

         There  can be no  assurance  that  the  Company  will be able to  raise
additional capital on a debt or equity basis.

                                   OTHER RISKS

              THE COMPANY'S STOCK PRICE HAS DECLINED SIGNIFICANTLY
                               AND MAY NOT RECOVER

         The  trading  price  of  the   Company's   common  stock  has  declined
significantly  since  approximately  October 2001.  The market for the Company's
common  stock is  essentially  nonexistent  and there can be no  assurance  of a
change in the immediate future.

 THE COMPANY MAY BE SUBJECT TO PENNY STOCK REGULATIONS AND REQUIREMENTS FOR LOW
                                  PRICED STOCK

         The SEC adopted  regulations  which generally define a "penny stock" to
be any nonNasdaq  equity security that has a market price of less than $5.00 per
share,  subject to  certain  exceptions.  Based upon the price of the  Company's
common stock as currently traded on the OTC Bulletin Board, the Company's common
stock is subject to Rule 15g9 under the  Exchange Act which  imposes  additional
sales practice  requirements on broker-dealers  which sell securities to persons
other than established customers and "accredited investors." For transactions


                                       32
<PAGE>
covered  by  this  rule,  a  broker  dealer  must  make  a  special  suitability
determination for the purchaser and have received a purchaser's  written consent
to the transaction  prior to sale.  Consequently,  this rule may have a negative
effect on the ability of  stockholders  to sell common  shares of the Company in
the secondary market.

  ADDITIONAL DEBT, CONVERTIBLE DEBT, OR EQUITY FINANCING MAY EFFECT ABILITY OF
                         INVESTORS TO SELL COMMON STOCK

         The Company's  common stock currently trades on the OTC Bulletin Board.
Stocks trading on the OTC Bulletin Board  generally  attract a smaller number of
market makers and a less active public market and may be subject to  significant
volatility.  If the  Company  raises  additional  capital  from  the sale of the
Company's common stock, the market price could drop and the ability of investors
to sell the Company's common stock could be diminished.

Item 3. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         The  Company's  Chief  Executive  Officer,  Richard  Astrom  and  Chief
Financial  Officer,   Christopher   Astrom,  have  reviewed  and  evaluated  the
effectiveness of the Company's disclosure controls and procedures (as defined in
Exchange Act Rules 13a15(e) and 15d15(e)) as of the end of the period covered by
this  quarterly  report on Form  10QSB.  Based on that  evaluation,  Christopher
Astrom  determined that he and Richard Astrom,  the Company's only two directors
and officers, are the only individuals involved in the Company's disclosure

process. The Company's system is designed so that information is retained by the
Company  and relayed to counsel as it becomes  available.  The  Company's  Chief
Executive  Officer and Chief Financial  Officer  believes that, as of the end of
the  period  covered by this  report,  the  Company's  disclosure  controls  and
procedures are effective to ensure that information  required to be disclosed by
the Company in the reports  that it filed or submits  under the  Exchange Act is
recorded, processed,  summarized and reported, within the required time periods.
Further,  the Company's officers have concluded that the disclosure controls and
procedures  are  also  effective  to  ensure  that  information  required  to be
disclosed  in the  reports  that the Company  files and submits  pursuant to the
Exchange Act of 1934 is accumulated and  communicated  to management,  including
our  chief  executive  officer  and chief  financial  officer,  to allow  timely
decisions regarding required disclosure.



CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

         No changes in the Company's  internal control over financial  reporting
have come to  management's  attention  during the Company's  last fiscal quarter
that have materially affected, or are likely to materially affect, the Company's
internal control over financial reporting.









                                       33
<PAGE>
                                     PART II
                                OTHER INFORMATION

Item 1. Legal Proceedings

         The Company is not a party to any pending legal  proceedings nor is any
of the Company's property the subject of any pending legal proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

         None

Item 3. Defaults Upon Senior Securities

See the discussion in "RISK FACTORS RISKS RELATED TO LEGAL UNCERTAINTIES"


Item 4. Submission of Matters to a Vote of Securities Holders

         None

Item 5. Other Information

         None

Item 6. Exhibits and Reports on Form 8K

(a) Exhibits:

EXHIBIT
NUMBER            DESCRIPTION


31.1     Certification of Chief Executive Officer pursuant to Section 302 of the
         Sarbanes Oxley Act of 2002.

31.2     Certification of Chief Financial Officer pursuant to Sec ton 302 of the
         Sarbanes Oxley Act of 2002.

32.1     Certification of Chief Executive Officer pursuant to Sec ton 906 of the
         Sarbanes Oxley Act of 2002.

32.2     Certification of Chief Financial Officer pursuant to Sec ton 906 of the
         Sarbanes Oxley Act of 2002.

(b) Reports on Form 8K:

         None











                                       34
<PAGE>
SIGNATURES

In accordance with the  requirements of the Exchange Act, the Company has caused
this report to be signed by the undersigned, thereunto duly authorized.

GENESIS CAPITAL CORPORATION OF NEVADA.


Date:  September 21, 2006


By: /s/ RICHARD ASTROM

Richard Astrom
Chief Executive Officer

By: /s/ CHRISTOPHER ASTROM

Christopher Astrom
Chief Financial Officer










































                                       35