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

                                   FORM 10-KSB

(Mark One)

|X| ANNUAL  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
1934.


                   For the fiscal year ended December 31, 2006

                        Commission File Number: 000-25562

                          GENESIS COMPANIES GROUP, INC.
                          -----------------------------
        (Exact name of small business issuer as specified in its chapter)

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

               255 S. Leland Norton Way, San Bernardino, CA 92408
                    (Address of principal executive offices)

                                  (303-741-5785
                           (Issuer's telephone number)

         SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:

                        Common Stock, $0.00001 Par Value
                                (Title of Class)

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

         Check whether the issuer(1)  filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. YES [ X ] NO


         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B 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. [ ]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act). YES [ X ] No [ ]

         State issuer's revenues for its most recent fiscal year:  $0

     As of the close of trading on April __, 2007, there were 15,242,000  common
     shares outstanding, 2,742,000 of which were held by non-affiliates.


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (check one): YES [ ] NO [ X ]

<PAGE>
<TABLE>
<CAPTION>
<S>                                                                             <C>




TABLE OF CONTENTS                                                               PAGE

PART I

Item 1. Description of Business                                                    1

Item 2. Description of Property                                                    8

Item 3. Legal Proceedings                                                          8

Item 4. Submission of Matters to a Vote of Security Holders.                       8

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.                  8

Item 6. Management's Discussion and Analysis or Plan of Operation.                 9

Item 7. Financial Statements.                                                     12
Item 8. Changes In and Disagreements With Accountants on Accounting and
        Financial Disclosure.                                                     12 - 13

         Item 8A Controls and Procedures
         Item 8A(T). Controls and Procedures.
         Item 8B.  Other Information.

PART II

Item 9. Directors,  Executive Officers, Promoters, Control Persons and Corporate  12
Governance; Compliance With Section 16(a) of the Exchange Act.

Item 10.  Executive Compensation.                                                 15

Item 11.  Security Ownership of Certain Beneficial Owners and Management and
          Related Stockholder Matters.                                            16

Item 12.  Certain Relationship and Related Transactions, and Director
          Independence.                                                           18

Item 13.  Exhibits.                                                               18

Item 14.  Principal Accountant Fees and Services.                                 18

Signatures                                                                        19

</TABLE>


This annual report  contains  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange Act of 1934, as amended.  These statements relate to future
events or our future  financial  performance.  In some cases,  you can  identify
forward-looking  statements  by  terminology  such as "may,"  "will,"  "should,"
"expects,"  "plans,"   "anticipates,"   "believes,"   "estimates,"   "predicts,"
"potential,"  or "continue," or the negative of these terms or other  comparable
terminology.  These  statements are only  predictions  and may involve known and
unknown  risks,  uncertainties  and other  factors,  including  the risks in the
section  entitled "Risk  Factors,"  that may cause our or our industry's  actual
results,  level  of  activity,  performance  or  achievements  to be  materially
different  from  any  future  results,   levels  of  activity,   performance  or
achievements expressed or implied by these forward-looking statements.

Although  we believe  that the  expectations  reflected  in the  forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity,  performance or  achievements.  Except as required by applicable  law,
including the securities  laws of the United States,  we do not intend to update
any of the  forward-looking  statements  to conform  these  statements to actual
results.



<PAGE>




                                     PART I

Item 1.  Description of Business

General Overview

Genesis Companies Group, Inc. ("the Company") was incorporated under the laws of
the State of Delaware on December 22,  1988,  for the purpose of engaging in any
lawful  activity.  From the date of inception to March 15, 2006, the Company had
minimal operating activities.  During this time, the Company did issue 4,500,000
shares of restricted  common stock to the  Company's  original  shareholders  in
exchange  for cash of  $13,500.  As such,  the  Company was defined as a "shell"
company, whose sole purpose at the time was to locate and consummate a merger or
acquisition with a private entity.

On March 15, 2006, the Company  appointed new management.  Mr. Daniel Medina and
Mr. Madhava Rao Mankal were appointed as the Chief  Executive  Officer and Chief
Financial Officer,  respectively.  At the same time,  Messrs.  Medina and Mankal
were  appointed to the  Company's  Board of Directors.  In  connection  with the
changes in  management,  4,500,000  shares of common  stock held by the original
stockholders  of the  Company  were  transferred  to Messrs.  Daniel  Medina and
Madhava Rao Mankal of Medina International Holdings, Inc. ("Medina") in exchange
for their shares of Medina.  Of the  4,500,000  common  shares,  500,000  common
shares were then transferred to Medina in exchange for 50,000  restricted common
shares of Medina, valued at $25,000.

On July 28,  2006,  management  decided to acquire a "300 Watts  Portable  Laser
De-coating  System" ("PLDS") in exchange for 30,000,000  shares of the Company's
restricted  common stock.  The Company has issued  8,950,000  common shares,  as
partial  payment on the PLDS. Upon the issuance of the title and the transfer of
ownership  of the PLDS to the  Company,  the  Company  will issue the  remaining
21,050,000 common shares to complete the transaction.

In July 2006,  the Company issued 280,000 shares of its common stock in exchange
for cash totaling  $28,000 ($0.10 per share).  The shares were offered through a
private placement memorandum.  The Company has received funds of $26,000 and has
a receivable of $2,000,  at December 31, 2006.

Current Business

We are currently in the process of upgrading electronic systems and refurbishing
existing equipment in connection with implementing the PLDS.

Principal Products

The PLDS is used to strip paints and other contaminants from surfaces of various
kinds of  objects  including  surfaces  consisting  of  metals,  composites  and
concrete.  The paint  and/or  contaminants  are removed  through a process  that
incinerates the hazardous materials and toxic chemicals.  In addition,  the PLDS
can be used to strip  paint  on  delicate  parts,  such as the  landing  gear of
aircraft, without causing damage to the metal.

                                       1

<PAGE>




Sales and Marketing

While there are different uses for the PLDS,  management,  is focusing its sales
and marketing  efforts on those markets where the PLDS is used  specifically for
paint removal. These potential customers who could make use of the PLDS include:

-    the  Department  of  Defense  ("DOD"),  the  PLDS can be used by the DOD in
     de-painting not only military  aircraft,  but also other pieces of military
     equipment;

-    amusement  parks where the PLDS can be used for the  maintenance and upkeep
     of rides and other pieces of equipment; and

-    city governments can use the PLDS to not only maintain  equipment,  such as
     water towers and bridges, but can also use the PLDS to remove graffiti.

Government Regulation

The  Company's  activities  and  products  to date have not been  subject to any
governmental  regulations  that  management  believes  would have a  significant
impact on its business.  The Company  believes that it is in compliance with all
applicable regulations that apply to its business, as it is presently conducted.
The Company will produce  professional  units for a series of durability testing
in accordance with U.S. regulations.

Competition

There  are many  domestic  and  foreign  companies  of  various  sizes  who have
equipment or chemical stripping capabilities to strip paint and/or other related
coatings.  Many of these companies have had longer operating histories,  greater
financial,  sales,  marketing,  technological  resources and established  client
relationships than the Company currently possesses. At this time, the Company is
unaware of any  competitors  whose  products  are able to reach  levels of laser
de-coating  capabilities,  comparable to the Company's  abilities.  As a result,
management of the Company believes that it does not face any direct  competition
from  its  competitors.   Nonetheless,  in  the  future  the  Company  may  face
competition  as a result of  technological  innovation,  changes in both product
emphasis and applications, and from new companies entering the market place, who
may have greater capabilities or better techniques and/or technologies.

Employees

As of December  31,  2006,  the Company has no  employees.  The  officers of the
Company have agreed to allocate a portion of their time to the  operation of the
Company without compensation.

RISK FACTORS

The  Company's  business  operations  are  subject  to a  number  of  risks  and
uncertainties, including, but not limited to those set forth below:

RISK FACTORS RELATED TO OUR BUSINESS

If the Company is not able to devote adequate  resources to product  development
and commercialization, it may not be able to develop its product.

                                       2

<PAGE>




The  Company's  business  strategy  is  to  manufacture  and  market  the  PLDS.
Management  believes  that  revenue  growth  and  profitability,  if  any,  will
substantially depend upon management's ability to:

|X|      raise additional needed capital for further research and development;

|X|      complete the development of the Company's product; and

|X|      successfully introduce and commercialize the PLDS.

Because the Company has limited  resources to devote to product  development and
commercialization,  any delay in the  development of its PLDS or reallocation of
resources to development efforts that prove unsuccessful may delay or jeopardize
the  development  of the Company.  Management  believes  that it will be able to
finance the continued  development  of the PLDS through  private  placements and
other capital  resources.  If management is unsuccessful in bringing the PLDS to
market, the Company's ability to generate revenues will be adversely affected.

The commercial  viability of the PLDS remains  largely  unproven and the Company
may not be able to attract customers.

The  commercial  viability of the PLDS is not known at this time.  If commercial
opportunities  are not realized from the sale and use of the PLDS, the Company's
ability to generate revenue will be adversely affected.  There are no assurances
that the Company will be successful  in marketing  the PLDS,  or that  customers
will  ultimately  purchase  or lease the  Company's  products.  Failure  to have
commercial  success from the sale of the PLDS will  significantly and negatively
impact the Company's financial condition.

If the PLDS does not gain market  acceptance,  it is  unlikely  that the Company
will obtain profitability.

The commercial  success of the PLDS will depend upon the adoption of the product
by  manufacturers  and consumers as an alternative  approach to paint  stripping
methods  currently  in use.  Market  acceptance  will depend upon many  factors,
including but not limited to:

|X|  the willingness  and ability of consumers and industry  partners to adopt a
     new technology;

|X|  the Company's ability to convince potential industry partners and consumers
     that  the  PLDS  is  an  attractive   alternative  to  current  and  future
     technologies for paint stripping methods;

|X|  the Company's  ability to manufacture our products and provide  services in
     sufficient  quantities with acceptable  quality and at an acceptable  cost;
     and

|X|  the  Company's  ability to place and service  sufficient  quantities of its
     products.

The  manufacturing,  use or sale of the Company's  current and proposed products
may  infringe on the patent  rights of others,  and the Company may be forced to
litigate if an intellectual property dispute arises.

If the Company infringes or are alleged to have infringed another party's patent
rights,  management  may be required to seek a license,  defend an  infringement
action or challenge the validity of the patents in court.  Patent  litigation is
costly and time  consuming.  The Company may not have  sufficient  resources  to
bring these actions to a successful  conclusion.  In addition, if the Company is
unable to obtain a license, do not successfully defend an infringement action or
are unable to have infringed patents declared invalid, the Company may:

                                       3

<PAGE>





|X|  incur substantial monetary damages;

|X|  encounter  significant delays in marketing our current and proposed product
     candidates; and

|X|  be unable to  conduct or  participate  in the  manufacture,  use or sale of
     product.


Parties  making such claims may be able to obtain  injunctive  relief that could
effectively  block the Company's ability to further develop or commercialize its
current  and  proposed  product  and could  result  in the award of  substantial
damages.  Defense of any  lawsuit or  failure to obtain any such  license  could
substantially harm the Company. Litigation,  regardless of outcome, could result
in substantial cost to and a diversion of efforts by the Company.

Management is unaware of the source of the 300 Watts Portable  Laser  De-coating
System (PLDS) and the Company may be forced into  litigation  if PLDS  infringes
upon someone else's ownership.

The Company has agreed to acquire the PLDS from Mr. Joe  Ermalovich  in exchange
for  common  stock of the  Company.  Management  is unaware of the source of the
PLDS,  its owner(s),  its  inventor(s),  its valid or invalid  patents or patent
pending.  Due to high risk and  uncertainties  of the  acquired  equipment,  the
Company's  ability to manufacture,  sell, or lease the equipment may be limited.
The Company may be forced into litigation by one or more factors mentioned above
and this could result in a heavy burden on the Company's finances.

Management  devotes a small portion of their time towards the Company's business
activities and this can limit the progress of the Company's business plans.

Management  anticipates  devoting up to twenty hours per month to the  Company's
business activities.  None of the Company's officers have entered into a written
employment  agreement  with the  Company  and no one is expected to do so in the
foreseeable future. The Company's has not obtained key man life insurance on any
of our officers and directors.  Notwithstanding  the combined limited experience
and  time  commitment  of  management,  loss  of the  services  of any of  these
individuals  could adversely affect the Company's  development and likelihood of
continuing  operations.  See "PART III, Item 9. Directors,  Executive  Officers,
Promoters  and Control  Persons;  Compliance  with Section 16(a) of the Exchange
Act."

Due to  management's  commitment  to devote  small  portion of their  time,  the
Company's management may have conflicts of interest.

The Company's  officers and directors may in the future  participate in business
ventures which could be deemed to compete directly with the Company's  business.
Additional conflicts of interest and non-arms length transactions may also arise
in the future if the officers or directors are involved in the management of any
firm with which the Company transacts business.

The Company has had negative cash flows from operations.  The Company's business
operations may fail if the Company's actual cash requirements  exceed estimates,
and if the Company is not able to obtain further financing.

                                       4

<PAGE>





The  Company  has had  negative  cash  flows  from  operations.  Management  has
estimated that it will require approximately $100,000 to carry out the Company's
business  plan for the twelve  months  ending  December  31,  2007.  There is no
assurance that actual cash requirements will not exceed estimates, in which case
the Company would require  additional  financing to finance  working capital and
pay for operating expenses and capital requirements until the Company achieves a
positive cash flow.

The Company may not be able to obtain  additional  equity or debt  financing  on
acceptable  terms if and when they need it. Even if financing is  available,  it
may not be available on terms that are favorable to the Company or in sufficient
amounts to satisfy the Company's requirements.  If the Company requires, but is
unable to obtain,  additional financing in the future, the Company may be unable
to implement the Company's current business plan and growth strategies,  respond
to  changing  business  or  economic  conditions,  withstand  adverse  operating
results, and compete effectively.

The Company has a history of losses and negative cash flows,  which is likely to
continue  unless the PLDS  gains  sufficient  market  acceptance  to  generate a
commercially viable level of sales.

Since inception  through  December 31, 2006, the Company has incurred  aggregate
net loss of $291,005 and at December 31, 2006 had a working  capital  deficit of
$24,321.  There is no assurance that the Company will ever operate profitably or
will ever generate positive cash flow in the future.

The Company's proposed  operations are speculative.  The success of the proposed
plan of  operations  will depend to a great extent on the  operation,  financial
condition  and  management  of the Company.  If the Company is unable to proceed
with its business  plan due to any of the factors  mentioned  above,  management
will have to seek other mergers or acquisition.

While management  intends to seek business  combination(s)  with entities having
established  operating  histories,  there can be no assurance  that they will be
successful  in  locating  candidates  meeting  such  criteria.  In the event the
Company  was to  complete  a  business  combination,  of which  there  can be no
assurance,  the success of its operations  will be dependent upon  management of
the successor  firm or venture  partner firm and numerous  other factors  beyond
management's control.

RISKS RELATED TO THE COMPANY'S COMMON STOCK

There is currently no market for the Company's  securities,  and there can be no
assurances  that any market will ever  develop or that our common  stock will be
quoted  for  trading  and if quoted,  it is likely to be subject to  significant
price fluctuations.

Prior to the date of this  annual  report,  there  has not been any  established
trading market for the Company's  common stock, and there is currently no market
whatsoever  for our  securities.  We will  seek to have a market  maker  file an
application  with the NASD on our  behalf to quote the  shares of the  Company's
common stock on the OTC Bulletin Board ("OTCBB")  maintained by the NASD.  There
can be no  assurance  as to whether  such  market  maker's  application  will be
accepted or, if  accepted,  the prices at which the common stock will trade if a
trading market develops, of which there can be no assurance.  The Company is not
permitted to file such  application  on its own behalf.  If the  application  is
accepted,  the Company cannot  predict the extent to which investor  interest in
the Company will lead to the  development of an active,  liquid trading  market.
Active  trading  markets  generally  result in lower price  volatility  and more
efficient execution of buy and sell orders for investors.

                                       5

<PAGE>





In addition, the common stock is unlikely to be followed by any market analysts,
and there may be few institutions  acting as market makers for the common stock.
Either of these factors could  adversely  affect the liquidity and trading price
of the  Company's  common  stock.  Until  the  Company's  common  stock is fully
distributed  and an orderly market  develops in the Company's  common stock,  if
ever, the price at which it trades is likely to fluctuate significantly.  Prices
for the Company's  common stock will be determined in the marketplace and may be
influenced by many factors,  including the depth and liquidity of the market for
shares of common  stock,  developments  affecting  our  business,  including the
impact of the factors  referred to  elsewhere  in these risk  factors,  investor
perception  of the  Company  and  general  economic  and market  conditions.  No
assurances  can be given that an orderly or liquid  market will ever develop for
the shares of the Company's common stock.

Because of the anticipated low price of the securities, many brokerage firms may
not be willing to effect transactions in these securities.

If a market develops for the Company's common stock,  Rule 144 sales may depress
prices in that market.

All of the  outstanding  shares of the  Company's  common  stock held by present
stockholders  are "restricted  securities"  within the meaning of Rule 144 under
the Securities Act of 1933, as amended (the "Securities Act").

As restricted  shares,  these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable
exemptions  from  registration  under the Act and as required  under  applicable
state  securities  laws. Rule 144 provides in essence that a person who has held
restricted  securities for a prescribed  period may,  under certain  conditions,
sell every three months, in brokerage transactions, a number of shares that does
not exceed 1.0% of a company's outstanding common stock. The alternative average
weekly  trading  volume during the four calendar  weeks prior to the sale is not
available to our shareholders  being that the OTCBB (if and when listed thereon)
is not an "automated  quotation  system" and,  accordingly,  market based volume
limitations  are not available for securities  quoted only over the OTCBB.  As a
result of  revisions  to Rule 144 which  became  effective on or about April 29,
1997, there is no limit on the amount of restricted  securities that may be sold
by a  non-affiliate  (i.e.,  a  stockholder  who is not an officer,  director or
control person) after the restricted  securities have been held by the owner for
a period of two years.  A sale under Rule 144 or under any other  exemption from
the Act, if available,  or pursuant to registration of shares of common stock of
present stockholders,  may have a depressive effect upon the price of the common
stock in any market that may develop.

Any market that develops in shares of the Company's common stock will be subject
to the penny stock  restrictions  which will create a lack of liquidity and make
trading difficult or impossible.

Until the Company's  common stock  qualifies for inclusion in the NASDAQ system,
if  ever,  the  trading  of the  Company's  securities,  if any,  will be in the
over-the-counter  markets  which  are  commonly  referred  to as  the  OTCBB  as
maintained  by the NASD.  As a result,  an  investor  may find it  difficult  to
dispose of, or to obtain  accurate  quotations  as to the price of the Company's
securities.

The SEC has adopted  rules that regulate  broker-dealer  practices in connection
with  transactions  in "penny  stocks."  Penny  stocks  (generally)  are  equity
securities with a price of less than $5.00, other than securities  registered on
certain national securities exchanges or quoted on NASDAQ, provided that current
price and volume  information with respect to transactions in such securities is
provided by the exchange or system.  Prior to a transaction  in a penny stock, a
broker-dealer is required to:

                                       6

<PAGE>





     -    Deliver a standardized risk disclosure document prepared by the SEC;

     -    Provide the  customer  with current bid and offer  quotations  for the
          penny stock;

     -    Explain the compensation of the  broker-dealer  and its salesperson in
          the transaction;

     -    Provide  monthly account  statements  showing the market value of each
          penny stock held in the customer's account;

     -    Make a  special  written  determination  that  the  penny  stock  is a
          suitable investment for the purchaser; and

     -    Provide a written agreement to the transaction.

These requirements may have the effect of reducing the level of trading activity
in the secondary market for the Company's stock.  Because our shares are subject
to the penny stock  rules,  you may find it more  difficult to sell your shares.
The additional  burdens imposed upon  broker-dealers  by such  requirements  may
discourage  broker-dealers  from  recommending  transactions  in our securities,
which could  severely  limit the liquidity of our  securities  and  consequently
adversely affect the market price for the Company's securities.

If and  when  the  Company's  securities  become  quoted  on the  OTCBB or other
exchange the securities may be thinly traded which may not provide liquidity for
the Company's investors.

If the Company's  securities  become  quoted on the OTCBB or other  exchange our
securities  may be  thinly  traded  which  may  not  provide  liquidity  for our
investors.  The OTCBB is an inter-dealer,  over-the-counter market that provides
significantly  less  liquidity  than the  NASDAQ  Stock  Market or  national  or
regional  exchanges.  Securities  traded on the OTCBB are usually thinly traded,
highly volatile,  have fewer market makers and are not followed by analysts. The
SEC's order handling  rules,  which apply to  NASDAQ-listed  securities,  do not
apply to securities quoted on the OTCBB. Quotes for stocks included on the OTCBB
are not listed in newspapers.  Therefore, prices for securities traded solely on
the OTCBB may be difficult to obtain and holders of our securities may be unable
to resell their  securities at or near their original  acquisition  price, or at
any price.

Investors must contact a broker-dealer to trade OTCBB  securities.  As a result,
you may not be able to buy or sell the  Company's  securities  at the times that
you may wish. Even if the Company's  securities  become quoted on the OTCBB, the
OTCBB may not permit the Company's  investors to sell securities when and in the
manner that they wish.  Because there are no automated  systems for  negotiating
trades on the OTCBB, they are conducted via telephone.  In times of heavy market
volume, the limitations of this process may result in a significant  increase in
the time it takes to execute  investor orders.  Therefore,  when investors place
market orders to buy or sell a specific  number of shares at the current  market
price it is  possible  for the  price of a stock to go up or down  significantly
during the lapse of time between placing a market order and its execution.

The  Company  does  not  intend  to pay  dividends  in the  foreseeable  future;
therefore, you may never see a return on your investment.

                                       7

<PAGE>




Management  does not  anticipate  the payment of cash dividends on the Company's
common stock in the foreseeable future.  Management anticipates that any profits
from  the  Company's   operations  will  be  devoted  to  the  Company's  future
operations.  Any  decision  to pay  dividends  will  depend  upon the  Company's
profitability at the time, cash available and other factors.

Item 2.  Description of Property

Facilities

The Company's  administrative  and principal place of business is located at 255
S. Leland Norton Way, San Bernardino, CA 92408, on a rent free basis pursuant to
an oral agreement.  It is anticipated that this arrangement will be suitable for
the Company's needs for the foreseeable future.

Item 3.  Legal Proceedings

There are no legal proceedings which are pending or have been threatened against
the Company and/or the officers and directors of the Company of which management
is aware.

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

None.

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Shareholder Matters

Market Information

Currently, there is no public trading market for the Company's common stock.

Holders

As of December 31, 2006, there are 59 holders of the Company's common stock.

  Dividends

  The Company has not declared or paid any cash  dividends  since  inception and
  management  does not  intend  to pay any  cash  dividends  in the  foreseeable
  future. Although there are no restrictions that limit the Company's ability to
  pay dividends on shares of the Company's  common stock other than as described
  below,  management intends to retain future earnings for use in our operations
  and the expansion of our business.

  Recent Sales of Unregistered Securities

The Company  completed a private  placement of 260,000  shares of its restricted
common  stock for  proceeds of $26,000 on July 28,  2006 ($0.10 per share).  The
private  placement was subscribed for by 26 investors.  As of December 31, 2006,
the Company  holds a  subscription  for 20,000 shares of its  restricted  common
stock for proceeds of $2,000, that have not been paid for at this time.

                                       8

<PAGE>




On July 28, 2006, the Company issued 1,400,000  shares of its restricted  common
stock to 3 individuals for their consulting services,  the shares were estimated
to have a value of $140,000.

The Company issued  8,950,000  shares of its restricted  common stock to Mr. Joe
Ermalovich  (distributed to 12 shareholders who are relatives and friends of Mr.
Joe Ermalovich,  per his instructions) in exchange for the purchase of the PLSD.
The shares had an estimated value of $87,183 on July 28, 2006.

Equity Compensation Plan Information

The Company has not adopted any equity compensation plans.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.


Item 6. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

The  following  discussion  should  be  read in  conjunction  with  our  audited
financial  statements and notes thereto and included herein. In connection with,
and because we desire to take advantage of, the "safe harbor"  provisions of the
Private  Securities  Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by us, or on our behalf,  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 that are inherently  subject to significant  business,  economic
and competitive  uncertainties and  contingencies,  many of which are beyond our
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 us, or on our behalf. We disclaim any
obligation to update forward looking statements.

Results of Operations

During the years ended December 31, 2006 and 2005, the Company did not recognize
any revenues from operations.

Total  operating  losses  for the year ended  December  31,  2006 were  $152,304
compared  to $17,516  for the year ended  December  31,  2005.  The  increase of
$134,788  was due to  increased  operating  activities  through  the year  ended
December 31, 2006 compared to the year ended December 31, 2005.  During the year
ended  December  31,  2006  operating  expenses   included:   $10,793  worth  of
professional  fees,  $60 in  registration  fees and  $141,451 of  administrative
expenses. Administrative expenses included $140,000 of consulting services, such
services were paid for by the Company  through the issuance of 1,400,000  shares
of the Company's common stock.

For the year ended  December 31, 2006,  the Company  incurred a loss of $161,845
compared to a loss of $19,250 as of December 31, 2005 and an accumulated loss of
$291,005 since incorporation. The increase of $142,595 was due to an increase in
operating activities in connection with the purchasing of the PLDS.

                                       9

<PAGE>




Plan of Operation and Cash Requirements

The  Company's  principal  capital  resources  have been through the issuance of
common  stock,  although in the future the Company  may use  shareholder  loans,
advances from related parties, or borrowings.

At December 31, 2006,  there was a working capital deficit of $111,504  compared
to a working capital deficit of $115,660 at December 31, 2005.

At December 31, 2006, total current assets were $21,825,  consisting of cash and
a note  receivable,  compared to total  current  assets of $0 as of December 31,
2005.

At December 31, 2006, total current liabilities were $133,329, compared to total
current liabilities of $115,660 as of December 31, 2005.


At December 31, 2006, the Company had a cash balance of $26 compared to $0 as of
December 31, 2005.

During the year ended December 31, 2006,  management of the Company concentrated
its  efforts on the  acquisition  of the "300 Watts  Portable  Laser  De-coating
System"  ("PLDS").  The PLDS is being acquired in exchange for 30,000,000 shares
of the  Company's  restricted  common  stock.  The Company has issued  8,950,000
common shares,  as partial  payment on the PLDS.  Upon the issuance of the title
and the transfer of ownership of the PLDS to the Company, the Company will issue
the remaining 21,050,000 common shares to complete the transaction.

The Company  expects to spend  $100,000  during the  twelve-month  period ending
December  31, 2007 on the  development  of it business  plan for the PLDS and on
general and administrative expenses including legal and auditing fees, salaries,
office  equipment,  SEC  expenses  and other  administrative  related  expenses.
Management will need to raise additional capital in order to meet immediate cash
requirements to proceed with the Company's business plans. Management intends to
raise  additional  capital for the Company through the private  placement of our
securities.

There can be no assurance  that  additional  financing  will be available to the
Company when needed or, if  available,  that it can be obtained on  commercially
reasonable terms. If the Company is not able to obtain the additional  financing
on a timely basis, if and when it is needed,  management will be forced to scale
down or perhaps even cease the operation of the Company.

Recently Issued Accounting Policies

In  February  2006,  the FASB  issued SFAS 155,  Accounting  for Certain  Hybrid
Financial  Instruments,   which  amends  SFAS  133,  Accounting  for  Derivative
Instruments and Hedging  Activities,  and SFAS 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a replacement
of FASB  Statement  No. 125.  SFAS 155 will be effective for the Company for all
financial  instruments  issued or acquired  after the  beginning its fiscal year
ending  December 31, 2007. We have not yet evaluated and  determined  the likely
effect of SFAS 155 on our future financial statements.

                                       10

<PAGE>




In June 2006, the FASB issued  Interpretation No. 48, Accounting for Uncertainty
in Income Taxes - An  Interpretation of FASB Statement No. 109, (FIN 48). FIN 48
clarifies  the  accounting  for  uncertainty  in income taxes  recognized  in an
enterprise's  financial  statements in accordance  with FASB  Statement No. 109,
Accounting for Income Taxes. FIN 48 also prescribes a recognition  threshold and
measurement attribute for the financial statement recognition and measurement of
a tax  position  taken or expected to be taken in a tax return that results in a
tax benefit.  Additionally,  FIN 48 provides guidance on de-recognition,  income
statement  classification  of  interest  and  penalties,  accounting  in interim
periods,  disclosure,  and transition.  This interpretation is effective for the
Company for its year ended  December 31, 2007. The Company has not yet evaluated
the  effect  that the  application  of FIN 48 may have,  if any,  on its  future
results of operations and financial condition.

On February 15, 2007,  the FASB issued SFAS No. 159,  "The Fair Value Option for
Financial  Assets and  Financial  Liabilities  - Including  an Amendment of FASB
Statement  No. 115." This standard  permits an entity to measure many  financial
instruments  and  certain  other  items at  estimated  fair  value.  Most of the
provisions  of SFAS No. 115  ("Accounting  for Certain  Investments  in Debt and
Equity   Securities)   applies   to  all   entities   that   own   trading   and
available-for-sale  securities.  The fair value  option  created by SFAS No. 159
permits  an entity  to  measure  eligible  items at fair  value as of  specified
election dates. Among others,  eligible items exclude (1) financial  instruments
classified  (partially  or in total) as  permanent  or  temporary  stockholders'
equity (such as a convertible  debt security  with a  non-contingent  beneficial
conversion  feature)  and (2)  investments  in  subsidiaries  and  interests  in
variable interests that must be consolidated.  A for-profit business entity will
be  required to report  unrealized  gains and losses on items for which the fair
value option has been elected in its statements of operations at each subsequent
reposting date. The fair value option (a) may generally be applied instrument by
instruments, (b) is irrevocable unless a new elections date occurs, and (c) must
be applied to the entire instrument and not to only a portion of the instrument.
SFAS No. 159 is  effective  as of the  beginning  of the first  fiscal year that
begins after  November 15, 2007.  The Company has not yet  evaluated  the effect
that the  application  of FIN 48 may have,  if any,  on its  future  results  of
operations and financial condition.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations
are based upon our consolidated  financial statements,  which have been prepared
in accordance with accounting principles generally accepted in the United States
of America.  The preparation of these financial  statements  requires us to make
estimates  and  judgments  that  affect  the  reported  amounts  of  assets  and
liabilities,  revenues and expenses and related disclosures of contingent assets
and  liabilities.  On an on-going  basis,  we evaluate our estimates,  including
those related to deferred revenues;  depreciation or fixed assets,  valuation of
intangible  assets  such as our  intellectual  property,  financing  operations,
currency  valuations and contingencies and litigation.  We base our estimates on
historical  experience and on various other  assumptions that are believed to be
reasonable  under the  circumstances,  the  results  of which form the basis for
making  judgments about the carrying  values of assets and liabilities  that are
not readily  apparent from other  sources.  Actual results may differ from these
estimates under different assumptions or conditions.

The  Company  believes  that the  following  are  some of the  more  significant
accounting policies and methods used by the Company:

-    stock based compensation;

-    value of long-lived assets; and

-    revenue recognition and deferred revenue.

                                       11

<PAGE>


Stock based compensation

The Company has chosen to account for employee  stock-based  compensation  using
the intrinsic value method prescribed in Accounting Principles Board Opinion No.
25 (APB  No.  25),  Accounting  for  Stock  Issued  to  Employees,  and  related
interpretations.  Accordingly,  employee  compensation cost for stock options is
measured as the excess,  if any, of the  estimated  fair value of the  Company's
stock at the date of the grant over the amount an  employee  must pay to acquire
the stock.

In December 2004, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 123(R),  Share-Based Payment, which addresses the accounting for share-based
payment  transactions.  SFAS No.  123(R)  eliminates  the ability to account for
share-based  compensation  transactions  using APB 25,  and  generally  requires
instead that such  transactions  be accounted and recognized in the statement of
operations based on their fair value.

Valuation of long-lived assets

The Company  assesses the  impairment of long-lived  assets  whenever  events or
changes  in   circumstances   indicate  that  the  carrying  value  may  not  be
recoverable.  Factors the Company  considers  important  which could  trigger an
impairment  review  include  negative  projected  operating  performance  by the
Company and significant  negative industry or economic trends.  The Company does
not  believe  that  there has been any  impairment  to  long-lived  assets as of
December 31, 2006.

Revenue recognition and deferred revenue

The Company's revenue  recognition policy is significant  because future revenue
could be a key  component  of its  results or  operations.  Revenue  results are
difficult  to  predict,  and any  shortfall  in revenue or delay in  recognizing
revenue could cause operating results to vary significantly.

Item 7.  Financial Statements

The  financial  statements  for the year ended  December  31,  2006 and  related
financial  information  required  to be filed  are  indexed  on page F-1 and are
incorporated herein.

Item 8.  Changes In and Disagreements with Accountants on Accounting and
         Financial Disclosure

None.

Item 8A. Controls and Procedure

The management of the company has evaluated the effectiveness of the issuer's
disclosure controls and procedures as of the end of the period of the report
(evaluation date) and have concluded that the disclosure controls internal
controls and procedures are adequate and effective based upon their evaluation
as of the evaluation date.

There  were no changes  in the small  business  issuers  internal  control  over
financial  reporting  identified  in  connection  with  the  Company  evaluation
required by  paragraph  (d) of Rule 13a-15 or Rule 15d-15 under the Exchange act
that occurred  during the small business  issuers fourth fiscal quarter that has
materially  affected or is  reasonable  likely to materially  affect,  the small
business issuers internal control over financial reporting.

                                       12

<PAGE>





Within the 90 days prior to the filing  date of this  report,  we carried out an
evaluation of the  effectiveness  of the design and operation of our  disclosure
controls and procedures  pursuant to Exchange Act Rule 13a-14.  This  evaluation
was done  under the  supervision  and with the  participation  of our  Principal
Financial  Officer and other management  personnel.  Based upon that evaluation,
they  concluded  that our  disclosure  controls and  procedures are effective in
gathering, analyzing and disclosing information needed to satisfy our disclosure
obligations under the Exchange Act.

Changes in Internal Controls

There were no significant  changes in our internal  controls or in other factors
that could significantly  affect those controls since the most recent evaluation
of such controls.

Item 8B. Other Information

None.

                                    PART III

Item 9. Directors,  Executive Officers, Promoters, Control Persons and Corporate
Governance; Compliance With Section 16(a) of the Exchange Act.

The  Company's   directors   hold  office  until  the  next  annual  meeting  of
shareholders  and until their  successors  have been duly elected and qualified.
The Board of  Directors  elects the officers at its annual  meeting  immediately
following the  shareholders  annual meeting and hold office until they resign or
are removed from office.  There are no family  relationships  that exist between
any director,  executive  officer,  significant  employee or person nominated or
chosen by the Company to become a director of executive officer. The Company has
not established audit, incentive compensation and nominating committees, at this
time.

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



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

Daniel F. Medina           54      President and Director    March 15,
                                                             2006 to date.

Madhava Rao Mankal         55      Chief Financial Officer   March 15,
                                   and Director              2006 to date.
---------------------- ----------- ------------------------ --------------

The following  sets forth the portion of their time the directors  devote to the
Company:

                  Daniel Medina                      <25%
                  Madhava Rao Mankal                 <25%

                                       13

<PAGE>




The Company's  success depends on the performance of both directors,  Mr. Medina
and Mr. Mankal.  The Company does not have "key person" life insurance  policies
on any employees nor does the Company have employment agreements for fixed terms
with any of its  employees.  Any of the  employees,  including any member of the
management team, may terminate his or her employment at any time.

Biographies of Officers and Directors

Set forth below is a brief  description  of the  background  of our officers and
directors based on information provided by them to us.

Daniel  Medina,  54. Mr.  Medina has served the  President and a Director of the
Company since March 15, 2006. Mr. Medina currently serves as the President and a
Director of Medina  International  Holdings,  Inc. Mr. Medina started as a Sales
Rep/Production  Manager in 1973-1985 with  Rosemary's  Draperies.  Daniel Medina
owned  Lavey  Craft Boat Co. from  1985-1992.  Mr.  Medina was also a partner in
California  Cool  Custom  Boats from 1992- June 1997.  He was the  designer  and
manufacturer  of all of their boats.  Mr. Medina served as the Director of Sales
and  Marketing  and  Production  Manager for Sonic Jet  Performance,  Inc.  from
October 1999 to October 2001 and  successfully  increased the company revenue by
50%.  He has  extensive  experience  in every  phase  of  sales,  marketing  and
manufacturing.

Madhava Rao Mankal, 55. Mr. Mankal has served as the Chief Financial Officer and
a Director of the Company since March 15, 2006. Mr. Mankal  currently  serves as
the Chief Financial  Officer and a Director of Medina  International  Holdings,
Inc. Mr. Mankal has more than 28 years of  experience  as an  executive.  He has
served  as  President/CFO  of  Force  Protection,   Inc.   (formerly  Sonic  Jet
Performance,  Inc.) since May 1999 to December 31, 2003.  He was a member of the
Board of Directors of Force  Protection,  Inc. until  September 30, 2004. He has
over 25 years of senior  financial  management  experience  which  includes  the
position of controller,  chief financial officer and financial advisor.  He is a
Certified  Chartered  Accountant from India and Cost Accountant from India,  and
Certified  Management  Accountant  from USA.  He is member of the  Institute  of
Chartered Accountants of India, Institute of Cost and Works Accountants of India
and Institute of Management Accountants, USA. He has Bachelor Degree in Commerce
from Bangalore University.

Involvement in Certain Legal Proceedings

Our directors,  executive officers and control persons have not been involved in
any of the following events during the past five years:

1.   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;

2.   any  conviction  in a criminal  proceedings  or being  subject to a pending
     criminal   proceeding   (excluding   traffic  violations  and  other  minor
     offenses);

3.   being subject to any order, judgment, or decree, not subsequently reversed,
     suspended, or vacated, of any court of competent jurisdiction,  permanently
     or temporarily  enjoining,  barring,  suspending or otherwise  limiting his
     involvement in any type of business, securities or banking activities; or

4.   being found by a court of competent  jurisdiction (in a civil action),  the
     SEC or the Commodity Futures Trading  Commission to have violated a federal
     or  state  securities  or  commodities  law,  and the  judgment  has not be
     reversed, suspended, or vacated.

                                       14

<PAGE>




Financial Expert

Our  board of  directors  has  determined  that it does  not have a member  that
qualifies as an "financial  expert" as defined in Item 401(e) of Regulation S-B,
and is  "independent"  as the term is used in Item  7(d)(3)(iv)  of Schedule 14A
under the Securities Exchange Act of 1934, as amended.

The Company believes that the members of the board of directors are collectively
capable of analyzing and evaluating our financial  statements and  understanding
internal  controls and  procedures  for financial  reporting.  In addition,  the
existing  directors  believe that  retaining an  independent  director who would
qualify as an "financial  expert" would be overly costly and  burdensome and not
warranted in the Company's current  circumstances  given the early stages of the
Company's  development  and the fact  that the  Company  has not  generated  any
significant revenues to date.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires that
executive  officers  and  directors  and  persons  who own  more  than  10% of a
registered class of equity securities to file with the SEC initial statements of
beneficial  ownership,  reports  of  changes in  ownership  and  annual  reports
concerning  their  ownership  of our  shares  of common  stock and other  equity
securities, on Form 3, 4 and 5, respectively.  Executive officers, directors and
greater than 10% stockholders are required by the SEC regulations to furnish the
Company with copies of all Section 16(a) reports they file.

Based solely on our review of the copies of such forms  received by the Company,
or written  representations  from certain  reporting persons that Form 5 was not
required for those persons,  management  believes  that,  during the fiscal year
ended  December 31, 2006,  all filing  requirements  applicable to its owners as
well as its  officers  and  directors.


Item  10.  Executive  Compensation.

The following  table  summarizes  the  compensation  of key  executives  ("Named
Executive  Officers")  for the years ended  December  31,  2006,  2005 and 2004,
respectively.  No other officers or directors  received  annual  compensation in
excess of $100,000 during the last three complete fiscal years.

<TABLE>
<CAPTION>

                                               SUMMARY COMPENSATION TABLE(1)
                                               -----------------------------

                                  ANNUAL COMPENSATION                             LONG TERM COMPENSATION
                                  -------------------                             ----------------------

                                                                             AWARDS                      PAYOUTS
                                                                             ------                      -------
<S>                 <C>       <C>          <C>         <C>           <C>          <C>             <C>          <C>


                                                         OTHER                    SECURITIES
                                                        ANNUAL       RESTRICTED   UNDERLYING        LTIP       ALL OTHER
NAME & PRINCIPAL              SALARY       BONUS       COMPENSA        STOCK       OPTIONS/       PAYOUTS      COMPENSA-
POSITION            YEAR      ($)          ($)           TION        AWARDS ($)    SARS (#)        ($)           TION
Daniel F. Medina,    2006        $-0-          $-0-         $-0-           $-0-          -0-           $-0-         $-0-
President & Director (2)2005     $-0-          $-0-         $-0-           $-0-          -0-           $-0-         $-0-
                     2004        $-0-          $-0-         $-0-           $-0-          -0-           $-0-        $-0-

Madhava Rao Mankal   2006$       $-0-          $-0-         $-0-           $-0-          -0-           $-0-         $-0-
Chief Financial      2005        $-0-          $-0-         $-0-           $-0-          -0-           $-0-         $-0-
Officer &            2004        $-0-          $-0-         $-0-           $-0-          -0-           $-0-         $-0-
Director, (3)
</TABLE>


(1)  The  value of  perquisites  and other  personal  benefits,  securities  and
     property for the Named Executive  Officers that do not exceed the lesser of
     $50,000 or 10% of the total of the annual  salary and bonus is not reported
     herein

(2)  Mr. Daniel F. Medina was appointed as the Company's  President and Director
     on March 15, 2006.

(3)  Mr.  Madhava Rao Mankal was  appointed  as the  Company's  Chief  Financial
     Officer and Director on March 15, 2006.

                                       15

<PAGE>
<TABLE>
<CAPTION>

Compensation of Directors

                          Directors Compensation Table

<S>               <C>               <C>              <C>               <C>              <C>                  <C>         <C>

Name              Fees              Stock            Options           Non-Equity       Nonqualified         All Other   Total
                  Earned or         Awards           Awards            Incentive Plan   Deferred             Compen-      ($)
                  Paid-in           ($)              ($)               Compensation     Compensation         sation
                  Cash ($)                                             ($)              ($)                    ($)

Daniel F. Medina  $0                $0               $0                $0               $0                     $0          $0

Madhava Rao
Mankal            $0                $0               $0                $0               $0                     $0          $0


</TABLE>


The Company did not reimburse its directors for expenses  incurred in connection
with attending  board  meetings no did the Company pay director's  fees or other
cash compensation for services rendered as a director in the year ended December
31, 2006.

The  Company  does  not,  at this  time,  have a formal  plan  for  compensating
directors  for their  services in their  capacity as  directors,  although  such
directors are expected in the future to receive stock options to purchase common
shares as awarded by the board of directors  or ( as to future stock  options) a
compensation  committee  which may be  established.  Directors  are  entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of the board of directors.  The Company's
board of directors may award special  remuneration  to any director  undertaking
any special  services on the  Company's  behalf other than  services  ordinarily
required of a director. No director received and/or accrued any compensation for
their services as a director,  including committee  participation and/or special
assignments.

Employment  Contracts  and  Termination  of  Employment  and  Change in  Control
Arrangements

There  are no  arrangements  or plans in which  the  Company  provides  pension,
retirement or similar  benefits for directors or executive  officers.  Directors
and executive  officers may receive stock options at the discretion of the board
of  directors in the future.  The Company  does not have any  material  bonus or
profit sharing plans pursuant to which cash or non-cash  compensation  is or may
be paid to our directors or executive officers, except that stock options may be
granted at the discretion of the board of directors.

The Company does not have any plans or  arrangements  in respect of remuneration
received or that may be received by the executive  officers to  compensate  such
officers in the event of termination of employment (as a result of  resignation,
retirement,  change of  control)  or a change of  responsibilities  following  a
change of  control,  where the value of such  compensation  exceeds  $60,000 per
executive officer.

Item 11. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

The following  table sets forth  certain  information  regarding the  beneficial
ownership of outstanding shares of the Company's common stock as of December 31,
2006 on a fully  diluted  basis,  by (a) each person known by the Company to own
beneficially  5% or more of the  outstanding  shares  of common  stock,  (b) the
Company's directors,  Chief Executive Officer and executive officers whose total
compensation  exceeded  $100,000 for the last fiscal year, and (c) all directors
and executive officers of the Company as a group.

                                       16

<PAGE>

<TABLE>
<CAPTION>

NAME, ADDRESS & NATURE OF
        BENEFICIAL OWNER                    TITLE OF CLASS(1)         AMOUNT            PERCENT OF CLASS (2)
        ----------------                    -----------------         ------            --------------------
<S>                                         <C>                         <C>                    <C>


Daniel F. Medina                            Common Stock                2,000,000               13.12%
11561 East Beverly Blvd
Whitter, CA 90601

Sharada Rao(3)                              Common Stock                2,000,000               13.12%
7476 Sungold Ave.
Corona, CA 92880

Danielle Cristina Campbell                  Common Stock                1,000,000                6.56%
32060 Fruehauf Street
Fraser, MI 48026

Catherine Druia                             Common Stock                1,250,000                8.20%
32060 Fruehauf Street
Fraser, MI 48026

Joshua Christian Druia                      Common Stock                1,250,000                8.20%
32060 Fruehauf Street
Fraser, MI 48026

Joseph Paul Ermalovich                      Common Stock                1,250,000                8.20%
39127 Mame
Sterling Heights, MI 48313

Elizabeth A. Lassman                        Common Stock                1,250,000                8.20%
16256 Admiral Street
Fraser, MI 48026

Srikishna Manka                             Common Stock                1,250,000                8.20%
7476 Sungold Ave.
Corona, CA 92880

Maria Moran                                 Common Stock               1,250,000                 8.20%
550 Skinner
Highland, MI 48357

All Officers and Directors
  as a Group (2 persons)                    Common Stock               4,000,000                26.00%
</TABLE>

(1)  Beneficial  ownership is determined in accordance with the rules of the SEC
     and  generally   includes  voting  or  investment  power  with  respect  to
     securities. Shares of common stock subject to options or warrants currently
     exercisable or convertible, or exercisable or convertible within 60 days of
     December 15, 2006 are deemed  outstanding  for computing the  percentage of
     the person  holding  such option or warrant but are not deemed  outstanding
     for computing the percentage of any other person.

                                       17

<PAGE>


(2)  Percentage   based  on  15,242,000   shares  of  common  stock  issued  and
     outstanding on December 31, 2006.

(3)  Mrs. Rao is the wife of Mr. Madahva Rao Mankal, the Chief Financial Officer
     and a Director  of the  Company.  Mrs.  Rao holds the  2,000,000  shares of
     common stock directly and beneficially.

Changes in Control

Management  is unaware of any  contract or other  arrangement  the  operation of
which may at a subsequent date result in a change in control of the Company.

Item 12.   Certain Relationships and Related Transactions, and Director
           Independence.

The Company has been a party to  transactions  between its directors,  officers,
and 5% beneficial security holder.

On March 15, 2006,  Mr.  Daniel F. Medina,  the  President and a Director of the
Company was transferred  2,000,000  shares of the common stock of the Company in
exchange  for 500,000  shares of the common  stock of Medina,  Mr.  Medina is an
officer and director of Medina.

On March 15,  2006,  Mrs.  Sharada  Rao,  wife of Madhava Rao Mankal,  the Chief
Financial  Officer  and a Director of the  Company,  was  transferred  2,000,000
shares of the common  stock of the  Company  in  exchange  for common  shares of
Medina  International  Holdings,  Inc. Mr. Mankal, is an officer and director of
Medina.

On July 28, 2006, Mr.  Srikrishna Mankal was been issued 1,250,000 shares of the
common stock of the Company for  consulting  services  valued at  $125,000.  Mr.
Srikrishna  Mankal  is the  son of Mr.  Madhava  Rao  Mankal,  who is the  Chief
Financial Officer and a Director of the Company.

In March 2006,  Messrs.  Medina and Mankal were  transferred  possession of note
payables held by the original  stockholder  of the Company.  The  unsecured,  8%
promissory notes are due on demand.  At December 31, 2006, the notes had accrued
interest of $8,460. The note is still outstanding at this time.


Item 13. Exhibits

The following is a complete list of exhibits filed as part of this Form 10KSB.
Exhibit number correspond to the numbers in the Exhibit table of Item 601 of
Regulation S-B.

31. Certifications pursuant to Section 302 of the Sarbanes - Oxley Act. (*)

32. Certifications pursuant to Section 906 of the Sarbanes - Oxley Act. (*)

Item 14. Principal Accountant Fees and Services.

(*) Filed herewith

Audit Fees

The aggregate fees billed by Jaspers + Hall, P.C.  rendered for the audit of our
annual  financial  statements  for  review of our  quarterly  interim  financial
statements and in connection  with statutory and regulatory  filings were $2,500
for the fiscal year ended December 31, 2006 and $6,000 for the fiscal year ended
December 31, 2005.  This category also includes the review of interim  financial
statements  and services in connection  with  registration  statements and other
filings with the Securities and Exchange Commission.

Audit Related Fees

There are no other  fees  billed by our  current or prior  independent  auditors
during the last two fiscal years for  assurance  and related  services that were
reasonably  related to the  performance  of the audit or review of our financial
statements and not reported under "Audit fees" above.

Tax Fees

The aggregate  fees billed by Jaspers + Hall, PC during the last fiscal year for
professional  services  rendered  for tax  compliance  for  fiscal  years  ended
December 31, 2006 and 2005 was $0.


                                       18
<PAGE>


                              FINANCIAL STATEMENTS
                                TABLE OF CONTENTS




                                                             PAGE
                                                            -------
INDEPENDENT AUDITOR'S REPORT............................     F-1

BALANCE SHEET................................................F-2

STATEMENT OF OPERATIONS .....................................F-3

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)..................F-4

STATEMENT OF CASH FLOWS......................................F-5

NOTES TO FINANCIAL STATEMENTS................................F-6 - F-10

<PAGE>

JASPERS + HALL, PC
CERTIFIED PUBLIC ACCOUNTANTS
-------------------------------------------------------------------------------
9175 Kenyon Avenue, Suite 100
Denver, CO 80237
303-796-0099

To the Board of Directors
Genesis Companies Group, Inc.

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying  balance sheet of Genesis Companies Group, Inc.
as of December 31, 2006 and 2005, and the related statements of operations, cash
flows, and changes in stockholders' deficit for the years then ended and for the
period  December 31, 1988  (inception)  to December 31,  2006.  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 audit.

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 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  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 Art Boutique,  Inc. at December
31, 2006 and 2005,  and the results of its operations and its cash flows for the
years then ended and for the period May 15, 1984  (inception)  to  December  31,
2006, in conformity with accounting  principles generally accepted in the United
States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  described  in  Note 1 to the
financial  statements,  the Company is in the  development  stage and conditions
exist which raise substantial doubt about the Company's ability to continue as a
going  concern.  Management's  plans in regard to these matters are described in
Note 2. The  financial  statements  do not  include any  adjustments  that might
result from the outcome of this uncertainty.



March 31, 2007
/s/Jaspers + Hall PC

                                      F-1

<PAGE>
<TABLE>
<CAPTION>



                          GENESIS COMPANIES GROUP, INC.
                          (A Development Stage Company)
                                 Balance Sheets
<S>                                                                            <C>                  <C>

                                                                                            December 31,
                                                                                    2006                 2005
                                                                               ----------------     ----------------

Assets

Current Assets:
    Cash                                                                            $      26                  $ -
    Interest receivable                                                                 1,074
    Notes receivable (Note 3)                                                          20,725                    -
                                                                                       -------                   -
              Total current assets                                                     21,825                    -
                                                                                       -------                   -

Property and equipment:
    Machinery (Note  5 )                                                               87,183                    -
                                                                                       -------                   -

Total assets                                                                        $ 109,008                  $ -
                                                                                    ==========                 ====

Liabilities and Stockholders' Equity (Deficit)

Liabilities:
      Accounts payable                                                              $  10,054             $ 83,956
      Accrued liability - related party                                                 8,460                4,902
      Notes payable - related party (Note 4 )                                         114,815               26,802
                                                                                      --------              ------

Total liabilities (all current)                                                       133,329              115,660
                                                                                      --------             -------

Stockholders' equity (deficit) (Note 5):
        Preferred stock, $.00001 par value, 10,000,000 shares
         authorized, issued and outstanding - none                                          -                    -
       Common stock, $0.00001 par value, 100,000,000 shares
          authorized, 15,242,000  and 4,500,000 shares issued and
          outstanding on December 31, 2006 and 2005, respectively                         152                   45
       Additional paid-in capital                                                     268,532               13,455
       Subscription receivable                                                         (2,000)                   -
       Deficit accumulated during the development stage                              (291,005)            (129,160)
                                                                                      --------            ---------

Total stockholders' equity (deficit)                                                  (24,321)            (115,660)
                                                                                      --------            ---------

Total liabilities and stockholders' equity (deficit)                                $ 109,008                  $ -
                                                                                    ==========            =========

The accompanying notes are an integral part of these financial statements.
</TABLE>

                                                      F-2

<PAGE>
<TABLE>
<CAPTION>

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

<S>                                             <C>              <C>                      <C>

                                                       Year Ended              December 31, 1988
                                                      December 31,               (Inception) to
                                                  2006               2005      December 31, 2006
                                       --------------------------------------------------------------

Revenues                                              $ -              $ -                      $ -
                                                      ----             ----                     ---

Operating expenses:
      Professional fees                             10,793           15,360                   98,138
      Registration fees                                 60                -                    3,728
      Administrative expenses                      141,451            2,156                  174,696
                                                  --------           ------                 -------

Loss from operations                              (152,304)         (17,516)                (276,562)
                                                  ---------         --------                ---------

Other income (expense):
Interest income                                      1,074                -                    1,074
Interest expense, related party                    (10,615)          (1,734)                 (15,517)
                                                  ---------         --------                ---------
                                                    (9,541)          (1,734)                 (14,443)
                                                  ---------         --------                ---------
Net loss                                        $ (161,845)      $  (19,250)              $ (291,005)
                                                ===========      ===========              ===========

Weighted average number of
    common shares outstanding                    9,120,197        4,500,000
                                                ==========       ==========

Net loss per share                              $   (0.018)       $  (0.040)
                                                ==========       ==========

The accompanying notes are an integral part of these financial statements.
</TABLE>

                                       F-3

<PAGE>
<TABLE>
<CAPTION>

                          GENESIS COMPANIES GROUP, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows
<S>                                                             <C>                    <C>               <C>

                                                                                                       December 22, 1988
                                                                        Year Ended                      (Inception) to
                                                                       December 31,                      December 31,
                                                                 2006                 2005                 2006
                                                      --------------------------------------------------------------

Cash flows from operating activities:
      Net loss                                                  $ (161,845)            $ (19,250)        $ (291,005)
                                                                -----------            ----------        -----------
      Adjustments to reconcile net loss to net cash
         used in operating activities:
             Common stock issued in exchange for
               consulting services                                 140,000                     -            140,000
             Changes in operating assets and liabilities:
              Increase in receivable                                (1,074)                    -             (1,074)
              (Decrease) increase in accounts payable              (73,901)               12,016             10,055
              Increase in accrued liabilities                        3,558                 1,734              8,460
                                                                -----------            ----------        -----------
      Total adjustments                                             68,583                13,750            157,441
                                                                -----------            ----------        -----------
        Net cash used in operating activities                      (93,262)               (5,500)          (133,564)
                                                                -----------            ----------        -----------
Cash flows from investing activities:
     Increase in note receivables                                  (20,725)                   -             (20,725)
                                                                -----------            ----------        -----------
       Net cash used in investing activities                       (20,725)                   -             (20,725)
                                                                -----------            ----------        -----------
Cash flows from financing activities:
      Proceeds from notes payables, related party                   88,013                 5,500            114,815
      Proceeds from the issuance of common stock                    26,000                     -             39,500
                                                                -----------            ----------        -----------
       Net cash provided by financing activities                   114,013                 5,500            154,315
                                                                -----------            ----------        -----------
Net increase in cash and cash equivalents                               26                     -                 26

Cash and cash equivalents - beginning of period                         -                     -                  -
                                                                -----------            ----------        -----------
Cash and cash equivalents, ending                                     $ 26                   $ -               $ 26
                                                                ===========            ==========        ===========
Supplemental disclosure of cash flow information:
    Interest Paid                                                     $ -                   $ -                $ -
                                                                ===========            ==========        ===========
    Taxes paid                                                        $ -                   $ -                $ -
                                                                ===========            ==========        ===========
Supplemental disclosure of non-cash investing activities:
      Common stock issued for purchase of machinery               $ 87,183                   $ -           $ 87,183
                                                                ===========            ==========        ===========



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

                                      F-4

</TABLE>





<PAGE>
                          GENESIS COMPANIES GROUP, INC.
                          (A Development Stage Company)
              Statement of Changes in Stockholders' Equity (Deficit)
             From December 22, 1988 (Inception) to December 31, 2006


<TABLE>
<CAPTION>
<S>                          <C>          <C>      <C>         <C>         <C>         <C>

                                                                            Deficit Accum.
                                                   Additional                During the
                                 Common Stock       Paid-In    Subscription  Development
                               Shares     Amount    Capital    Receivable    Stage         Totals
                             ------------ -------- ----------- ----------- ----------- -----------
Balance -  December 22, 1988           -      $ -         $ -        $ -          $ -         $ -
Stock issued for cash -
 December 5                    4,500,000       45      13,455          -            -      13,500
                             ------------ -------- ----------- ---------- ------------ -----------

Balance -  December 31, 1989   4,500,000       45      13,455          -            -      13,500
                             ------------ -------- ----------- ---------- ------------ -----------
Write-off deferred offering
  costs                                -        -           -          -      (10,661)    (10,661)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance -  December 31, 1990   4,500,000       45      13,455          -      (10,661)      2,839
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -       (1,309)     (1,309)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance -  December 31, 1991   4,500,000       45      13,455          -      (11,970)      1,530
                             ------------ -------- ----------- ---------- ------------ -----------

Net loss for year                      -        -           -          -          (10)        (10)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 1992    4,500,000       45      13,455          -      (11,980)      1,520
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -           (9)         (9)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 1993    4,500,000       45      13,455          -      (11,989)      1,511
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -         (859)       (859)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 1994    4,500,000       45      13,455          -      (12,848)        652
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -         (192)       (192)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 1995    4,500,000       45      13,455          -      (13,040)        460
                             ------------ --------------------------------------------------------
Net loss for year                      -        -           -          -       (4,988)     (4,988)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 1996    4,500,000       45      13,455          -      (18,028)     (4,528)
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -      (12,270)    (12,270)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 1997    4,500,000       45      13,455          -      (30,298)    (16,798)
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -       (6,059)     (6,059)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 1998    4,500,000       45      13,455          -      (36,357)    (22,857)
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -       (9,901)     (9,901)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 1999    4,500,000       45      13,455          -      (46,258)    (32,758)
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -      (10,611)    (10,611)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 2000    4,500,000       45      13,455          -      (56,869)    (43,369)
                             ------------ -------- ----------- ---------- ------------ -----------

Net loss for year                      -        -           -          -      (11,863)    (11,863)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 2001    4,500,000       45      13,455          -      (68,732)    (55,232)
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -      (12,943)    (12,943)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 2002    4,500,000       45      13,455          -      (81,675)    (68,175)
                             ------------ -------- ----------- ---------- ------------ -----------

Net loss for year                      -        -           -          -      (11,352)    (11,352)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 2003    4,500,000       45      13,455          -      (93,027)    (79,527)
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -      (16,883)    (16,883)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 2004    4,500,000       45      13,455          -     (109,910)    (96,410)
                             ------------ -------- ----------- ---------- ------------ -----------
Net loss for year                      -        -           -          -      (19,250)    (19,250)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 2005    4,500,000       45      13,455          -     (129,160)   (115,660)
                             ============ ======== =========== ========== ============ ===========
Common stock issued for cash     280,000        3      27,997     (2,000)           -      26,000
Common stock issued for
 services                      1,400,000       14     139,986          -            -     140,000
Common stock issued in
 exchange agreement              112,000        1           -          -            -           1
Common stock issued for
 equipment                     8,950,000       89      87,094          -            -      87,183
Net loss for year                      -        -           -          -     (161,845)   (161,845)
                             ------------ -------- ----------- ---------- ------------ -----------
Balance - December 31, 2006   15,242,000    $ 152   $ 268,532   $ (2,000)  $ (291,005)    (24,321)
                             ============ ======== =========== ========== ============ ===========

</TABLE>

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

                                      F-5


<PAGE>
                          GENESIS COMPANIES GROUP, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements


                      For the year ended December 31, 2006


Note 1.  BASIS OF PRESENTATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
         POLICIES:

BASIS OF PRESENTATION:

The accompanying  financial statements are for the accounts of Genesis Companies
Group, Inc., a Delaware corporation (the Company),  incorporated on December 22,
1988.

Development Stage Company:

The  Company  has  not  earned   significant   revenue  from  planned  principal
operations.  Accordingly,  the Company's  activities  have been accounted for as
those of a "Development Stage Company" as set forth in Statement of Financial
Accounting  Standards No. 7 ("SFAS 7"). Among the disclosures required by SFAS 7
are  that  the  Company's  financial  statements  be  identified  as  those of a
development stage company, and that the statements of operations,  stockholders'
equity  (deficit)  and  cash  flows  disclose  activity  since  the  date of the
Company's inception.

BUSINESS:

Prior to March 2006, the only activities  undertaken by the Company had 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,  at that  time,
executed and delivered a "lock-up" letter  agreement,  affirming that they would
not sell their  respective  shares of the Company's common stock until such time
as the Company has  successfully  consummated a merger or  acquisition  has been
consummated.  Also, each  shareholder had agreed to place their respective stock
certificates  with the  Company's  legal  counsel  who will  not  release  their
respective  certificates  until such time as legal counsel has confirmed  that a
merger or acquisition has been successfully consummated.

On March 15,  2006,  the  Company's  Board of  Directors  decided  to change the
management  of the Company.  Messrs.  Madhava Rao Mankal and Daniel  Medina were
appointed  as the Chief  Financial  Officer  and  President,  respectively.  The
4,500,000  shares  of the  Company's  common  stock  held by the  then  existing
stockholders  were  transferred  to Messrs.  Mankal and Medina in  exchange  for
500,000  shares of the  common  stock of  Medina  International  Holdings,  Inc.
(Medina).  At the time of the  transaction,  the shares of Medina were valued at
$25,000.

On July 28,  2006,  the  Company  began the  process of  acquiring  a "300 Watts
Portable Laser De-coating  System" ("PLDS") in exchange for 30,000,000 shares of
the  Company's  common stock.  In  connection  with the purchase the Company has
issued  8,950,000 common shares towards the purchase of parts for the PLDS. Upon
issuance of title and the transfer of ownership of the PLDS to the Company,  the
Company  will  issue an  additional  21,050,000  shares of its  common  stock to
complete the transaction

On July 28, 2006, the Company sold 28,000 shares of its common stock for cash of
$26,000  and a  subscription  receivable  of $2,000  under a  Private  Placement
Memorandum.

                                      F-6

<PAGE>

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

                      For the year ended December 31, 2006

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Use of Estimates In The Financial Statements:

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  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.  At  December  31,  2006,  the Company had cash or cash
equivalents of $26.

Property and Equipment:

Property and Equipment  are stated at cost. At December 31, 2006,  the Machinery
held by the  Company  consisted  of parts for the PLDS.  At December  31,  2006,
construction  of the PLDS was not  completed  and  therefore the Company has not
begun to depreciate the Machinery.

Income Taxes:

The Company  accounts for income taxes under  Statement of Financial  Accounting
Standards  (SFAS) No. 109,  which  requires the asset and liability  approach to
accounting  for  income  taxes.  Under  this  method,  deferred  tax  assets and
liabilities are measured based on differences  between  financial  reporting and
tax bases of assets and  liabilities  measured  using enacted tax rates and laws
that are expected to be in effect when differences are expected to reverse (Note
6).

Other Comprehensive Income (Loss):

SFAS No. 130, Reporting Comprehensive Income, requires the reporting and display
of comprehensive  income (loss) and its components.  The Company has no material
components of other  comprehensive  income (loss) and  accordingly,  net loss is
equal to comprehensive loss in all periods.

Loss Per Share:

The loss per common  share is  computed  based on the  average  number of common
shares outstanding during the year.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

In February 2006, the FASB issued SFAS No. 155,  "Accounting  for Certain Hybrid
Financial  Instruments-an  amendment  of FASB  Statements  No.133  and 140",  to
simplify  and  make  more  consistent  the  accounting  for  certain   financial
instruments.  SFAS No. 155  amends  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," to permit fair value re-measurement for any
hybrid financial  instrument with an embedded  derivative that otherwise require
bifurcation, provided that the whole instrument is accounted for on a fair value
basis.  SFAS No. 155 amends  SFAS No. 140,  "Accounting  for the  Impairment  or
Disposal of Long-Lived Assets," to allow a qualifying  special-purpose entity to
hold a derivative  financial  instrument that pertains to a beneficial  interest
other than other derivative  financial  instrument.  SFAS No. 155 applies to all
financial  instruments  acquired or issued  after the  beginning  of an entity's
first fiscal year that begins after September 15, 2006, with earlier application
allowed.  The  adoption  of this  statement  is not  expected to have a material
effect on our  company's  future  reported  financial  position  or  results  of
operations.

                                      F-7

<PAGE>

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

                      For the year ended December 31, 2006


In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
financial  Assets,  an  amendment  of FASB  statement  No. 140,  Accounting  for
transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
This  statement   requires  all  separately   recognized  assets  and  servicing
liabilities be initially measure at fair value, if practicable,  and permits for
subsequent  measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization  and impairment  requirements of
Statement No. 140. The Subsequent measurement of separately recognized servicing
assets and  servicing  liabilities  at fair value  eliminates  the necessity for
entities  that  manage the risks  inherent  in  servicing  assets and  servicing
liabilities  with  derivatives  to qualify for hedge  accounting  treatment  and
eliminates the characterization  declines in fair value as impairments or direct
write-downs.  SFAS No.  156 is  effective  for an  entity's  first  fiscal  year
beginning  after  September  15,  2006.  The  adoption of this  statement is not
expected to have a material effect on our company's  future  reported  financial
position or results of operations.

In June 2006, the FASB issued  Interpretation No. 48, Accounting for Uncertainty
in Income Taxes - An  Interpretation of FASB Statement No. 109, (FIN 48). FIN 48
clarifies  the  accounting  for  uncertainty  in income taxes  recognized  in an
enterprise's  financial  statements in accordance  with FASB  Statement No. 109,
Accounting for Income Taxes. FIN 48 also prescribes a recognition  threshold and
measurement attribute for the financial statement recognition and measurement of
a tax  position  taken or expected to be taken in a tax return that results in a
tax benefit.  Additionally,  FIN 48 provides guidance on de-recognition,  income
statement  classification  of  interest  and  penalties,  accounting  in interim
periods,  disclosure,  and transition.  This interpretation is effective for the
Company for its year ended  December 31, 2007. The Company has not yet evaluated
the  effect  that the  application  of FIN 48 may have,  if any,  on its  future
results of operations and financial condition.

In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements." The
objective of SFAS 157 is to increase consistency and comparability in fair value
measurements and to expand disclosures about fair value  measurements.  SFAS 157
defines  fair  value,  establishes  a  framework  for  measuring  fair  value in
generally accepted  accounting  principles,  and expands  disclosures about fair
value measurements.  SFAS 157 applies under other accounting pronouncements that
require or permit  fair value  measurements  and does not  require  any new fair
value  measurements.  The provisions of SFAS No.157 are effective for fair value
measurements  made in fiscal  years  beginning  after  November  15,  2007.  The
adoption of this  statement  is not  expected  to have a material  effect on our
company's future reported financial position or results of operations.

On February 15, 2007,  the FASB issued SFAS No. 159,  "The Fair Value Option for
Financial  Assets and  Financial  Liabilities  - Including  an Amendment of FASB
Statement  No. 115." This standard  permits an entity to measure many  financial
instruments  and  certain  other  items at  estimated  fair  value.  Most of the
provisions  of SFAS No. 115  ("Accounting  for Certain  Investments  in Debt and
Equity   Securities)   applies   to  all   entities   that   own   trading   and
available-for-sale  securities.  The fair value  option  created by SFAS No. 159
permits  an entity  to  measure  eligible  items at fair  value as of  specified
election dates. Among others,  eligible items exclude (1) financial  instruments
classified  (partially  or in total) as  permanent  or  temporary  stockholders'
equity (such as a convertible  debt security  with a  non-contingent  beneficial
conversion  feature)  and (2)  investments  in  subsidiaries  and  interests  in
variable interests that must be consolidated.  A for-profit business entity will
be  required to report  unrealized  gains and losses on items for which the fair
value option has been elected in its statements of operations at each subsequent
reposting date. The fair value option (a) may generally be applied instrument by
instruments, (b) is irrevocable unless a new elections date occurs, and (c) must
be applied to the entire instrument and not to only a portion of the instrument.
SFAS No. 159 is  effective  as of the  beginning  of the first  fiscal year that
begins after  November 15, 2007.  The Company has not yet  evaluated  the effect
that the  application  of FIN 48 may have,  if any,  on its  future  results  of
operations and financial condition.

                                      F-8

<PAGE>

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

                      For the year ended December 31, 2006

NOTE 2.  GOING CONCERN AND MANAGEMENT'S PLANS:

The  accompanying  financial  statements  have been prepared in conformity  with
accounting   principles   generally   accepted  in  the  United  States,   which
contemplates  continuation  of the  Company  as a  going  concern.  The  Company
reported a net loss of  $161,845  for the year ended  December  31,  2006 and an
accumulated  deficit during the development  state of $291,005.  The Company has
minimal cash and its current  liabilities  exceed  current assets by $111,504 at
December 31, 2006.  The Company had no revenues from its  activities  during the
year ended December 31, 2006.

The future  success  of the  Company is likely be  dependent  on its  ability to
attain additional capital, or to find an acquisition to add value to its present
shareholders  and  ultimately,  upon its  ability  to attain  future  profitable
operations.  There can be no assurance  that the Company will be  successful  in
obtaining  such  financing,  or that it will  attain  positive  cash  flow  from
operations. Management believes that actions presently being taken to revise the
Company's operating and financial  requirements  provide the opportunity for the
Company to continue as a going concern.

NOTE 3.  NOTES RECEIVABLE:

At December 31, 2006,  notes  receivable  consists of two loans in the amount of
$8,561 and $12,164. Both notes are unsecured,  8% promissory notes with payments
due on demand. The notes are held against an individual and a corporation.

NOTE 4.  NOTES PAYABLE - RELATED PARTY:

During  the year  ended  December  31,  2006,  outstanding  notes  payable  were
transferred to Messrs.  Medina and Mankal officers and directors of the Company.
The unsecured,  8% promissory notes are due on demand. At December 31, 2006, the
notes had accrued  interest  of $8,460.  The note is still  outstanding  at this
time.

NOTE 5.  STOCKHOLDERS' EQUITY:

During the year ended December 31, 2006,  the Company had the following  capital
stock transactions:

On March 15, 2006, the Company issued  112,000  restricted  shares of its $.0001
par value  common  stock  for  stock  purchase  agreements  $1 to an  accredited
investor.

On July 28, 2006, the Company issued 280,000 restricted shares of its $.0001 par
value common stock for cash of $28,000 to an accredited investor.

On July 28, 2006, the Company issued 1,400,000  restricted  shares of its $.0001
par value common stock for consulting services valued at $140,000.

On July 28, 2006, the Company issued 8,950,000  restricted  shares of its $.0001
par value common stock for equipment parts valued at $87,183.

In July 2006,  the Company  sold 28,000  shares of its common  stock for cash of
$26,000  and a  subscription  receivable  of $2,000  under a  Private  Placement
Memorandum.

In July  2006,  the  Company  issued  1,400,000  shares of its  common  stock to
consultants in exchange for services valued at $140,000.

In July 2006,  the Company  began the process of acquiring  PLDS in exchange for
30,000,000 shares of the Company's common stock. In connection with the purchase
the Company issued 8,950,000 common shares towards the purchase of parts for the
PLDS valued at $87,183.  Upon issuance of title and the transfer of ownership of
the PLDS to the Company, the Company will issue an additional  21,050,000 shares
of its common stock to complete the transaction.

                                      F-9

<PAGE>

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

                      For the year ended December 31, 2006

NOTE 6:  INCOME TAXES:

The FASB has issued SFAS 109,  "Accounting  for Income  Taxes," which requires a
change from the  deferred  method to the asset and  liability  method,  deferred
income taxes are recognized for the tax consequences of "temporary  differences"
by  applying  enacted   statutory  tax  rates  applicable  to  future  years  to
differences  between the financial  statement carrying amounts and the tax basis
of existing assets and liabilities.

The Company has deferred  income tax assets,  which have been fully  reserved as
follows:

              Deferred tax assets
                       Net operating loss carry forwards               $161,845
                       Valuation allowance for deferred tax assets    ($161,845)
                                                                       ---------

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

At December  31,  2006,  the Company had net  operating  loss carry  forwards of
approximately $161,845 for federal income tax purposes. These carry forwards, if
not utilized to offset taxable income will expire at the end of the December 31,
2016.

                                      F-10

<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 5, 2007.

                                       GENESIS COMPANIES GROUP, INC.
                                               (Registrant)


                                       By: s/ Daniel F. Medina
                                       ----------------------------------
                                              Daniel F. Medina, President

                                       By: s/ Madhava Rao Mankal
                                       -------------------------
                                              Madhava Rao Mankal, Chief
                                              Financial Officer

     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 5, 2007.

                                       /s/ Daniel F. Medina
                                       --------------------
                                           Daniel F. Medina,
                                       President and Director

                                       /s/ Madhava Rao Mankal
                                       ----------------------
                                           Madhava Rao Mankal
                                       Chief Financial Officer and Director

                                       19