SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                                   (Mark One)
                   [X] Annual Report Pursuant to Section 13 or
                  15(d) of the Securities Exchange Act of 1934

            [ ] Transitional Report Under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                   For the fiscal year ended December 31, 1998

                           Commission File No. 0-25562

                          GENESIS COMPANIES GROUP, INC.
                          -----------------------------
                 (Name of small business issuer in its charter)

            Delaware                                      72-1175963
(State or other jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                         Identification Number)

                                830 S. Kline Way
                            Lakewood, Colorado 80226
                                 (303) 985-3972
        (Address, including zip code and telephone number, including area
                    code, of registrant's executive offices)

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

               Securities registered under to Section 12(g) of the
                                 Exchange Act:

                                  Common Stock
                                (Title of class)

Check  whether the issuer (1) 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 Company was  required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.
                                    Yes X  No
                                       ---    ---

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will 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-KSB or any  amendment to
this Form 10-KSB.

Issuer's revenues for its most recent fiscal year: $ -0-

                          (Continued on Following Page)


<PAGE>



State the  aggregate  market value of the voting  stock held by  non-affiliates,
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days: As of April 26, 1998: $0.

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the  latest  practicable  date:  As of April 26,  1998 there were
4,500,000 shares of the Company's common stock issued and outstanding.

Documents Incorporated by Reference: None

                 This Form 10-KSB consists of Twenty-Five Pages.
                  Exhibit Index is Located at Page Twenty Four.

                                        2

<PAGE>



                                TABLE OF CONTENTS

                            FORM 10-KSB ANNUAL REPORT

                          GENESIS COMPANIES GROUP, INC.

                                                             PAGE

Facing Page
Index
PART I
Item 1.    Description of Business.....................         4
Item 2.    Description of Property.....................         5
Item 3.    Legal Proceedings...........................         5
Item 4.    Submission of Matters to a Vote of
               Security Holders........................         5

PART II
Item 5.    Market for the Registrant's Common Equity
               and Related Stockholder Matters.........         6
Item 6.    Management's Discussion and Analysis of
               Financial Condition and Results of
               Operations..............................         6
Item 7     Financial Statements........................         8
Item 8.    Changes in and Disagreements on Accounting
               and Financial Disclosure................        17


PART III
Item 9.    Directors, Executive Officers, Promoters
               and Control Persons, Compliance with
               Section 16(a) of the Exchange Act.......        17
Item 10.   Executive Compensation......................        19
Item 11.   Security Ownership of Certain Beneficial
               Owners and Management...................        20
Item 12.   Certain Relationships and Related
               Transactions............................        21

PART IV
Item 13.   Exhibits and Reports of Form 8-K............        22



SIGNATURES.............................................        23



                                        3

<PAGE>



                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

         Genesis  Companies  Group,  Inc. (the "Company" or  "Registrant"),  was
incorporated  under the laws of the State of Delaware on December 22, 1988,  for
the purpose of engaging in any lawful activity.  On or about March 29, 1990, the
Company  filed a  registration  statement on Form S-18 with the  Securities  and
Exchange  Commission,  wherein the Company  attempted to register  20,000 Units,
each Unit  consisting of 100 shares of the Company's  Common Stock and 100 Class
A,  Class B and  Class C  Common  Stock  Purchase  Warrants.  This  registration
statement  was  subsequently  voluntarily  abandoned  by the  Company  prior  to
effectiveness due to adverse market conditions. Other than filing and abandoning
of the aforesaid registration  statement,  the only activities undertaken by the
Company  since its  inception  has been the issuing of  4,500,000  shares of the
Company's common stock to its original  shareholders,  which stock was issued in
exchange for aggregate cash  consideration  of $13,500  (average price of $0.003
per  share) and which  shares are  presently  held by 8  persons.  As such,  the
Company can be defined as a "shell" company,  who's sole purpose at this time is
to locate and consummate a merger or acquisition with a private entity.

         The proposed business activities  described herein classify the Company
as a "blank  check"  company.  Many  states  have  enacted  statutes,  rules and
regulations  limiting the sale of securities of "blank check" companies in their
respective jurisdictions. Management does not intend to undertake any efforts to
cause a market to develop  in the  Company's  securities  until such time as the
Company  has  successfully  implemented  its  business  plan  described  herein.
Relevant  thereto,  each shareholder of the Company has executed and delivered a
"lock-up" letter agreement,  affirming that they shall not sell their respective
shares  of the  Company's  common  stock  until  such  time as the  Company  has
successfully  consummated a merger or  acquisition  and the Company is no longer
classified as a "blank check" company.  In order to provide  further  assurances
that no  trading  will  occur in the  Company's  securities  until a  merger  or
acquisition  has been  consummated,  each  shareholder has agreed to place their
respective  stock  certificate  with the Company's  legal counsel,  who will not
release  these  respective  certificates  until such time as legal  counsel  has
confirmed  that a  merger  or  acquisition  has been  successfully  consummated.
However,  while management believes that the procedures  established to preclude
any sale of the Company's securities prior to closing of a merger or acquisition
will be sufficient,  there can be no assurances that the procedures  established
relevant herein will unequivocally limit any shareholder's ability to sell their
respective securities before such closing.



                                        4

<PAGE>



         Management  of  the  Company  is  of  the  opinion  that  the  business
objectives of the Company remain viable,  despite the Company's failure to merge
with or acquire  another  business  entity to date.  Management  of the  Company
continues to review potential merger candidates and acquisition opportunities.

Employees

         The Company has no full time  employees.  The  Company's  officers  and
directors  have agreed to allocate a portion of their time to the  activities of
the Company, without compensation.  These officers and directors anticipate that
the  business  plan of the  Company  can be  implemented  by their  devoting  an
aggregate of  approximately  20 hours per month to the  business  affairs of the
Company and,  consequently,  conflicts of interest may arise with respect to the
limited time  commitment by such  officers.  See "Part III,  Item 9,  Directors,
Executive Officers, Promoters and Control Persons."

ITEM 2.  DESCRIPTION OF PROPERTY

         The Company has no  properties  and at this time has no  agreements  to
acquire any  properties.  The Company  intends to attempt to acquire assets or a
business in exchange for its  securities  which assets or business is determined
to be desirable for its objectives.

         The  Company's  principal  place of business is located at 830 S. Kline
Way, Lakewood, Colorado 80226, which offices are provided by Wm. Ernest Simmons,
an  officer,  director  and  shareholder  of the  Company,  on a rent free basis
pursuant to an oral  agreement.  Mr.  Simmons has advised the Company that he is
agreeable to maintain this situation until the Company successfully  consummates
an  acquisition  or merger.  It is  anticipated  that this  arrangement  will be
suitable for the needs of the Company for the foreseeable future.

ITEM 3.   LEGAL PROCEEDINGS

         There are no material legal  proceedings which are pending or have been
threatened against the Company of which management is aware.

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

         None

                                        5

<PAGE>



                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS

         (a) Market Information. There is presently no trading market for the 
common or preferred equity of the Company.

         (b) Holders. There are eight (8) holders of the Company's Common Stock.

         As of the date of this  report all  4,500,000  shares of the  Company's
Common  Stock  are  eligible  for sale  under  Rule 144  promulgated  under  the
Securities Act of 1933, as amended,  subject to certain limitations  included in
said Rule.  In general,  under Rule 144, a person (or persons  whose  shares are
aggregated),  who  has  satisfied  a one  year  holding  period,  under  certain
circumstances,  may sell within any three-month  period a number of shares which
does not exceed the greater of one percent of the then outstanding  Common Stock
or the average  weekly  trading  volume during the four calendar  weeks prior to
such sale.  Rule 144 also  permits,  under  certain  circumstances,  the sale of
shares without any quantity  limitation by a person who has satisfied a two-year
holding period and who is not, and has not been for the preceding  three months,
an affiliate of the Company.

         (c)  Dividends.

         (1) The Company has not paid any  dividends  on its Common  Stock.  The
Company  does not  foresee  that the  Company  will  have the  ability  to pay a
dividend on its Common Stock in the fiscal year ended December 31, 1998,  unless
the Company  successfully  consummates a merger or acquisition.  There can be no
assurances  that a dividend will be issued even if a merger or acquisition is so
consummated.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

         The  following  discussion  should  be read  in  conjunction  with  the
Company's  audited  financial  statements and notes thereto included herein.  In
connection  with, and because it desires to take advantage of, the "safe harbor"
provisions of the Private Securities  Litigation Reform Act of 1995, the Company
cautions readers regarding  certain forward looking  statements in the following
discussion  and elsewhere in this report and in any other  statement made by, or
on the  behalf  of the  Company,  whether  or not in  future  filings  with  the
Securities and Exchange  Commission.  Forward looking  statements are statements
not  based on  historical  information  and which  relate to future  operations,
strategies, financial results or other developments.  Forward looking statements
are necessarily based upon estimates and assumptions

                                        6

<PAGE>



that are inherently  subject to significant  business,  economic and competitive
uncertainties and contingencies,  many of which are beyond the Company's control
and many of which,  with respect to future  business  decisions,  are subject to
change.  These  uncertainties  and  contingencies  can affect actual results and
could cause  actual  results to differ  materially  from those  expressed in any
forward looking  statements  made by, or on behalf of, the Company.  The Company
disclaims any obligation to update forward looking statements.

         (a)  Plan of Operation.

         The  Company  intends to seek to acquire  assets or shares of an entity
actively  engaged in business  which  generates  revenues,  in exchange  for its
securities.  The  Company  has no  particular  acquisitions  in mind and has not
entered  into  any  negotiations  regarding  such  an  acquisition.  None of the
Company's  officers,  directors,  promoters  or  affiliates  have engaged in any
preliminary  contact or discussions with any representative of any other company
regarding the  possibility  of an  acquisition or merger between the Company and
such other company as of the date of this registration statement.

         The  Company's  Board of  Directors  intends to provide  the  Company's
shareholders  with  complete  disclosure  documentation  concerning  a potential
business  opportunity  and the  structure of the proposed  business  combination
prior to  consummation  of the same,  which  disclosure is intended to be in the
form of a proxy statement.  While such disclosure may include audited  financial
statements  of such a target  entity,  there is no  assurance  that such audited
financial  statements  will be available.  The Board of Directors does intend to
obtain  certain  assurances  of  value  of the  target  entity  assets  prior to
consummating  such a  transaction,  with  further  assurances  that  an  audited
statement  would  be  provided  within  sixty  days  after  closing  of  such  a
transaction.  Closing  documents  relative thereto will include  representations
that the value of the assets  conveyed to or otherwise so  transferred  will not
materially differ from the  representations  included in such closing documents,
or the transaction will be voidable.

         The Company has no full time  employees.  The  Company's  President and
Secretary-Treasurer  have  agreed to  allocate  a portion  of their  time to the
activities of the Company, without compensation.  These officers anticipate that
the  business  plan  of  the  Company  can  be  implemented  by  their  devoting
approximately  20 hours per month to the  business  affairs of the Company  and,
consequently,  conflicts  of interest may arise with respect to the limited time
commitment by such officers. See "Management Resumes."

         Because the Company  presently has nominal  overhead or other  material
financial obligations, management of the Company believes

                                        7

<PAGE>



that the Company's short term cash  requirements  can be satisfied by management
injecting  whatever  nominal  amounts of cash into the  Company  to cover  these
incidental expenses. There are no assurances whatsoever that any additional cash
will be made available to the Company through any means.

Year 2000 Disclosure

         Many existing  computer programs use only two digits to identify a year
in  the  date  field.   These  programs  were  designed  and  developed  without
considering the impact of the upcoming change in the century.  If not corrected,
many computer  applications  could fail or create erroneous results by or at the
Year 2000.  As a result,  many  companies  will be required to  undertake  major
projects  to address  the Year 2000  issue.  Because  the Company has no assets,
including any personal  property such as computers,  it is not anticipated  that
the  Company  will  incur any  negative  impact  as a result  of this  potential
problem.  However,  it is  possible  that  this  issue may have an impact on the
Company  after the Company  successfully  consummates  a merger or  acquisition.
Management intends to address this potential problem with any prospective merger
or acquisition candidate.  There can be no assurances that new management of the
Company  will be able to  avoid a  problem  in this  regard  after a  merger  or
acquisition is so consummated.

ITEM 7.  FINANCIAL STATEMENTS


                                        8

<PAGE>











                         GENESIS COMPANIES GROUP, INC.
                         (A Development Stage Company)


                             FINANCIAL STATEMENTS

                               December 31, 1998















                                        9

<PAGE>



                         Michael B. Johnson & Co, P.C.

                         (A Professional Corporation)
                         Certified Public Accountants
                       9175 East Kenyon Ave., Suite 100
                            Denver, Colorado 80237

Michael B. Johnson C.P.A.                            Telephone: (303) 796-0099
Member: A.I.C.P.A.                                         Fax: (303) 796-0137
Colorado Society of C.P.A.'s



Board of Directors
Genesis Companies Group, Inc.


We have examined the accompanying balance sheet of Genesis Companies Group, Inc.
(A Development Stage Company) as of December 31, 1998 and December 31, 1997, and
the related  statements of operations,  cash flows, and changes in stockholders'
equity for the period December 22, 1988 (inception),  through December 31, 1998,
and the  fiscal  years  ended  December  31,  1998  and  1997.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  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 statements presentation.
We believe that our audits provide a reasonable basis for our opinion.

As shown in the financial statements,  the company incurred a net loss of $6,059
for 1998 and had incurred substantial losses in the prior years. At December 31,
1998,  current  liabilities  exceed  current  assets by $22,857.  These  factors
indicate that the company has substantial doubt about the ability to continue as
a going  concern.  The  financial  statements  do not  include  any  adjustments
relating to the  recoverability  and  classification  of recorded assets, or the
amounts and  classification  of liabilities that might be necessary in the event
the company cannot continue in existence.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Genesis Companies Group, Inc.
at December 31, 1998 and December  31, 1997,  and the results of its  operations
and its cash  flows  for the  period  December  22,  1988  (inception),  through
December 31, 1998,  and the fiscal  years ended  December 31, 1998 and 1997,  in
conformity with generally accepted accounting principles.


s/Michael B. Johnson & Co., P.C.

Denver, Colorado
April 14, 1999




                                       10

<PAGE>

<TABLE>


                         GENESIS COMPANIES GROUP, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEET




<CAPTION>
                                                      December 31, December 31,
                                                          1998         1997
                                                       ---------    ---------
<S>                                                    <C>          <C>      
ASSETS:

Current Assets:
Cash                                                   $       -    $       -
                                                       ---------    ---------
Total Current Assets                                           -            -
                                                       ---------    ---------
TOTAL ASSETS                                           $       -    $       -
                                                       =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current Liabilities:
Accounts Payable                                       $   9,300    $   5,090
Short term Borrowing from Shareholders                    13,557       11,708
                                                       ---------    ---------
Total Current Liabilities                                 22,857       16,798
                                                       ---------    ---------

Stockholders' Equity:
Common stock, $.00001 par value, 100,000,000
 shares authorized, 4,500,000 shares issued and
 outstanding                                                  45           45
Preferred stock, $.00001 par value, 10,000,000
 shares authorized                                             -            -
Additional paid-in capital                                13,455       13,455
Deficit accumulated during the
 development stage                                       (36,357)     (30,298)
                                                       ---------    ---------
Total Stockholders' Equity                               (22,857)     (16,798)
                                                       ---------    ---------
TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                                $       -    $       -
                                                       =========    =========















  The accompanying notes are an integral part of these financial statements.

</TABLE>


                                       11

<PAGE>
<TABLE>



                         GENESIS COMPANIES GROUP, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                            STATEMENT OF OPERATIONS






<CAPTION>
                                For the        For the     December 22, 1988
                              Year Ended     Year Ended     (Inception) thru
                              December 31,   December 31,     December 31,
                                  1998          1997              1998
                              -----------    -----------      -----------
<S>                           <C>            <C>              <C>        
INCOME                        $         -    $         -      $         -


OPERATING EXPENSES:
Professional Fees                   5,970          6,290           25,346
Registration Fees                       0            250            3,490
Administrative Expenses                89          5,730            7,521
                              -----------    -----------      -----------
Total Operating Expenses            6,059         12,270           36,357
                              -----------    -----------      -----------
Net Loss from Operations      $    (6,059)   $   (12,270)     $   (36,357)
                              ===========    ===========      ===========
Weighted average number of
  shares outstanding            4,500,000      4,500,000        4,500,000

Net Loss Per Share            $     0.001    $     0.003      $     0.008
                              ===========    ===========      ===========

* Less than $0.01 per share

























  The accompanying notes are an integral part of these financial statements.

</TABLE>


                                       12

<PAGE>

<TABLE>


                         GENESIS COMPANIES GROUP, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                            STATEMENT OF CASH FLOWS
                                INDIRECT METHOD



<CAPTION>
                                 For the         For the     December 22, 1988
                               Year Ended      Year Ended     (Inception) thru
                               December 31,    December 31,      December 31,
                                   1998            1997              1998
                               -----------     -----------       -----------
<S>                            <C>             <C>              <C>          
Cash Flows From Operating
  Activities:
Net Loss Accumulated During
  the Development Stage        $    (6,059)    $   (12,270)     $    (36,357)

Increase (Decrease) in
  Accounts Payables                  4,204             568             9,300
Increase (Decrease) in
  Shareholder Note Payable           1,855          11,702            13,557
                               -----------     -----------      ------------
                                     6,059          12,270            22,857
                               -----------     -----------      ------------
Net Cash Provided by (Used In)
    Operating Activities                 -               -           (13,500)
                               -----------     -----------      ------------

Cash Flow From Financing
  Activities:
Issuance of Common Stock                 -               -            13,500
                               -----------     -----------      ------------
Net Cash Flows Provided by
  Financing Activities                   -               -            13,500
                               -----------     -----------      ------------

Increase (Decrease) in Cash              -               -                 -

Cash and Cash Equivalents,
    beginning of period                  -               -                 -
                               -----------     -----------      ------------

Cash and Cash Equivalents,
    end of period              $         -     $         -      $          -
                               ===========     ===========      ============















  The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       13

<PAGE>

<TABLE>


                         GENESIS COMPANIES GROUP, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                       STATEMENT OF STOCKHOLDERS' EQUITY
<CAPTION>
                                                           Deficit
                                                         Accumulated
                                             Additional   During the
                                     Common    Paid-In   Development
                            Shares    Stock    Capital      Stage      Totals
                          ---------  ------   --------   -----------  ---------
<S>                       <C>        <C>      <C>        <C>          <C>       

Balance at
  December 22, 1988               -  $    -   $      -   $         -  $       -

Issuance of common stock:
  April 14, 1989
   (for cash)               113,000       1        149             -        150
  May 12, 1989            1,315,000      13      3,987             -      4,000
  November 10, 1989       2,622,000      26      7,974             -      8,000
  December 5, 1989          450,000       5      1,345             -      1,350
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1989       4,500,000      45     13,455             -     13,500
W/O deferred
  offering costs                  -       -          -       (10,661)   (10,661)
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1990       4,500,000      45     13,455       (10,661)     2,839
Net loss for year ended
  December 31, 1991               -       -          -        (1,309)    (1,309)
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1991       4,500,000      45     13,455       (11,970)     1,530
Net loss for year ended
  December 31, 1992               -       -          -           (10)       (10)
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1992       4,500,000      45     13,455       (11,980)     1,520
Net loss for year ended
  December 31, 1993               -       -          -            (9)        (9)
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1993       4,500,000      45     13,455       (11,989)     1,511
Net loss for year ended
  December 31, 1994               -       -          -          (859)      (859)
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1994       4,500,000      45     13,455       (12,848)       652
Net loss for year ended
  December 31, 1995               -       -          -          (192)      (192)
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1995       4,500,000      45     13,455       (13,040)       460
Net loss for year ended
  December 31, 1996               -       -          -        (4,988)    (4,988)
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1996       4,500,000      45     13,455       (18,028)    (4,528)
Net loss for year ended
   December 31, 1997              -       -          -       (12,270)   (12,270)
                          ---------  ------   --------   -----------  ---------
Balance at
  December 31, 1997       4,500,000      45     13,455       (30,298)   (16,798)
Net loss for year ended
   December 31, 1998              -       -          -        (6,059)    (6,059)
                          ---------  ------   --------   -----------  ---------
Balance at
   December 31, 1998      4,500,000  $   45   $ 13,455   $   (36,357) $ (22,857)
                          =========  ======   ========   ===========  =========
  The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       14

<PAGE>



                         GENESIS COMPANIES GROUP, INC.
                         (A Development Stage Company)
                         Notes to Financial Statements
                               December 31, 1998

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
         --------------------------------------------
         Organization

         Genesis Companies Group, Inc. (the Company) was organized as a Delaware
         corporation on December 22, 1988.

         Basis of Presentation

         The Company is in the  development  stage and is  primarily  engaged in
         raising  capital.  On or about  March 29,  1990,  the  Company  filed a
         registration  statement on Form S-18 with the  Securities  and Exchange
         Commission,  wherein the company  attempted to register  20,000  Units,
         each Unit  consisting of 100 shares of the  Company's  Common Stock and
         100 Class A, Class B and Class C Common Stock  Purchase  Warrants.  The
         company prior to effectiveness  subsequently voluntarily abandoned this
         registration statement. Other than filing of the aforesaid registration
         statements,  the only  activities  undertaken  by the Company since its
         inception  has been the issuing of  4,500,000  shares of the  Company's
         Common  Stock to its original  shareholders,  which stock was issued in
         exchange for aggregate cash consideration of $13,500.  Each shareholder
         of the Company has executed and delivered a "lock-up" letter agreement,
         affirming  that they  shall  not sell  their  respective  shares of the
         Company's  Common Stock until such time as the Company has successfully
         consummated a merger or acquisition.  Also, each shareholder has agreed
         to place their  respective  stock  certificate with the Company's legal
         counsel who will not release these respective  certificates  until such
         time as legal counsel has confirmed  that a merger or  acquisition  has
         been successfully consummated.

         Basis of Accounting:

         The  accompanying  financials  statements  have  been  prepared  on the
         accrual  basis of  accounting in  accordance  with  generally  accepted
         accounting principles.

         The Company's fiscal year end is December 31.

         Estimates:

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and assumptions  that affect certain  reported amounts and disclosures.
         Accordingly, actual results could differ from those estimates.

     Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company considered all
         cash and other highly  liquid  investments  with initial  maturities of
         three months or less to be cash equivalents.

         Income Taxes:

         The Company has made no provision  for income taxes  because there have
         been no operations to date causing  income for financial  statements or
         tax  purposes.  The Company had net  operating  loss  carryforwards  of
         approximately  $18,000 for financial statement and tax purposes,  which
         begin to expire in 2003.

                                       15

<PAGE>



                         GENESIS COMPANIES GROUP, INC.
                         (A Development Stage Company)
                         Notes to Financial Statements
                               December 31, 1998


NOTE 2 - RELATED PARTY TRANSACTIONS:
         --------------------------

         Short term borrowing from shareholders

         The  Chairman  and other  executive  officers of the  Company  provided
         services and advanced  cash to the Company for  operations.  Certain of
         these  transactions  resulted in notes being issued to the Chairman and
         certain executive officers which were still outstanding at December 31,
         1998. Notes payable to officers are unsecured and bear interest at 8%.


NOTE 3 - GOING CONCERN:
         --------------

         The  company  incurred a net loss of $6,059  for 1998 and had  incurred
         substantial  losses in the prior years.  At December 31, 1998,  current
         liabilities  exceed current assets by $22,857.  These factors  indicate
         that the company has substantial doubt about its ability to continue in
         existence.  The  financial  statements  do not include any  adjustments
         relating to the  recoverability  and classification of recorded assets,
         or  the  amounts  and  classification  of  liabilities  that  might  be
         necessary in the event the company cannot continue in existence.



                                       16

<PAGE>




ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

         None

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS;  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

         Directors  are  elected  for  one-year  terms or until the next  annual
meeting  of  shareholders  and  until  their  successors  are duly  elected  and
qualified.  Officers  continue  in  office  at  the  pleasure  of the  Board  of
Directors.

         The Directors and Officers of the Company as of the date of this report
are as follows:

Name                               Age               Position
----                               ---               --------

Wm. Ernest Simmons                  60               President and Director

Harry G. Titcombe, Jr.              68               Secretary-Treasurer and
                                                     Director

         All  Directors  of the Company  will hold office  until the next annual
meeting  of  the  shareholders  and  until  successors  have  been  elected  and
qualified.  Officers of the Company  are elected by the Board of  Directors  and
hold office until their death or until they resign or are removed from office.

         There are no family  relationships  among the officers  and  directors.
There is no  arrangement  or  understanding  between  the Company (or any of its
directors or officers) and any other person pursuant to which such person was or
is to be selected as a director or officer.

         (b)  Resumes:

         Wm. Ernest  Simmons  currently is, and has been since  inception of the
Company in 1988,  the  President  and a Director of the Company.  He is also the
President,  a director and a controlling  shareholder  of Yaak River  Resources,
Inc., a public reporting company engaged in the mining business.  In addition to
his service to the Company,  Mr.  Simmons is also currently a consultant for the
ER-SHI-JU Company,  Ltd., Mongolia and the "Bornuur" Company, both of which have
common interests in a large agricultural project in north central Mongolia.  Mr.
Simmons is also a  consultant/operations  manager to Itec  Minerals,  a Canadian
firm employing advanced technology to purge mined sites and waste disposal areas
of their contaminants. From January 1995 through

                                       17

<PAGE>



May 1998, Mr. Simmons was  Director-General of the "Bumbat" Company Ltd., Zaamar
Sum,  Mongolia,  a  Mongolian-Canadian  joint venture mining operation where his
responsibilities  included  acquisitions  and  mobilization of all equipment and
supplies,  preparation and construction of mill sites and mining site operations
and other managerial  matters associated with the exploration and development of
hard rock gold mines.  From February 1991 through July 1994,  Mr.  Simmons was a
life and health insurance agent in Denver, Colorado with New York Life Insurance
Company. From 1978 to 1990, Mr. Simmons served as Manager of U.S. Operations for
Mining  Corporation,  Inc.,  of Lakewood,  Colorado.  From February 1987 through
December 1989 Mr.  Simmons was  president  and a director of Bluestone  Capital,
Inc.,  a publicly  held "blind  pool"  Colorado  corporation.  From March,  1986
through  July,  1994,  Mr.  Simmons was  president  and a director of Yaak River
Mines,  Ltd., a Colorado  corporation  also defined as a public "shell" company.
Mr. Simmons  received a Bachelor's of Science Degree in Business  Administration
from Regis  University,  Denver,  Colorado  in 1987 and  received  the Degree of
Mining Technologist from Haileybury School of Mines in 1973. Mr. Simmons devotes
approximately 20 hours per month to the business of the Company.

     Harry G.  Titcombe,  Jr. has been  Treasurer  and a director of the Company
since  November,  1989.  In January  1995,  Mr.  Titcombe was also  appointed as
Secretary of the Company.  Since 1984, Mr.  Titcombe has engaged in the practice
of law as a sole practitioner in Denver,  Colorado.  Prior to that, Mr. Titcombe
was a partner and  associate at the Denver law firm of Burnett,  Horan & Hilgers
and was a Deputy District  Attorney in the offices of the Denver County District
Attorney.  He is also an officer and director of Yaak River  Resources,  Inc., a
public reporting company engaged in the mining business. Mr. Titcombe received a
degree of L.L.B.  in 1960 from the  University  of Denver  College  of Law.  Mr.
Titcombe devotes only such time as necessary to the business of the Company.

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's officers,  directors and person who own more than 10% of the Company's
Common  Stock to file reports of  ownership  and changes in  ownership  with the
Securities and Exchange Commission. All of the aforesaid persons are required by
SEC  regulation  to furnish the Company  with copies of all Section  16(a) forms
they file. There were no changes in the securities holdings of any person during
the fiscal year ended  December 31, 1998,  as all issued and  outstanding  share
certificates  issued  by the  Company  are  presently  held in  escrow  with the
Company's legal counsel, until such time as the Company successfully consummates
a merger or acquisition.


                                       18

<PAGE>



ITEM 10.  EXECUTIVE COMPENSATION.

Remuneration

         The following table reflects all forms of compensation  for services to
the Company for the fiscal  years ended  December 31, 1997 and 1998 of the chief
executive officer of the Company.

<TABLE>
                           SUMMARY COMPENSATION TABLE


<CAPTION>
                                             Long Term Compensation
                                          ----------------------------

                   Annual Compensation          Awards         Payouts
                  ---------------------   -------------------- -------
                                                    Securities
                                 Other                Under-            All
Name                             Annual   Restricted   lying           Other
and                               Compen-     Stock   Options/  LTIP  Compen-
Principal         Salary  Bonus  sation     Award(s)    SARs   Payouts  sation
Position    Year  ($)(1)   ($)    ($)        ($)        (#)       ($)     ($)
----------  ----  ------  -----  ------    --------   -------  -------  ------
<S>         <C>   <C>     <C>    <C>       <C>        <C>      <C>      <C>
Wm. Ernest  1997  $    0  $   0  $    0    $      0         0  $     0  $    0
Simmons,
President &
Director    1998  $    0  $   0  $    0    $      0         0  $     0  $    0
-------------------------
<FN>
(1)      It is not  anticipated  that any executive  officer of the Company will
         receive  compensation  exceeding  $100,000  during 1999,  except in the
         event the Company successfully  consummates a business combination,  of
         which there is no assurance.
</FN>
</TABLE>

         The Company maintains a policy whereby the directors of the Company may
be  compensated  for  out of  pocket  expenses  incurred  by each of them in the
performance of their relevant duties. The Company did not reimburse any director
for such expenses during fiscal years 1997 or 1998.

         In  addition  to the cash  compensation  set forth  above,  the Company
reimburses each executive officer for expenses incurred on behalf of the Company
on an out-of-pocket basis. The Company cannot determine,  without undue expense,
the exact amount of such expense  reimbursement.  However,  the Company believes
that such  reimbursements  did not exceed,  in the aggregate,  $1,000 during the
fiscal year ended December 31, 1998.


                                       19

<PAGE>



Incentive Stock Option Plan

         The  Company  has  adopted  an  incentive  stock  option  plan  for key
employees,  including  officers  and  directors  (the  "Plan").  The Company has
reserved a maximum of 2,500,000  Common Shares to be issued upon the exercise of
options granted under the Plan. The Plan is intended to qualify as an "incentive
stock option plan" under  Section 422A of the Internal  Revenue Code of 1986, as
amended. Accordingly,  options will be granted under the Plan at exercise prices
at least  equal to the fair  market  value per share of the Common  Stock on the
respective dates of grant and will be subject to the limitations provided by the
Code. However, options may be granted to officers and/or directors or others who
own more than 10% of the outstanding Common Stock only at an option price which,
on the date  granted,  is at least 110% of the fair  market  value of the Common
Stock. With respect to options granted pursuant to Section 422A,  employees will
not recognize  taxable income upon either the grant or exercise of such options.
The Company will not be entitled to any  compensating  deduction with respect to
such  options  unless  disqualifying  dispositions,  as defined by such law, are
made. The Plan is administered  by the Board of Directors.  No options have been
granted  under the Plan as of the date of this  report  and no  options  will be
granted until such time as the Company has  successfully  consummated a business
combination.

         No other retirement, pension, profit sharing, stock option or insurance
programs  or other  similar  programs  have been  adopted by the Company for the
benefit of its employees.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

         (a) and (b) Security Ownership of Certain Beneficial Owners
and Management.

         The table below lists the beneficial  ownership of the Company's voting
securities  by each person  known by the Company to be the  beneficial  owner of
more than 5% of such securities, as well as by all directors and officers of the
issuer. Unless otherwise indicated,  the shareholders listed possess sole voting
and investment power with respect to the shares shown.

                    Name and            Amount and
                   Address of           Nature of
                   Beneficial           Beneficial     Percent of
Title of Class       Owner                Owner           Class   
--------------       -----                -----           -----   

Common          Wm. Ernest Simmons(1)     1,206,000       26.8%
                830 S. Kline Way
                Lakewood, CO 80226


                                       20

<PAGE>




                    Name and            Amount and
                   Address of           Nature of
                   Beneficial           Beneficial     Percent of
Title of Class       Owner                Owner           Class   
--------------       -----                -----           -----   

Common          Harry G. Titcombe, Jr.(1) 1,206,000       26.8%
                3003 E. 3rd Ave., #201
                Denver, CO 80206

Common          Susan K. Sunsvold         1,000,000       22.2%
                5121 S. Ironton Way
                Englewood, CO 80111

Common          Heather E. Nutting          315,000        7.0%
                9035 W. 5th Place
                Lakewood, CO 80226

Common          John D. Brasher, Jr.        283,500        6.3%
                3773 Cherry Creek No. Dr.
                Suite 615
                Denver, CO 80209

Common          All Officers &            2,412,000       53.6%
                Directors as a Group
                (2 persons)
-------------------
(1)  Officer and/or director of the Company.

         The balance of the  Company's  outstanding  Common Shares are held by 3
persons.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Wm. Ernest  Simmons,  the President and a director of the Company,  has
loaned the Company an aggregate of $13,557 to cover  general and  administrative
costs incurred by the Company. This loan is expected to be repaid on an interest
free basis when the Company successfully consummates a merger or acquisition, if
such funds are available.

     Mr.  Simmons also  provides the Company with its  principal  office  space,
which space is provided to the Company on rent free basis.

         There were no other related party  transactions  which occurred  during
the past two years  and  which are  required  to be  disclosed  pursuant  to the
requirements included under Item 404 of Regulation SB.


                                       21

<PAGE>



                                     PART IV

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)  Exhibits

         3.1* Certificate and Articles of Incorporation and Amendments thereto.

         3.2*  Bylaws

         4.1*  Copies of All Lock-up Agreements by the Company's
Shareholders

         EX-27 Financial Data Schedule

* Filed with the  Securities  and  Exchange  Commission  in the Exhibits to Form
10-SB, filed on February 15, 1995, and are incorporated by reference herein.

         (b)  Reports on Form 8-K

         The  Company  did not file any  reports  on Form  8-K  during  the last
calendar quarter of the fiscal year ended December 31, 1998.


                                       22

<PAGE>



                                   SIGNATURES

         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934,  the  Company  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized, on April 26, 1999.

                                        GENESIS COMPANIES GROUP, INC.
                                        (Registrant)


                                         By:/s/ Wm. Ernest Simmons     
                                           ----------------------------
                                            Wm. Ernest Simmons, President


                                         By:/s/ Harry G. Titcombe      
                                           ----------------------------
                                            Harry G. Titcombe, Jr.,
                                            Secretary-Treasurer


         In accordance  with the Exchange Act, this report has been signed below
by the  following  persons  on behalf of the  registrant  and in the  capacities
indicated on April 26, 1999.



/s/ Wm. Ernest Simmons        
------------------------------
Wm. Ernest Simmons,
President and Director


/s/ Harry G. Titcombe         
------------------------------
Harry G. Titcombe, Jr.,
Secretary-Treasurer and Director


                                       23

<PAGE>


                  GENESIS COMPANIES GROUP, INC.

          EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-KSB
           FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

EXHIBITS                                                 Page No.

  EX-27     Financial Data Schedule . . . . . . . . . .       25



                                       24