FORM 10-K





SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549






[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
   OR
  [   ]
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: 2-87052-D





GENESIS SOLAR CORPORATION


(Name of registrant as specified in its charter)




Colorado
84-0914754(State or other jurisdiction of
(I.R.S. Employerincorporation or organization)
Identification No.)


4600 South Ulster Street, Suite 800


Denver, CO 80237


(Address of principal executive offices)





Issuer’s telephone number: 303-221-3680





Securities registered under Section 12(b) of the Exchange Act: None


Securities registered under Section 12(g) of the Exchange Act: None





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act .


Yes oNo R





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes oNo R





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 RNo o





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









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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.


Yes RNo o








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


Large accelerated filer o
Accelerated filer o
Non-accelerated filer o
Smaller reporting Company R





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes RNo o





As of June 17, 2011, there were 2,963,000 shares of the Registrant’s $.01 par value Common Stock (“Common Stock”) outstanding, the Registrant’s only class of voting securities outstanding.





The aggregate market value of Common Stock held by non-affiliates of the Registrant as of September 30, 2010, was $0.








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GENESIS SOLAR CORPORATION





FORM 10-K





PART I





Statements that we make in this Form 10-K that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions in the federal securities laws and judicial interpretations thereof.  These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “anticipate,” “estimate,” or “continue,” or the negative thereof.  Such forward-looking statements speak only as of the date made.  Any forward-looking statements represent management's best judgment as to what may occur in the future.  However, forward-looking statements are subject to risks, uncertainties and important facts beyond the control of Genesis Solar Corporation that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected.  We disclaim any obligation to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.





Item l.     Business.





Overview.





Genesis Solar Corporation (formerly known as Cogenco International, Inc.) (“Genesis Solar” or the “Company”) was organized under the laws of the State of Colorado on June 27, 1983, for the purpose of engaging in the cogeneration business, which is the simultaneous production of power, either mechanical or electrical, and useful thermal energy, such as steam, so that the waste heat which is a by-product of one process becomes the energy source for the other.  Effective December 7, 2009 the Company changed its name from Cogenco International, Inc. to Genesis Solar Corporation when the Company’s Amended and Restated Articles of Incorporation became effective under Colorado law.





The Company commenced active business operations after it completed its initial public offering of securities in February 1985, pursuant to which the Company realized total net proceeds of approximately $1,000,000.  The Company eventually depleted its financial resources and was not able to secure additional capital to continue active business operations, and as a result ceased active business operations in early 1988.  The Company has been seeking potential business opportunities since that time, has maintained itself as a validly existing Colorado corporation, and has continued to make filings under Section 15(d) of the Securities Exchange Act of 1934.





Except for a series of private equity financings in 2005, 2006, and 2007 totaling approximately $4.7 million, and the activities described below with respect to DMI BioSciences, Inc. (“DMI”) and Genesis Energy Investment Plc. (“GEI Plc.”), Genesis Solar has not engaged in active business operations for more than the past five years.  The Company has not received any revenues from operations for more than the past ten years.





We do not currently have any subsidiary corporations.  The address of our principal executive offices and our telephone and facsimile numbers at that address are:





Genesis Solar Corporation


4600 South Ulster Street, Suite 800


Denver, CO 80237


Telephone No.: (303) 221-3680

Facsimile No.: (303) 221-8686






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Business of Issuer.





General Information.





Since the Company ceased active business operations in 1988, we have been seeking potential business opportunities.  Although at times we have had discussions with third parties and entered into agreements aimed to result in a business transaction or relationship, to date we have not successfully executed on any business combination(s) or similar strategic transaction(s).  However, as described below, within the last five years we entered into an agreement with DMI with respect to a potential business opportunity.  Further, during our 2009 fiscal year we entered into an agreement with GEI Plc (which agreement was later amended multiple times) to acquire certain businesses and interests, and through the quarter ended December 31, 2010 pursued that transaction.





We believe that there are other companies in our position which are seeking business opportunities.  In an effort aimed to make the Company a more attractive party to a potential transaction or business opportunity, we have maintained our status as a corporation in good standing under Colorado law and we have further filed all reports with the Securities and Exchange Commission.  However, ultimately we will need a significant amount of additional financing in order to identify and complete a business acquisition.





To the extent that the Company does become involved in a business opportunity we will likely compete with others in that industry and may be subject to a significant amount of government regulation.  The nature of the competition and the amount of regulation will depend on the industry in which the Company becomes engaged.  We currently have no patents, patent applications, or other material interest in intellectual property.  During the last ten years we have not produced any products or offered any services, and therefore the Company is not dependent on any material customer relationships.  We do not currently conduct any research and development. Since we do not own any real property or engage in any business operations, environmental compliance is not material to us.





Mr. David Brenman is currently the Company’s only employee and serves pursuant to an employment agreement that became effective on September 30, 2005 (further described in Item 11 below).  Generally, Mr. Brenman has been the only person actively involved in day-to-day operations of the Company, although at times, and with respect to the potential transaction with GEI Plc, the Company utilized third parties to help the Company explore potential transactions and business opportunities.  Mr. Brenman is also actively involved in other businesses as well.  Mr. Brenman agreed to suspend without interest the accrual of his salary effective as of March 31, 2008.  As of March 31, 2008 the total accrued amount owed to Mr. Brenman was $241,750, and as of March 31, 2011 and subsequently, this continues to be the amount owed.  The Company’s Board of Directors may later agree to recommence accruing or paying Mr. Brenman’s salary or enter into a new employment agreement with Mr. Brenman at a future time if deemed appropriate.





We anticipate that additional employees and/or consultants will be retained as may be necessary to operate the Company in the future, whether in connection with a business combination or otherwise.  We believe that our current arrangement is adequate to meet our needs during our current process of pursuing business opportunities.





Recent Business Transactions and/or Opportunities Pursued.





The Company has attempted to act upon certain business opportunities it has identified.  Certain of these business opportunities have been initially identified by Genesis Capital Management Ltd. (“GCM Ltd”), which directly and through its relationships owns greater than 50% of our outstanding common stock.  However, to date our lack of liquidity and inability to raise significant funds from third parties have significantly limited our ability to fully pursue opportunities and/or complete any strategic transactions. The business opportunities that the Company has actively pursued during its last five fiscal years, and certain agreements intended to help the Company act on those opportunities, are outlined below.






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Potential Transaction with GEI Plc.





Starting in April 2009 we began pursuing a transaction whereby we were attempting to acquire a 100% interest in certain subsidiaries of, and certain “Know-How” owned by, what was then an affiliated company, GEI Plc.  That transaction contemplated the Company acquiring Genesis Solar Espana, S.L. (“GSE”) which is a Spanish entity that hoped to build a plant in Spain to manufacture hi-tech solar panels using thin film technology. In addition to GSE, the Company originally contemplated acquiring other entities formerly owned by GEI Plc being Genesis Solar Singapore Pte. Ltd. (“GSS”) and Genesis Solar Hungary Kft (“GSH”). Collectively, GSE, GSS and GSH are referred to in this report as the “Solar Subsidiaries.”   However, the Company later determined that it only intended to acquire GSE and the related “Know-How.”





The Company’s contemplated acquisition of the Solar Subsidiaries and associated Know-How, and the various agreements entered into with respect to that contemplated transaction, were described in numerous reports filed by the Company.  However, the Company was unable to acquire GSE, the Know-How or any of the Solar Subsidiaries and its obligations and rights to acquire GSE and the Know-How expired on January 1, 2011.  The transactions can be summarized as follows:





Date
EventApril 2009
The Company and GEI Plc entered into a memorandum of understanding outlining the initial terms by which the Company sought to acquire the Solar Subsidiaries.August 2009
The Company entered into stock purchase agreement with GEI Plc to acquire the Solar Subsidiaries and the Know-How, an agreement that was later amended in November 2009 and January 2010.May 2010
The Company entered into an amended and restated stock purchase agreement with GEI Plc to acquire the Solar Subsidiaries and the Know-How.May 2010
Initial closing of the amended and restated stock purchase agreement into escrow.August 2010
The Company assigned its rights in the amended and restated stock purchase agreement to GCM Ltd., which then proceeded to complete the transaction with GEI Plc.August 2010
As part of the GCM Ltd-GEI Plc closing, 50,000 shares of Company common stock were returned to the Company for cancellation and the balance (14,096,093 shares) were retained in escrow as consideration to be released to GEI Plc if the Company acquired GSE and the Know-How from GCM Ltd.January 2011
The August 2010 escrow agreement expired, the Company did not acquire GSE or the Know-How from GCM Ltd., and the Company demanded the return of the 14,096,093 shares of Company common stock then held in escrow.February 2011
The 14,096,093 shares of Company common stock held in escrow were returned to the Company’s transfer agent for cancellation.









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As such, to the Company’s knowledge GCM Ltd. owns the Solar Subsidiaries and there no longer is any agreement in place giving the Company the right or obligation to acquire any of the Solar Subsidiaries.





Although the Company has not foreclosed the possibility of acquiring GSE (or any of the Solar Subsidiaries), there no longer is an agreement in place between the parties providing for such an acquisition. If the Company were to elect to again to pursue the acquisition of any of the Solar Subsidiaries, the Company will need to make further arrangements with GCM Ltd, and possibly GEI Plc and several other parties which could result in a change in the structure of the transaction as it was previously structured and/or a change in the structure and amount of the consideration to be paid by the Company.  Any such transaction will require significant additional financing for Genesis Solar which it has not yet been able to obtain despite its efforts to do so.





Potential Funding Agreements





Largely in an effort to further the potential acquisition of the Solar Subsidiaries, starting in the spring of 2009 the Company entered into various agreements with parties that the Company reasonably believed would result in the Company receiving outside funding. However, these agreements, (as reported in various filings with the Securities and Exchange Commission under the 1934 Act) never resulted in any external financing for the Company.




First,on April 28, 2009, and as amended twice in June 2009, the Company entered into a Share Purchase Agreement pursuant to which a single European investor agreed to make a significant investment in the Company. The investor was obligated to purchase 540,000 shares of Company common stock with a total investment of $2,700,000.  Because the prospective investor did not provide the funding, after on-going discussions with the prospective investor on October 22, 2009, the Company affirmatively terminated the Share Purchase Agreement and notified the investor of its termination.




Then on March 29, 2010 the Company entered into a Share Purchase Agreement in form of a private placement agreement (the “PPA”) with a single prospective non-U.S. investor.  The PPA provided for the sale of 3,500,000 shares of Company common stock (the “Shares”) at $10.00 per share.  The original terms of the PPA provided that the prospective investor was obligated pay the total purchase price of $35,000,000 through a single payment by no later than June 30, 2010 (which date was later extended).  Despite reaching an agreement with the prospective investor to extend the date, the Company did not receive the funding it anticipated.




In part because of the difficulty and expenses associated with initiating legal actions and enforcing judgments against persons outside the U.S., to date the Company has not attempted to take any legal action against the prospective investors when those prospective investors have failed to meet their contractual commitment(s) to the Company.




The Company’s Investments, and Former Relationship with DMI





From 2004 through September 2007 the Company engaged in, and explored, various transactions and strategic relationships with DMI.  However, due to a lack of funding the Company was unable to complete any of the strategic transactions the parties contemplated.  In June 2007, the Company converted its $3,250,000 investment into 1,000,000 shares of DMI common stock, and (between March and September 2007) purchased an additional 673,256 shares of DMI common stock.





In March 2008, in order to address certain issues raised by the Securities and Exchange Commission regarding the potential application of the Investment Company Act of 1940 (the “ICA”), the Company determined it preferable to sell its DMI shares to Genesis Biotechnology Fund (“GBF”) and GCM Ltd, which were then already majority shareholders of the Company.  Accordingly, on March 7, 2008 the Company entered into two separate stock purchase agreements whereby:






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1.
The Company sold to GBF 1,423,256 shares of DMI common stock in consideration for GBF surrendering 1,423,256 shares of the Company’s common stock.





2.
The Company sold GCM Ltd 250,000 shares of DMI common stock for $250,000, for which the Company received a promissory note.  The promissory note issued by GCM Ltd carried 6% interest and provided that GCM Ltd was obligated to pay the Company $25,000 per quarter.  During the quarter ended December 31, 2010 GCM Ltd made the final payment due under this note.





At about the time of its divestiture of its DMI stock the Company determined that it would no longer pursue a business opportunities or transactions with DMI.





Current Company Status





The Company is currently not actively pursuing a business opportunity involving any of the Solar Subsidiaries.  However, the Company may later elect to again pursue such an opportunity.





Ultimately, the Company hopes to identify and act upon a business opportunity in the energy production and/or energy distribution industries either in the U.S. or abroad, although the Company may consider business opportunities in other industries.  Although the Company has taken certain preliminary steps to investigate new business opportunities, none of these investigations have resulted in any form of agreement or any definitive steps towards the consummation of a transaction or relationship.  There can be no assurance that the Company will identify an appropriate business opportunity or corporate transaction and consummate any such transactions.





As the Company has effectively exhausted its assets, to pursue any business opportunity in the short term the Company will likely rely on its affiliates to advance the Company funds.For the Company to take significant steps in consummating any such transaction or relationship, the Company will likely have to identify and execute upon a significant amount of outside funding.  To date, the Company has not been able to successfully obtain such funding and there can be no assurance that if the Company identifies a new business opportunity that outside funding will be available to the Company on reasonable terms, if at all.





Additional Information





The Company files reports with the Securities and Exchange Commission as required by Section 13(a) of the Securities Exchange Act of 1934. The public may read and copy any materials filed by the Company with the SEC at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.





The Company does not currently maintain a corporate website.





Item 1A.  Risk Factors





An investment in and ownership of our common stock is one of high risk.You should carefully consider the risks described below in connection with any decision whether to acquire, hold or sell our securities.  If any of the contingencies discussed in the following paragraphs or other materially adverse events actually occurs, the business, financial condition and results of operations could be materially and adversely affected.  In such case, the trading price of our common stock could decline, and you could lose all or part of your investment.






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We have no active business operations, and only limited prospectus for business operations.





We currently are not engaged in any business operations and presently have limited prospects for engaging in any active business operations.  Although starting in at least April 2009 we began working towards acquiring the Solar Subsidiaries we no longer have an agreement in place to acquire GSE and/or any of the Solar Subsidiaries and are currently not actively pursuing that potential transaction.  Moreover, although we have recently taken certain preliminary steps to explore other transactions and/or business opportunities in the power production and/or distribution industries, we have not taken any significant steps towards such a transaction.  We cannot offer any assurance that the Company will be able to successfully identify and/or execute upon any business opportunity.  Moreover, our ability to execute upon business opportunities has historically been severely limited by our history of a lack of liquidity.  Ultimately, the Company will need to raise a substantial amount of capital to successfully identify and execute upon a business opportunity.  Further, the Company can offer no assurance that if we do identify a business opportunity that we will be able to negotiate reasonable terms for the Company to be able to act upon that activity.





We have a lack of liquidity to fund our current and prospective operations.





We currently do not any source of outside liquidity, and as of March 31, 2011 our only asset consisted of $2,147 of cash on hand.  During our fiscal years ended March 31, 2010 and March 31, 2011 the Company in part relied on quarterly payments to the Company by GCM Ltd to fund its basic obligations.  However, that obligation was paid in full during the quarter ended December 31, 2010.  Moreover, we have had little working capital for more than the past five years.  Although we raised $240,000 during our fiscal 2005, $3,700,000 during our fiscal 2006, and $775,000 during our fiscal 2007, the funds were primarily used to pay some (but not all) of our financing objectives in connection with the DMI transactions.  Further, although during both our 2010 and 2011 fiscal years we entered into agreements with prospective investors to purchase our common stock, the Company did not receive any funds from those prospective investors.





Our available on-hand assets are not sufficient for us to engage in any business operations, or to complete a merger, acquisition, or other business combination.  Unless and until we obtain outside funding, we likely will be dependent on our affiliates to advance the Company funds.  We cannot offer any assurance that any Company affiliate will be able or willing to advance funds for the Company’s operations.  Additionally, the on-going volatile U.S. and global economy combined with the on-going volatility in global financial and capital markets have further limited the availability of outside equity or debt financings.  If we are unable to fund future operations by way of financing, including public or private offerings of equity or debt securities, our ability to locate and execute upon any business opportunities will be adversely impacted.We cannot offer any assurance that we will be able to obtain the necessary working capital on commercially-reasonable terms, if at all, should circumstances arise requiring us to have additional working capital available.





Our financial statements reflect a “going concern” qualification.





Because of our lack of revenues, lack of working capital, our inability to meet certain of our contractual obligations, and lack of any assured financing sources, our financial statements raise doubt about our ability to continue as a going concern because of our financial condition, and substantial losses.  The opinion of our auditors for the year ended March 31, 2011, expressed the following concerns about our ability to continue as a going concern:





“...the Company has incurred significant losses from inception to date and does not have sufficient funds on hand to continue to fund operations without a capital infusion. These conditions raise substantial doubt about its ability to continue as a going concern.”





(the “Going Concern Qualification”).  This condition has continued since those financial statements, and we expect that these conditions will continue for the foreseeable future unless we are able to raise a substantial amount of additional financing.  In view of the matters described herein and in Note 1 to our financial statements, our ability to continue to pursue our plan of operations as described herein is dependent upon our ability to raise the capital necessary to meet our financial requirements on a continuing basis.






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We have a history of losses and have never engaged in the profitable operation of our business.





We have had a history of operating losses and cash flow deficits, and our financial statements reflect a Going Concern Qualification as described above.  We have never engaged in the profitable operation of a business, and there can be no assurance that we will ever be able to do so.





The Company has not been involved in active business operations since 1988.  To date, we have not implemented a successful business plan.  Although we have reviewed several possibilities for business operations during the past several years, we have yet been able to execute upon a business opportunity or transaction.





It is likely that any efforts we may make to raise capital or effect a business transaction will result in substantial additional dilution to our shareholders.





It is likely that if we raise capital for any operations in the future or to effect a business combination or transaction, such action will require the issuance of equity or debt securities which will result in substantial dilution to our existing shareholders.  For example, the transaction originally negotiated regarding the Solar Subsidiaries would have resulted in the issuance of 14,146,093 shares of Company common stock had it been completed.  Although we will attempt to minimize the dilutive impact of any future capital-raising activities or business transactions, we cannot offer any assurance that we will be able to do so because of the lack of any historical operations or profitability, as well as the lack of any trading market for our publicly-held securities.   If we are successful in raising additional working capital, we will likely have to issue additional shares of our common stock at prices that may be a discount from the then-current market price of our common stock.  As described above under “Going Concern Qualification,” we cannot offer any assurance that we will be able to raise such funds when necessary.





We identified material weaknesses in our disclosure controls and procedures and our internal control over financial reporting.





Section 404 of the Sarbanes-Oxley Act of 2002 requires management to assess our internal control over financial reporting (“ICFR”) pursuant to a defined framework.  In making that assessment, management identified a material weakness in our disclosure controls as a result of several material weaknesses identified in our ICFR as described in Item 9A below.  There are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective ICFR can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements.  Material weaknesses make it more likely that a material misstatement of annual or interim financial statements will not be prevented or detected.  In addition, effective ICFR at any point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.





We have not instituted corporate governance policies or procedures.





The Company currently only has a single employee who serves as our chief executive and financial officer.   The Company does not have any independent directors, an audit committee, a nominating committee, any other corporate governance committee, or experienced accounting personnel.  Thus, our shareholders do not have the benefits or protections associated with corporate governance controls and other corporate oversight mechanisms overseen by independent directors.






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Because we are dependent upon our key personnel for our future success, if we fail to retain or attract key personnel, our potential business operations will be adversely affected.





David W. Brenman is the only person who has devoted a substantial amount of time to our business during the past five years.  If we are to succeed in any business opportunity or transaction (which cannot be assured) it will primarily be as a result of the efforts of Mr. Brenman. David Brenman’s employment agreement with the Company became effective on September 30, 2005.  We paid Mr. Brenman his salary as due under this employment agreement through August 15, 2006, and except for a $2,000 payment made during fiscal 2008 to keep our payroll service active, since August 15, 2006 we have not made any payments to him as required under his employment agreement.  In addition, we anticipate that we will continue to be unable to make any payments under this employment agreement for the foreseeable future.  Mr. Brenman has agreed to defer the compensation due to him under his employment agreement (without interest) until such time as the Company has adequate resources to be able to make such payments.   In addition to his deferred salary we also have other significant obligations to Mr. Brenman, including for expenses Mr. Brenman has occurred on the Company’s behalf and the repayment with interest of the $40,000 he advanced to the Company during our 2010 fiscal year.





No market exists for our common stock; should a market develop, our common stock will likely be vulnerable to pricing and purchasing actions that are beyond our control and, therefore, persons acquiring our shares may be unable to resell their shares at a profit as a result of this volatility.




Currently, no market exists for our common stock, and we cannot offer any assurance that any market will develop.  Previously, occasional trades were reported on the “pink sheets.”  Should a trading market resume the trading price of our securities at least initially will likely be impacted by very low sales volumes, general market conditions, and other events and factors.   In addition, the realization of any of the risks described in these “Risk Factors” could have a significant and adverse impact on such market prices.





SEC penny stock regulations limit the ability to trade our securities.





Our common stock is subject to additional disclosure requirements for penny stocks mandated by the Securities Enforcement Remedies and Penny Stock Reform Act of 1990.  The SEC Regulations generally define a penny stock to be an equity security that is not traded on the Nasdaq Stock Market and has a market price of less than $5.00 per share. We are included within the SEC Rule 3a-51 definition of a penny stock.  As a “penny stock”, trading in our stock is covered by Rule 15g-9 promulgated under the Securities Exchange Act of 1934, for non-Nasdaq and non-national securities exchange listed securities.





Under this rule, broker-dealers who recommend such securities to persons other than established customers and accredited investors must make a special written disclosure to, and suitability determination for, the purchaser and receive the purchaser’s written agreement to a transaction prior to sale.  The regulations on penny stocks limit the ability of broker-dealers to sell our common stock and thus the ability of purchasers of our common stock to sell their securities in the secondary market and adversely impact the willingness of investors to purchase our common stock on either a private or open market basis.





Provisions in our charter documents could prevent or delay a change in control, which could delay or prevent a takeover.





Our articles of incorporation authorize the issuance of “blank check” preferred stock with such designations, rights, and preferences, as may be determined by our Board of Directors.  Accordingly, the Board of Directors may, without shareholder approval, issue shares of preferred stock with dividend, liquidation, conversion, voting, or other rights that could adversely affect the voting power or other rights of the holders of our common stock.  Preferred stock could also be issued to discourage, delay, or prevent a change in our control, although we do not currently intend to issue any additional series of our preferred stock.






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Provisions in our bylaws provide for indemnification of officers and directors to the full extent permitted by Colorado law, which could require us to direct funds away from our business and products.





We do not expect to pay dividends in the foreseeable future.





We have never paid cash dividends on our common stock.  We do not expect to pay cash dividends on our common stock at any time in the foreseeable future.  The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider.  Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.





Our prior sale of unregistered securities may create certain risks.





We cannot offer any assurance that our prior sales of unregistered securities were in compliance with the law.  To the extent that our prior sales were not strictly in compliance with all legal requirements, we may have some contingent liabilities of which we are unaware.  The availability of an exemption from registration is conditional upon numerous facts and circumstances over which we have no control, including the investment intent of the purchasers, the accuracy of the purchasers’ representations that they were accredited investors, and whether others involved in the transaction utilized any form of general solicitation.  To the extent that any securities were offered or sold at a time when there was no exemption from registration available and a person makes a claim for rescission, we may have a liability which has not been included in our financial statements.





We expect that the vast majority of our common stock will be directly and indirectly controlled by a single investor; and our common stock is not eligible to be resold pursuant to Rule 144.





Throughout our recent fiscal years GCM Ltd directly and indirectly owned or controlled significantly greater than 50% of our outstanding common stock.  As of March 31, 2011 CGM Ltd owns or controls approximately 68% of our outstanding common stock.





Because the Company’s common stock is not registered under the Securities Exchange Act of 1934, this shareholder does not have any reporting obligations under Sections 13(d) or 16(a) of the Securities Exchange Act and therefore is not required to disclose its holdings or any changes in its beneficial ownership of the Company common stock.





All of the shares of Company common stock held by our major stockholders constitute “restricted shares” or “control shares” as defined in Rule 144 under the Securities Act.  The restricted shares may only be sold if they are registered under the Securities Act or another exemption from registration under the Securities Act.  However, because the Company is a shell company our common stock is not currently eligible to be resold pursuant to Rule 144.





Indemnification of officers and directors may result in unanticipated expenses.





Colorado Revised Statutes and our articles of incorporation and bylaws provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with us or activities on our behalf.  We also will bear the expenses of such litigation for any of their directors, officers, employees, or agents, upon such person’s promise to repay them if it is ultimately determined that any such person shall not have been entitled to indemnification.  This indemnification policy could result in substantial expenditures by us that we may be unable to recoup and could direct funds away from our business and products (if any).






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Our president, Mr. David Brenman, is involved in other ongoing business opportunities.





The board of directors by resolution dated May 5, 2005, agreed to permit Mr. David Brenman to pursue a business opportunity with respect to certain imaging devices that are being developed by Micro-Imaging Solutions, LLC. (“MIS”).  MIS is involved in the research and development of small scale high resolution medical devices.  Mr. Brenman’s activities with respect to MIS could cause time conflicts and other various conflicts of interest with respect to his duties and obligations to the Company.  In addition, Mr. Brenman’s association with MIS could diminish his ability to obtain additional financing on behalf of the Company if he is also providing such assistance to MIS.





We have significant obligations under the Securities Act of 1934.





Because we are a public company filing reports under the Securities Exchange Act of 1934, as amended, we are subject to increased regulatory scrutiny and extensive and complex regulation.  The Securities and Exchange Commission has the right to review the accuracy and completeness of our reports, press releases, and other public documents.  In addition, we are subject to extensive requirements to institute and maintain financial accounting controls and for the accuracy and completeness of their books and records.  Normally these activities are overseen by an audit committee consisting of qualified independent directors.  We have not appointed any independent directors.  Consequently, the protections normally provided to shareholders by independent directors are not available.  Although we hope to appoint qualified independent directors in the future, we cannot offer any assurance that we will locate any person willing to serve in that capacity, or that we will be able to acquire the directors’ and officers’ liability insurance that will be a pre-condition to any such person’s willingness to serve.





Forward-looking statements may prove to be inaccurate.





In our effort to make the information in this report more meaningful, this report contains both historical and forward-looking statements.  All statements other than statements of historical fact are forward-looking statements within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements in this report are not based on historical facts, but rather reflect the current expectations of our management concerning future results and events.  It should be noted that because we are a “penny stock,” the protections provided by Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934 do not apply to us.  We have attempted to qualify our forward-looking statements with appropriate cautionary language to take advantage of the judicially-created doctrine of “bespeaks caution” and other protections.





The forward-looking statements generally can be identified by the use of terms such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will” or other similar words or phrases. Furthermore, statements that describe our objectives, plans, or goals are, or may be, forward-looking statements.





Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance and achievements to be different from any future results, performance and achievements expressed or implied by these statements.





These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in the forward-looking statements in this prospectus.  Other unknown or unpredictable factors also could have material adverse effects on our future results.






12







Item 1B.  Unresolved Staff Comments





Not applicable.





Item 2.        Properties.





The Company currently maintains its offices at 4600 South Ulster Street, Suite 800, Denver, CO 80237.  This office is leased by Micro-Imaging Solutions, LLC (“MIS”), and the Company subleases office space from MIS on a month-to-month basis.  The Company currently pays approximately $2,300 per month under this arrangement.  Management believes that this arrangement will be suitable for its needs for the immediate future.





During its fiscal year ended March 31, 2011, and through the date of this report, the Company owned no real property and no material personal property.





Item 3.       Legal Proceedings.





The Company is not a party to any legal proceedings and no such proceedings are known to be contemplated.





Item 4.       Reserved.











PART II





Item 5.        Market for Common Equity and Related Stockholder Matters.





Market Information.





Our common stock is not eligible for listing on any stock exchange.  Trading, if any, has been strictly limited to the over-the-counter market.  In the past, our common stock has been quoted from time-to-time in the “Pink Sheets” maintained by the National Quotation Bureau, Inc. under the trading symbol “CGNN.”  In January 2010 the Company notified the Financial Industry Regulatory Authority (“FINRA”) that the Company’s name had changed under Colorado law to Genesis Solar Corporation. Although FINRA has reflected the name change in its records it did not assign the Company a new trading symbol and thus CGNN continues to be the symbol for our common stock.





Since 1988, we do not believe that any established trading market has existed for our common stock.  We are not aware of any public sales of our common stock for more than the past two years, and consequently we are unable to report any market information.





Holders.





The approximate number of record holders of our $0.01 par value common stock as of June 17, 2011, was 324.This does not include an indeterminate number of persons who hold our common stock in brokerage accounts and otherwise in ‘street name.’





Dividends.





The Company has not paid a dividend with respect to its common stock since its incorporation.  We do not expect to pay a dividend on our common stock in the foreseeable future.





Our ability to pay dividends is restricted by provisions of the Colorado Business Corporation Act which provides that a Colorado corporation may only pay dividends if, after giving effect to the dividend, the corporation would be able to pay its debts as they become due in the usual course of business, or the corporation’s total assets would be less than its total liabilities plus the amount that would be needed (if dissolution were to occur at the time of the dividend) to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the dividend.  At the present time, there are no shareholders who have any preferential rights.






13






Securities Authorized for Issuance Under Equity Compensation Plans





On November 18, 2009 our Board of Directors approved the 2009 Equity Incentive Plan (the “Plan”) and reserved 1,500,000 shares of common stock under the Plan.  The Company has not submitted the Plan for shareholder approval, although the Plan’s adoption was not contingent upon such approval.The Plan was adopted to compensate new, continuing, and existing employees, officers, consultants, and advisors of the Company and its controlled, affiliated and subsidiary entities. The Plan is currently administered by the Board of Directors as a whole.  The Plan originally contemplated two types of options:  (i) Options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended are referred to as “Incentive Options”; and (ii) Options which are not intended to qualify as Incentive Options are referred to as “Non-Qualified Options.” Bonuses, which may also be granted under the Plan, are the outright issuance of shares of common stock.  However, because the Company did not seek and obtain shareholder approval of the Plan by November 28, 2010 the Company may not grant Incentive Options under the Plan.  The exercise price of the options granted under the Plan must be 100% of the “fair market value” (which is defined in the Plan) of our common stock on the date of grant, and the exercise period for options granted under the Plan cannot exceed ten years from the date of grant. The Plan provides that an option may be exercised through the payment of cash, in property or in a combination of cash, shares and property subject to approval of the Company.





To date no stock options have been granted, or stock bonuses issued, pursuant to the Plan.





The information in the following table is provided with respect to compensation plans (including individual compensation arrangements) under which equity securities are authorized for issuance as of the fiscal year ending March 31, 2011.





Plan Category and Description
Number of Securities to be issued upon exercise of outstanding options, warrants, and rights

(a)
Weighted –average exercise price of outstanding options, warrants and rights

(b)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

(c)Equity compensation plans approved by security holders
-0-
-0-
-0-Equity compensation plans not approved by security holders
-0-
-0-
1,500,000Total
-0-
-0-
1,500,000





Sales of Unregistered Equity Securities.





Any unregistered sales of equity securities that may have occurred during the fiscal year ended March 31, 2011 have been previously reported by the Company.





Purchases of Equity Securities by Genesis Solar and its Affiliates.





The Company’s common stock is not registered under Section 12 of the Securities Exchange Act of 1934 and therefore no disclosure is required.  Further, during the year ended March 31, 2011, the Company did not repurchase any shares of its common stock.






14






Item 6.     Selected Financial Data.





Not applicable.





Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operation.





Going Concern Qualification





Because of our lack of revenues, lack of working capital, our inability to meet certain of our contractual obligations, and lack of any assured financing sources, our financial statements raise doubt about our ability to continue as a going concern because of our financial condition, and substantial losses.  The opinion of our auditors for the year ended March 31, 2011, expressed the following concerns about our ability to continue as a going concern:





“...the Company has incurred significant losses from inception to date and does not have sufficient funds on hand to continue to fund operations without a capital infusion. These conditions raise substantial doubt about its ability to continue as a going concern.”





(the “Going Concern Qualification”).  This condition has continued since the date of those financial statements, and we expect that these conditions will continue for the foreseeable future unless we are able to raise a substantial amount of additional financing.  In view of the matters described herein and in Note 1 to our financial statements, our ability to continue to pursue our plan of operations as described herein is dependent upon our ability to raise the capital necessary to meet our financial requirements on a continuing basis.





Summary





As stated above, the Company has been essentially inactive since early 1988 until the 2005 fiscal year.  During this time we investigated investment alternatives in the oil and gas and biotechnology industries but, to date, we have been unsuccessful in completing any such transaction.





Results of Operations





Years Ended March 31, 2011 and 2010.





We recognized a net loss of $(116,091) for the fiscal year ended March 31, 2011, as compared to the $(203,363) net loss recognized for the fiscal year ended March 31, 2010. Our net loss decreased for the year ended March 31, 2011 when compared to the previous year as in large part during the fiscal year ended March 31, 2010 we engaged in a greater amount of activities intended to explore and negotiate the Company’s previously contemplated acquisition of the Solar Subsidiaries.  Although we undertook various actions and incurred expenses during the fiscal year ended March 31, 2011 related to the potential acquisition (such as expenses associated with the initial closing into escrow and assigning various rights to GCM Ltd in July 2010), the Company incurred greater expenses during its fiscal year ended March 31, 2010 when it first negotiated the terms of the transaction, negotiated with certain prospective investors and incurred expenses aimed to initially define and further the transaction.  These greater activities during the fiscal year ended March 31, 2010 caused the Company to incur higher operating costs and expenses when compared to fiscal 2011.  For example, for the fiscal year ended March 31, 2011 the Company’s general and administrative expenses decreased by approximately $53,000, our consulting and travel expenses decreased by approximately $23,000 and our legal fees decreased by approximately $11,600.






15






Historically, we have incurred significant losses and we anticipate that we will continue to incur significant net losses as we continue to pursue business opportunities.  We will pursue these business opportunities to the extent that our management has identified opportunities that it believes are worth pursuing and to the extent that the Company has sufficient funds to do so.  At the present time, the Company has no source of revenues from operations, and the Company can provide no assurance that it will generate a source of revenues from operations, either as a result of a merger or acquisition transaction, or as a result of developing such a source from within.





Liquidity and Capital Resources





We have been without adequate funds since 1987 through the 2011 fiscal year, and subsequently.  At the time we ceased active business operations, the Company was essentially out of money.  The Company did not raise any substantial amounts capital until the 2005 fiscal year during which we raised $240,000, the 2006 fiscal during which we raised $3,700,000, and an additional $775,000 raised in 2007.  During our 2010 fiscal year we raised $17,300 through the sale of our common stock, however, this amount was not sufficient to cover our on-going general corporate and other requirements.   We were unable to raise any outside funds during our 2011 fiscal year.





At March 31, 2011, the Company had current assets of $2,147 and working capital deficit of $(314,291), as compared to current assets of $122,172 and a working capital deficit of $(198,204) at March 31, 2010.  As of March 31, 2011 our assets consisted solely of the small amount of cash we had on-hand.   In large part our current assets decreased from our fiscal year ended March 31, 2010 to March 31, 2011 as a result of continuing general and administrative expenditures, our continuing operating losses, our receipt and then use of funds that were due to us GCM Ltd during the fiscal year, and our on-going use of cash assets to pay our general administrative obligations.





Through the first three quarters of fiscal 2010 the Company’s only source of outside liquidity was the receipt of quarterly payments of $25,000 under the GCM Note.  GCM was obligated to pay the Company $25,000 per quarter through the quarter ended December 31, 2010.  GCM made the final payment due under the GCM Note on or about December 20, 2010. With the GCM Note being paid in full, our only current source of funds for our general and administrative and other expenses likely will come in the form of loans from our president, David Brenman or other Company affiliates.  There can be no assurance that Mr. Brenman (or other Company affiliates) will loan the Company funds to permit the Company to satisfy its basic obligations.





In considering our substantial working capital deficit, it is important to note that more than $310,000 of our liabilities are owed to our President, David Brenman, or to an affiliate of his.  Although these are all current liabilities, Mr. Brenman has not attempted collection action with respect thereto.  With Mr. Brenman’s consent, the Company prioritizes payables owed to unrelated parties and, as additional cash is available, pays amounts due to Mr. Brenman.  As of the March 31, 2011 the funds owed to our President, Mr. Brenman, were:





§
Unpaid accrued salary amounting to $241,750 at March 31, 2011. Effective March 31, 2008 Mr. Brenman orally agreed to suspend any further accrual of the salary due to him until we are adequately financed.





§
$26,460 at March 31, 2011 for expenses Mr. Brenman has incurred on behalf of the Company which have not been reimbursed to him, which obligation does not bear interest.





§
$40,000 that Mr. Brenman has advanced to the Company during the quarter ended September 30, 2009 which is represented by a promissory note bearing interest at 5% per annum, due on demand.  As of March 31, 2011, $3,019 in interest had accrued on this note.






16




We have had significant cash flow difficulties. During recent fiscal years, we paid our operating expenses with funds raised from the issuance of common stock and the sale of marketable securities we held as well as the funds provided by GCM Ltd as it paid down the amount owed to the Company at the rate of $25,000 per quarter. We no longer hold any marketable securities, and except for $17,300 raised in November 2009, we have not raised funds through the issuance of common stock since March 2007.  In both our 2010 and 2011 fiscal years we entered into agreements with prospective investors whereby we expected to receive funding.  However, the Company did not receive any funds under either of these agreements.




With the GCM Note being paid in full, as of March 31, 2011 we had effectively exhausted our assets.Because the Company does not currently have any outside source of liquidity, and only has limited cash on hand, as noted above the Company anticipates that for at least the short term it will rely on its affiliates to advance funds to the Company so that it can pay its routine obligations.  However, ultimately the Company will need to secure outside funding to pay its obligations beyond the near term.  .





The Company does not have any capital obligations during fiscal 2012.





As stated above under “Going Concern Qualification” and in the Risk Factors, above, we do not believe that our current assets are sufficient to maintain our activities and we will remain dependent on related party financing.  There can be no assurance that we will be able to raise any additional capital, or that the terms on which we can raise any capital will be commercially reasonable.





Plan of Operations





The Company is not engaged in active business operations at the present time.  Although we have previously received proposals for business opportunities from third parties and we seek out business opportunities with others, we have not actively pursued any such business opportunity in more than the past two years except for the business transactions with DMI described above and those involving the Solar Subsidiaries.  However, to date we have been unable to successfully pursue any business opportunities in part because of our lack of financial resources.  We currently have no rights or obligations with respect to the Solar Subsidiaries are not currently actively pursuing that potential business opportunity.




We intend to seek and review other opportunities in the energy production and/or distribution industry, and potentially other industries as we become aware of appropriate opportunities.  However, our ability to successfully identify and execute upon a business opportunity will likely require that we raise a substantial amount of additional funding from third parties. Consequently, we cannot offer any assurance that we will be able to obtain the funds necessary to execute upon any business opportunity.




Off Balance Sheet Arrangements





We have no off balance sheet arrangements and thus no disclosure is required. However, the Company currently has an obligation to pay rent to an affiliated party, Micro-Imaging Solutions, LLC, under an office lease at the rate of approximately $2,300 per month. Micro-Imaging Solutions leases the office space from an unaffiliated landlord, and the Company reimburses Micro-Imaging Solutions for the Company’s proportional share (based on square footage occupied).This obligation is not reflected on the Company’s balance sheet, although our rent expense is recognized on our Statement of Operations.





Critical Accounting Policies




Our significant accounting policies are disclosed in Note 1 to the Financial Statements included in this Form 10-K.




Item 7A.Quantitative and Qualitative Disclosures About Market Risk.





Not Applicable.






17





Item 8.        Financial Statements.





The following financial statements are filed as a part of this Form 10-K immediately following the signature page:





Page No.Report of Independent Registered PublicAccounting Firm
F-1Balance Sheet - March 31, 2010 and 2011
F-2Statement of Operations - For the Years Ended March 31, 2010 and 2011 and Cumulative Amounts from Inception of the
F-3Development Stage (October 1, 2008) through March 31, 2011Statement of Stockholders’ Equity (Deficit)
F-4For the years ended March 31, 2010 and 2011 and from Inception of the DevelopmentStage (October 1, 2008) through March 31, 2011Statement of Cash Flows - For the Years Ended March 31, 2010 and 2011 andCumulative Amounts from Inception of the Development Stage (October 1, 2008) through March 31, 2011
F-5Notes to Financial Statements March 31, 2010 and 2011
F-6


Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.





Since inception, the Company has not filed a Current Report on Form 8-K reporting a change of accountants, nor has there been any material disagreement with its accountants on any matter regarding accounting or financial disclosure.





Item 9A.     Controls and Procedures.





(a)           Evaluation of Disclosure Controls and Procedures.





As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered in this report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures.  This evaluation was carried out under the supervision and with the participation of our principal executive officer (who also serves as our principal financial officer), who concluded, that because of the material weaknessin our internal control over financial reporting described below that, our disclosure controls and procedures were not effective as of March 31, 2011.  A material weakness is a deficiency or a combination of deficiencies in internal controls over financial reporting such that there is not a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.






18






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





(b)           Internal Control Over Financial Reporting.





Management of the Company is also responsible for establishing internal control over financial reporting as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934.





The Company’s internal controls over financial reporting are intended to be designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal controls over financial reporting are expected to include those policies and procedures that management believes are necessary that:





(i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;





(ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and





(iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.





As of March 31, 2011, management assessed the effectiveness of the Company's internal control over financial reporting (ICFR) based on the criteria for effective ICFR established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments by smaller reporting companies and non-accelerated filers.





Based on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures were not effective as of March 31, 2011 and that material weaknesses in ICFR existed as more fully described below.





As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board ("PCAOB"), a material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of March 31, 2011:





(1)
Lack of an independent audit committee or audit committee financial expert, and no independent directors.  We have never had an audit committee.  We have not identified an audit committee financial expert on our board of directors, and at the present time we do not have any independent directors.  These factors are counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision over management.






19





(2)
Inadequate staffing and supervision within our bookkeeping operations. We have only a single employee involved in bookkeeping functions, and we utilize independent consultants on a part-time basis to supplement our accounting staff.  The relatively small number of people who are responsible for bookkeeping functions prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews which may result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the Securities and Exchange Commission.





(3)
Outsourcing of significant portions of the accounting operations of our Company.  Because we currently have only a single employee, we outsource a portion of the accounting functions of our Company to an independent accounting firm. The employees of this accounting firm are managed by supervisors within the accounting firm, and are not answerable to the Company's management. This is a material weakness because it could result in a disjunction between the accounting policies adopted by our Board of Directors and the accounting practices applied by the accounting firm.





(4)
Insufficient installation of information technology to assist in our accounting functions.  Because of a lack of working capital and personnel, we have been unable to upgrade our information technology software and hardware to assist in providing effective controls.





Our management determined that these deficiencies constituted material weaknesses.





Due to a lack of financial and personnel resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses.  We will not be able to do so until, if ever, we acquire sufficient financing and staff to do so.  We will implement further controls as circumstances, cash flow, and working capital permit.  Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in this Annual Report on Form 10-K for the fiscal year ended March 31, 2011, fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.





We are committed to improving our financial organization. As part of this commitment, we will (when funds are available to the Company) likely: (1) appoint one or more outside directors to our Board of Directors and form an independent audit committee of the Board of Directors who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; (2) create a position to segregate duties consistent with control objectives and will increase our personnel resources; and (3) hire independent third parties to perform expert advice.  We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.





This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting due to the permanent exemption from such requirement for smaller reporting companies.






20





There were no changes in our internal controls or in other factors during the period ended March 31, 2011 (the end of our fourth fiscal quarter) that could significantly affect these internal controls subsequent to the date of their evaluation.





Item 9B.                      Other Information.





None.


PART III





Item 10.                      Directors, Executive Officers, and Corporate Governance





Identification of Directors and Executive Officers.





The Company’s directors are elected to hold office until the next annual meeting of shareholders and until their respective successors have been elected and qualified.  Company executive officers are appointed by the Board of Directors and hold office until their successors are elected and qualified.  No arrangement exists between any of our executive officers and directors pursuant to which any one of those persons was elected or appointed to such office or position.As described below, none of our existing directors are “independent” as that term is used in the U.S. securities laws.





As of June 17, 2011 the officer and directors of the Company are:


Name
Age
PositionDavid W. Brenman
55
Director, President, Chief Financial Officer, Secretary and Treasurer since 1985Robert A. Melnick
55
Director, since 2004


David W. Brenman, since 1988 has been engaged as an independent financial consultant, and beginning in September 2005 Mr. Brenman became a Company employee.  From 1984 until the present Mr. Brenman has served as President and Director of the Company and also serves as the Company’s Treasurer and Secretary.  From 1979 until 1984, Mr. Brenman was an associate with the law firm of Brenman Raskin & Friedlob, P.C. of Denver, Colorado, where he specialized in the fields of taxation and securities law.    From 1987 to 1988, Mr. Brenman was a Vice President of Lloyds International Corporation, the merchant banking subsidiary of Lloyds Bank Plc.  From 1994 and until March 2003, he served as President of Taltos S.p.A., a Company engaged in the production of light-weight stone products.  Mr. Brenman received a B.A. degree from the University of Washington in accounting, a J.D. degree from the University of Denver, College of Law, and an L.L.M. in taxation from New York University.  Mr. Brenman is also currently engaged in business through Micro-Imaging Solutions, LLC.





Robert A. Melnick, David Brenman’s brother-in-law, has been engaged in the field of automotive finance since 1995.  Mr. Melnick served in the capacity as Finance Director for Chesrown Automotive, which was acquired by AutoNation in 1997. Mr. Melnick continued to serve in that capacity for AutoNation until January 2004. From January through August 2004, Mr. Melnick was an independent consultant in the financial services area of the automotive industry.  Since August, 2004, Mr. Melnick has served as Business Manager for Prestige Imports, Inc., Lakewood, Colorado. Mr. Melnick received his B.A. from Drake University and M.S. from Carnegie-Mellon University.





Significant Employees.





Other than Mr. David Brenman, we have no significant employees at the present time.






21





Family Relationships.





Mr. Brenman and Mr. Melnick are brothers-in-law.





Board of Directors – Composition.





Our Board of Directors seeks to ensure that it is composed of members whose particular experience, qualifications, attributes, and skills, when taken together, will allow the Board of Directors to satisfy its oversight obligations effectively.  Currently, the Company does not have a separate nominating committee as it does not believe that given the small size of the Company and its limited resources and personnel that such a committee is warranted.  Currently the Board of Directors as a whole is in charge of identifying and appointing appropriate persons to add to the Board of Directors when necessary.  In identifying Board candidates it is the Board’s goal to identify persons whom it believes have appropriate expertise and experience to contribute to the oversight of a company of the Company’s nature while also reviewing other appropriate factors.    The Company believes that each of the persons that currently comprise its Board of Directors  have the experience, qualifications and attributes and skills taken as a whole to enable the Board of Directors to satisfy its oversight responsibilities effectively.   To this end Mr. Brenman has been involved in structuring and financing early stage companies and Mr. Melnick has a range of business experiences that could prove valuable as the Company evaluates and attempts to execute upon a business opportunity  If the Company is able to ultimately enter into a business relationship or transaction it will likely consider expanding the Board of Directors and may at that time appoint additional directors with skills and backgrounds that are in-line with that business opportunity.





Involvement in Certain Legal Proceedings.





During the past ten years, no present director or executive officer of the Company has been the subject matter of any of the following legal proceedings that are required to be disclosed pursuant to Item 401(f) of Regulation S-K including: (a) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (b) any criminal convictions; (c) any order, judgment, or decree permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (d) any finding by a court, the SEC or the CFTC to have violated a federal or state securities or commodities law, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud; or (e) any sanction or order of any self-regulatory organization or registered entity or equivalent exchange, association or entity.  Further, no such legal proceedings are believed to be contemplated by governmental authorities against any director or executive officer.





No Audit Committee or Audit Committee Financial Expert or Compensation Committee





Our Board of Directors has not appointed a separately designated standing audit committee in accordance with section 3(a)(58)(A) of the Exchange Act.  Instead, the entire Board acts as the Company’s audit committee.  The Board does not have an audit committee financial expert.The Board of Directors has reviewed the audited financial statements and discussed with the independent auditors the matters required by Auditing Standards No. 61.  Additionally, the Board of Directors has received written disclosures and the letter from the independent accountants regarding their independence.





We do not have a compensation committee due to the limited number of persons employed by us.  Rather, the full Board of Directors participates in deliberations concerning executive compensation and establishes the compensation and benefit plans and programs of the Company.  The Board of Directors does not utilize a compensation committee charter when performing the functions of such committee.  Mr. Brenman is our only employee (although we have not paid his salary since August 2006) and he is also a member of the Board.  Mr. Brenman did not participate in any deliberations of the board concerning his own compensation.






22






Material Changes to Nomination Procedures





The Company does not have a separately designated nominating committee. We do not have a nominating committee because our board does not believe that such a committee is necessary given our small size, we have not been actively involved in business operations for several years, and the infrequency at which we have held shareholder meetings.  Except for a shareholders meeting held on March 30, 2009 we have not held a shareholders meeting in more than ten years.  Instead, when a board vacancy occurs, the remaining board members participate in deliberations concerning director nominees.




For the same reasons stated immediately above, the Board of Directors has not adopted a formal procedure by which security holders may recommend nominees to the Board of Directors.  However, any shareholder desiring to nominate a person to the Board of Directors or communicate directly with any officer or director of the Company may address correspondence to that person at our offices in Denver, Colorado.




Section 16(a) Beneficial Reporting Compliance





Section 16(a) of the Securities Exchange Act of 1934 (the “1934 Act”) requires all directors, executive officers and persons who own more than 10% of a registered class of securities, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of Genesis Solar.  Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.  Since our common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, our directors, executive officers, and significant shareholders are not subject to the Section 16 filing obligations.





No Code of Ethics





We have not adopted a code of ethics or a code of conduct that applies to its principal executive officer, principal financial officer, principal accounting officer, controller, or to persons performing similar functions.  We have not done so because its board of directors believes that its nominal activities and nominal financial resources do not merit the expense of preparing, adopting and administering a code of ethics.  The board of directors intends to adopt a code of ethics or a code of conduct when circumstances warrant.





Item 11.       Executive Compensation.





Compensation Discussion and Analysis





Summary.Since we only have a single employee and we have not issued any options or other derivative securities, our compensation structure is not complicated.  If we are successful in indentifying, and then executing upon, a business opportunity, we may need to hire additional employees.   In such a case, we believe that the ability to attract and retain qualified executive officers and other key employees will be essential to our long term success.  We have not paid any salary to Mr. David Brenman, who serves as our chief executive officer and chief financial officer, since August 31, 2006, and as of March 31, 2008, the obligation to pay his salary ceased accruing.





Compensation Linked to Attainment of Performance Goals.Currently, the compensation of our only employee, Mr. David Brenman, is not linked to performance based goals; rather his compensation is a fixed annual salary as set forth in his employment agreement.  However, under Mr. Brenman’s employment agreement, he may receive supplemental or incentive compensation based on the criteria the board deems appropriate consistent with the Company’s strategic plan.  Except for $2,000 paid to Mr. Brenman during the quarter ended June 30, 2007 to keep our payroll service active, due to cash shortages, we have been unable to pay this salary as due since August 2006.  If we are in a position to hire additional employees at a later date (of which we can grant no assurances) we may consider adopting a formal compensation plan linked to performance based goals in order to attract qualified employees.






23






Named Executive Officers.As discussed above, we only have one named executive officer, Mr. David Brenman.  Mr. Brenman has served as our President, Secretary and Treasurer since 1985.





Elements of our Executive Compensation Program.Currently, the only element of our executive compensation program is the base salary owed to Mr. David Brenman.  In part because we have no revenues from operations, we do not provide any annual bonus opportunity and equity compensation components, and we provide no other employee benefits, such as retirement plans or medical benefits.  The members of the Board of Directors as a whole serve as the Company’s Compensation Committee and participate in deliberations concerning executive compensation and (at a later date if our financial resources substantially increase) will establish the compensation and benefit plans and programs of the Company.  Mr. David Brenman did not participate in any deliberations of the Board concerning the terms of his own compensation.  These deliberations were conducted by Mr. David Brenman’s father (who previously served on our Board of Directors) and Mr. Melnick (Mr. Brenman’s brother-in-law).





In general, the base salary for Mr. Brenman was determined by evaluating his responsibilities, experience and the competitive marketplace.  More specifically, we considered the following factors in determining Mr. Brenman’s base salary, and will also consider these factors if the Company is in a position to hire additional employees:





1.
the Company’s financial resources;


2.
the executive’s leadership and operational performance and potential to enhance long-term value to the Company’s shareholders;


3.
performance compared to the financial, operational and strategic goals established for the Company;


4.
the nature, scope and level of the executive’s responsibilities;


5.
competitive market compensation paid by other companies for similar positions, experience and performance levels; and


6.
the executive’s current salary (if applicable), the appropriate balance between incentives for long-term and short-term performance.





Due to our lack of revenue and liquidity shortages it is unlikely that Mr. David Brenman will receive a salary adjustment until we have adopted a successful business plan, successfully completed a business transaction, and/or generated significant revenues.  As noted above, because of inadequate working capital, it is unlikely that we will pay Mr. David Brenman his accrued salary until the Company determines that it has adequate funds available from which to pay Mr. Brenman.  If we are ultimately successful in acquiring the Solar Panel Subsidiaries, and assuming the Company has raised capital, the Company likely will consider resuming making payments to Mr. Brenman in accordance with this employment agreement or a separate compensation arrangement.





Retirement and Deferred Compensation Benefits.We do not presently provide Mr. David Brenman with a defined benefit pension plan or any supplemental executive retirement plans, nor do we provide Mr. Brenman with retiree health benefits.





Perquisites.We do not provide any perquisites to Mr. Brenman.





Post-Termination/ Change Of Control Compensation.We have no compensation plan or arrangement with respect to any executive officer which plan or arrangement results or will result from the resignation, retirement or any other termination of such individual’s employment except as described below for the employment agreement with David Brenman.






24






Tax Implications of Executive Compensation.Our aggregate deduction for Mr. Brenman’s compensation is  potentially  limited by Section 162(m) of the Internal  Revenue Code to the extent the aggregate amount paid to him exceeds $1.0 million, unless it is paid  under a  predetermined  objective  performance  plan  meeting certain requirements, or satisfies one of various other exceptions specified in the Internal  Revenue Code.  At Mr. Brenman’s 2011 compensation levels, and considering that we have not paid him any compensation since August 2006, (except for $2,000 paid to Mr. Brenman during the quarter ended June 30, 2007 to keep our payroll service active) we did not believe that Section  162(m) of the  Internal  Revenue Code would  be  applicable,  and  accordingly,  we did not  consider  its  impact in determining compensation levels for Mr. Brenman.





Employment Agreement with our Named Executive Officer.In November 2004, we entered into an employment contract with David Brenman which became effective on or about September 30, 2005.  The employment agreement was approved by our Board of Directors, on November 16, 2004, which at that time included David Brenman’s father in addition to his brother-in-law.  The material terms of David Brenman’s employment agreement are as follows:





·
Annual salary of $150,000;


·
Employment for an initial five year term, and then automatically continuing for additional one year terms unless either party provides written notice of its intent to terminate the agreement;


·
The employee is subject to confidentiality/non-competition/protection of trade secrets/non-solicitation provisions;


·
The employment agreement provides for premature termination in certain circumstances; and


·
Mr. Brenman has certain rights in the event of a change of control of the Company including a two year extension of his employment term and a requirement that his full salary (through the term of the agreement) be paid to him within 30 days of such change of control. Change of control can also constitute a basis on which the employee can terminate the agreement prematurely.





We paid Mr. Brenman his salary as due under this employment agreement through August 15, 2006, but have been unable to make payments required under his employment agreement since August 31, 2006.  However, during the quarter ended June 30, 2007 we paid Mr. Brenman $2,000 in salary to prevent our payroll service company from discontinuing their services due to lack of use.  We anticipate that we will continue to be unable to make any payments under this employment agreement for the foreseeable future.  Mr. Brenman agreed to defer the compensation due to him under his employment agreement (without interest) until such time as the Company has adequate resources to be able to make such payments.  However, effective March 31, 2008 the Company and Mr. David Brenman agreed to suspend the accrual of Mr. Brenman’s unpaid salary.





SUMMARY OF COMPENSATION





Disclosure of Compensation





As previously discussed, our only employee is David Brenman.  Under his employment agreement, Mr. Brenman is entitled to an annual salary of $150,000; however, due to cash shortages, except for a $2,000 payment made during the quarter ended June 30, 2007, we have not paid his salary since August 2006.  Except for the $2,000 payment made to Mr. Brenman during the quarter ended June 30, 2007, we did not pay Mr. Brenman any compensation during fiscal 2008.  Further, during 2009 and fiscal 2010 we did not pay Mr. Brenman any compensation.  Mr. Brenman agreed to suspend without interest the accrual of his salary effective as of March 31, 2008.  As of March 31, 2008 the total accrued amount owed to Mr. Brenman was $241,750, and as of March 31, 2011 and subsequently, this continues to be the amount owed.  The Company’s Board of Directors may later agree to recommence accruing or paying Mr. Brenman’s salary at a future time if deemed appropriate.






25





Outstanding Equity Awards at Fiscal Year-End





There are no outstanding equity awards, including stock option or bonus plans.





Director Compensation





We do not pay our directors for their services in that capacity.  We do reimburse our officers and directors for out-of-pocket expenses incurred by them in connection with our business.  Currently, we do not pay any directors fees for attendance at board meetings.





We have no other arrangements pursuant to which any of our directors was compensated during the fiscal year ended March 31, 2011 for services as a director.





Item 12.      Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters.





Security Ownership of Company Officers and Directors





As of June 17, 2011 there were 2,963,000 shares of the Company’s common stock outstanding.  The following table sets forth the beneficial ownership of the Company’s common stock as of June 17, 2011 by each director and each executive officer of the Company and by all directors and executive officers as a group.





Name and Address of Beneficial Owner
Position(s)
Amount and Nature of Beneficial Ownership (1)
Percent of Common StockDavid Brenman

c/o Genesis Solar Corporation

4600 S. Ulster St., #800

Denver, CO 80237
CEO, CFO, President, and Chairman
690,000 (2)
23.3%Robert Melnick

c/o Genesis Solar Corporation

4600 S. Ulster St., #800

Denver, CO 80237
Director
50,000
**All current directors and executive officers as a group (two persons)

815,000
25%





** Equals less than 1%.





(1)  Calculated in accordance with rule 13d-3 under the Securities Exchange Act of 1934.





(2) Consists of shares of common stock.





Security Ownership of Certain Beneficial Owners





The following table sets forth information as of June 17, 2011, as to the beneficial ownership of shares of our only outstanding class of securities, our common stock, by each person who, to our knowledge at that date, was a beneficial owner of 5% or more of the outstanding shares of our common stock, by each person who is an officer and/or director, and by all of our officers and directors as a group. The table does not include information regarding shares of common stock held in the names of certain depositories/clearing agencies as nominee for various brokers and individuals.  No such broker or individual is believed to hold greater than 5% of our common stock.  The percent of class is based on 2,963,000 shares of our common stock being outstanding as of June 17, 2011.






26








Name and Address of Beneficial Owner
Amount of Beneficial Ownership

(ownership is direct unless otherwise noted)
Percent of ClassGenesis Capital Management Limited

Trust House, 112 Brodie Street, Kingstown, Saint Vincent and the Grenadines. (1, 2, 3, 4)
2,031,867
68.6%





(1)
Of these shares, 150,000 were issued to Genesis Capital Management Limited (“GCM Ltd”) in November 2009 and 851,867 shares of common stock are owned in the name of Genesis Investment Funds Limited (“GIF”). Additionally, this includes: (i) 500,000 shares held by Mr. Janssen’s spouse, as described below Mr. Janssen is a control person of GIF; (ii) 50,000 shares are held by the Chairman of the Board of GIF (an affiliate of GCM Ltd.).  220,000 of these shares are subject to an agreement by GCM Ltd. to return those shares to Mr. Brenman in the event the Company completes a successful business combination.  This does not include 1,423,256 shares that GIF (on behalf of GBF) returned to the Company in March 2008 and which were subsequently cancelled as described in Note (2), below.  This also does not include 14,096,093 shares that were held in escrow while the Company sought to acquire GSE as such shares were only to be released to CGM Ltd upon the Company’s acquisition of GSE and thus were returned to the Company for cancellation in February 2011.The shares of Company common stock owned directly or indirectly by GCM Ltd were primarily acquired in various transactions with the Company and its affiliates.





(a)
Genesis Investment Funds is controlled by GCM Ltd.  GCM Ltd is controlled by Herald A.M.A. Janssen and Peter H. Jacobs.  Mr. Janssen and Mr. Jacobs co-founded Genesis Investment Funds Limited and GCM Ltd, and appointed GCM Ltd as the investment advisor for Genesis Investment Funds Limited.  Pursuant to a discretionary investment management agreement, GCM Ltd has discretionary investment and voting control over the assets of Genesis Investment Funds Limited, including the shares of Company common stock that Genesis Investment Funds Limited owns or controls directly and indirectly.





(b)
Genesis Investment Funds Limited is also controlled by Peter H. Jacobs, a licensed European property manager who holds a degree in engineering from the Technical Institute, Heerlen, Netherlands.  He is a certified appraiser by the court in the Netherlands.  Mr. Jacobs has been working as an asset manager in Europe since the 1980’s and has from time-to-time worked with Mr. Janssen and MJM Asset Management.  Mr. Jacobs co-founded Genesis Investment Funds Limited with Mr. Janssen.  Mr. Jacob’s address is Matschils 23, 9495 Triesen, Liechtenstein.





(c)
As a result of their control of Genesis Investment Funds Limited, Mr. Jacobs and Janssen control the right to vote and to dispose of greater than 5% of the Company’s outstanding common stock.  Pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934 each of Genesis Investment Funds Limited, GCM Ltd, Mr. Janssen and Mr. Jacobs may be deemed the beneficial owner of the shares of Company common stock held by Genesis Investment Funds and/or GCM Ltd.





(2)
In March 2008 as part of the Company’s divestiture of its entire equity interest in DMI, Genesis Biotechnology Fund Limited, a sub-fund of Genesis Investment Funds Limited, surrendered 1,423,256 shares of Company common stock it then held.






27






(3)
On November 25, 2007 David W. Brenman, Robert A. Melnick and Albert Brenman, sold all of their Company shares they then held in consideration for a promissory note issued by Janssen B.V. (an entity owned by Mrs. Corry Janssen, mother of Herald A.M.A. Janssen and an affiliate of GCM Ltd) to each of Messrs. David Brenman, Melnick, and Albert Brenman.    In addition, as described above in note (1), GCM Ltd has a contingent obligation to return 220,000 shares to David Brenman.  These shares are not included in Mr. David Brenman’s beneficial ownership because there can be no assurance that the conditions that would require a return of the shares to him will ever be satisfied.





Changes in Control.





Management is not aware of any arrangements which may result in a change of control of the Company.  However, throughout our recent fiscal years GCM Ltd has directly and indirectly owned or controlled greater than 50% of the Company’s common stock.  As GCM Ltd directly and/or indirectly owns or controls beneficial ownership of greater than a majority of our outstanding common stock, GCM Ltd could, in their discretion, call a meeting of the shareholders of the Company and vote its shares to replace all directors and take over control of the Company.  GCM Ltd. has never advised the Company that it has any plans to do so.  Because the Company’s common stock is not registered under the Securities Exchange Act of 1934, GCM Ltd does not have any reporting obligations under Sections 13(d) or 16(a) of the Securities Exchange Act.





Securities Authorized for Issuance under Equity Compensation Plans





As further described in Item 5 above the Company has adopted the2009 Equity Incentive Plan and reserved 1,500,000 shares of common stock for issuance under that plan.  To date no stock options have been granted, and no stock bonuses issued, pursuant to that plan.





Item 13.        Certain Relationships and Related Transactions.





(a)           Transactions with Related Persons





Transactions with David Brenman





1.           In November 2004, our Board of Directors approved an employment agreement with our president, David W. Brenman.  That employment agreement became effective on or about September 30, 2005, and contains the terms and conditions described in Item 11 above.





2.           Because of working capital shortages, Mr. David Brenman has from time-to-time advanced funds and incurred expenses for the benefit of the Company.  The Company repays these amounts without interest, when it has sufficient funds available.  At March 31, 2011 the Company owed Mr. Brenman $26,460 for unreimbursed travel and other expenses incurred on behalf of the Company.





3.           During the quarter ended September 30, 2009 the Company borrowed $40,000 from Mr. Brenman to help the Company cover certain of its corporate obligations.  The Company issued Mr. Brenman a promissory note to evidence its obligation to repay these funds to Mr. Brenman.  The note is a demand note and accrues interest at 5%. Principal and accrued interest is due in full upon demand by Mr. Brenman.





4.           In November 2009 Mr. Brenman participated in a private placement conducted by the Company.  Mr. Brenman purchased 500,000 shares of Company common stock at $0.01 per share.  The terms upon which Mr. Brenman participated in this private placement were the same as those upon which other investors participated.





5.           In addition, we have previously entered into transactions which have resulted in compensation being paid to David Brenman:






28






·
Starting in our 2007 fiscal year the Company raised funds through MJM Asset Management Company Establishment (“MJM”) which served as a finder that resulted in compensation paid by MJM to David W. Brenman, our president.  Until January 1, 2007, Herald A.M.A. Janssen controlled MJM, a company he founded in 1997.  As described above, Genesis Investment Funds Limited, one of our significant shareholders, is controlled by GCM Ltd, a company that is also partially controlled by Herald A.M.A. Janssen.  The Company paid MJM a finders’ fee of 71⁄2% of the $3,900,000 in funds raised by MJM Asset Management for the Company.





·
In prior transactions, MJM paid one-third of the finder’s fee to Mr. Brenman in accordance with an oral agreement. At the time the disinterested directors of the Company approved the arrangements with MJM, they understood that MJM has an obligation to pay one-third of the finder’s fee to Mr. Brenman, in accordance with an oral agreement between them.  As a result of those finder’s fee agreements, we paid approximately $292,500 to MJM from the funds raised to date.  After Mr. Janssen’s sale of MJM, Mr. Brenman is not entitled to receive any further compensation from MJM’s direct or indirect investments in the Company.





Transactions with Genesis Capital Management Ltd and Related Entities




1.           On March 7, 2008 we entered into two separate stock purchase agreements with: (i) Genesis Biotechnology Fund (“GBF”); and (ii) GCM Ltd.  GBF is a sub-fund of Genesis Investment Funds Ltd.  Through these two stock purchase agreements we divested our entire interest in DMI which consisted of 1,673,256 shares.  It was also through these agreements with GCM Ltd that we received the $250,000 promissory note from GCM Ltd.  Notwithstanding the significant ownership that GCM Ltd has in the Company, and although the directors of the Company have a small minority ownership interest in GBF, GCM Ltd did not initiate the March 7, 2008 transaction, nor did GCM Ltd attempt to influence the board’s decision.  In connection with GCM Ltd’s purchase of the DMI stock from the Company, the Company also transferred its right to purchase additional shares of DMI common stock to GCM Ltd.  The Company did not have sufficient capital available to exploit that opportunity.






2.           On April 28, 2009, as amended twice in June 2009, the Company entered into a Share Purchase Agreement with a single European investor to invest not less than $250,000 by June 30, 2009 and the balance of the anticipated $2.7 million investment by not later than July 31, 2009.  Although these funds were never received the Company planned to use the proceeds of the offering in part to pay a fee to GCM AG for introducing the investor, and to lend the balance of the proceeds from the offering to GCM Ltd.




3.              In November 2009 GCM Ltd and certain of its affiliates participated in a private placement conducted by the Company.  In total GCM Ltd and its affiliates purchased 1,180,000 shares of Company common stock at $0.01 per share.  The terms upon which these persons participated in this private placement were the same as those upon which other investors participated.





4.              On March 29, 2010 the Company entered into a Share Purchase Agreement in form of a private placement agreement (the “PPA”) with Vital Source, SA.  The PPA provided for the sale of 3,500,000 shares of Company common stock at $10.00 per share.  The PPA provides that the prospective investor is obligated pay the total purchase price of $35,000,000. Although these funds were never received the Company planed to use the proceeds of the offering for the increase of capital of GSE for €25,000,000 (approximately $30,750,000 US).   The Company planed to use a portion of the proceeds to the payment to GCM Ltd. of $1,750,000 as a fee for introducing the investor to the Company.





5.            On May 12, 2010 the Company entered into an Amended and Restated Stock Purchase Agreement with GEI Plc (an affiliate of GCM Ltd) regarding the Company’s potential acquisition of the Solar Subsidiaries.  This agreement amended and restated the agreement the parties initially entered into on August 11, 2009 and then amended twice subsequently (on November 24, 2009 and January 19, 2010) regarding the potential acquisition of the Solar Panel Subsidiaries.   Then on May 25, 2011 the Company and GEI Plc conducted an initial closing of the transaction into escrow at which time the Company deposited share certificates representing 14,146,093 shares of the Company’s common stock with an escrow agent, and certain other certificates and documents.






29






6.           On or about July 27, 2010 the Company entered into various agreements with GCM Ltd whereby the Company assigned its rights under the Amended and Restated Stock Purchase Agreement with GEI Plc (described in the preceding paragraph) to CGM Ltd. At that time the Company also entered into a subscription agreement with GCM Ltd whereby CGM Ltd would have acquired 14,096.093 shares of Company common stock had the Company acquired GSE and certain related intellectual property. However, the Company did not acquire GSE and these shares of common stock were later returned to the Company for cancellation.






Stock Issuances.




The Board of Directors has approved stock issuances to related parties as described above.  Further, Mr. Melnick, a director of the Company, also participated in the private placement conducted in November 2009 and purchased 50,000 shares at $0.01 per share.  Because of the significant stock ownership of the purchasers and/or their relationships with the Company, these transactions were not negotiated at arms’-length.






Approval of Outside Business Activities.




The Board of Directors by resolution dated May 5, 2005, agreed to permit Mr. David Brenman to pursue a business opportunity with respect to CMOS imaging devices that are being developed by Micro-Imaging Solutions, LLC (“MIS”).  MIS is involved in the research and development of small scale high resolution medical devices.  The Board of Directors determined that the business opportunity with MIS is not a corporate opportunity of the Company, and that David Brenman is entitled to pursue such opportunity outside of his employment responsibilities with the Company, provided that such activities do not unreasonably interfere with his employment activities with the Company or compromise any trade secrets or confidential or non-public information relating to the Company.






Office Leases with Related Party.




Commencing January 2009, MIS leased an office suite from an unaffiliated party and subleased it to the Company by which the Company paid one-half the rent.  An affiliate of David Brenman has a significant equity interest in MIS.  This lease and sublease were originally approved by the remaining members of the Company board of directors, including Mr. David Brenman’s father and his brother-in-law.




On January 1, 1010, the Company moved its offices to 4600 South Ulster Street, Suite 800, Denver, CO 80237.  This office is leased by MIS, and the Company subleases office space from MIS on a month-to-month basis.  The Company currently pays approximately $2,300 per month under this arrangement.





(b)           Director Independence





None of the members of the Company’s board are "independent" as defined by Section 803A of the NYSE Amex Company guide.  The board considers all relevant facts and circumstances in its determination of independence of all members of the board (including any relationships set forth in this Form 10-K under the heading "Certain Related Person Transactions").  As disclosed above, the entire board performs the role of the audit committee and the compensation committee; therefore, none of the persons performing the functions of those committees are independent.






30







Item 14.      Principal Accountant Fees and Services.





(a)            Audit Fees.





Our principal accountant, Causey, Demgen & Moore, Inc., billed us aggregate fees in the amount of approximately $13,150for the fiscal year ended March 31, 2011 and approximately $14,300 for the fiscal year ended March 31, 2010.  These amounts were billed for professional services that Causey, Demgen & Moore, Inc. provided for the audit of our annual financial statements, review of the financial statements included in our report on Form 10-Q, and other services typically provided by an accountant in connection with statutory and regulatory filings or engagements for those fiscal years.





(b)           Audit-Related Fees.





Causey, Demgen & Moore, Inc. billed us aggregate fees in the amount of $-0- for the fiscal year ended March 31, 2011 and $-0- for the fiscal year ended March 31, 2010, for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements.





(c)           Tax Fees





Causey, Demgen & Moore, Inc. billed us aggregate fees in the amount of $815 for the fiscal year ended March 31, 2011 and approximately $825 for the fiscal year ended March 31, 2010, for tax compliance, tax advice, and tax planning.





(d)           All Other Fees





Causey, Demgen & Moore, Inc. billed us aggregate fees in the amount of $-0- for the fiscal years ended March 31, 2011 and 2010, for other fees.




(e)           Audit Committee’s Pre-Approval Practice





Section 10A(i) of the Securities Exchange Act of 1934 prohibits our auditors from performing audit services for us as well as any services not considered to be “audit services” unless such services are pre-approved by the audit committee of the Board of Directors (or the Board of Directors as a whole if there is no audit committee appointed), or unless the services meet certain de minimis standards.  Since the Company has no audit committee, the Board of Directors pre-approved the audit services and tax services that Causey, Demgen & Moore, Inc. performed for the Company during the fiscal years ended March 31, 2010 and 2011, and has pre-approved that firm’s continuation of those services.





The percentage of the fees for audit, audit-related, tax and other services were as set forth in the following table:





Percentage of total fees paid to Causey, Demgen & Moore, Inc.Fiscal Year 2010
Fiscal Year 2011Audit fees
95%
95%Audit-related fees
0%
0%Tax fees
5%
5%All other fees
0%
0%







31








PART IV





Item 15.                      Exhibits and Financial Statement Schedules.





(a)           Exhibits


Number
Description3.1
Amended and Restated Articles of Incorporation.  Incorporated by reference from the Form 8-K dated March 30, 2009, filed April 2, 2009.3.2
Amended and Restated Bylaws.   Incorporated by reference from Form 10-Q dated September 30, 2010, filed November 18, 2010.10.1
Employment Agreement with David W. Brenman.  Incorporated by reference from the Form 10-KSB for the year ended March 31, 2006, filed June 29, 2006.10.2
2009 Equity Incentive Plan.  Incorporated by reference from Form 10-Q dated September 30, 2009, filed November 20, 2009.31*
Certification pursuant to Rule 13a-14(a).32*
Certification pursuant to 18 U.S.C. §1350.





32


SIGNATURES





In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





Date:   June 24, 2011


GENESIS SOLAR CORPORATIONBy:  /s/ David W. BrenmanDavid W. Brenman, President





In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the date indicated.




Date:   June 24, 2011By: /s/ David W. BrenmanDavid W. Brenman, President, PrincipalExecutive Officer, Principal AccountingOfficer, Principal Financial Officer andDirectorDate:   June 24, 2011By: /s/ Robert A. MelnickRobert A. Melnick, Director





33




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 The Board of Directors and Shareholders
 Genesis Solar Corporation
 
 We have audited the accompanying balance sheets of Genesis Solar Corporation  (a development stage company) as of March 31, 2010 and 2011, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended and for the period from inception of the development stage (October 1, 2008) through March 31, 2011. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based upon our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Genesis Solar Corporation as of March 31, 2010 and 2011, and the results of its operations and its cash flows for the years then ended and the period from inception of the development stage (October 1, 2008) through March 31, 2011, in conformity with U.S. generally accepted accounting principles.
 
 The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As discussed in Note 1 to the financial statements, the company has incurred significant losses from inception to date and does not have sufficient funds on hand to continue to fund operations without a capital infusion. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
    Denver, Colorado
/s/ CAUSEY DEMGEN & MOORE INC.June 24, 2011
  
 
 F-1




GENESIS SOLAR CORPORATION


(formerly Cogenco International, Inc.)


(A Development Stage Company)


BALANCE SHEET


March 31, 2010 and 2011





ASSETS2010


2011Current assets:Cash ($954 in interest bearing accounts)

$
9,362


$
2,147Note receivable - related party - current portion (Note 4)


95,599



-Interest receivable - related party (Note 4)


1,441



-Prepaid expense


15,770



-Total current assets


122,172



2,147Computer equipment, at cost, net of accumulateddepreciation of $3,496 (2010) and $3,500 (2011)


4



-Total assets

$
122,176


$
2,147LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)Current liabilities:Accounts payable

$
5,655


$
5,209Accounts payable - related party


31,952



26,460Officer payable (Note 4)


40,000



40,000Accrued salary - officer (Note 4)


241,750



241,750Accrued interest - officer (Note 4)


1,019



3,019Total current liabilities


320,376



316,438Commitments (Note 5)Preferred stock, $.01 par value; 100,000,000 sharesauthorized, no shares issued and outstanding


-



-Common stock, $.01 par value; 500,000,000 sharesauthorized, 2,963,000 shares issued and outstanding


29,630



29,630Additional paid-in capital


6,150,558



6,150,558Accumulated deficit (including $358,996 deficitaccumulated during the development stage at March 31, 2011) (Note 1)


(6,378,388
)


(6,494,479
)Total stockholders' equity (deficit)


(198,200
)


(314,291
)Total liabilities and stockholders' equity (deficit)

$
122,176


$
2,147



















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 STATEMENT OF OPERATIONS
 For the Years Ended M arch 31, 2010 and 2011 and Cumulative Amounts
 from Inception of the Development Stage (October 1, 2008) Through March 31, 2011


Cumulativeamounts from2010


2011


InceptionCosts and expensesLegal fees

$
53,849


$
42,256


$
106,500Consulting and travel expenses -related party


30,116



7,123



39,680General and administration


92,394



39,368



148,377Rent and storage expenses


33,045



27,511



92,656Depreciation


783



4



1,178Total costs and expenses


210,187



116,262



388,391Other income (expense)Rental income (Note 5)


-



-



16,450Interest income


7,843



2,171



15,964Interest expense


(1,019
)


(2,000
)


(3,019
)Total other income (expense)


6,824



171



29,395Net loss (Note 3)

$
(203,363
)

$
(116,091
)

$
(358,996
)Basic and diluted loss per common share

$
(0.11
)

$
(0.04
)

$
(0.16
)Weighted average number of commonshares outstanding


1,863,384



2,963,000



2,178,708




















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
 For the Years Ended March 31, 2010 and 2011 and from Inception
 of the Development Stage (October 1, 2008) Through March 31, 2011





Additional





TotalCommon stock


paid-in


Accumulated


stockholders'Shares


Amount


capital


deficit


equity (deficit)Balance at March 31, 2008

1,233,000


$
12,330


$
6,150,558


$
(6,080,899
)

$
81,989Net loss for the period ended September 30, 2008

-



-



-



(54,584
)


(54,584
)Balance at September 30, 2008

1,233,000



12,330



6,150,558



(6,135,483
)


27,405Net loss for the period ended March 31, 2009

-



-



-



(39,542
)


(39,542
)Balance at March 31, 2009

1,233,000



12,330



6,150,558



(6,175,025
)


(12,137
)Sale of common stock to related parties for

1,730,000



17,300



-



-



17,300cash ($.01 per share) November 18, 2009Net loss for the period ended March 31, 2010

-



-



-



(203,363
)


(203,363
)Balance at March 31, 2010

2,963,000



29,630



6,150,558



(6,378,388
)


(198,200
)Net loss for the period ended March 31, 2011

-



-



-



(116,091
)


(116,091
)Balance at March 31, 2011

2,963,000


$
29,630


$
6,150,558


$
(6,494,479
)

$
(314,291
)





















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 STATEMENT OF CASH FLOWS
 For the Years Ended March 31, 2010 and 2011 and Cumulative Amounts
 from Inception of the Development Stage (October 1, 2008) Through March 31, 2011




Cumulativeamounts from2010


2011


InceptionCash flows from operating activities:Net loss

$
(203,363
)

$
(116,091
)

$
(358,996
)Adjustment to reconcile net loss to netcash used in operating activities:Depreciation expense


783



4



1,178Change in interest receivable and prepaid expense


(3,701
)


17,211



19,514Change in accounts payable and accrued expenses


33,107



(3,938
)


21,445Net cash used in operations


(173,174
)


(102,814
)


(316,859
)Cash flows from investing activities:Receipts on note receivable


90,788



95,599



229,784Net cash provided by investing activities


90,788



95,599



229,784Cash flows from financing activities:Proceeds from sale of stock


17,300



-



17,300Proceeds from officer loan


40,000



-



40,000Net cash provided by financing activities


57,300



-



57,300Net decrease in cash


(25,086
)


(7,215
)


(29,775
)Cash and cash equivalents at beginning of period


34,448



9,362



31,922Cash and cash equivalents at end of period

$
9,362


$
2,147


$
2,147


















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS


March 31, 2010 and 2011






1.             Significant accounting policies




Organization:




Genesis Solar Corporation, formerly known as Cogenco International, Inc. (the “Company”) was incorporated under the laws of the State of Colorado on June 27, 1983, for the purpose of engaging in the cogeneration business (the simultaneous production of power, either mechanical or electrical, and useful thermal energy, such as steam, so that the waste heat which is a by-product of one process becomes the energy source for the other).  The Company commenced active business operations after it completed its initial public offering of securities in February 1985, pursuant to which the Company realized total net proceeds of approximately $1,000,000.  The Company eventually depleted its financial resources and was not able to secure additional capital to continue active business operations.  The Company ceased active business operations in early 1988.  The Company has been seeking potential business opportunities since that time, has maintained itself as a validly existing Colorado corporation, and has continued to make filings under Section 15(d) of the Securities Exchange Act of 1934.




Effective December 7, 2009 the Company changed its name from Cogenco International, Inc. to Genesis Solar Corporation when the Company’s Amended and Restated Articles of Incorporation became effective under Colorado law.




Except for a series of private equity financings in 2005, 2006, and 2007 totaling approximately $4.7 million, and certain activities with DMI BioSciences, Inc. (“DMI”), and the potential transaction with Genesis Energy Investment Plc (“GEI Plc”) the Company has not engaged in active business operations for more than the past five years.  The Company has not received any revenues from operations for more than the past ten years.  Effective October 1, 2008, the Company decided to begin a search for a new business opportunity inasmuch as it determined that it was no longer pursuing any business opportunities or transactions with DMI. The Company therefore entered a new development stage as more fully defined in the guidance in Section 915 of the FASB Accounting Standards CodificationTM.




On August 11, 2009, Genesis Solar entered into an agreement to acquire three subsidiaries (collectively the “Solar Subsidiaries”) of GEI Plc, which was then an affiliate of Genesis Solar’s principal shareholder.   This agreement was amended twice, and then in May 2010 the parties entered into an Amended and Restated Stock Purchase Agreement with respect to the Company’s potential acquisition of the Solar Subsidiaries.  Later in May 2010, the parties conducted an initial closing of the transaction into escrow.   Effective August 3, 2010, the Company entered into various agreements further amending the terms of the transaction, pursuant to which the Solar Subsidiaries were transferred to an affiliate of the Company, with the expectation that the Company may be able to complete the acquisition of one of the Solar Subsidiaries and certain intellectual property from that affiliate by December 31, 2010.  Due both to a lack of funding and the failure of the other parties to the arrangement to complete their respective obligations, the Company did not complete the acquisition by that date and theCompany’s obligations and right to do so expired.  As described below, although Genesis Solar has not foreclosed the possibility of attempting to acquire one of the Solar Subsidiaries and related intellectual property, there is not currently a formal agreement between the parties setting forth the terms by which the Genesis Solar would do so.













GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2010 and 2011




1.             Significant accounting policies (continued)





Basis of presentation:





The financial statements have been prepared on a going concern basis which contemplates the realization of assets and liquidation of liabilities in the ordinary course of business.  As shown in the accompanying financial statements, the Company has incurred significant losses from inception to date and does not have sufficient funds on hand to continue to fund operations.  As a development stage company, the Company continues to rely on infusions of equity capital to fund operations.  As a result, substantial doubt exists about the Company’s ability to continue to find future operations using its existing resources.  The Company continues to seek equity investments of which there can be no assurance.




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 disclosure 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.




Fair value accounting:




The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement:





Level 1:  Quoted prices in active markets for identical assets or liabilities;


Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or


Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.





A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2010 and 2011






1.             Significant accounting policies (continued)




The carrying amounts of cash, cash equivalents, notes receivable, prepaid and accrued expenses, accounts payable, and note payable – officer are assumed to approximate fair value because of the short maturities of those instruments.




Stock based compensation:




The Company records stock based compensation based on the estimated fair value of the awards on the date of grant. Forfeitures of awards are estimated based on the Company’s experience, and recognizes compensation only for those awards expected to vest. Compensation expense is amortized over the estimated service period, which is the shorter of the period required for the award to vest or the derived service period implied by special accelerated vesting provisions, when they might exist as a feature of the award granted.




Loss per share:




Net loss per common share is based on the weighted average number of shares outstanding during each period.




Income taxes:




The Company accounts for income taxes using a liability approach under which deferred income taxes are provided based upon enacted tax laws and rates applicable to the periods in which the taxes become payable.  The Company has adopted FIN No. 48 “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109” revised as set forth in Section 740 of the FASB Accounting Standards Codification.




After evaluating the tax positions taken, none are considered to be uncertain; therefore, no amounts have been recognized as of March 31, 2010 and 2011. Interest and penalties, if any, associated with tax positions are recorded in the period assessed as income tax expense. No interest or penalties have been assessed as of March 31, 2010 or 2011. Tax years that remain subject to examination include 2008 through the current period for Federal returns and 2006 through the current period for the state returns.




Cash flows:




For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.


















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2010 and 2011


1.             Significant accounting policies (continued)




Concentrations of credit risk:




Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality financial institutions, which deposits are insured up to $250,000 per institution by the Federal Deposit Insurance Corporation (FDIC). At various times during the year, the balance at one financial institution may exceed FDIC limits.




Computer equipment:




Computer equipment is stated at cost. Depreciation is provided by the Company on straight-line and accelerated methods over estimated useful lives of three to five years.




Recently issued accounting pronouncements:




In December 2010, the Financial Accounting Standards Board (“FASB”) issued an update to FASB Accounting Standards Codification (“ASC”) Topic 805, Business Combinations: Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in the update specify that if a public entity presents comparative financial statement, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The update also expands supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in reported pro forma revenue and earnings. These provisions are effective prospectively for business combinations for with the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company will adopt this update on April 1, 2011 and does not believe this will have a significant impact on the financial statements.
































GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2010 and 2011




2.             Stockholders’ equity




Stock issuances:




The Company did not issue any shares of its common stock during the year ended March 31, 2011.




On November 18, 2009 the Company issued 1,730,000 shares of common stock to eight individual investors (including our President Mr. Brenman, the other member of our Board of Directors, the principals of GCM Ltd, the chairman of GEI Plc, and certain other parties) pursuant to a private placement transaction.  The Company received net proceeds of $17,300 from this transaction.





On November 18, 2009 the Company’s board of directors adopted and approved the 2009 Equity Incentive Plan and reserved 1,500,000 shares for issuance under the plan.  To date, no options have been granted, or shares issued, under the plan.




Stock cancellation:




The Company entered into a stock purchase agreement with Genesis Biotech to sell 1,423,256 shares of DMI common stock to Genesis Biotech in consideration for Genesis Biotech surrendering 1,423,256 shares of the Company’s common stock.  These shares of the Company’s common stock have been received from Genesis Biotech and cancelled.




Agreements to issue common stock:




On April 28, 2009, as amended twice in June 2009, the Company entered into a Share Purchase Agreement (the “SPA”) with a single European investor (which was not otherwise affiliated with the Company) to invest not less than $250,000 by June 30, 2009 and the balance of the anticipated $2.7 million investment by not later than July 31, 2009.  The shares of the Company’s common stock were to be issued to the European investor at $5.00 per share.  The Company did not receive any funds from the European investor as contemplated in the SPA and no shares of the Company’s common stock were issued pursuant to the SPA. On October 22, 2009, the Company’s Board of Directors affirmatively terminated the SPA and notified the investor of its termination.





On March 29, 2010 the Company entered into a Share Purchase Agreement in the form of a private placement agreement (the “PPA”) with Vital Source, S.A.  The Company expected to issue 3,500,000 shares of Company common stock at $10.00 per share pursuant to the PPA. Vital Source was to purchase these shares by September 30, 2010. However, the Company never received any funding from Vital Source.

















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2010 and 2011


3.            Income taxes




No provision for income taxes is required for the years ended March 31, 2010 and 2011 or the period from inception of the development stage (October 1, 2008) through March 31, 2011 because the Company has incurred net operating losses for the periods. The net operating losses generated may be carried forward to offset future taxable income. The amount of carryforwards from 1993 and prior years that may be used in the future will be limited pursuant to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended. The 1993 and prior aggregate net operating loss carryforward for Federal income tax reporting purposes is limited to approximately $236,000, of which only $11,800 may be used in any one year.  The 2007 and prior aggregate net operating loss carryforward for Federal income tax reporting purposes is limited to approximately $71,000 in any one year.  Furthermore, future acquisition by the company could further limit utilization of net operating loss carryforwards.  If not used to offset future taxable income, the carryforwards will expire as follows:




2011

$
12,0002012


9,0002013


14,0002019


8,0002020


14,0002021


12,0002022


16,0002023


17,0002024


58,0002025


184,0002026


151,0002027


103,0002028


94,0002029


200,0002030


114,000$
1,006,000




















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2010 and 2011
 3.            Income taxes (continued):




As of March 31, 2010 and 2011, total deferred tax assets and valuation allowance are as follows:






2010



2011Deferred tax assets resulting from:Loss carryforward

$
346,900



375,400Future deduction for research anddevelopment and accrued officer salary and interest


90,600



91,500Valuation allowance


(437,500
)


(466,900
)$
-


$
-







A 100% valuation allowance has been established against the deferred tax asset as utilization of the loss carryforwards cannot be reasonably assured.  Due to the sale of the DMI stock to a related party during March 2008, the future deduction for research and development costs will not be deductible resulting in a reduction of deferred tax assets and the corresponding valuation allowance of approximately $1,212,000.




4.             Related party transactions




a. David Brenman Employment Agreement




In November 2004 the Company’s Board of Directors approved an employment agreement with its president, David W. Brenman.  The material terms of the employment agreement are as follows:




·
Annual salary shall be $150,000;


·
Employment is for a 5 year term, and then automatically continuing for additional one year terms unless either party provides written notice of its intent to terminate the agreement;


·
The employee is subject to Confidentiality/non-competition/protection of trade secrets/non-solicitation provisions;


·
The employment agreement provides for premature termination in certain circumstances; and


·
The employee has certain rights in the event of a change of control of the Company including a two year extension of his employment term and a requirement that his full salary (through the term of the agreement) be paid to him within 30 days of such change of control.  Change of control can also constitute a basis on which the employee can terminate the agreement prematurely.

















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2010 and 2011




4.      Related party transactions (continued)





The Employment Agreement commenced September 30, 2005 when the Company paid DMI pursuant to a co-development agreement.  Mr. Brenman agreed to suspend without interest the accrual of his salary effective as of March 31, 2008.  As of March 31, 2008 the total accrued amount owed to Mr. Brenman was $241,750, and as of March 31, 2010 and subsequently, this continues to be the amount owed.  The Company’s Board of Directors may later agree to recommence accruing or paying Mr. Brenman’s salary at a future time if deemed appropriate.





b.      Affiliate Loan





During the quarter ended September 30, 2009, Mr. Brenman advanced the Company $40,000 to provide the Company additional liquidity to pay its obligations pursuant to the terms of a promissory note issued by the Company (the “Note”). The Note is a demand note and accrues interest at 5%. Principal and accrued interest is due in full upon demand by Mr. Brenman.





c.      Office Lease




Since October 2005, the Company has been sharing office lease expenses with Micro-Imaging Solutions, LLC (“MIS”), a company affiliated with Mr. Brenman.  See the description below in Note 5, “Operating Lease” for more information about this transaction.




d.      DMI Stock Sale and Genesis Capital Management Limited Promissory Note




On March 7, 2008 Genesis Solar sold its minority ownership of DMI to Genesis Biotechnology Fund (“Genesis Biotech”) and Genesis Capital Management Limited (“GCM Ltd”).   Genesis Biotech and GCM Ltd. are affiliated with Genesis Investment Funds Limited, which through its affiliated entities was, and currently is, the majority shareholder of Genesis Solar (currently owning greater than 50% of Genesis Solar’s outstanding common stock).





The transaction occurred as follows:





§
Genesis Solar sold 1,423,256 shares of DMI to Genesis Biotech in consideration for Genesis Biotech surrendering 1,423,256 shares of Genesis Solar common stock; and





§
Genesis Solar sold 250,000 shares of DMI to GCM Ltd. in consideration for a promissory note in the face amount of $250,000 (the “CGM Note”).  The CGM Note carried 6% interest and obligated GCM Ltd. to pay Genesis $25,000 per quarter.  The first payment was made on June 26, 2008, and the final payment was made on or about December 20, 2010.  Payments totaled $274,211.






















GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)
 NOTES TO FINANCIAL STATEMENTS
 March 31, 2010 and 2011


4.     Related party transactions (continued)





Payments under the CGM Note were the only outside source of liquidity for Genesis Solar, and Genesis Solar used the quarterly payments to help satisfy its basic obligations.  Now that the CGM Note has been paid in full in the near future Genesis Solar will have to identify and obtain other sources of funding to pay its routine general and administrative obligations.





e.       Potential Acquisition of Genesis Solar Espana, S.L.





On May 12, 2010 the Company entered into an Amended and Restated Stock Purchase Agreement (the “Restated SPA”) with GEI Plc (then an affiliate of GCM Ltd) regarding the Company’s potential acquisition of the “Solar Subsidiaries” (being Genesis Solar Espana, S.L. (“GSE”), Genesis Solar Singapore Pte. Ltd. (“GSS”), and Genesis Solar Hungary Kft (“GSH”)).  This agreement amended and restated the agreement the parties initially entered into on August 11, 2009 and then amended twice subsequently (on November 24, 2009 and January 19, 2010).  The parties completed the initial closing into escrow on May 25, 2010 at which time the Company deposited share certificates with a third party escrow agent (the “Escrow Agent”) representing 14,146,093 shares of the Company’s common stock, and certain other certificates and documents.  The shares deposited were allocated for the purchase price of GSE, GSS, GSH, and certain intellectual property owned by GEI Plc.





In July 2010 the Company assigned its rights under the Restated SPA to GCM Ltd, and on or about August 3, 2010, GCM Ltd exercised its rights to acquire the Solar Subsidiaries and certain know-how from GEI Plc.   As a part of that that transaction, the Company indicated that it was not interested in acquiring GSS or GSH, and as a result 50,000 shares of Company common stock were returned to the Company for cancellation.  GCM Ltd. exercised its rights under the Restated SPA to acquire the Solar Subsidiaries and Know-How on or about August 3, 2010.  Genesis Solar retained rights to acquire GSE and the know-how from GCM Ltd.  Pursuant to the terms of a new escrow agreement the Escrow Agent continued to hold certificates representing 14,096,093 shares of Company common stock (the “Shares”) in escrow, which the parties agreed would not be released from escrow until Gensis Solar’s notification following the satisfaction or waiver of various conditions precedent (the “Release Conditions”).   The parties had agreed that if the Release Conditions were not satisfied or waived by December 31, 2010 the Escrow Agent would return the Shares to the Company.





In large part because the Company did not have the working capital necessary to engage in significant due diligence with respect to GSE and certain “Know-How”, owned by GSE and the other parties did not enter into various other agreements necessary to satisfy the Release Conditions, Genesis Solar’s rights to acquire GSE and the Know-How expired on January 1, 2011 when the escrow agreement terminated.





Genesis Solar requested the Escrow Agent to return to it the 14,096,093 shares of Genesis Solar common stock that the Escrow Agent held.  Those shares were returned to Genesis Solar in February 2011 and submitted to the transfer agent for cancellation.
























GENESIS SOLAR CORPORATION
 (formerly Cogenco International, Inc.)
 (A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS


March 31, 2010 and 2011










5.   Operating lease




On January 1, 2010, the Company moved its offices to 4600 South Ulster Street, Suite 800, Denver, CO  80237.  The office is leased by Micro-Imaging Solutions, LLC (“MIS”), and the Company subleases office space from MIS on a month-to-month basis.  The Company currently pays approximately $2,292 per month under this arrangement.  An affiliate of David Brenman has a significant equity interest in MIS and Mr. Brenman is a manager of MIS.  Total rent expense amounted to $33,045 and $27,511 for the years ended March 31, 2010 and 2011 respectively.




6.   Subsequent events




In April 2011, David Brenman advanced the Company $10,000.




On or about June 23, 2011 the Company issued a promissory note to a third party in the face amount of $22,500 for the payment of services rendered to the Company.  The note bears interest at 5% per annum and is due: (i) on or before May 31, 2013; or (ii) within 25 days of the earlier of a liquidity event for a loan or stock sale by the Company greater than $500,000.