UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549








FORM
10-Q







(Mark
One)





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





For The
Quarterly Period Ended June 30, 2008





[  
  ] 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:   000-27831





GENESIS
CAPITAL CORPORATION OF NEVADA


(Exact
name of registrant business issuer as specified in its charter)






Nevada
            
            91-1947658(State
      or other jurisdictionof
      incorporation or organization)
            
            (IRS Employer
      Identification No.)









One
N.E. First Avenue, Suite 306,  Ocala, Florida 34470


(Address
of principal executive offices) (zip
code)





(718)
554-3652


(Registrant’s
telephone number, including area code)







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





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that 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 large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated
      filer   [     ]
            
            Accelerated
      filer   [     ]Non-accelerated
      filer   [     ]
            
            Smaller reporting
      company   [ X ](Do
      not check if a smaller reporting company)







Indicate
by check mark whether the issuer is a shell company (as defined in rule 12b-2 of
the Exchange Act) Yes [ X ] No
[     ]





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:





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.





As of August 14, 2008, there were
10,048 shares of the Registrant's Common Stock, $0.001 par value per share,
outstanding.






















































GENESIS
CAPITAL CORPORATION OF NEVADA




For
The Quarterly Period Ended June 30, 2008




TABLE
OF CONTENTS






PART
      I - FINANCIAL INFORMATIONItem 1.
            Financial Statements
            1Item 2.
            Management’s Discussion and Analysis of Financial Condition
      and Results of
      Operations
            16Item
      3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            N/AItem 4.
            Controls and Procedures
            22PART
      II - OTHER INFORMATIONItem 1.
            Legal Proceedings
            23Item 1A.
            Risk
    Factors
            N/AItem 2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            23Item 3.
            Defaults upon Senior Securities
            23Item 4.
            Submission of Matters to a Vote of Security
      Holders
            23Item 5.
            Other Information
            23Item 6.
            Exhibits
            24




















THIS
REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE   RISKS
AND UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS,
ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY.
FORWARD-LOOKING 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 FORWARD-LOOKING STATEMENTS. THE
COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING
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
FINANCIAL STATEMENTS (UNAUDITED)
 JUNE
30, 2008 AND 2007
 
 
 
 
 
 
 
 
 1
 GENESIS
CAPITAL CORPORATION OF NEVADA
 
 INDEX
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 
 
 
  PAGE(S)Financial
      Statements:Balance
      Sheets as of June 30, 2008 (Unaudited)and  September
      30, 2007 (Audited)
              3Statements
      of Operations for the nine and three monthsended
      June 30, 2008 and 2007 (Unaudited)
              4Statements
      of Cash Flows for the nine monthsJune
      30, 2008 and 2007 (Unaudited)
              5Notes to Financial Statements (Unaudited)
              6-15
  
 
 
 
  
            
 2
 GENESIS CAPITAL CORPORATION OF NEVADA
 CONDENSED
BALANCE SHEETS (UNAUDITED)
 ASSETS(Unaudited)
                
                
                (Audited)June
      30,
                
                
                September
      30,2008
                
                
                2007CURRENT
      ASSETSCash
      and cash equivalents
                
                $
                11,956
                
                
                $
                12,187TOTAL
      ASSETS
                
                $
                11,956
                
                
                $
                12,187LIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
      LIABILITIESOfficers
      Loan
                
                $
                147,284
                
                
                $
                2,284Total
      Current Liabilities
                
                
                147,284
                
                
                
                2,284STOCKHOLDERS'
      EQUITY (DEFICIT)Preferred
      stock A, $.001 par value; 5,000,000 sharesauthorized
      and 5,000,000 shares issued and outstanding
                
                
                5,000
                
                
                
                5,000Preferred
      stock B, $.001 par value; 5,000,000 sharesauthorized
      and 5,000,000 shares issued and outstanding
                
                
                5,000
                
                
                
                5,000Common
      stock, $.001 par value; 500,000,000shares
      authorized and 10,048 shares issuedand
      outstanding
                
                
                10
                
                
                
                10Additional
      paid-in capital
                
                
                336,285
                
                
                
                336,285Accumulated
      deficit
                
                
                (481,623
                )
                
                
                (336,392
                )Total
      Stockholders' Equity (Deficit)
                
                
                (135,328
                )
                
                
                9,903TOTAL
      LIABILITIES ANDSTOCKHOLDERS'
      EQUITY (DEFICIT)
                
                $
                11,956
                
                
                $
                12,187
   The
accompanying notes are an integral part of the condensed financial
statements.
 3
 GENESIS CAPITAL CORPORATION OF NEVADA
 CONDENSED
STATEMENTS OF OPERATIONS (UNAUDITED)
 FOR
THE NINE AND THREE MONTHS ENDED JUNE 30, 2008 AND
2007
 NINE
      MONTHS ENDED
                
                
                THREE
      MONTHS ENDED2008
                
                
                2007
                
                
                2008
                
                
                2007CONSULTING
      REVENUE
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -OPERATING
      EXPENSESProfessional
      fees and compensation expenses
                
                
                87,652
                
                
                
                62,288
                
                
                
                8,270
                
                
                
                35,537Administrative
      expenses
                
                
                57,579
                
                
                
                182,484
                
                
                
                11,767
                
                
                
                70,227Total
      operating expenses
                
                
                145,231
                
                
                
                244,772
                
                
                
                20,037
                
                
                
                105,764LOSS
      BEFORE OTHER INCOME (EXPENSE)
                
                
                (145,231
                )
                
                
                (244,772
                )
                
                
                (20,037
                )
                
                
                (105,764
                )OTHER
      INCOME (EXPENSE)Other
      income
                
                
                -
                
                
                
                627,134
                
                
                
                -
                
                
                
                -Total
      Other Income (Expense)
                
                
                -
                
                
                
                627,134
                
                
                
                -
                
                
                
                -INCOME
      (LOSS) BEFORE PROVISION FOR INCOME TAXES
                
                
                (145,231
                )
                
                
                382,362
                
                
                
                (20,037
                )
                
                
                (105,764
                )Provision
      for income taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -NET  INCOME
      (LOSS) APPLICABLE TO COMMON SHARES
                
                
                (145,231
                )
                
                
                382,362
                
                
                
                (20,037
                )
                
                
                (105,764
                )NET
      INCOME (LOSS) PER BASIC SHARES
                
                
                (14.45
                )
                
                
                38.05
                
                
                
                (1.99
                )
                
                
                (10.53
                )NET
      INCOME (LOSS) PER DILUTED SHARES
                
                
                -
                
                
                
                1.47
                
                
                
                -
                
                
                
                -WEIGHTED
      AVERAGE NUMBER OF OUTSTANDINGBASIC
                
                
                10,048
                
                
                
                10,048
                
                
                
                10,048
                
                
                
                10,048DILUTED
                
                
                -
                
                
                
                260,048
                
                
                
                -
                
                
                
                -
 
 The
accompanying notes are an integral part of the condensed financial
statements.
 4
 GENESIS CAPITAL CORPORATION OF NEVADA
 CONDENSED
STATEMENTS OF CASH FLOWS (UNAUDITED)
 FOR
THE NINE MONTHS ENDED JUNE 30, 2008 AND
2007
 2008
                
                
                2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income (loss)
                
                $
                (145,231
                )
                
                $
                382,362Adjustments
      to reconcile net income (loss) to net cashprovided
      by (used in) operating activities:Expiration
      of debentures
                
                
                -
                
                
                
                (453,720
                )Expiration
      of expenses associated with debentures
                
                
                -
                
                
                
                (173,414
                )Changes
      in assets and liabilities:Decrease
      in  loans receivable related party
                
                
                -
                
                
                
                50,434Decrease
      in management fee receivable
                
                
                -
                
                
                
                143,482(Decrease)
      in accounts payable and accrued expenses
                
                
                -
                
                
                
                (61,024
                )Increase
      in officers loan
                
                
                145,000
                
                
                
                114,084Total
      adjustments
                
                
                145,000
                
                
                
                (380,158
                )Net
      cash provided by(used in) operating activities
                
                
                (231
                )
                
                
                2,204NET
      INCREASE (DECREASE) IN CASH ANDCASH
      EQUIVALENTS
                
                
                (231
                )
                
                
                2,204CASH
      AND CASH EQUIVALENTSBEGINNING
      OF PERIOD
                
                
                12,187
                
                
                
                4,908CASH
      AND CASH EQUIVALENTSEND
      OF PERIOD
                
                $
                11,956
                
                
                $
                7,112SUPPLEMENTAL
      DISCLOSURE OF CASH FLOWINFORMATION:CASH
      PAID DURING THE PERIOD FOR:Interest
      expense
                
                $
                -
                
                
                $
                -Income
      taxes paid
                
                $
                -
                
                
                $
                -SUPPLEMENTAL
      DISCLOSURE OF NONCASHINVESTING
      AND FINANCING ACTIVITIESReclassify
      Temporary Equity to Permanent Equity
                
                $
                -
                
                
                $
                266,377Expiration
      of debentures
                
                $
                -
                
                
                $
                453,720Expiration
      of costs associated with debentures
                
                $
                -
                
                
                $
                173,414
   The
accompanying notes are an integral part of the condensed financial
statements.
 5
 GENESIS CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS
 JUNE
30, 2008 AND 2007
  NOTE
1 - ORGANIZATION AND
BASIS OF PRESENTATION
 
 The
condensed 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 financial statements and notes are
presented as permitted on Form 10-Q and do not contain information included in
the Company’s annual condensed unaudited statements and
notes.  Certain information and footnote disclosures normally included
in condensed 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
unaudited financial statements be read in conjunction with the September 30,
2007 audited financial statements and the accompanying notes
thereto.  While management believes the procedures followed in
preparing these condensed 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 unaudited financial statements reflect all adjustments, including
normal recurring adjustments which, in the opinion of management, are necessary
to present fairly the condensed operations 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, 2008 and 2007, respectively, (par value $.001) with 10,048
shares issued and outstanding at June 30, 2008 and 2007, respectively, and
10,000,000 shares authorized preferred stock (par value of $.001) with
10,000,000 shares issued and outstanding as of June 30, 2008 and 2007,
respectively.
 
 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.
 
 6
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
  NOTE
1 - ORGANIZATION AND
BASIS OF PRESENTATION (CONTINUED)
 
 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. 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 as the subsidiaries were dissolved.
 
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Use of
Estimates
 
 The
preparation of 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 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 did not earn any revenue from
consulting services in 2008 and 2007.
 
 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.
 
 The
Company maintains cash and cash equivalent balances at a financial institution
that is insured by the Federal Deposit Insurance Corporation up to
$100,000.
 7
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
 
 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.
 
 Fair Value of Financial
Instruments
 
 The
carrying amount reported in the balance sheets for cash and cash equivalents,
accounts payable and accrued expenses approximate fair value because of the
immediate or short-term maturity of these financial instruments.
 
 
 Earnings (Loss) Per Share of
Common Stock
 
 Historical
net income (loss) 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.
 
 8
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Earnings (Loss) Per Share of
Common Stock (Continued)
 
 The
following is a reconciliation of the computation for basic and diluted EPS for
the nine months ended June 30, 2008 and 2007:
 
 June
      30,
                
                
                June
      30,2008
                
                
                2007Net
      income (loss)
                
                $
                (145,231
                )
                
                $
                382,632Weighted-average
      common sharesoutstanding
      (Basic)
                
                
                10,048
                
                
                
                10,048Weighted-average
      common stockequivalents:Preferred
      Stock Conversions
                
                
                -
                
                
                
                250,000Weighted-average
      common sharesoutstanding
      (Diluted)
                
                
                10,048
                
                
                
                260,048
  There
were no outstanding options and warrants at June 30, 2008 and 2007.
 
 Recent Accounting
Pronouncements
 
 In
February 2006, the FASB issued SFAS No. 155, “Accounting for Certain
Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and
140.” SFAS No. 155 resolves issues addressed in SFAS No. 133
Implementation Issue No. D1, “Application of Statement 133 to Beneficial
Interests in Securitized Financial Assets,” and permits fair value remeasurement
for any hybrid financial instrument that contains an embedded derivative that
otherwise would require bifurcation, clarifies which interest-only strips and
principal-only strips are not subject to the requirements of SFAS No. 133,
establishes a requirement to evaluate interests in securitized financial assets
to identify interests that are freestanding derivatives or that are hybrid
financial instruments that contain an embedded derivative requiring bifurcation,
clarifies that concentrations of credit risk in the form of subordination are
not embedded derivatives and amends SFAS No. 140 to eliminate the
prohibition on a qualifying special-purpose entity from holding a derivative
financial instrument that pertains to a beneficial interest other than another
derivative financial instrument. SFAS No. 155 is effective for all
financial instruments acquired or issued after the beginning of the first fiscal
year that begins after September 15, 2006. The adoption of SFAS
No. 155 did not have a material impact on the Company’s financial position
or results of operations.
 
 
 9
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements (Continued)
 
 In
March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of
Financial Assets, an amendment of FASB Statement No. 140.” SFAS
No. 156 requires an entity to recognize a servicing asset or liability each
time it undertakes an obligation to service a financial asset by entering into a
servicing contract under a transfer of the servicer’s financial assets that
meets the requirements for sale accounting, a transfer of the servicer’s
financial assets to a qualified special-purpose entity in a guaranteed mortgage
securitization in which the transferor retains all of the resulting securities
and classifies them as either available-for-sale or trading securities in
accordance with SFAS No. 115, “Accounting for Certain Investments in Debt
and Equity Securities” and an acquisition or assumption of an obligation to
service a financial asset that does not relate to financial assets of the
servicer or its affiliates. Additionally, SFAS No. 156 requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value, permits an entity to choose either the use of an
amortization or fair value method for subsequent measurements, permits at
initial adoption a one-time reclassification of available-for-sale securities to
trading securities by entities with recognized servicing rights and requires
separate presentation of servicing assets and liabilities subsequently measured
at fair value and additional disclosures for all separately recognized servicing
assets and liabilities. SFAS No. 156 is effective for transactions entered
into after the beginning of the first fiscal year that begins after
September 15, 2006. The adoption of SFAS No. 156 did not have a
material impact on the Company’s financial position or results of
operations.
 
 In
September 2006, the FASB issued SFAS No. 157 “Fair Value
Measurements,” which provides a definition of fair value, establishes a
framework for measuring fair value and requires expanded disclosures about fair
value measurements. SFAS No. 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. The provisions of SFAS No. 157
should be applied prospectively. Management is assessing the potential impact on
Genesis’s financial condition and results of operations.
 
 In
February 2008, FASB Staff Position ("FSP") FAS No. 157-2, "Effective
Date of FASB Statement No. 157" ("FSP No. 157-2") was issued. FSP
No. 157-2 defers the effective date of SFAS No. 157 to fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years, for all nonfinancial assets and liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). Examples of items within the scope of FSP
No. 157-2 are nonfinancial assets and nonfinancial liabilities initially
measured at fair value in a business combination (but not measured at fair value
in subsequent periods), and long-lived assets, such as property, plant and
equipment and intangible assets measured at fair value for an impairment
assessment under SFAS No. 144.
 
 
 
 10
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements (Continued)
 
 The
partial adoption of SFAS No. 157 on January 1, 2008 with respect to
financial assets and financial liabilities recognized or disclosed at fair value
in the financial statements on a recurring basis did not have a material impact
on the Company's financial statements. See Note 8 for the fair value
measurement disclosures for these assets and liabilities. The Company is in the
process of analyzing the potential impact of SFAS No. 157 relating to its
planned January 1, 2009 adoption of the remainder of the
standard.
 
 In
September 2006, the FASB issued SFAS No. 158 “Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans”, which amends
SFAS No. 87 “Employers’ Accounting for Pensions”
(SFAS No. 87), SFAS No. 88 “Employers’ Accounting for
Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits” (SFAS No. 88), SFAS No. 106
“Employers’ Accounting for Postretirement Benefits Other Than Pensions”
(SFAS No. 106), and SFAS No. 132R “Employers’ Disclosures
about Pensions and Other Postretirement Benefits (revised 2003)”
(SFAS No. 132R). This Statement requires companies to recognize an
asset or liability for the overfunded or underfunded status of their benefit
plans in their financial statements. SFAS No. 158 also requires the
measurement date for plan assets and liabilities to coincide with the sponsor’s
year end. The standard provides two transition alternatives related to the
change in measurement date provisions. The recognition of an asset and liability
related to the funded status provision is effective for fiscal year ending after
December 15, 2006 and the change in measurement date provisions is
effective for fiscal years ending after December 15, 2008. This
pronouncement has no effect on Genesis Capital at this time.
 
 In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Liabilities, including an amendment of FASB Statement No.
115” (“SFAS No. 159”). SFAS No. 159 permits entities to choose, at specified
election dates, to measure many financial instruments and certain other items at
fair value that are not currently required to be measured at fair value.
Unrealized gains and losses shall be reported on items for which the fair value
option has been elected in earnings at each subsequent reporting date. SFAS No.
159 is effective for fiscal years beginning after November 15, 2007. Early
adoption is permitted as of the beginning of a fiscal year that begins on or
before November 15, 2007, provided the entity also elects to apply the
provisions of SFAS No. 157 “Fair Value Measurements” (“SFAS No. 157”). The
Company is currently assessing the impact that SFAS No. 159 will have on its
financial statements.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interest in
Consolidated Financial Statements” (“SFAS No. 160”). SFAS No. 160, This
Statement amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this Statement was issued,
limited guidance existed for reporting
 11
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements (Continued)
 
 noncontrolling
interests. As a result, considerable diversity in practice existed. So-called
minority interests were reported in the consolidated statement of financial
position as liabilities or in the mezzanine section between liabilities and
equity. This Statement improves comparability by eliminating that diversity.
SFAS No. 160 is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008. Earlier adoption is
prohibited. The Company is currently assessing the impact that SFAS No. 160 will
have on its financial statements.
 
 In
March 2008, the FASB issued SFAS No. 161, “Disclosures about
Derivative Instruments and Hedging Activities,” (“SFAS No. 161”). 
SFAS No. 161 amends and expands the disclosure requirements of SFAS
No. 133, “Accounting for Derivative Instruments and Hedging
Activities.”  SFAS No. 161 requires qualitative disclosures about
objectives and strategies for using derivatives, quantitative disclosures about
fair value amounts of gains and losses on derivative instruments and disclosures
about credit-risk-related contingent features in derivative agreements. 
This statement is effective for financial statements issued for fiscal years
beginning after November 15, 2008.  The adoption of SFAS No. 161 is
not anticipated to affect the Company’s financial condition and results of
operations, but may require additional disclosures if we enter into derivative
and hedging activities.
 
 Reclassifications
 
 Certain
amounts for the nine months ended June 30, 2007 have been reclassified to
conform to the presentation of the June 30, 2008 amounts. The reclassifications
have no effect on the net income for the nine months ended June 30,
2008.
 
 NOTE
3 - DEBENTURES
PAYABLE
 
 The
Company had outstanding convertible debentures at December 31, 2006 in the
amount of $453,720. The debentures were 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 were in default. The
debentures were released by the debenture holders, the company recorded income
on the relief of debt and reported it as other income.
 
 NOTE
4 - OFFICERS
LOANS
 
 This
represents amounts advanced to companies under common ownership, and 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.
 12
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
 NOTE
5 - STOCKHOLDERS’
(DEFICIT)
 
 Common and Preferred
Stock
 
 In
October 2001, the Company completed a 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
December 31, 2007, the Company had issued 10,000,000 of its preferred stock;
5,000,000 Series A and 5,000,000 Series B shares.
 
 On
February 22, 2007, the Company filed an Amended and Restated Certificate of
Designation of Series A Convertible Preferred Stock with the state of Nevada,
which certificate of designation decreased the designated Series A Convertible
Preferred Stock from 10,000,000 shares to 5,000,000 shares. Each share of series
A convertible preferred stock entitles the holder thereof to 25 votes on all
matters, the right to convert each share into 25 shares of common stock and a
liquidation preference of $1.00 per share. On February 22, 2007, the Company
filed a Certificate of Designation of Series B Convertible Preferred Stock with
the state of Nevada, which certificate of designation designated 5,000,000
shares of Series B Convertible Preferred Stock. Each share of series B
convertible preferred stock entitles the holder thereof to 250 votes on all
matters, the right to convert each share into 250 shares of common stock and a
liquidation preference of $1.00 per share.
 
 On April
24, 2008, the Company affected a 500-for-1 reverse stock split of its common
stock.   There was no change to the par value or the authorized
shares of common stock of the Company.  All shares and per share
amounts have been retroactively restated to reflect this split.
 13
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
 NOTE
5 - STOCKHOLDERS’ (DEFICIT)
(CONTINUED)
 
 Options and
Warrants
 
 The
Company had no options or warrants outstanding at June 30, 2008 and 2007,
respectively.
 
 NOTE
6 - INCOME
TAXES
 
 The net
deferred tax assets in the accompanying balance sheets include the following
components at June 30, 2008 and 2007:
 
 2008
                
                
                2007Deferred
      tax assets
                
                $
                144,487
                
                
                $
                133,300Deferred
      tax valuation allowance
                
                
                (144,487
                )
                
                
                (133,300
                )Net
      deferred tax assets
                
                $
                -
                
                
                $
                -
 Due to
the uncertainty of utilizing the approximate $481,623 and $444,267 in net
operating losses, for the nine months ended June 30, 2008 and 2007 respectively,
and recognizing the deferred tax assets, an offsetting valuation allowance has
been established.
 
 NOTE
7 - GOING
CONCERN
 
 The
Company incurred a loss for the current nine-month period ended June 30, 2008
and has had recurring losses for years including and prior to September 30, 2007
and has an accumulated deficit account of $481,623.
 
 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
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
 
 14
 GENESIS
CAPITAL CORPORATION OF NEVADA
 NOTES
TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
 JUNE
30, 2008 AND 2007
 NOTE 8 - Fair
Value Measurements
 
 On
January 1, 2008, the Company adopted SFAS No. 157 “Fair Value
Measurements” (“SFAS 157”). SFAS 157 defines fair value, provides a consistent
framework for measuring fair value under Generally Accepted Accounting
Principles and expands fair value financial statement disclosure requirements.
SFAS 157’s valuation techniques are based on observable and unobservable inputs.
Observable inputs reflect readily obtainable data from independent sources,
while unobservable inputs reflect our market assumptions. SFAS 157 classifies
these inputs into the following hierarchy:
  Level 1
Inputs– Quoted prices for identical instruments in active markets.
  Level 2
Inputs– Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.
  Level 3
Inputs– Instruments with primarily unobservable value drivers.
  The
following table represents the fair value hierarchy for those financial assets
and liabilities measured at fair value on a recurring basis as of June 30,
2008.
  Fair
Value Measurements on a Recurring Basis as of June 30, 2008:
  Assets
                
                Level
      I
                
                
                Level
      II
                
                
                Level
      III
                
                
                TotalInvestment
      securities
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Cash
      equivalents
                
                
                11,956
                
                
                
                -
                
                
                
                -
                
                
                
                11,956Total
      Assets
                
                
                11,956
                
                
                
                -
                
                
                
                -
                
                
                
                11,956Liabilities
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Total
      Liabilities
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -












15


Item
2.Management's
Discussion and Analysis of Financial Condition and Results of Operations
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.





Non-Operating Shell
Company.





Currently, the Company is a
non-operating shell corporation. The Company intends to effect a merger,
acquisition or other business combination with an operating company by using a
combination of capital stock, cash on hand, or other funding sources, if
available. The Company intends to devote substantially all of its time to
identifying potential merger or acquisition candidates. There can be no
assurances that it will enter into such a transaction in the near future or on
favorable terms, or that other funding sources will be available.  A
more detailed discussion of the current business plan is set forth
below.





History





We were 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. 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").





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 years. In 1999, 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. 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.





On March 9, 1999, both the Colorado
Corporation and the Nevada Corporation executed 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 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.





On August 30, 2001, the Company entered
into a Stock Acquisition Agreement ("Acquisition Agreement") with Christopher
Astrom (Purchaser); Hudson Consulting Group, Inc. (Seller); and Global
Universal, Inc (Seller), 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. 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.





16


On October 30, 2001, the Company
entered into a Share Exchange Agreement and Plan of Reorganization with Mr.
Astrom and Senior Lifestyle Communities, the purpose of which was to accommodate
the financing by Mr. Astrom of his $315,000 obligation. Senior Lifestyle
Communities issued 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.





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. 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. In March 2002, the Company
sold its interest in the Connecticut Properties to Nathan Kahn and CT Adult
Condominiums, LLC.  At the time, National and the Company had the same
officers and directors and, accordingly, may have been deemed
“affiliates".





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 rendered to Wahoo certain
financial and business consulting services in exchange for a total of
$700,000.  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 had previously transferred all assets and
liabilities associated with these companies into the parent Genesis Capital
Corporation of Nevada.





On or about February 19, 2006, the
Company's registration statement filed with the SEC on Form 10-SB became
effective. Accordingly, the Company 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.





In February 2007, the Company filed an
Amended and Restated Certificate of Designation of Series A Convertible
Preferred Stock with the state of Nevada, and a Certificate of Designation of
Series B Convertible Preferred Stock. The Certificate of Designation of Series B
Preferred Stock, designated 5,000,000 shares. On February 22, 2007, the Board of
Directors approved the issuance of 5,000,000 shares of its Series B Convertible
Preferred Stock to Christopher Astrom, in exchange for services
rendered.





Each share of Series A convertible
preferred stock entitles the holder thereof to twenty-five (25) votes on all
matters, the right to convert each share into twenty-five (25) shares of common
stock and a liquidation preference of $1.00 per share. Each share of series B
convertible preferred stock entitles the holder thereof to two hundred fifty
(250) votes on all matters, the right to convert each share into two hundred
fifty (250) shares of common stock and a liquidation preference of $1.00 per
share.





On March 12, 2007, the Company affected
a 1 for 100 reverse split of its common stock.  In April 21, 2008, the
Company affected a 1 for 500 reverse split of its common stock.





17


Current Business Plan





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 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 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 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.





18


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 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 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.





19


The Company does not intend to provide
its 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.





RESULTS
OF OPERATIONS




THREE
MONTHS ENDED JUNE 30, 2008 (Q3 2008)


COMPARED
TO THREE MONTHS ENDED JUNE 30, 2007 (Q3 2007)





Revenues





Revenues were $0  for the
three months ended June 30, 2008, as compared to $0 for the three months ended
June 30, 2007.





Operating
Expenses





Operating expenses for the three months
ended June 30, 2008 were $20,037 compared to $105,764 for the three months ended
June 30, 2007. This decrease was primarily attributed to the lack of
negotiations and activity related to prospective merger or acquisition
candidates.





Loss From
Operations





Loss from operations for the three
months ended June 30, 2008 was $20,037 compared to $105,764  for the
three months ended June 30, 2007.





Net Loss Applicable To
Common Stock





Net loss applicable to Common Stock was
$20,037 for the three months ended June 30, 2008 compared to $105,764 for the
three months ended June 30, 2007. Net loss per common share was $1.99 for the
three months ended June 30, 2008 and $10.53 for the three months ended June 30,
2007.




20


NINE
MONTHS ENDED JUNE 30, 2008 (Q3 2008)


COMPARED
TO NINE MONTHS ENDED JUNE 30, 2007 (Q3 2007)





Revenues





Revenues were $0 for the nine months
ended June 30, 2008, as compared to $0 for the nine months ended June 30,
2007.





Operating
Expenses





Operating expenses for the nine months
ended June 30, 2008 were $145,231 compared to $244,772 for the nine months ended
June 30, 2007. This decrease was primarily attributed to the lack of
negotiations and activity related to prospective merger or acquisition
candidates.





Loss From
Operations





Loss from operations for the nine
months ended June 30, 2008 was $145,231 compared to $244,772 for the nine months
ended June 30, 2007.





Net Income (Loss) Applicable
To Common Stock





Net loss applicable to Common Stock was
$145,231 for the nine months ended June 30, 2008 compared to net income of
$382,682 for the nine months ended June 30, 2007. Net loss per common share was
$14.45 for the nine months ended June 30, 2008 and net income per common share
of $38.05 for the nine months ended June 30, 2007.  The increased
income was attributable to the expiration of company debentures
($627,134).





LIQUIDITY
AND CAPITAL RESOURCES





The Company currently plans to satisfy
its cash requirements for the next 12 months by borrowing from affiliated
companies with common ownership or control or directly from its officers and
directors 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 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, 2008, the Company had
current assets consisting of cash and cash equivalents in the amount of
$11,956.  As of June 30, 2008, the Company had current liabilities
consisting of  an officer’s loan in the amount of
$147,284.





21


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.





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





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





Item
3. Quantitative and
Qualitative Disclosures about Market Risk





We are a smaller reporting company as
defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not
required to provide information under this item.





Item 4. Controls and
Procedures





EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES





The
Company maintains a set of disclosure controls and procedures designed to ensure
that information required to be disclosed by the Company in the reports filed
under the Securities Exchange Act, is recorded, processed, summarized and
reported within the time periods specified by the SEC’s rules and forms.
Disclosure controls are also designed with the objective of ensuring that this
information is accumulated and communicated to the Company’s management,
including the Company’s chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.





Based
upon their evaluation as of the end of the period covered by this report, the
Company’s chief executive officer and chief financial officer concluded that,
the Company’s disclosure controls and procedures are not effective to ensure
that information required to be included in the Company’s periodic SEC filings
is recorded, processed, summarized, and reported within the time periods
specified in the SEC rules and forms.





The
Company’s board of directors was advised by Bagell, Josephs, Levine &
Company, L.L.C., the Company’s independent registered public accounting firm
that during their performance audit procedures for 2007 Bagell, Josephs, Levine
& Company, L.L.C. identified a material weakness as defined in Public
Company Accounting Oversight Board Standard No. 2 in the Company’s internal
control over financial reporting.





This
deficiency consisted primarily of inadequate staffing and supervision that could
lead to the untimely identification and resolution of accounting and disclosure
matters and failure to perform timely and effective reviews. However, the size
of the Company prevents us from being able to employ sufficient resources to
enable us to have adequate segregation of duties within our internal control
system. Management is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.





22


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.





PART II


OTHER
INFORMATION





Item
1. Legal
Proceedings





We are not a party to any pending legal
proceedings nor is any of our property the subject of any pending legal
proceedings.





Item
1A. Risk
Factors





We are a smaller reporting company as
defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not
required to provide information under this item.





Item
2. Unregistered Sales Of
Equity Securities And Use Of Proceeds.





none





Item
3. Defaults Upon Senior
Securities





none





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





See Item 5, below.





Item
5. Other
Information





On April 21, 2008, the Company filed a
Definitive Information Statement on Schedule 14A notifying its stockholders that
action has been approved by the holders of at least a majority of the voting
power of stockholders, by written consents without holding a meeting of
stockholders. By such written consents, the Company, on April 24, 2008, effected
a reverse stock split of the Company's issued and outstanding shares of common
stock in a ratio of one (1)  new share for every five hundred (500)
existing shares of common stock, with all fractional shares rounded up to the
nearest whole share.  The reverse stock split did not change the par
value of our common stock nor change the number of authorized shares of our
common stock. The effect of this action is reflected in the
Company's  financial  statements as of the first day of the
first period presented.





23


Item 6. Exhibits








EXHIBIT
              NUMBER
            DESCRIPTION31.1
            Certification of Principal Executive Officer
      pursuant to Sarbanes-Oxley Section 30231.2
            Certification of Principal Financial Officer
      pursuant to Sarbanes-Oxley Section 30232.1
            Certification of Chief Executive Officer
      pursuant to Sarbanes-Oxley Section 90632.2
            Certification of Chief Financial Officer
      pursuant to Sarbanes-Oxley Section
906






















































24


SIGNATURES





Date:
August 14, 2008





By: /s/
RICHARD ASTROM


Richard
Astrom


Chief
Executive Officer, Director





By: /s/
CHRISTOPHER ASTROM


Christopher
Astrom


Chief
Financial Officer, Secretary, Director

















































25