UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

~~(Mark~~[X] ~~One~~ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~[X] ANNUAL~~For the ~~REPORT~~fiscal ~~UNDER~~year ~~SECTION~~ended 13December OR31, ~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~2018

~~For~~[ ~~the~~] ~~fiscal~~TRANSITION ~~year~~REPORT ~~ending~~PURSUANT ~~December~~TO ~~31,~~SECTION ~~2017~~13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

~~[ ] TRANSITION~~For the ~~REPORT~~transition ~~UNDER~~period ~~SECTION~~from 13___________ ORto ~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~_____________

~~For~~Commission File ~~the~~No.: ~~transition period from to~~ 000-55943

~~Commission~~GENESIS FINANCIAL, ~~file number: 333-103331~~INC.

~~Genesis~~(Exact name ~~Financial,~~of ~~Inc.~~registrant as specified in its charter)

(Name of Issuer in its Charter)

Wyoming

03-0377717

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

Wyoming	03-0377717
445 Park Avenue, Suite 922, New York, New York		10022
(State of Incorporation)	(IRS Employer Identification No.)
(Address of principal executive offices)		(Zip Code)

3773 St., Ste. 301, Post Falls, ID	83854
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 485-8085

~~Issuer’s~~Securities registered ~~telephone~~pursuant ~~number:~~to Section 12(~~208~~b) ~~457-9442~~of the Act:

~~Securities~~Title ~~Registered Pursuant~~ of ~~Section~~Class 12Trading Symbol(bs) Name of ~~the~~each ~~Act:~~exchange on which registered None

Securities registered ~~Registered~~pursuant ~~Pursuant~~to of Section 12(g) of the Act: ~~None~~

~~Indicate~~Common ~~by check mark if the registrant is a well-known seasoned issuer~~Stock, aspar ~~defined~~value in$0.001 ~~Rule~~per ~~405~~share (Title of ~~the Securities Act. Yes [ ] No [X]~~class)

Indicate by check mark ofif the registrant is ~~not~~a ~~required~~well-known toseasoned ~~file~~issuer, ~~reports~~as ~~pursuant~~defined toin ~~Section~~Rule 13405 ~~or 15(d)~~ of the Securities Act. ~~Yes~~ ~~[X] No [ ]~~

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X ] No [ X]

Indicate by check mark ~~whether~~if the registrant ~~has~~is ~~submitted~~not ~~electronically and posted on its corporate Web site, if any, every Interactive Data File~~ required to befile ~~submitted~~reports ~~and posted~~ pursuant to ~~Rule~~Section ~~405~~13 ofor ~~Regulation S-T~~ 15(~~§232.405~~d) of ~~this chapter) during~~ the ~~preceding~~Act: ~~12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]~~

~~Indicate~~Yes by[ ] No check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. [ X]

Indicate by check mark whether the registrant is(1) ahas ~~large~~filed ~~accelerated~~all ~~filer,~~reports anrequired ~~accelerated~~by ~~filer,~~Section 13 or a15(d) ~~non-accelerated~~of ~~filer~~the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]

~~Large~~Indicate by ~~accelerated~~check ~~filer~~mark ~~[ ]~~whether ~~Accelerated~~the ~~filer~~registrant ~~[ ]~~has ~~Non~~submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-~~accelerated~~T ~~filer~~(§232.405 ~~[ ]~~of ~~Smaller~~this ~~reporting~~chapter) ~~company~~during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]

Indicate by check mark whether the registrant is a ~~shell~~large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, ~~(as~~or ~~defined~~an byemerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act). ~~Yes [ ] No [X]~~

~~The~~Large ~~aggregate~~accelerated ~~market~~filer ~~value~~[ of] ~~the~~Accelerated ~~voting~~filer ~~and~~[ ~~non-voting~~] ~~common equity held by non~~Non-~~affiliates~~accelerated offiler ~~the~~[X] ~~registrant~~Smaller onreporting ~~June~~company ~~30,~~[X] ~~2017,~~Emerging ~~the~~growth ~~last~~company ~~business~~[ day of the registrant’s most recently completed second fiscal quarter, based on the average bid and asked price of such common equity of the registrant’s common stock on the Over the Counter QB was $868,928. The sum excludes the shares held by officers, directors, and stockholders whose ownership exceeded 10% of the outstanding shares at June 30, 2017, in that such persons may be deemed affiliates of the Company. This determination of affiliate status is not necessarily a conclusive determination for other purposes. ]

AsIf an ofemerging ~~February~~growth 14company, ~~2018~~indicate ~~there~~by ~~were~~check ~~879,763~~mark ~~common~~if ~~shares~~the ~~issued~~registrant ~~and~~has ~~outstanding~~elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

1Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [ ]

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

Yes [ ] No [X]

The aggregate market value of the voting stock held by non-affiliates of the registrant at June 30, 2018, the last business day of the registrant’s most recently completed second fiscal quarter was $38,716,191 based on the last reported sales price of the registrant’s common stock as reported by the OTC Markets on that date.

As of August 13, 2020, there were an aggregate of 56,688,110 shares of the Registrant’s common stock, par value $0.001 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

GENESIS FINANCIAL, INC.

FORM 10-K

December 31, ~~2017~~2018

TABLE OF CONTENTS

	PART I
Item 1.	BUSINESS	3
Item 1A.	RISK FACTORS	10
Item 1B.	UNRESOLVED STAFF COMMENTS	10
Item 2.	PROPERTIES	10
Item 3.	LEGAL PROCEEDINGS	10
Item 4.	MINE SAFETY DISCLOSURES	10

	PART II
Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	10
Item 6.	SELECTED FINANCIAL DATA	11
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
Item 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	17
Item 8.	FINANCIAL STATEMENTS SUPPLEMENTARY DATA	18
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.	19
Item 9A.	CONTROLS AND PROCEDURES.	19
Item 9B.	OTHER INFORMATION	19

	PART III
Item 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	23
Item 11.	EXECUTIVE COMPENSATION	24
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS	25
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	27
Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	27

	PART IV
Item 15.	EXHIBITS	28
Item 16.	FORM 10-K SUMMARY	29
Signatures		30

PART I

Item 1. BUSINESS

Cautionary Note Regarding Forward-Looking Statements

Statements in this Current Report on Form 10-K may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described herein and those risks discussed from time to time in this report, including the risks described under “Risk Factors” in other documents which we may file with the SEC. In addition, such statements could be affected by risks and uncertainties related to:

●	Our ability to raise funds for general corporate purposes and operations;

●	The commercial feasibility and success of our technology; and

●	Our ability to recruit qualified management and technical personnel

Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of such statements.

The terms the “Company,” “we,” “us,” and “our” refer to the combined enterprises of Genesis Financial, Inc. (“Genesis Financial”), Epoint Payment Corp. (“Epoint”) , Fintech Holdings, LLC and Fintech Investments, Inc. after giving effect to the Exchange Agreement and the related transactions described below, except with respect to information for periods before the consummation of the Exchange Agreement which refer expressly to Epoint or Genesis Financial, as specifically indicated.

Reverse Merger with EPOINT Payment Corp.

On February 15, 2018, Genesis Financial and Epoint completed the transactions contemplated by the previously disclosed Capital Stock Exchange Agreement (the “Exchange Agreement”) entered into as of September 8, 2017, as subsequently amended. Under the Exchange Agreement, Genesis acquired 100% of the outstanding capital stock of Epoint, following which Epoint became a wholly-owned subsidiary of Genesis. The transaction was structured as a tax-free reorganization and exempt from registration under the Securities Act of 1933, as amended (the “Act”). Pursuant to the Exchange Agreement, Genesis issued to Epoint’s shareholders an aggregate of 8,231,536 shares of its common stock in exchange for all of their capital holdings in Epoint. At the closing, Genesis also issued to Epoint’s shareholders warrants to purchase up to an additional 845,000 shares of common stock in exchange for an equal number of Epoint common stock warrants. The warrants are exercisable through February 12, 2028 at a per share exercise price of $3.00.

On February 12, 2018, Epoint issued warrants to purchase 1,970,250 shares of common stock to certain partners, associates, and designees of Whitestone Investment Network, Inc., a mergers and acquisition advisory group which was instrumental in introducing the management of Epoint to Genesis, and in structuring the Exchange Agreement. At the closing of the Exchange Agreement on February 15, 2018, Genesis also issued to these entities warrants to purchase up to 1,970,250 shares of its common stock in exchange for an equal number of Epoint common stock warrants. The warrants are exercisable through February 12, 2023 at a per share exercise price of $3.00.

At the closing of the Exchange Agreement on February 15, 2018, noteholders of $250,000 in principal amount of convertible loans payable (described in Note 5) voluntarily elected to convert their loans into 100,000 shares of Genesis common stock at a conversion rate of $2.50 per share.

Prior to the closing, Genesis was engaged in the business of buying and selling seller financed real estate loans and originating commercial real estate loans and providing start-up funding (the “Prior Business”). In connection with the closings and as mandated by the terms of the Exchange Agreement, Genesis and the Coghlan Family Corporation (the “Coghlan Family Corporation”), an entity controlled by John R. Coghlan, one of the directors and the holder of the majority of the outstanding debt of Genesis prior to the closing, entered into an agreement with Genesis pursuant to which the Coghlan Family Corporation agreed, at a mutually agreeable date after the closings, to assume and otherwise discharge all of Genesis’ outstanding debt, except for a loan of $100,000 payable to Coghlan Family Corporation (the “CFC Loan”), in consideration of the transfer to it by Genesis of the assets related to the Prior Business (the “Purchase and Sale Agreement”). The CFC Loan bears interest at an annual rate of 6% and the maturity date was extended to May 15, 2019. Upon extension of the note in May 2018, Genesis issued to Coghlan Family Corporation 65,000 shares of Common Stock.

In accordance with Financial Accounting Standards Board Accounting Standards Codification section 805, “Business Combinations”, Genesis has accounted for the Exchange Agreement transaction as a reverse business combination using the acquisition method. This determination is based on Epoint shareholders obtaining voting control as well as management and Board control of the combined entity. Accordingly, the assets and liabilities and the historical operations that are reflected in these consolidated financial statements are those of Epoint and are recorded at the historical cost basis of Epoint, and the assets and liabilities of Genesis at the merger date were recorded at their fair values.

~~ITEM~~For accounting purposes, Genesis is deemed to have issued 879,765 common shares to the legacy shareholders of Genesis. Using an estimated fair value of common stock on February 15, 2018 of $2.00 per share, the purchase price of the 879,765 shares held by the legacy shareholders of Genesis was approximately $1,759,500. ~~Business~~ The difference between the fair value of these shares and the recorded fair value of assets acquired and liabilities assumed of Genesis totaling $1,835,684 was allocated to Goodwill. The preliminary fair value estimates for the consideration paid and the assets acquired and liabilities assumed for our acquisition is based on preliminary calculations and valuations and our estimates and assumptions are subject to change as we obtain additional information for our estimates during the measurement period (up to one year from the acquisition date). The primary areas of those preliminary estimates that were not yet finalized related to valuation of goodwill and fair value of common stock.

3Acquisition of Fintech – Immediately following the closing of the Exchange Agreement, on February 15, 2018, Genesis and Fintech Holdings, LLC (“Fintech LLC”), an Oregon limited liability company, signed and closed a Membership Interest Exchange Agreement between Genesis and Fintech LLC (the “Fintech Exchange Agreement”; together with the Exchange Agreement, the “Exchange Agreements”) pursuant to which Genesis issued to the members of Fintech LLC an aggregate of 26,435,604 shares of Common Stock. Fintech Investments Inc., the wholly-owned subsidiary of Fintech LLC (“Fintech Investments”) and a company formerly owned and operated by Gary Larkin, the former Executive Co-Chairman of Genesis, holds the intellectual property licenses of Epoint’s proprietary platform technologies. Given that the entities were under common control, all of the transactions performed by Fintech Investments were done at the direction of Epoint, and substantially all of the fair value of gross assets acquired is concentrated in a group of similar identifiable assets, management determined that the assets acquired do not represent a business. Accordingly, the assets and liabilities of Fintech LLC and Fintech Investments have been recorded at their historical cost basis at the merger date, and are included in the Company’s consolidated financial statements.

~~ITEM~~Henceforth, all 1Areferences to the “Company” shall mean and include Genesis Financial. ~~Risk~~, ~~Factors~~Inc. and its subsidiaries, following the closing of the Exchange Agreements.

Overview of the Business of the Company

Genesis Financial, Inc., through its wholly-owned subsidiary, Epoint Payment Corp., is engaged in providing a range of diverse alternate financial products designed for cost-efficient delivery via a smart phone or other mobile device. Epoint intends to initiate financial services with an integrated “Mobile First” enabled program targeting underbanked and unbanked consumers, initially in North America, which will include micro credit, mobile phone device financing programs, money transfers, prepaid debit cards, bill payments, mobile top up, check processing, insurance and travel.

We intend to leverage our relationships and agreements with key technology and media participants, together with appropriate financial institutions and distribution partners, to offer target customers a wide range of price leading and more convenient local and international financial services, including money transfer, bill payment, mobile top up, Point of Sale (POS) payments, instant micro loans, check processing, insurance and travel services, all of which are to be delivered via an advanced proprietary platform technology.

We plan to initiate our service offering with products designed to appeal to key underbanked consumer market segments including ex-patriate Spanish speaking consumers in the United States.

The Epoint value proposition has been achieved through strong collaboration with leading players from within the existing payment and mobile telephony industries which leverages the existing infrastructure in a manner not previously achieved, to create cost efficiencies and expanded functionality designed specifically to cater to the Epoint customers.

Prior to the closing, Genesis was engaged in the business of buying and selling seller financed real estate loans and originating commercial real estate loans and providing start-up funding. Following the closing of the reverse acquisition between Genesis Financial, Inc. and Epoint Payment Corp., pursuant to which Epoint became a wholly-owned subsidiary of Genesis, these operations have been discontinued.

Industry Background

In addition to those consumers who have traditionally fallen into the under-banked and unbanked category, there is an emerging segment of consumers, including millennials, who are drawn to less formal banking preferring to manage their finances through prepaid debit cards and/or more recently reloadable mobile wallets. As merchants have moved to replace legacy credit/debit card processing terminals with more secure Micro Chip (EMV Chip), Near Field Communication (NFC) and Biometric capable devices we have seen emergence of more mobile device payment services (i.e. Apple Pay, Bank of America mobile wallet programs). We expect a substantial growth in mobile wallet managed purchases leading to reductions and or possible elimination of the traditional physical card over the coming years.

According to the Nielsen’s fifth report on the Latino consumer in the annual Diverse Intelligence Series, Hispanic power and influence is surging: 50% of U.S. population growth from 2010 to 2015 has come from Hispanics, and the U.S. Census expects the U.S. Latino population to more than double within the next two generations. Almost 57 million strong, Hispanics represent almost 18% of the U.S. population, and they’re expected to continue showing growth, reaching 24% of the population by 2040. To put this in perspective, the report notes, “if U.S. Hispanics were a standalone country, their market buying power would be one of the top twenty economies in the world.” Based on these projections the unbanked Hispanic consumer controls annual spending of over $300 billion.

We believe a unique window of opportunity exists to establish a “Lifestyle Brand” for the under-banked consumer, initially with the Hispanic market segment in the U.S. Existing financial services providers (e.g., Amex, Visa, MasterCard, Capital One, Discover, MoneyGram, Western Union and almost all US Banks) are not generally regarded as positive lifestyle brands to the Hispanic consumer.

Epoint leverages several key distinctions:

●	Our target customer already uses prepaid cards and alternate financial services, just not typically through a single channel or brand; and

●	Our target customer is highly mobile connected and relies heavily on their mobile phone to maintain contact with their loved ones.

A substantial segment of our target consumer base relies heavily on remittances from the Hispanic population in the United States to Spanish-speaking Latin American countries. A remittance is a transfer of money by a foreign worker to an individual in his or her home country. According to a World Bank report released October 3, 2017 remittances to Latin America and the Caribbean in 2017 were expected have risen by 6.9 percent to $79 billion. The World Bank also predicts that remittances to the region will likely continue to grow, to approximately $82 billion in 2018.

The Epoint Solution

The Epoint solutions technology ecosystem incorporates a range of discrete and proprietary platforms interfaced with industry leading third parties which deliver either core network, gateway payment or third-party product solutions. The key elements of our proprietary solutions include the following:

Epoint eWallet Platform Technology

Epoint has developed a proprietary platform for the delivery of mobile App enabled financial solutions. This secure, regulatory compliant and fully scalable platform has been developed and is supported by a permanent IT staff of experienced developers. Our team possesses substantial domain expertise within the banking, payments and remittance segments of the global financial services industry.

The eWallet platform meets all existing regulatory requirements for Payment Card Industry (PCI) compliance. In addition to PCI compliance, Epoint has integrated advanced data security protocols to further protect its clients and end-users from financial and personal information theft and fraud.

Our eWallet mobile solutions are designed to fulfil the regulatory requirements of the financial service industry including that of international remittance which must comply with stringent OFAC, FINCIN and Patriot Act requirements.

The Epoint Micro Credit or MLOC capability and Program Platform (the “MLOC Platform”) was sub-licensed to Epoint by Fintech Investments. The unique MLOC Platform has been designed to support a variety of market applications dependent upon the specific channel partner’s requirements. This flexibility enables the optimum reach into developing markets with minimal development or ramp-up time.

Epoint has been able to craft a unique, integrated suite of financial services products that can be offered to end consumers as an “IN-NETWORK” package. These initial integrated service offerings will include:

●	A secure debit card issued by participating regulated banks and differentiated by a range of bundled financial services, that provides the convenience of retail and online purchasing within the U.S. and Latin American markets.

●	Fast and cost efficient international Money Transfer at a consumer price point significantly less than currently available options.

●	In-market and cross-border bill payment solutions (Pay by phone, mobile or Internet for less than half of current market cost).

●	Domestic & cross-border Remote mobile top up (conveniently reload prepaid mobile minutes anywhere anytime)

●	A complete mobile financial services solution for the under-banked. Easy download and complete remote financial services transaction management for everyone

●	Cash in/cash out services at thousands of convenient retail locations

●	Remote check cashing via mobile phone (No more standing in lines and paying high fees to cash checks)

●	Domestic and cross border rewards and loyalty programs

●	Emergency credit facilities.

Product Offerings

Epoint will offer a comprehensive and fully integrated set of cost efficient mobile enabled financial services targeted to the under-banked and unbanked consumer, including:

●	Debit Cards & eWallets: Delivering a combination of both traditional general purpose reloadable debit cards and network integrated mobile phone wallets, will enable the Epoint customer to take full advantage of their purchasing power at all participating retailers, ATMs and online merchants.

●	Money Transfer: Low cost and ultra-convenient way for consumers to send money anywhere anytime using the convenient fully compliant mobile remittance application. Offering lower cost money transfer with the convenience of mobile payment saves our customers many lost hours of time spent in lines at traditional retail remittance locations.

●	Bill Payment: Epoint mobile enabled bill payment services will provide consumers with a convenient and cost-efficient way to pay recurring and one-off household bills. Instead of standing in lines at retail counters to purchase money order for rent or utility payments, Epoint empowered consumers can take care of their monthly household utility and recurring bills utilizing their mobile communication devices.

●	Check Cashing: Using a convenient online mobile remote check capture will allow our consumers to save both time and money converting payroll checks into cash or instant purchasing power.

●	Mobile Top Up: The unbanked and under-banked consumer is predominately a prepaid mobile services customer, because achieving monthly account status is almost impossible without established credit and banked history. Epoint enables pay as you go customers to buy competitively priced wireless plans directly from their mobile phone, thereby reducing both cost and time.

●	Loyalty & Rewards: Well-banked customers have come to expect competitive and valuable rewards and loyalty programs from their credit and debit card providers. These programs have matured over the last ten years and resulted in movement from one network card to another based solely on loyalty (i.e. American Express Costco Rewards, Airline mileage credit card programs etc.). The unbanked and under-banked customers have not been able to participate in these increasingly valuable consumer marketing activities. Through an Epoint enabled Loyalty & Rewards Plan, including cross-border loyalty/rewards programs, our future customers would be able to earn valuable benefits, discounts and preferred pricing based upon their purchase history.

●	Insurance Services: Auto, home, death and disability insurance products are desirable and sought-after products in the under-banked communities. Epoint intends to present products which can be purchased through the Epoint Consumer Portal and paid for online with the Epoint debit card.

●	Credit Services: Today’s unbanked and under-banked consumer typically looks to either a Pay Day lender or a Pawn Shop as a source for short-term credit, with medium and long-term credit options completely out of reach. Epoint intends to introduce a range of affordable credit options including:

	○	Payroll based credit programs: These will be made available in the U.S following pending regulation for the re-introduction of products of this nature.

	○	Credit Card Services: As a secondary phase expansion, Epoint intends to introduce a Credit Card for the sub-prime consumer. This is a strong market opportunity with many able partners ready to support a well-branded move into this market segment.

	○	Cross Border Credit: Current credit regulation and policy in the U.S. excludes the sub-prime consumer. We plan to expand into Mexico and offer the Mexican consumer a small dollar value credit solution, or a micro loan, which will be linked to a recurring Mexico bound remittance from a U.S. based Epoint cardholder.

Competitive Advantages of the Epoint Solution

We believe that Epoint has a disruptive competitive advantage which will be rooted in our unique and exclusive coupling of established payment networks and electronically automated processes which cannot easily, if at all, be replicated by existing market providers.

Existing financial services providers including banks, money transfer agents and alternate financial services bureaus have created expensive retail infrastructures to support their required physical interaction with a customer. These groups together with traditional debit/credit card networks including Visa, MasterCard and Discover are further hampered by embedded economic distribution models that were developed decades ago to protect once essential individual channel partners, which Epoint will efficiently circumvents with its streamlined processes. In the following bullet points we have briefly described the competitive infrastructure and compared it to the Epoint solution:

●	Debit/Credit Card Financial Services: The card networks have focused solely upon providing a backbone to enable the use of a card at the Point of Sales (“POS”). These transactions generate fees and interchange that create the vast majority of network revenues. These Network competitors have relied upon their pervasiveness within the banking industry to retain customers rather than expand their financial services offerings to assist the unbanked or under-banked by providing valuable network delivered and cost effective ancillary financial services. Their origins, as previously bank owned entities, have led to their deferral of all ancillary services to their bank partners.

●	International Money Transfer/Remittance: The long-term leaders in the enormous remittance market including Western Union, MoneyGram and Travelex together with newcomers such as XOOM, rely heavily upon a physical transaction capture and/or distribution networks.

	○	This expensive and cumbersome retail presence has layered in historical costs that have continued to keep remittance charges higher than necessary, often exceeding 10% of the funds being sent, and rarely less than $4.99 per transaction. The Epoint “In-Network” remittance program leverages our network partner relationships with leading industry participant such as FIS for their reach throughout the U.S. and Latin America.

	○	Epoint is able to utilize the low-cost cross-border Mexico debit network to profitably send money instantly and at unprecedented ultra-low costs that cannot be easily matched by any of the traditional remittance competition or newcomer Internet service providers.

	○	Even the largest of US banks (Wells Fargo) which recently announced it would be introducing a new remittance service to its existing customers, projects a retail price of over $7 per transaction.

	○	Cost of pre-existing infrastructure — inability to easily gain equivalent relationships with core financial network operators in the U.S and Mexico, together with existing high cost of established distribution structures are all ongoing impediments for our competitors within the remittance product segment.

●

Cross Border Bill Payment & Mobile Top-Up: We believe the unmatched resources of Epoint, FIS and its partners within Mexico will provide the most efficient and cost effective cross-border bill payment and mobile money top-up between US and Mexico, ensuring we maintain both the “best of breed” customer solution and the lowest possible market price.

Significant Agreements and Arrangements

The provision of the Epoint solution requires the collaboration of various market participants with whom Epoint currently has agreements and others with whom it is in discussion with relating to various collaboration efforts. Below is a summary of these agreements and arrangements.

●	Epoint has a long-term Network operational services agreement with FIS, the world’s largest payment processing group. This agreement provides Epoint with turnkey acceptance of Epoint issued debit cards at over 2.0 million US retail locations and more than 450,000 ATMs. In addition, this network support enables our Bank and Program management partners to create mobile wallet and other virtual accounts.

●	Epoint has a master services agreement with FIS’s PayNet Group for the provision of all U.S. outbound remittance services. Under this agreement FIS will offer Epoint access at most favorable rates to all FIS global remittance distribution as well as its secure and compliant remittance transaction-processing services.

●	A strategic teaming agreement with AMDOCS for Epoint to provide financial services to AMDOCS key customers. AMDOCS, a leader in provision of essential services to the world’s largest mobile carriers including AT&T/Crickett, Tracfone, Sprint, Airtel, Vodafone, America Movil, and Telefonica.

●	Epoint has secured an agreement with StreetCred Capital, LLC, (StreetCred), a prominent provider of lead generation for finance within the mobile telephony industry. Under this agreement Epoint intends to develop and deliver a rent-to-own (“RTO”) mobile phone device financing program for certain StreetCred mobile carrier clients in the U.S. and Mexico.

●	Epoint is working to enter into several agreements with US and Central American distribution and support partners to secure direct distribution rights for its diverse mobile financial services suite of products, of which no guarantee can be provided as to ultimate success.

Market Penetration Strategy

Exploiting the Existing Distribution Channels

We intend to partner with leading prepaid issuing banks and their key program manager to position our financial products and our card /mobile wallet account services to the under-banked consumer. Epoint further plans to exploit strategic partnerships with prominent industry distribution channel partners including AMDOCS, StreetCred, leading carriers within the mobile segment, prominent program managers within the prepaid debit card segment, and others. We believe that the unique relationships Epoint has forged with FIS and its nationally operated payment network NYCE, will allow Epoint to in distribution within the U.S. market.

Card and Mobile Wallets

We intend to establish partnership agreements with both traditional debit card and emerging mobile wallet programs. Through these partnerships, our customers will be able to choose either traditional debit cards or where applicable their mobile wallet to efficiently complete purchase transactions. Well-established brand marketers generally manage these payment programs for sponsoring banks. We intend to enter into agreements with a number of major mobile carriers both directly and as part of the AMDOCS Teaming agreement. In addition, we are finalizing a regional Distribution and Services support agreement covering Central America with a leading credit services group based in Mexico.

Financial Institution Program Sponsors

We are in the process of finalizing agreements with several banks to support Epoint programs for initial launch within the U.S.

In addition, we intend to form additional partnerships with other prepaid sponsor banks which also have strong reach into the pre-paid debit card market.

Community banks and Credit Unions within the U.S. are struggling to capture and retain customers. The increased regulatory burdens imposed upon banks for basic consumer financial services including prepaid debit card issuance, remittance, bill payment and other daily financial services have exceeded the revenue potential of the programs. While the largest of the national banks can afford to support the internal compliance and operational overheads necessary to satisfy their regulators, smaller regional financial institutions have been crowded out losing any competitive edge.

The initial national acceptance of the Epoint card at all PIN Debit retail locations and ATMs provides our end user customers with the necessary coverage to conduct all daily purchase and cash back transactions.

Our Revenue Model

Epoint intends to deploy a channel partner lead “Business to Business to Consumer” (B2B2C) marketing distribution strategy designed to enable Epoint to reach its intended target customer base. This strategy has the distinct advantage of capturing consumers in large groups often with a common known socio-economic or ethnic make-up which allows for more precise message targeting for higher conversion rates.

While it is subject to change as our business develops, Epoint has devised a structured pricing model that provides shared revenue with the channel partners based on the conversion and revenue generated directly from their consumers. Each of Epoint’s financial services has a distinct economic yield and channel partners are able to adjust end-user costs basis to assist in driving higher aggregate program yields based on the unique characteristics of their own customers.

All the pricing and revenue share elements are configurable within the advanced Epoint platform and program results are published in real-time through the secure reporting portal so that our partners can track inter-daily program usage and performance.

Competition

The payment and financial services industries are highly competitive, and our continued growth depends on our ability to compete effectively. Although we do not face direct competition from any competitor in exactly the same combined lines of business, we face competition from a variety of financial and non-financial business groups. These competitors include retail banks, non-traditional payment service providers, such as retailers and mobile network operators, traditional kiosk and terminal operators and electronic payment system operators, as well as other companies that provide various forms of payment services, including electronic payment and payment processing services. Competitors in our industry seek to differentiate themselves by features and functionalities such as speed, convenience, network size, accessibility, hours of operation, reliability and price. A significant number of our competitors have greater financial, technological and marketing resources than we have, operate robust networks and are highly regarded by consumers.

We expect to face varied competition across our anticipated full product service offerings including:

PRODUCT / SERVICE		COMPETITOR EXAMPLES
Debit Card Issue		Visa, MasterCard, Capital One, Discover & American Express
Community Banking Services		Jack Henry, First Data, FISERV
Money Transfer		MoneyGram, Western Union, Xoom, Uniteller, Travelex
Bill Payment		MoneyGram, Online Bill Payment & Hybrid Debit Card Solutions
Mobile Top Up		Prepaid Telco retail, Unidos, EMIDA
Loyalty & Rewards		None Known Currently
Insurances		Online and Hispanic Specialty Retail
Travel Programs		Online and Hispanic Specialty Retail

~~ITEM 1B. Unresolved Staff Comments~~Intellectual Property

9The Company does not hold any patents. Fintech Investments Inc., the wholly-owned subsidiary of Fintech LLC (“Fintech Investments”) and a company formerly owned and operated by Gary Larkin, the Executive Co-Chairman of Genesis, holds the intellectual property licenses of Epoint’s proprietary platform technologies. We rely on a combination of contractual rights, copyright, trademark and trade secret laws to establish and protect our proprietary technology.

~~ITEM 2~~Item 1A. ~~Properties~~ RISK FACTORS

9As a “smaller reporting company,” we are not required to provide the information required by this item.

~~ITEM 3~~Item 1B. ~~Legal~~ ~~Proceedings~~UNRESOLVED STAFF COMMENTS

9None.

~~ITEM 4~~Item 2. ~~Mine~~ ~~Safety Disclosures~~PROPERTIES

9At December 31, 2018, our executive offices were located at 11920 Southern Highlands Parkway, Suite 200, Las Vegas, Nevada 89141. We leased these premises under a lease agreement which started on March 1, 2018 and ends on February 28, 2021. The lease was terminated in January 2019.

Item 3. LEGAL PROCEEDINGS

We are not currently subject to any material legal proceedings; however, we could be subject to legal proceedings and claims from time to time in the ordinary course of our business. Regardless of the outcome, litigation is time consuming and expensive to resolve, and it diverts management resources.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock trades on the OTC Markets under the symbol “GFNL.” The following table sets forth the high and low closing prices of our common stock (USD) for the last fiscal year, as reported by the OTC Markets and represents inter dealer quotations, without retail mark-up, mark-down or commission and may not be reflective of actual transactions. During the fourth quarter of 2017, the Company implemented a twenty for one (20:1) reverse stock split resulting in a higher share prices. Limited trading of our common stock has occurred since the completion of the Exchange Agreement on February 15, 2018; therefore, only limited historical price information is available. The market prices reported above have be adjusted to give retroactive effect to the reverse split.

2018	High		Low
First quarter	$	5.75	$	3.25
Second quarter		5.24		3.75
Third quarter		4.10		2.50
Fourth quarter		2.50		1.51

2017	High		Low
First quarter	$	2.40	$	1.60
Second quarter		2.00		1.40
Third quarter		3.40		1.50
Fourth quarter		4.00		2.80

Shareholders

Our shares of common stock are issued in registered form. The registrar and transfer agent for our shares of common stock is Columbia Stock Transfer Company: 1869 E Seltice Way #292, Post Falls, ID 83854. Telephone (208) 777-8998.

As of August 13, 2020, there were 56,688,110 shares of our common stock outstanding, which were held by approximately 159 record stockholders. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of shares of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

~~ITEM 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.~~Dividend Policy

10We have not paid cash dividends on our common stock since our inception, and we do not contemplate paying dividends in the foreseeable future.

~~ITEM~~Recent Sales ~~6. Selected~~of ~~Financial~~Unregistered ~~Data~~Securities

10During the twelve months ended December 31, 2018, we issued unregistered securities as follows:

~~ITEM~~1. 7On February 15, 2018, the Company and Epoint completed the transactions contemplated under the Exchange Agreement where Genesis acquired 100% of the outstanding capital stock of Epoint, following which Epoint became a wholly-owned subsidiary of Genesis. ~~Management’s~~ ~~Discussion~~Pursuant to the Exchange Agreement, Genesis issued to former Epoint shareholders an aggregate of 8,231,536 shares of its common stock in exchange for all of their capital holdings in Epoint. 2. On February 15, 2018, Genesis also issued to former Epoint shareholders warrants to purchase up to an additional 845,000 shares of common stock in exchange for an equal number of Epoint common stock warrants. The warrants are exercisable through February 12, 2028 at a per share exercise price of $3.00. 3. On February 12, 2018, Epoint issued warrants to purchase 1,970,250 shares of common stock to certain partners, associates, and ~~Analysis~~designees of ~~Financial~~Whitestone ~~Condition~~Investment Network, Inc., a mergers and ~~Results~~acquisition advisory group which was instrumental in introducing the management of ~~Operations~~Epoint to Genesis, and in structuring the Exchange Agreement. At the closing of the Exchange Agreement on February 15, 2018, Genesis also issued to these entities warrants to purchase up to 1,970,250 shares of its common stock in exchange for an equal number of Epoint common stock warrants. The warrants are exercisable through February 12, 2023 at a per share exercise price of $3.00. 4. On February 15, 2018, noteholders of $250,000 of convertible loans payable voluntarily elected to convert their loans into 100,000 shares of Genesis common stock at a conversion rate of $2.50 per share. 5. On February 15, 2018, Genesis and Fintech LLC signed and closed the Fintech Exchange Agreement pursuant to which Genesis issued to the members of Fintech LLC an aggregate of 26,435,604 shares of common stock. 6. In May 2018, the Company issued 65,000 shares of its common stock to a lender as debt issuance costs under a loan extension and modification agreement. 7. In August 2018, the Company issued 1,550,000 warrants to purchase shares of its common stock to lenders as debt issuance costs under loan extension and modification agreements.

These securities were not registered under the Securities Act of 1933, as amended (the “Securities Act”), but qualified for exemption under Section 4(a)(2) of the Securities Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act a because the issuance of such securities by the Company did not involve a “public offering,” as defined in Section 4(a)(2) of the Securities Act, the investor’s representations that it is acquiring the securities for its own account for investment purposes and not as nominee or agent, and not with a view to the resale or distribution thereof, and that the investor understands that the securities may not be sold or otherwise disposed of without registration under the Securities Act and any applicable state securities laws, or an applicable exemption therefrom.

Securities authorized for issuance under equity compensation plans.

The Company does not have any equity compensation plans.

Item 6. SELECTED FINANCIAL DATA

Not applicable.

~~ITEM 7A~~Item 7. ~~Quantitative~~ ~~and~~MANAGEMENT’S ~~Qualitative~~DISCUSSION ~~Disclosure~~AND ~~About~~ANALYSIS ~~Market~~OF ~~Risk~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this Form 10-K and in other documents incorporated herein, as well as in oral statements made by the Company, statements that are prefaced with the words “may,” “will,” “expect,” “anticipate,” “continue,” “estimate,” “project,” “intend,” “designed,” and similar expressions, are intended to identify forward-looking statements regarding events, conditions, and financial trends that may affect the Company’s future plans of operations, business strategy, results of operations, and financial position. Examples include those statements set forth above under “Item 1. Business - Cautionary Note Regarding Forward-Looking Statements.” These statements are based on the Company’s current expectations and estimates as to prospective events and circumstances about which the Company can give no assurance. Further, any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement to reflect future events or circumstances. Forward-looking statements should not be relied upon as a prediction of actual future financial condition or results. These forward-looking statements, like any forward-looking statements, involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks and uncertainties include the factors set forth above and the other information set forth in this Form 10-K.

Overview of the Business of the Company

For most people, having a bank account is as natural as breathing. But according to the 2016 FDIC National Survey of Unbanked and Underbanked Households, 15.6 million adults are completely unbanked and 27% of U.S. households, or approximately 68 million consumers, are underbanked, which means they have no credit history or only nonbank credit. These unbanked and underbanked consumers tend to rely solely upon alternate financial services or in many instances are forced supplement their bank relationship with alternative financial services. In both categories, consumers often turn to non-bank financial products that many consumer advocates describe as predatory at worst and insufficient at best. In addition to those consumers who have traditionally fallen into the under-banked and unbanked category, there is an emerging segment of consumers, including millennials, who are drawn to less formal banking preferring to manage their finances through prepaid debit cards and/or more recently reloadable mobile wallets.

We plan to initiate our service offering with products designed to appeal to key underbanked consumer market segments including ex-patriate Spanish speaking consumers in the United States.

Prior to the closing, Genesis was engaged in the business of buying and selling seller financed real estate loans and originating commercial real estate loans and providing start-up funding. Following the closing of the reverse acquisition between Genesis Financial, Inc. and Epoint Payment Corp., pursuant to which Epoint became a wholly-owned subsidiary of Genesis, these operations have been discontinued.

Reverse Merger

On February 15, 2018, Genesis Financial and Epoint completed the transactions contemplated under the Exchange Agreement where Genesis acquired 100% of the outstanding capital stock of Epoint, following which Epoint became a wholly-owned subsidiary of Genesis. Immediately following the closing of the Exchange Agreement, on February 15, 2018, Genesis and Fintech Holdings, LLC (“Fintech LLC”), an Oregon limited liability company, signed and closed a Membership Interest Exchange Agreement between Genesis and Fintech LLC (the “Fintech Exchange Agreement”).

Following the closings, each of Epoint and Fintech LLC became wholly-owned subsidiaries of the Company.

Results of Operations

Years ended December 31, 2018 and 2017

	2018			2017
Revenues:
Financial services and other revenue, net	$	72,732		$	-

Expenses:
Impairment of capitalized technology and goodwill		2,195,048			-
Professional services		2,003,074			336,698
Compensation, payroll taxes and benefits		356,557			341,890
Technologies and telecom		140,349			163,623
Loss of deposits on planned acquisition of SmartPay Leasing, LLC		200,000			-
Gain on extinguishment of accrued expenses		(429,200	)		-
Depreciation and amortization		141,191			52,917
Taxes, licenses and insurance		82,526			2,454
Occupancy and equipment		78,472			5,301
Loss on disposal of fixed assets		32,262			-
Other operating expenses		66,024			30,556
Total operating expenses		4,866,303			933,439

Net loss from operations		(4,793,571	)		(933,439	)

Other income		50,000			-
Interest income		114			48
Interest expense		(857,919	)		(14,433	)

Net loss	$	(5,601,376	)	$	(947,824	)

Year Ended December 31, 2018 Compared to the Year Ended December 31, 2017

Revenues

The Company had revenues of $72,732 for the year ended December 31, 2018 and no revenue for the year ended December 31, 2017.

Expenses

The Company recorded a $2.2 million charge for impairment of capitalized technology and goodwill for the year ended December 31, 2018 for the carrying values of the assets that exceeded the fair values.

Professional services expenses for the year ended December 31, 2018 increased to $2.0 million from $0.3 million for the year ended December 31, 2017. The increase is primarily attributable to increased legal, accounting and consulting expenses related to the Exchange Agreement closing, Fintech Exchange Agreement closing and the preparation of the SmartPay MIPA, and included $1.1 million of stock-based compensation expense calculated by the Black-Scholes pricing model relating to the issuance of options to purchase 1,900,000 shares of common stock to Genesis directors and officers, and warrants to purchase 1,970,250 shares of common stock to certain partners, associates, and designees of Whitestone Investment Network, Inc., a mergers and acquisition advisory group which was instrumental in introducing the management of Epoint to Genesis, and in structuring the Exchange Agreement.

Compensation, payroll taxes and benefits expenses for the year ended December 31, 2018 increased to $0.4 million from $0.3 million for the year ended December 31, 2017. The increase is primarily attributable to the headcount additions after the closing of the Exchange Agreement and the Fintech Exchange Agreement, including the Chief Executive Officer and Chief Financial Officer, and an Epoint Project Manager, offset by headcount and salary reductions in the fourth quarter of 2018. Due to cash flow deficiencies from the termination of the SmartPay MIPA, the Company was forced to significantly curtail its operations in the fourth quarter of 2018. This included reaching separation agreements with its CEO, CFO and President/COO and cutting back third party consultants work on the Epoint eWallet and MLOC technology platforms to focus primarily on servicing existing customer contracts.

Technologies and telecom expenses for the year ended December 31, 2018 decreased to $0.1 million from $0.2 million for the year ended December 31, 2017. The decrease is primarily attributable to decreased platform support services in the fourth quarter of 2018, where third party consultants perform routine maintenance and testing of the Epoint eWallet and MLOC platforms.

A loss of $0.2 million of deposits on the planned acquisition of SmartPay Leasing, LLC was taken in the year ended December 31, 2018, when the acquisition agreement was terminated on July 15, 2018.

In a prior year, Fintech entered into a license agreement with 3rd Rock to acquire global license rights to certain intellectual property licensed to 3rd Rock by Cash America Holdings, Inc. and Enova Financial, LLC, for the exploitation of a micro-credit program. Under this agreement, Fintech committed to pay to 3rd Rock a gross sum of $500,000 periodically through September 2018 and made scheduled payments to 3rd Rock in the amount of $75,000. The intellectual property is included in Technology and equipment. The payable of $425,000 was canceled on December 31, 2018 in a settlement agreement with 3rd Rock, and is included in Gain on extinguishment of accrued expenses on the consolidated statements of operations.

Interest expense is higher due to the increase in the principal balance of notes payable.

Liquidity and Capital Resources

Year Ended December 31, 2018

The Company does not have cash or liquidity to pay down maturing debt and maintain operations. Our primary capital requirements are for cash used in operating activities. Funds for such purposes have historically been generated from short-term credit in the form of extended payment terms from suppliers, convertible debt and equity financings.

Historically, we have funded our cash and liquidity needs through the issuance of equity, equity-linked or debt securities. We incurred a net loss of $5.6 million and have an accumulated deficit of $63.3 million as of and for the year ended December 31, 2018. To date, we have depended on raising capital from debt and equity financings to meet our needs for cash flow used in operating activities. For the year ended December 31, 2018, we raised $0.9 million from financing activities to meet cash flow used in operating activities. This situation creates uncertainties relating to our ability to execute our business plan, finance operations, and indicates substantial doubt about our ability to continue as a going concern for at least one year from the date these financial statements were issued.

At December 31, 2018, we had $9,421 of cash on hand with a negative working capital of $2.4 million. Our ability to meet ongoing operating cash needs is dependent on raising additional working capital on an immediate basis and ultimately generating positive cash flow, primarily through generating revenue and controlling expenses. During the first quarter of 2018, we began entering into an eWallet transaction processing services agreements. The revenue pertaining to those service agreements was initially deferred, until we began to recognize the revenue in the fourth quarter of 2018 as control of these services were transferred to the customer.

We need to raise additional funds on an immediate basis in order to be able to satisfy our cash requirements, pay down maturing debt and maintain operations. At December 31, 2018, debt obligations totaling approximately $2.2 million matured. We currently do not have sufficient funds to repay those debt obligations and must secure additional equity or debt capital in order to repay those obligations or obtain additional extensions of maturity, of which no assurance can be provided that we can obtain the needed funding or maturity extension on commercially reasonable terms or at all. We have been actively seeking additional capital. At the present time, we have no commitments for financing and no assurance can be given that we will be able to raise the needed capital on commercially acceptable terms or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, our ability to or support our business and to respond to business challenges will be significantly limited and we may need to further curtail or cease operations.

Our cash flow related information for the years ended December 31, 2018 and 2017 are as follows:

	Years Ended December 31,
	2018			2017
Net cash flows provided by (used in):
Operating activities	$	(1,341,335	)	$	(828,177	)
Investing activities		(279,950	)		(567	)
Financing activities		874,191			1,330,500

Operating Activities

In the year ended December 31, 2018, the net loss plus non-cash adjustments was approximately $1.2 million compared to $0.9 million during the same period in 2017. The increase in cash usage can be primarily attributed to the larger net loss incurred in 2018 as compared to 2017. Non-cash adjustments in the aggregate were about $4.3 million higher in 2018. In addition, there was a $0.1 million increase in accounts payable and accrued liabilities in 2018. In 2017, there was no significant change in working capital items.

Investing Activities

Cash used in investing activities consists primarily of $0.2 million of deposits on the planned acquisition of SmartPay Leasing, LLC paid in the year ended December 31, 2018, which agreement has as of July 15, 2018 been terminated. In addition, capital expenditures for the purchases of technology and equipment were $0.1 million and $Nil in the years ended December 31, 2018 and 2017, respectively. Cash acquired in acquisitions was $40,353 in the year ended December 31, 2018.

Financing Activities

During the year ended December 31, 2018, operating losses and working capital needs discussed above were met by raising cash in debt financing of $0.9 million.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon its consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These items are monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates could occur in the future. The more judgmental estimates are summarized below. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from the Company’s estimates if past experience or other assumptions do not turn out to be substantially accurate.

Revenue Recognition

We expect to derive revenues primarily from providing a range of alternate financial products related to providing financial services to underbanked and unbanked individuals. These services are expected to include micro-credit, mobile phone financing, money transfers, prepaid debit cards, bill payments and related services. Revenues will be recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

We determine revenue recognition through the following steps:

	●	Identification of the contract, or contracts, with a customer
	●	Identification of the performance obligations in the contract
	●	Determination of the transaction price
	●	Allocation of the transaction price to the performance obligations in the contract
	●	Recognition of revenue when, or as, we satisfy a performance obligation

Technology and Equipment

Technology and equipment, including furniture, equipment, leasehold improvements, purchased custom software and internally developed software is carried at cost less accumulated depreciation and amortization. We capitalize expenditures or betterments that substantially increase asset lives, and charges ordinary repairs and maintenance to operations as incurred. We compute depreciation using the straight-line method over estimated useful lives of three to five years. Estimated useful lives are periodically reviewed, and where appropriate, changes are made prospectively.

We capitalize certain software development costs incurred in connection with its eWallet and Micro Line of Credit products. Costs incurred in the preliminary stages of development are expensed as incurred. Once a product has reached the application development stage, internal and external costs, if direct and incremental, are capitalized until the product is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality; that is, modifications that enable the software to perform tasks that it previously was incapable of performing. Maintenance costs are expensed as incurred.

Goodwill

Goodwill was created at the time of purchase where the purchase price paid for Genesis exceeded the fair value of the tangible and identifiable intangible net assets acquired. Goodwill is tested for impairment on an annual basis on December 31st, or more frequently if events or changes in circumstances indicate that the reporting units might be impaired. The approach for the review of goodwill has two steps: identifying a potential impairment and measuring the amount of the impairment loss, if any. Factors that are considered important in determining whether an impairment of goodwill might exist include significant, continued underperformance compared to peers, significant changes in our business and products, material and ongoing negative industry or economic trends or other factors specific to each reporting unit being evaluated. Any changes in key assumptions about our business and our prospects, or changes in market conditions or other externalities, could result in an impairment charge. We use an income and market valuation hybrid approach, as it was considered to be the most appropriate method to isolate the estimated equity value of the Company. This valuation approach involved utilizing a forecasted future cash flow model discounted back at the estimated cost of equity as well as public company market comparables. Our projected cash flow model assumed revenue and operating expense growth over the five-year projected period. At December 31, 2018, a $2.2 million impairment loss was recognized. No impairment loss was recognized at December 31, 2017.

~~ITEM 8. Financial Statements and Supplementary Data.~~Stock-Based Compensation

The Company recognizes as compensation expense all stock-based awards issued to employees and nonemployees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards, which is generally the same as the vesting period. The fair value of warrants and options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and are subject to periodic market adjustments at the end of each reporting period and as the underlying stock-based awards vest.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material.

Recent Accounting Pronouncements

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments and in November 2016 issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The new standards will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and amends the existing accounting standards for the statement of cash flows. The amendments provide guidance on the following nine cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; separately identifiable cash flows and application of the predominance principle; and restricted cash. The adoption on January 1, 2018 of ASU 2016-15 and ASU 2016-18 did not have a material effect on the consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, which amends guidance on revenue recognition from contracts with customers. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most contract revenue recognition guidance, including industry-specific guidance. In July 2015, FASB deferred by one year the effective dates of its new revenue recognition standard for public and nonpublic entities. In addition, in March 2016, the FASB issued ASU 2016-08, which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, to clarify the implementation guidance on identifying performance obligations and licensing. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The adoption on January 1, 2018 of ASU 2014-09 did not have a material effect on the consolidated financial statements as we did not have any contracts with customers prior to January 1, 2018.

In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment. ASU 2017-04 will simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Current guidance requires that companies compute the implied fair value of goodwill under Step 2 by performing procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. ASU 2017-04 will require companies to perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and will be applied prospectively. Early adoption of this standard is permitted. The Company is currently in the process of evaluating the impact of ASU 2017-04 on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This standard requires the recognition of a right-of-use asset and lease liability on the balance sheet for all leases. This standard also requires more detailed disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, and should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, and early adoption is permitted. The Company expects to adopt this guidance on January 1, 2019. Although the Company is in the process of evaluating the impact of adoption of the ASU, the Company currently believes the adoption of this guidance will have an insignificant impact on its consolidated financial statements.

~~ITEM~~In July 92018, the FASB issued ASU 2018-11, Leases (Topic 842). ~~Changes~~ This guidance provides an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. In addition, this ASU provides a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease and ~~Disagreements~~instead ~~with~~account ~~Accountants~~for onthe ~~Accounting~~lease as a single component if both the timing and ~~Financial~~pattern ~~Disclosure~~of transfer of the nonlease component(s) are the same, and if the lease would be classified as an operating lease. These amendments have the same effective date as ASU 2016-02.

34In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The new standard is effective on January 1, 2019, and early adoption is permitted, including in interim periods, and should be applied to all new awards granted after the date of adoption. The Company is currently assessing the potential impact this ASU will have on our consolidated results of operations, financial position, and cash flows.

~~ITEM~~Item 7A ~~9A. Controls~~QUANTITATIVE ~~and~~AND ~~Procedures.~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

34Not applicable.

~~ITEM 9B. Other Information.~~17

35Item 8. FINANCIAL STATEMENTS SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm		F-1
Audited Consolidated Balance Sheets at December 31, 2018 and 2017		F-2
Audited Consolidated Statements of Stockholder’s Deficit for Years ended December 31, 2018 and 2017		F-4
Audited Consolidated Statements of Cash Flows for Years ended December 31, 2018 and 2017		F-5
Notes to Audited Consolidated Financial Statements for Years Ended December 31, 2018 and 2017		F-6

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Genesis Financial, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Genesis Financial, Inc. as of December 31, 2018 and 2017, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/S/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company’s auditor since 2019

Lakewood, CO

August 13, 2020

F-1

Genesis Financial, Inc. and Subsidiaries

Audited Consolidated Balance Sheets

December 31, 2018 and 2017

	December 31, 2018			December 31, 2017
Assets
Current assets:
Cash	$	9,421		$	756,515
Prepaid expenses and other current assets		25,000			25,000
Total current assets		34,421			781,515
Technology and equipment, net		-			171,889
Other assets		5,622			1,000
Total Assets	$	40,043		$	954,404

Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	243,182		$	112,437
Loans payable and accrued interest, net		2,235,942			1,344,933
Total liabilities		2,479,124			1,457,370

Stockholders’ deficit:
Preferred stock, $0.0001 par value, 6,000,000 total authorized, 2,500,000 authorized are designated as Series A 8% cumulative convertible preferred, Nil and 1,190,021 Series A 8% cumulative convertible preferred issued and outstanding at December 31, 2018 and December 31, 2017 (liquidation values of $Nil and $5,070,000), respectively		-			2,943,265
Series A common stock, $0.0001 par value, 15,000,000 authorized, Nil and 7,041,515 issued and outstanding at December 31, 2018 and December 31, 2017, respectively		-			-
Common stock, $0.001 par value; 100,000,000 authorized, 35,711,905 and Nil issued and outstanding at December 31, 2018 and December 31, 2017, respectively		35,712			-
Additional paid-in capital		60,827,937			1,218,490
Accumulated deficit		(63,302,730	)		(4,664,721	)
Total stockholders’ deficit		(2,439,081	)		(502,966	)

Total Liabilities and Stockholders’ Deficit	$	40,043		$	954,404

See accompanying Notes to Consolidated Financial Statements

F-2

Genesis Financial, Inc. and Subsidiaries

Audited Consolidated Statements of Operations

Years ended December 31, 2018 and 2017

	2018			2017
Revenues:
Financial services and other revenue, net	$	72,732		$	-
Expenses:
Impairment of capitalized technology and goodwill		2,195,048			-
Professional services		2,003,074			336,698
Compensation, payroll taxes and benefits		356,557			341,890
Technologies and telecom		140,349			163,623
Depreciation and amortization		141,191			52,917
Loss of deposits on planned acquisition of SmartPay Leasing, LLC		200,000			-
Occupancy and equipment		78,472			5,301
Taxes, licenses and insurance		82,526			2,454
Loss on disposal of fixed assets		32,262			-
Gain on extinguishment of accrued expenses		(429,200	)		-
Other operating expenses		66,024			30,556
Total operating expenses		4,866,303			933,439

Net loss from operations		(4,793,571	)		(933,439	)
Other income		50,000			-
Interest income		114			48
Interest expense		(857,919	)		(14,433	)

Net loss	$	(5,601,376	)	$	(947,824	)

Loss per share of common stock, basic and diluted	$	(0.17	)	$	(0.13	)

Weighted-average number of common shares outstanding, basic and diluted		32,153,871			7,041,519

See accompanying Notes to Consolidated Financial Statements

F-3

Genesis Financial, Inc. and Subsidiaries

Audited Consolidated Statements of Stockholder’s Deficit

Years ended December 31, 2018 and 2017

	Series A 8% Cumulative Convertible Preferred Stock						Series A Common Stock					Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares			Amount			Shares			Amount		Shares		Amount		Capital		Deficit			Deficit
Balance – December 31, 2016		1,190,021		$	2,943,265			7,041,515		$	-		-	$	-	$	1,218,490	$	(3,716,897	)	$	444,858
		-			-			-			-		-		-		-		(947,824	)		(947,824	)
Balance - December 31, 2017		1,190,021		$	2,943,265			7,041,515		$	-		-	$	-	$	1,218,490	$	(4,664,721	)	$	(502,966	)
Common shares issued on conversion of convertible notes		-			-			-			-		100,000		100		249,900		-			250,000
Issuance of warrants and options as stock-based compensation		-			-			-			-		-		-		1,130,085		-			1,130,085
Effect of reverse merger on legacy shareholders of EPOINT Payment Corp.		(1,190,021	)		(2,943,265	)		(7,041,515	)		-		8,231,536		8,231		2,935,034		-			-
Effect of reverse merger on legacy shareholders of Genesis Financial, Inc.		-			-			-			-		879,765		880		1,758,620		-			1,759,500
Common shares issued for acquisition of Fintech Holdings, LLC		-			-			-			-		26,435,604		26,436		52,844,772		(53,036,633	)		(165,424	)
Common shares issued for note extension		-			-			-			-		65,000		65		129,935		-			130,000
Issuance of warrants for note extension		-			-			-			-		-		-		561,100		-			561,100
Net loss		-			-			-			-		-		-		-		(5,601,376	)		(5,601,376	)
Balance – December 31, 2018		-		$	-			-		$	-		35,711,905	$	35,712	$	60,827,937	$	(63,302,730	)	$	(2,439,081	)

See accompanying Notes to Consolidated Financial Statements

F-4

Genesis Financial, Inc. and Subsidiaries

Audited Consolidated Statements of Cash Flows

Years ended December 31, 2018 and 2017

	2018			2017
Cash Flows From Operating Activities:
Net loss	$	(5,601,376	)	$	(947,824	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss of deposits on planned acquisition of SmartPay Leasing, LLC		200,000			-
Depreciation and amortization		141,191			52,917
Amortization of debt issuance costs		606,240			7,694
Loss on disposal of fixed assets		32,262			-
Impairment of capitalized technology and goodwill		2,195,048			-
Common stock issued for loan fee on note payable		80,000			-
Professional services compensated with stock-based compensation		1,130,085			-
Net change in operating working capital items		(124,785	)		59,036
Net cash used in operating activities		(1,341,335	)		(828,177	)

Cash Flows From Investing Activities:
Cash acquired in acquisitions		40,353			-
Purchases of technology and equipment		(120,303	)		(567	)
Deposits on planned acquisition of SmartPay Leasing, LLC		(200,000	)		-
Net cash used in investing activities		(279,950	)		(567	)

Cash Flows From Financing Activities:
Proceeds from loans payable		999,191			1,350,000
Debt issuance costs paid on loans payable		(125,000	)		(19,500	)
Net cash provided by financing activities		874,191			1,330,500

Net decrease in cash		(747,094	)		501,756
Cash - beginning of period		756,515			254,759
Cash - end of period	$	9,421		$	756,515

Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	$	-		$	19,500
Cash paid during the period for income taxes	$	-		$	-

Supplemental Disclosure of Non-Cash Financing Activity
Issuance of common stock for the reverse merger of EPOINT Payment Corp. and Genesis Financial, Inc. (see Note 6 for assets acquired and liabilities assumed)	$	1,759,500		$	-
Issuance of common stock for the acquisition of Fintech Holdings, LLC (see Note 6 for assets acquired and liabilities assumed)	$	52,871,210		$	-
Common stock issued in exchange of notes payable	$	250,000		$	-
Common stock issued as debt issuance costs	$	130,000		$	-
Issuance of warrants for note extension	$	561,100		$	-

See accompanying Notes to Consolidated Financial Statements

F-5

Genesis Financial, Inc. and Subsidiaries

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2018 and 2017

1. BACKGROUND

Nature of Operations – Genesis Financial, Inc. (“Genesis” or “Company”) was incorporated in Washington State on January 24, 2002 and on January 26, 2016 it moved its corporate domicile to the State of Wyoming. The Company’s wholly-owned subsidiary EPOINT Payment Corp. (“Epoint”) was incorporated as a C-Corp in the state of Delaware in May 2015. The Company’s headquarters are in Las Vegas, Nevada.

Epoint is in the business of providing a range of alternate financial products designed for cost-efficient delivery via a smart phone or other mobile device. Epoint intends to initiate financial services offerings with an integrated “Mobile First” enabled program targeting underbanked and unbanked consumers, initially in North America, which will include micro credit, mobile phone device financing programs, money transfers, prepaid debit cards, bill payments, mobile top up, check processing, insurance and travel.

Epoint intends to leverage its relationships and agreements with key technology and media participants, together with appropriate financial institutions and distribution collaborators, to offer target consumers a wide range of price leading and more convenient local and international financial services, including money transfer, bill payment, mobile top up, Point of Sale (POS) payments, instant micro loans, check processing, insurance and travel services, all of which are to be delivered via an advanced proprietary platform technology.

Reverse Merger with EPOINT Payment Corp. – On February 15, 2018, the Company and Epoint completed the transactions contemplated by the previously disclosed Capital Stock Exchange Agreement (the “Exchange Agreement”) entered into as of September 8, 2017, as subsequently amended. Under the Exchange Agreement, Genesis acquired 100% of the outstanding capital stock of Epoint, following which Epoint became a wholly-owned subsidiary of Genesis. The transaction was structured as a tax-free reorganization and exempt from registration under the Securities Act of 1933, as amended (the “Act”). Pursuant to the Exchange Agreement, Genesis issued to Epoint’s shareholders an aggregate of 8,231,536 shares of its common stock in exchange for all of their capital holdings in Epoint. At the closing, Genesis also issued to Epoint’s shareholders warrants to purchase up to an additional 845,000 shares of common stock in exchange for an equal number of Epoint common stock warrants. The warrants are exercisable through February 12, 2028 at a per share exercise price of $3.00.

F-6

For accounting purposes, Genesis is deemed to have issued 879,765 common shares to the legacy shareholders of Genesis. Using an estimated fair value of common stock on February 15, 2018 of $2.00 per share, the purchase price of the 879,765 shares held by the legacy shareholders of Genesis was approximately $1,759,500. The difference between the fair value of these shares and the recorded fair value of assets acquired and liabilities assumed of Genesis totaling $1,835,684 was allocated to Goodwill. The preliminary fair value estimates for the consideration paid and the assets acquired and liabilities assumed for our acquisition is based on preliminary calculations and valuations and our estimates and assumptions are subject to change as we obtain additional information for our estimates during the measurement period (up to one year from the acquisition date). The primary areas of those preliminary estimates that were not yet finalized related to valuation of goodwill and fair value of common stock.

Acquisition of Fintech – Immediately following the closing of the Exchange Agreement, on February 15, 2018, Genesis and Fintech Holdings, LLC (“Fintech LLC”), an Oregon limited liability company, signed and closed a Membership Interest Exchange Agreement between Genesis and Fintech LLC (the “Fintech Exchange Agreement”; together with the Exchange Agreement, the “Exchange Agreements”) pursuant to which Genesis issued to the members of Fintech LLC an aggregate of 26,435,604 shares of Common Stock. Fintech Investments Inc., the wholly-owned subsidiary of Fintech LLC (“Fintech Investments”) and a company formerly owned and operated by Gary Larkin, the Executive Co-Chairman of Genesis, holds the intellectual property licenses of Epoint’s proprietary platform technologies. Given that the entities were under common control, all of the transactions performed by Fintech Investments were done at the direction of Epoint, and substantially all of the fair value of gross assets acquired is concentrated in a group of similar identifiable assets, management determined that the assets acquired do not represent a business. Accordingly, the assets and liabilities of Fintech LLC and Fintech Investments have been recorded at their historical cost basis at the merger date, and are included in the Company’s consolidated financial statements.

Henceforth, all references to the “Company” shall mean and include Genesis Financial., Inc. and its subsidiaries, following the closing of the Exchange Agreements.

2. LIQUIDITY

Historically, the Company has funded its cash and liquidity needs through the issuance of equity, equity-linked or debt securities. The Company has incurred a net loss of $3,406,328 and has an accumulated deficit of $61,107,682 as of and for the year ended December 31, 2018. The Company has been dependent on raising capital from debt and equity financings to meet its needs for cash flow used in operating activities. For the year ended December 31, 2018, the Company raised $874,191 from financing activities in order to meet cash flow requirements in operating activities. This situation creates uncertainties about the Company’s ability to execute its business plan, finance operations, and indicates substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date these financial statements were issued.

At December 31, 2018, the Company had $9,421 of cash on hand with a negative working capital of $2.4 million. The Company’s ability to meet its ongoing operating cash needs is dependent on generating positive cash flow, primarily through raising capital on an immediate basis, and ultimately generating revenue and controlling expenses. During the first quarter of 2018, the Company began entering into eWallet transaction processing services agreements, and began receiving payments that were recorded as contract liability that were recognized as revenue starting in the fourth quarter of 2018 once control of those services were transferred to the customer. In addition, subsequent to December 31, 2018 and through July 8, 2020, the Company raised an additional $1,485,000 from 13 investors through convertible debt offerings (see Note 9, Subsequent Events). However, the Company’s current cash resources are not sufficient to support its operations as presently conducted, pay down maturing debt, or permit it to take advantage of business opportunities that may arise. At December 31, 2018, debt obligations totaling approximately $2.2 million mature and must be repaid. We currently do not have sufficient funds to repay those debt obligations and must secure additional equity or debt capital in order to repay those obligations or obtain additional extensions of maturity, of which no assurance can be provided that we can obtain the needed funding or maturity extension on commercially reasonable terms or at all. Management of the Company is continuing its efforts to secure funds through equity and/or debt instruments for its operations. Presently, the Company does not have any financing commitment from any person, and there can be no assurance that additional capital will be available to the Company on commercially acceptable terms or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, our ability to or support our business and to respond to business challenges will be significantly limited and we may need to further curtail or cease operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

3. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Basis of Presentation and Consolidation - The Company’s accounting and financial reporting policies conform to accounting principles generally accepted in the U.S. (U.S. GAAP). The consolidated financial statements include the accounts of Genesis and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. All normal and recurring adjustments considered necessary for a fair presentation of such financial statements have been included. Operating results for the year ended December 31, 2018 are not indicative of the results that may be expected for any future period. These consolidated financial statements and the notes thereto should be read in conjunction with the audited financial statements and notes thereto of EPOINT Payment Corp. for the years ended December 31, 2017 and 2016 included in the Company’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission (the “SEC”) on May 4, 2018 (our “8-K/A”).

F-7

Use of Estimates - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management bases its estimates on historical experience and other judgments which it thinks are reasonable.

Risks and Uncertainties - The Company’s future operations involve a number of risks and uncertainties. Factors that could materially affect future operating results include, but are not limited to, changes to laws and regulations, customer credit risk, continued access to capital and counterparty risk. To minimize counterparty risk, the Company maintains relationships with what management believes to be high-quality financial institutions for the purposes of maintaining cash balances and providing financing. The Company maintains levels of cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and it believes it is not exposed to any significant credit risk on cash.

Earnings (Loss) Per Share - Basic earnings per share (EPS) are computed by dividing net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock warrants, convertible debt instruments or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. For the year ended December 31, 2018, outstanding warrants to purchase an aggregate of 4,365,250 shares of common stock, outstanding stock options to purchase 1,900,000 shares of common stock, and 42,267 shares of common stock issuable upon conversion of convertible debt were excluded from the computation of dilutive earnings per share because the inclusion would have been anti-dilutive. For the year ended December 31, 2017, 42,267 shares of common stock issuable upon conversion of convertible debt were excluded from the computation of dilutive earnings per share because the inclusion would have been anti-dilutive.

Revenue Recognition – The Company expects to derive revenues primarily from providing a range of alternate financial products related to providing financial services to underbanked and unbanked individuals. These services are expected to include micro-credit, mobile phone financing, money transfers, prepaid debit cards, bill payments and related services. Revenues will be recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

We determine revenue recognition through the following steps:

	●	Identification of the contract, or contracts, with a customer
	●	Identification of the performance obligations in the contract
	●	Determination of the transaction price
	●	Allocation of the transaction price to the performance obligations in the contract
	●	Recognition of revenue when, or as, we satisfy a performance obligation

Cash and Cash Equivalents - The Company considers all highly-liquid investments with an original maturity of three months or less to be cash equivalents.

Fair Value Measurements - U.S. GAAP defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements. U.S. GAAP permits an entity to choose to measure many financial instruments and certain other items at fair value and contains financial statement presentation and disclosure requirements for assets and liabilities for which the fair value option is elected. At December 31, 2018 and December 31, 2017, management has not elected to report any of the Company’s assets or liabilities at fair value under the “fair value option” provided by U.S. GAAP.

The hierarchy of fair value valuation techniques under U.S. GAAP provides for three levels: Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing assets and liabilities under U.S. GAAP’s fair value measurement requirements are as follows:

	Level 1:	Fair value of the asset or liability is determined using unadjusted quoted prices in active markets for identical assets or liabilities.

	Level 2:	Fair value of the asset or liability is determined using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

	Level 3:	Fair value of the asset or liability is determined using unobservable inputs that are significant to the fair value measurement and reflect management’s own assumptions regarding the applicable asset or liability.

F-8

None of the Company’s assets or liabilities were measured at fair value at December 31, 2018 and December 31, 2017. However, U.S. GAAP requires the disclosure of fair value information about financial instruments that are not measured at fair value. Financial instruments consist principally of accounts payable, accrued liabilities, notes payable, and convertible note payable. The estimated fair value of accounts payable, and accrued liabilities approximates their carrying value due to the short period of time to their maturities. At December 31, 2018 and December 31, 2017, the Company’s notes payable and convertible notes payable are at fixed rates and due to their short-term nature the carrying value approximates fair value.

Technology and Equipment - Technology and equipment, including furniture, equipment, leasehold improvements, purchased custom software and internally developed software is carried at cost less accumulated depreciation and amortization. The Company capitalizes expenditures or betterments that substantially increase asset lives, and charges ordinary repairs and maintenance to operations as incurred. The Company computes depreciation using the straight-line method over estimated useful lives of three to five years. Estimated useful lives are periodically reviewed, and where appropriate, changes are made prospectively.

The Company capitalizes certain software development costs incurred in connection with its eWallet and Micro Line of Credit products. Costs incurred in the preliminary stages of development are expensed as incurred. Once a product has reached the application development stage, internal and external costs, if direct and incremental, are capitalized until the product is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality; that is, modifications that enable the software to perform tasks that it previously was incapable of performing. Maintenance costs are expensed as incurred.

Goodwill - Goodwill was created at the time of purchase where the purchase price paid for Genesis exceeded the fair value of the tangible and identifiable intangible net assets acquired. Goodwill is tested for impairment on an annual basis on December 31st, or more frequently if events or changes in circumstances indicate that the reporting units might be impaired. The approach for the review of goodwill has two steps: identifying a potential impairment and measuring the amount of the impairment loss, if any. Factors that are considered important in determining whether an impairment of goodwill might exist include significant, continued underperformance compared to peers, significant changes in our business and products, material and ongoing negative industry or economic trends or other factors specific to each reporting unit being evaluated. Any changes in key assumptions about our business and our prospects, or changes in market conditions or other externalities, could result in an impairment charge. We use an income and market valuation hybrid approach, as it was considered to be the most appropriate method to isolate the estimated equity value of the Company. This valuation approach involved utilizing a forecasted future cash flow model discounted back at the estimated cost of equity as well as public company market comparables. Our projected cash flow model assumed revenue and operating expense growth over the five-year projected period. At December 31, 2018, a $1.8 million impairment loss was recognized.

Impairment of long-lived assets and long-lived assets to be disposed of - The Company accounts for long-lived assets, including technology and equipment, at amortized cost. Management reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount of the asset, an impairment loss would be recognized to write down the asset to its estimated fair value. At December 31, 2018, a $0.4 million impairment loss was recognized.

Debt Issuance Costs - Debt issuance costs are amortized over the term of the related debt. Net debt issuance costs were $16,667 and $11,806 at December 31, 2018 and December 31, 2017, respectively, and are netted against Loans Payable on the Consolidated Balance Sheets.

Income Taxes - The provision for income taxes is based on income and expenses as reported for financial statement purposes using the “asset and liability method” for accounting for deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. At December 31, 2018 and December 31, 2017, the Company established full valuation allowances against its net deferred tax assets.

Income tax positions that meet the “more-likely-than-not” recognition threshold are measured at the largest amount of income tax benefit that is more than 50 percent likely to be realized upon settlement with the applicable taxing authority. The portion of the benefits associated with income tax positions taken that exceeds the amount measured as described above would be reflected as a liability for unrecognized income tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized income tax benefits would be classified as additional income taxes in the accompanying consolidated statements of operations. There were no unrecognized income tax benefits, nor any interest and penalties associated with unrecognized income tax benefits, accrued or expensed at and for the years ended December 31, 2018 and 2017.

F-9

The Company files federal income tax returns in the U.S. and various state income tax returns. The Company is no longer subject to examinations by the related tax authorities for the Company’s U.S. federal and state income tax returns for years prior to 2014.

Stock-Based Compensation - The Company recognizes as compensation expense all stock-based awards issued to employees and nonemployees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards, which is generally the same as the vesting period. The fair value of warrants and options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable. Stock-based awards issued to officers, directors and non-employees are recorded at fair value on the measurement date and are subject to periodic market adjustments at the end of each reporting period and as the underlying stock-based awards vest. Stock-based compensation was $1,130,085 from issuing warrants and options to non-employees and $Nil for the years ended December 31, 2018 and 2017, respectively, and is included in Professional services expenses on the Consolidated Statements of Operations.

Recently Adopted Accounting Pronouncements – In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments and in November 2016 issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The new standards will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and amends the existing accounting standards for the statement of cash flows. The amendments provide guidance on the following nine cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; separately identifiable cash flows and application of the predominance principle; and restricted cash. The adoption on January 1, 2018 of ASU 2016-15 and ASU 2016-18 did not have a material effect on the consolidated financial statements.

Recent Accounting Pronouncements - In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment. ASU 2017-04 will simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Current guidance requires that companies compute the implied fair value of goodwill under Step 2 by performing procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. ASU 2017-04 will require companies to perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and will be applied prospectively. Early adoption of this standard is permitted. The Company is currently in the process of evaluating the impact of ASU 2017-04 on its consolidated financial statements.

In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842). This guidance provides an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. In addition, this ASU provides a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease and instead account for the lease as a single component if both the timing and pattern of transfer of the nonlease component(s) are the same, and if the lease would be classified as an operating lease. These amendments have the same effective date as ASU 2016-02.

F-10

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The new standard is effective on January 1, 2019, and early adoption is permitted, including in interim periods, and should be applied to all new awards granted after the date of adoption. The Company is currently assessing the potential impact this ASU will have on our consolidated results of operations, financial position, and cash flows.

4. TECHNOLOGY AND EQUIPMENT

Technology and equipment consists of the following as of December 31, 2018 and December 31, 2017:

	December 31, 2018			December 31, 2017
Software	$	771,024		$	260,000
Computer equipment		-			5,106
Total cost		771,024			265,106
Less accumulated depreciation and amortization		(441,660	)		(93,217	)
Less impairment of capitalized technology		(359,364	)		-
Total technology and equipment, net	$	-		$	171,889

5. LOANS PAYABLE

Loans payable and accrued interest consists of the following as of December 31, 2018 and December 31, 2017:

	December 31, 2018			December 31, 2017
Convertible notes payable issued at a 7.8% debt discount. The notes had a 1-year maturity, due in August 2018. The notes had an automatic mandatory conversion feature upon the closing of an initial public offering or merger with, or acquisition by, a reporting company (the “IPO”) where the principal balance and any accrued interest are converted into equity securities at a price equal to $2.50 per share of the reporting company. If the IPO has not occurred on or before the one-year maturity date, the Company could extend the maturity date an additional 6 months bearing interest at 10.8%. The notes had a voluntary conversion feature where the investor could convert at any time into Series A Common Stock of Epoint at the conversion price of $2.50 per share. As described in Note 1, these notes were converted into common stock of the Company in February 2018.	$	-		$	250,000
Convertible note payable bearing interest at 10.0%. The note principal plus accrued interest is due in full on December 31, 2018. The note has an automatic conversion feature upon the closing of an IPO where the principal balance and any accrued interest are converted into equity securities at a price equal to 70% of the price per share sold to the public or, if no shares are sold to public at time of the IPO, 70% of the weighted average five trading day sale price of the shares of the reporting company. The note has a voluntary conversion feature where the investor may convert at any time into common stock of the Company at the conversion price of $2.50 per share.		100,000			100,000
Note payable bearing interest at 6.0%. The note principal plus accrued interest is due in full in May 2019. As described in Note 1, this note was assumed in February 2018 as part of the merger with Epoint.		100,000			-
Notes payable bearing interest at 6.0%. The notes have a 6-month maturity where the principal and accrued interest is due in full at various dates in 2018 and 2019. As of December 31, 2018, there were outstanding notes in aggregate principal amount and accrued interest of $1,940,335 that were in default where the maturity dates were on or before December 31, 2018 and are accruing additional interest at a 6.0% interest rate.		1,877,691			1,000,000
Total loans payable		2,077,691			1,350,000
Accrued interest		174,918			6,739
Debt issuance costs, net of amortization		(16,667	)		(11,806	)
Total loans payable and accrued interest, net	$	2,235,942		$	1,344,933

F-11

6. STOCKHOLDER’S DEFICIT

Reverse Merger

As discussed in Note 1, Genesis has accounted for the Exchange Agreement transaction as a reverse business combination using the acquisition method.

The fair value of the assets acquired and liabilities assumed in the Exchange Agreement are as follows:

Purchase price:
879,765 shares of common stock valued at $2.00 per share	$	1,759,500
Assets acquired and liabilities assumed:
Cash		14,666
Prepaid expenses and other current assets		25,000
Accounts payable and accrued expenses		(15,850	)
Loan payable		(100,000	)
Goodwill		1,835,684
	$	1,759,500

Pro Forma Financial Information

The following unaudited pro forma consolidated results of operations for the years ended December 31, 2018 and 2017 assume the reverse business combination was completed on January 1, 2017:

	Years Ended December 31,
	2018			2017
Pro forma revenues	$	72,732		$	48,911
Pro forma net loss		(5,218,328	)		(1,470,860	)
Pro forma basic and diluted net loss per share	$	(0.16	)	$	(0.04	)

Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the periods presented and is not intended to be a projection of future results.

All share and per share data in the accompanying financial statements and footnotes have been retroactively reflected for the reverse merger.

Warrants

As discussed in Note 1, at the closing of the Exchange Agreement, Genesis issued to Epoint’s shareholders warrants to purchase up to an additional 845,000 shares of common stock in exchange for an equal number of Epoint common stock warrants. The warrants are exercisable through February 12, 2028 at a per share exercise price of $3.00. Also at the closing of the Exchange Agreement, Genesis issued warrants to purchase up to 1,970,250 shares of its common stock in exchange for an equal number of Epoint common stock warrants. The warrants are exercisable through February 12, 2023 at a per share exercise price of $3.00. The estimated fair value of the warrants of $776,397 was expensed in full at issuance.

On August 22, 2018, Genesis issued a total of 1,550,000 warrants to certain noteholders as a material inducement for them to extend the maturity date of their notes to December 31, 2018. The warrants are exercisable through August 22, 2021 at a per share exercise price of $1.00. The estimated fair value of the warrants of $561,100 was initially recorded as debt issuance cost and was amortized to interest expense over the extended maturity period of the notes of December 31, 2018.

The estimated fair value of the warrants at issuance was based on a combination of management’s best estimate of the share price, and the Black-Scholes option-pricing model using the weighted-average assumptions below:

Volatility		50	%
Risk-free interest rate		2.44	%
Expected term (in years)		2.72
Expected dividend yield		-
Fair value of warrant	$	0.38

F-12

A summary of activity in warrants is as follows:

				Weighted		Weighted
				Average		Average
				Remaining		Exercise
	Warrants			Life		Price

Outstanding at December 31, 2017		845,000			2.5 years	$	3.00

Year ended December 31, 2018:
Granted		4,365,250			4.6 years	$	2.29
Exercised		-			-	$	-
Exchanged		(845,000	)		2.5 years	$	3.00

Outstanding at December 31, 2018		4,365,250			4.6 years	$	2.29

Conversion of Debt

As discussed in Note 1, at the closing of the Exchange Agreement on February 15, 2018, noteholders of $250,000 of convertible loans payable (described in Note 5) voluntarily elected to convert their loans into 100,000 shares of Genesis common stock at a conversion rate of $2.50 per share.

Purchase and Sale Agreement

As discussed in Note 1, in connection with the closings and as mandated by the terms of the Exchange Agreement, Genesis and the Coghlan Family Corporation, an entity controlled by John R. Coghlan, one of the directors and the holder of the majority of the outstanding debt of Genesis prior to the closings, entered into the Purchase and Sale Agreement with Genesis pursuant to which the Coghlan Family Corporation agreed, at a mutually agreeable date after the closings, to assume and otherwise discharge all of Genesis’ outstanding debt, except for the CFC Loan, in consideration of the transfer to it by Genesis of the assets related to the Prior Business.

The summary of the sale of assets and discharge of liabilities under the Purchase and Sale Agreement are as follows, and is not included in these consolidated financial statements as the transaction occurred in connection with the closing of the reverse merger with Epoint and amounts in these consolidated financial statements prior to the reverse merger relate to Epoint operations only:

Cash and cash equivalents	$	4,786
Investments in real estate limited liability companies		103,584
Loans held for sale		285,919
Long-term investment		212,619
Real estate leasehold interest, net		93,000
Technology and equipment, net		511
Total assets sold	$	700,419

Line of credit, affiliated company	$	(690,419	)
Other current liabilities		(10,000	)
Total liabilities discharged	$	(700,419	)

Fintech Exchange Agreement

As discussed in Note 1, immediately following the closing of the Exchange Agreement, on February 15, 2018, Genesis and Fintech LLC signed and closed the Fintech Exchange Agreement pursuant to which Genesis issued to the members of Fintech LLC an aggregate of 26,435,604 shares of Parent Common Stock. As described more fully in Note 1, the assets and liabilities of Fintech LLC and Fintech Investments have been recorded at their historical cost basis at the merger date, and are included in the Company’s consolidated financial statements.

F-13

The assets acquired and liabilities assumed in the Fintech Exchange Agreement are as follows:

Purchase price:
26,435,604 shares of common stock valued at $2.00 per share	$	52,871,210
Assets acquired and liabilities assumed:
Cash		25,687
Technology and equipment, net		240,625
Accounts payable and accrued expenses		(431,736	)
		(165,424	)
Accumulated deficit impact		53,036,634
	$	52,871,210

Issuance of Common Stock

In May 2018, the Company issued 65,000 shares of its common stock to a lender under a loan extension agreement. The fair value of the 65,000 shares of common stock amounting to $130,000 was recorded as a debt issuance cost to be amortized over the revised term of the note payable.

Stock-Based Compensation

The Company also issues, from time to time, options which are not issued under or subject to a formal option plan. At December 31, 2018, there were 1,900,000 options outstanding that were not issued under a formal option plan.

A summary of all stock option activity at and for the year ended December 31, 2018 is presented below:

			Weighted
			Average
	# of		Exercise
	Options		Price

Outstanding at December 31, 2017		-	$	-

Year ended December 31, 2018:
Granted		1,900,000	$	3.09
Exercised		-		-
Canceled		-		-

Outstanding at December 31, 2018		1,900,000	$	3.09

At December 31, 2018, there were 1,431,250 unvested options with a weighted average exercise price of $3.09. The unvested options will vest in accordance with the vesting schedule in each respective option agreement, which is two years from the grant date. The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2018 was $Nil. During the year ended December 31, 2018, 468,750 options became vested.

The Company uses the Black-Scholes valuation model to measure the grant-date fair value of stock options. The calculation includes several assumptions that require management’s judgment. The expected term of the options is calculated using the simplified method described in GAAP. The simplified method defines the expected term as the average of the contractual term and the vesting period. Estimated volatility is derived from volatility calculated using historical closing prices of common shares of similar entities whose share prices are publicly available for the expected term of the options. The risk-free interest rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the options.

The following weighted average assumptions were used in the Black-Scholes valuation model for options granted during the year ended December 31, 2018:

Risk-free interest rate	3.01	%
Expected term (in years)	6.0
Dividend yield	-
Expected volatility	50	%

F-14

The weighted average grant date fair value per share of stock options granted during the year ended December 31, 2018 was $0.75. The aggregate grant date fair value of the 1,900,000 options granted during the year ended December 31, 2018 was $1,423,000.

For the year ended December 31, 2018 and 2017, total stock option expense related to stock options was $353,688 and $Nil, respectively. At December 31, 2018, the total compensation cost related to stock options not yet recognized is approximately $1,068,312, which is expected to be recognized over a weighted average period of approximately 1.5 years.

7. RELATED-PARTY TRANSACTIONS

(i) Commencing August 2015, Epoint contracted Fintech Investments to provide development and distribution support services for the Company’s eWallet and Micro Line of Credit (“MLOC”) platforms. Fintech holds the underlying intellectual property pertaining to the Company technology platforms, including the eWallet and MLOC platforms. Gary Larkin, the Founder, Chairman and Chief Executive Officer of Epoint, is also the sole shareholder, Founder, Chairman and Chief Executive Officer of Fintech. Epoint made payments to Fintech of $40,000 and $191,456 in the years ended December 31, 2018 and 2017, respectively, and such payments are included in Technologies and telecom expenses on the Consolidated Statements of Operations.

(ii) Since July 2015, Epoint, the Company’s wholly owned subsidiary, contracted 3rd Rock Communications, Inc. (“3rd Rock”) to provide bookkeeping and general administrative services. 3rd Rock is a Delaware corporation wholly-owned by Gary Larkin, the Founder, Chairman and Chief Executive Officer of Epoint, and his spouse. Epoint made payments to 3rd Rock of $9,000 and $33,000 in the years ended December 31, 2018 and 2017, respectively, and such payments are included in Professional services expenses on the Consolidated Statements of Operations.

(iii) In a prior year, Fintech entered into a license agreement with 3rd Rock to acquire global license rights to certain intellectual property licensed to 3rd Rock by Cash America Holdings, Inc. and Enova Financial, LLC, for the exploitation of a micro-credit program. Under this agreement, Fintech committed to pay to 3rd Rock a gross sum of $500,000 periodically through September 2018 and made scheduled payments to 3rd Rock in the amount of $75,000. The intellectual property is included in Technology and equipment. The payable of $425,000 was canceled on December 31, 2018 in a settlement agreement with 3rd Rock, and is included in Gain on extinguishment of accrued expenses on the consolidated statements of operations.

(iv) In connection with $135,000 in aggregate principal amount of the notes payable bearing interest at 6% referred to in Note 5 above (Notes Payable) issued by the Company’s subsidiary Epoint Payment Corp (“Epoint”) in May-June 2018, Debit Plus LLC, (“DP”) the Company’s largest stockholder and under management and control of Gary Larkin, the Company’s Executive Co-Chairman and Roy Rose, the Company’s Chief Executive Officer and Executive Co-Chairman, entered into an agreement with such noteholders pursuant to which such noteholders were granted an option, exercisable by it on or before the earlier of 30 days prior to the maturity of such note or December 31, 2018, to exchange their note for a specified number of shares of the Company’s common stock held by DP. Epoint agreed to the assignment of the notes to DP.

8. PLANNED ACQUISITION OF SMARTPAY LEASING, LLC

On February 15, 2018, Epoint entered into a Membership Interest Purchase Agreement (the “SmartPay MIPA”) with WNLI Holdings, Inc., a corporation organized under the laws of the State of Ohio (“Seller”), and SmartPay Leasing LLC, a limited liability company organized under the laws of the State of Delaware (“SmartPay”), pursuant to which Epoint agreed to purchase from the Seller all of the outstanding membership interests of SmartPay for consideration of $48.5 million in cash and the assumption by Epoint of certain specified liabilities of SmartPay. Epoint assigned all of its rights under the agreement to Genesis on March 7, 2018. The Company paid an initial $100,000 deposit in March 2018. The closing of the transactions contemplated under the SmartPay MIPA was subject to customary closing conditions, including the raising by Genesis of approximately $60 million to cover the purchase price, related costs and continuing operations. The SmartPay MIPA provided for certain termination rights of the parties, including termination by a party if the closing does not occur on or before July 15, 2018. In addition, the Seller may have terminated the agreement if the parties did not reach agreement on or before June 1, 2018 with respect to the retention of certain SmartPay employees and by June 15, 2018, if the Company did not either deliver to the Seller a firm financing commitment for an amount sufficient to fund the purchase price or did not remit to the Seller $100,000 on account of the purchase price. The Company made the $100,000 payment in June 2018.

On July 15, 2018, the SmartPay MIPA with the Seller to acquire SmartPay Leasing LLC terminated as the closing conditions were not satisfied and no extension of the termination date was obtained. As a result, Genesis recorded a $200,000 loss of deposits on planned acquisition of SmartPay Leasing, LLC in the consolidated statements of operations for the year ended December 31, 2018.

F-15

9. SUBSEQUENT EVENTS

The Company has undertaken the following restructuring initiatives to transform into a diversified financial services company with a focus on Fintech Investment, Wealth Management, and Lending Platforms:

Board of Directors and Executive Management:

On March 1, 2019, Gary Larkin resigned from all positions with the Company, including his directorship. Mr. Larkin’s resignation was not related to any disagreement with the operations, practices or policies of the Company. As part of separation agreement, Mr. Larkin agreed to waive any and all unpaid compensation.

On March 4, 2019, Murray Smith, the Company’s Chief Financial Officer, resigned to pursue other opportunities. This resignation was not in connection with any disagreement with the Company on any matter relating to its operations, policies or practices. As part of separation agreement, Mr. Smith agreed to waive any and all unpaid compensation.

On October 20, 2019, Rahul Singh, the Company’s non-executive director, resigned to pursue other opportunities. Mr. Singh’s resignation was not in connection with any disagreement with the Company on any matter relating to its operations, policies or practices.

On January 2, 2020, Roy Rose resigned as a chairman of the Board of the Company to pursue other opportunities. Mr. Rose’s resignation was not in connection with any disagreement with the Company on any matter relating to its operations, policies or practices. As part of separation agreement, Mr. Rose agreed to waive any and all unpaid compensation.

On January 2, 2020, the Company’s Board appointed Russell Cameron to serve as a member of the Board, and as the Company’s Chief Executive Officer. Mr. Cameron was appointed to fill the vacancies resulting from the previously announced voluntary resignation of Roy Rose. In connection with Mr. Cameron’s appointment as a member of the Board and Chief Executive Officer, the Board awarded Mr. Cameron 6,311,774 restricted stock units, subject to Mr. Cameron’s continued employment with the Company through each such date.

Financing Initiatives:

The Company filed Form D on March 11, 2020 regarding a $5 million Convertible Note offering. To date, the Company has raised $1,485,000 from 13 investors. The unsecured notes accrue interest at 20% per annum. At any time, the noteholder may convert the principal amount and accrued interest outstanding into Units where each $0.50 of principal amount and accrued interest due shall convert into (a “Unit”) of one share of common stock and one three-year warrant exercisable into one-half of an additional share of common stock at a per share exercise price of $0.50 per share.

Mergers and Acquisitions:

Beacon Group

On June 30, 2020, the Company consummated its acquisition of the Beacon Group (as defined below) from Beacon Financial Group Pty Ltd., an Australian company (“Beacon”), pursuant to that certain Share and Business Sale Agreement, dated October 21, 2019 (the “Purchase Agreement”), between the Company and Beacon previously reported by the Company on a Form 8-K filed with the U.S. Securities Exchange Commission on October 30, 2019.

Pursuant to the terms of the Purchase Agreement, the Company purchased from Beacon all of the outstanding equity interests in the following Australian entities: (i) The Financial Link Group Pty Ltd, (ii) Interactive Mortgage and Finance Pty Ltd and (iii) CCS Operations Pty Ltd. (collectively, the “Beacon Group”) for consideration of AUD$15.5 million (USD$10,354,500) (the “Purchase Price”) comprised of AUD$5 million (USD$3,451,500) in cash and AUD$10.5 million (USD$7,248,150) in shares of the Company’s Common Stock. The amount of shares of Company Common Stock issuable are under the Purchase Agreement is based on the volume weighted average price (VWAP) of the Company’s Common Stock for the seven (7) trading days ending on the first trading day immediately preceding the date of determination but in no event at less than AUD$0.25 (USD$0.17) per share (subject to adjustment in the event of a capitalization event by the Company). The Consideration Shares will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) or under the securities laws of any state in the United States, and will be issued in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act.

F-16

The Beacon Group is a diversified financial services firm operating in Australia as a Registered Investment Advisor and provides financial advice through two divisions under an Australian Financial Services License and an Australian Credit License. The group holds distribution agreements with leading financial institutions and also offers finance and mortgage advice services through agreements with various mortgage brokers and aggregators. The accounting business within the Beacon Group is to assist with identifying the most suitable and competitive finance solutions for clients of the Wealth Management network, primarily for those funding the acquisition of investment properties.

Under the terms of the Purchase Agreement, the Company paid Beacon AUD$100,000 ($69,030) in cash upon the completion of the Company’s due diligence in 2020.

Pursuant to the Purchase Agreement, the balance of the Purchase Price is payable in three installments: (i) AUD$1 million (USD$690,300) in cash and AUD$4.5 million (USD$3,106,350) in Company Common Stock on June 30, 2020; (ii) AUD$1 million (USD$690,300) in cash and AUD$1.5 million (USD$1,035,450) in Company Common Stock on June 30, 2021; and (iii) AUD$2 million ($1,380,600) in cash and $4.5 million (USD$3,106,350) in Company Common Stock on June 30, 2022. As per the Agreement, the cash consideration payable in the second installment was subsequently reduced to AUD$616,370 (USD$425,580) due to lower earnings of the Beacon Group and the due date was extended to August 31, 2021.

On June 30, 2020, in satisfaction of the first installment of the Purchase Price, the Company paid Beacon AUD$0.8 million (USD$552,240) in cash and issued to Beacon an aggregate of 7,983,162 unregistered shares of Common Stock based on the USD$0.778 VWAP of the Company’s Common Stock for the seven (7) trading days prior to such date.

Each of the three June 30, 2020, 2021 and 2022 installments is subject to and conditioned upon Beacon Group recording at least AUD$3 million (USD$2,070,900) in net revenue per each fiscal year ending June 30^th based on the existing business resources as of the Closing Date. In the event that the Beacon Group does not meet the revenue target in full for each fiscal year, then the Purchase Price then payable in respect of such fiscal year is proportionately reduced.

Under the terms of the Purchase Agreement, in the event the Company does not remit the cash component of the Purchase when due, then, subject to a three month grace period, Beach is authorized, upon written notice to the Company within 10 business days of the end of such period, to unwind the transaction (the “Unwind Provision”) whereupon the Company shall return Beacon Group to Beacon and Beacon shall return the Consideration Shares issued as of such date to the Company. Accordingly, until the Purchase Price has been paid in full, the Company will maintain the separate corporate existence of each company in the Beacon Group.

The Purchase Agreement contained customary representations, warranties, covenants and indemnification provisions. The closing of the transaction contemplated under the Purchase Agreement was subject to the obtaining by the Beacon Group of all required Australian governmental and regulatory authorities and other customary closing conditions.

The foregoing description of the Purchase Agreement, and the transactions contemplated thereby, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Purchase Agreement. A copy of the Purchase Agreement was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities Exchange Commission on October 30, 2019 and is incorporated herein by reference.

Note — USD$ amounts stated above are estimates based on the exchange rate of AUD$1 = USD$0.69030 on June 30, 2020. Actual payments in USD$ depend on the AUD$ to USD$ exchange rate at the time of actual payment.

Ballast Holdings

On June 30, 2020, the Company consummated its acquisition of Ballast Holdings Pty Ltd, an Australian corporation (“Ballast”), pursuant to that certain Share Purchase Agreement, dated June 30, 2020 (the “Purchase Agreement”), by and among, the Company, Ballast, Ballast Holdings Pte Ltd, the 100% owner of Ballast (the “Seller”), and Wayne Blazejczk who had operational control over Ballast. Pursuant to the Purchase Agreement, the Company acquired 100% of the 1,002,000 issued and outstanding shares of capital stock of Ballast from the Seller in consideration for shares of the Company’s Common Stock (defined in the Purchase Agreement as the “Consideration Shares” and issuable in three tranches as set forth below), a sum of AUD$950,0000 (USD$655,785) by July 31, 2020, the sum of AUD$2,550,000 (USD$1,760,265) by August 31, 2020 or such other date as may be agreed on less the capped liability.

The Consideration Shares are comprised of (i) 9,685,375 shares of the Company’s Common Stock issued on June 30, 2020; (ii) 9,685,375 shares of the Company’s Common Stock issuable within seven (7) days of the Seller’s delivery of Ballast’s audited financial statements for the period ended June 30, 2020; and (iii) 3,750,000 shares of the Company’s Common Stock in respect to the advisory book of funds under either advise or management issuable on August 31, 2020.

Ballast operates as a holding entity for its operating subsidiaries: Ballast Accountants Pty Ltd., Ballast Financial Planning Pty Ltd. and Ballast Superannuation Management Pty Ltd. (collectively, the “Ballast Group”). The Ballast Group provides a comprehensive range of accounting and taxation advice and solutions for investors and small- to-medium businesses. Its services include tax planning and structuring, management and cashflow reporting, tax returns and ASIC compliance, including a SMSF specialist practice and can also assist with buying and selling businesses. The Ballast Group also offers finance and mortgage advice services through agreements with various mortgage brokers and aggregators.

F-17

On June 30, 2020, the Company issued 9,685,375 unregistered shares of Common Stock to Ballast Holdings Pte Ltd valued at USD1.00 per share.

The Purchase Agreement contained customary representations, warranties, covenants and indemnification provisions, including, among others, a covenant that required Mr. Blazejczk to conduct Ballast’s business in the ordinary course of business, consistent with past practice and to comply with certain covenants regarding the operations of its business until the total purchase price is paid.

The closing of the transactions contemplated under the Purchase Agreement was subject to the obtaining by the Ballast and the Seller of all required Australian governmental and regulatory authorities and other customary closing conditions.

Reverse Stock Split:

On June 30, 2020, the Board of Directors of the Company approved and recommended for stockholder approval, a 1-for-2 reverse stock split of the outstanding shares of common stock of the Company, with fractional shares resulting from the reverse stock split to be rounded up to the nearest whole number (the “Reverse Stock Split”). On June 30, 2020, the Company received a written consent in lieu of a meeting by the holders of an aggregate of 31,280,639 shares of common stock representing 52.85% of the voting power the outstanding common stock (the “Majority Stockholders”) authorizing the Reverse Stock Split.

The Reverse Stock Split will become effective no earlier than the 20 days after the Company files a Definitive Information Statement on Schedule 14C with the SEC and files an amendment to the Company’s Certificate of Incorporation, as amended, with the Secretary of State of the State of Wyoming.

Notwithstanding the foregoing, the Reverse Stock Split will not become reflected in the marketplace until announced by the Financial Industry Regulatory Authority (“FINRA”). The Company is required to notify FINRA of the intended Reverse Stock Split by filing an Issuer Company Related Action Notification Form under FINRA Rule 6490 and Rule 10b-17 under the Securities Exchange Act of 1934, as amended. However, the Reverse Stock Split will not be announced by FINRA or effected on the OTC Markets trading platform until the Company becomes current with its quarterly and annual reporting requirements with the SEC. The Company is currently working towards becoming current in its SEC reports.

F-18

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On April 18, 2018, the Company dismissed Fruci & Associates II, PLLC (“Fruci”) as its independent registered public accounting firm, effective April 18, 2018 and appointed Peterson Sullivan LLP (“Peterson”). Peterson audited the consolidated balance sheets of EPOINT Payment Corp. and Subsidiary (“the Company”) as of December 31, 2017 and 2016, the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2017, and the related notes. On or about January 30, 2020 the board of directors approved the selection of BF Borgers CPA, PC (“BF Borgers”) as its independent registered public accounting firm replacing Peterson. Our board of directors approved each of these appointment and dismissals.

Item 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by our management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of December 31, 2018. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. In performing this assessment, our management concluded that our disclosure controls and procedures were not effective as of December 31, 2018.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2018 using the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2018 due to several material weaknesses.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following internal control over financial reporting deficiencies that represent material weaknesses as of December 31, 2018.

	●	Financial Reporting and Closing Process: We did not maintain an effective financial reporting and closing process to prepare financial statements in accordance with GAAP. We determined that controls over timely and complete financial statement reviews, effective journal entry controls, and appropriate reconciliation processes were missing or ineffective. Further, we were unable to complete regulatory filings timely as required by the rules of the SEC.

	●	Qualified Personnel: We lacked a sufficient number of qualified accounting personnel in key financial reporting positions to operate processes and controls over the year end close process. As a result, a reasonable possibility exists that material misstatements in our financial statements will not be prevented or detected on a timely basis.

	●	Control Monitoring: Our controls for monitoring the adequacy of the design and operating effectiveness of internal control over financial reporting across the Company were ineffective. As a result, a reasonable possibility exists that material misstatements in our financial statements will not be prevented or detected on a timely basis.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

No changes in the Company’s internal control over financial reporting occurred during the quarter ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. OTHER INFORMATION

Subsequent Events:

Board of Directors and Executive Management:

	●	On March 1, 2019, Gary Larkin resigned from all positions with the Company, including his directorship. Mr. Larkin’s resignation was not related to any disagreement with the operations, practices or policies of the Company. As part of separation agreement, Mr. Larkin agreed to waive any and all unpaid compensation.

	●	On March 4, 2019, Murray Smith, the Company’s Chief Financial Officer, resigned to pursue other opportunities. This resignation was not in connection with any disagreement with the Company on any matter relating to its operations, policies or practices. As part of separation agreement, Mr. Smith agreed to waive any and all unpaid compensation.

	●	On October 20, 2019, Rahul Singh, the Company’s non-executive director, resigned to pursue other opportunities. Mr. Singh’s resignation was not in connection with any disagreement with the Company on any matter relating to its operations, policies or practices.

	●	On January 2, 2020, Roy Rose resigned as a chairman of the Board of the Company to pursue other opportunities. Mr. Rose’s resignation was not in connection with any disagreement with the Company on any matter relating to its operations, policies or practices. As part of separation agreement, Mr. Rose agreed to waive any and all unpaid compensation.

	●	On January 2, 2020, the Company’s Board appointed Russell Cameron to serve as a member of the Board, and as the Company’s Chief Executive Officer. Mr. Cameron was appointed to fill the vacancies resulting from the previously announced voluntary resignation of Roy Rose. In connection with Mr. Cameron’s appointment as a member of the Board and Chief Executive Officer, the Board awarded Mr. Cameron 6,311,774 restricted stock units, subject to Mr. Cameron’s continued employment with the Company through each such date.

Financing Initiatives:

On March 11, 2020, the Company filed a Form D with the SEC regarding a $5 million Convertible Note offering. To date, the Company has raised $1,485,000 from 13 investors. The unsecured notes accrue interest at 20% per annum. At any time, the noteholder may convert the principal amount and accrued interest outstanding into Units where each $0.50 of principal amount and accrued interest due shall convert into (a “Unit”) of one share of common stock and one three-year warrant exercisable into one-half of an additional share of common stock at a per share exercise price of $0.50 per share.

The Company issued the securities in a transaction exempt from the registration requirements of the Securities Act in reliance under Section 4(a)(2) and Rule 506(b) of Regulation D promulgated thereunder due to the fact that the offering did not involve a public offering of securities, there was no advertisement of the securities or solicitation of the investors and all of the investors were accredited investors as that term is defined under Rule 502(a) of Regulation D promulgated under the Securities Act.

Mergers and Acquisitions:

Beacon Group

Under the terms of the Purchase Agreement, the Company paid Beacon AUD$100,000 ($69,030) in cash upon the completion of the Company’s due diligence in 2020.

On June 30, 2020, the Company issued 7,983,162 unregistered shares of Common Stock to Beacon based on the USD$0.778 VWAP of the Company’s Common Stock for the seven (7) trading days prior to such date. The Company issued the securities in a transaction exempt from the registration requirements of the Securities Act in reliance under Section 4(a)(2) promulgated thereunder due to the fact that the offering did not involve a public offering of securities.

Ballast Holdings

On June 30, 2020, the Company issued 9,685,375 unregistered shares of Common Stock to Ballast Holdings Pte Ltd valued at USD1.00 per share. The Company issued the securities in a transaction exempt from the registration requirements of the Securities Act in reliance under Section 4(a)(2) promulgated thereunder due to the fact that the offering did not involve a public offering of securities.

Reverse Stock Split:

Repurchase of Stock and Convertible Note:

Pursuant to a Stock Purchase Agreement, dated as of June 30, 2020 (the “Purchase Agreement”), between the Company, Brisbane, LLC (“Brisbane”), and Roy Rose, the former Chairman and CEO of the Company, the Company purchased an aggregate of 2.5 million (2,500,000) shares of common stock of the Company held by Brisbane (the “Shares”) and a $100,000 convertible promissory note of the Company held by Roy Rose (the “Convertible Note”). In consideration for the Shares and Convertible Note, the Company issued to each Brisbane and Roy Rose a promissory note in the principal amount of US$100,000 interest free and due October 28, 2020 (the “Notes”). The Purchase Agreement and the Notes contain customary representations and warranties and events of default. The Notes are unsecured and non-recourse. The Company deemed the repurchased Shares as treasury stock available for reissuance and the repurchased Convertible Note to be satisfied and extinguished.

PART III

35Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

~~ITEM~~The following ~~10. Directors,~~is ~~Executive~~a ~~Officers~~brief description of the principal occupation and ~~Corporate~~recent ~~Governance~~business experience of each of our executive officers and directors and their ages as of August 13, 2020:

Name	Age	Position
Russell Cameron	59	Chief Executive Officer, Chief Financial Officer and Director
Warwick Kerridge	59	Chairman of the Board and Director

~~ITEM~~Our board 11of directors currently consists of two members. ~~Executive~~ ~~Compensation~~All directors hold office until their successors have been elected and qualified or until their earlier death, resignation, disqualification, or removal. Board vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority vote of the directors then in office, even if less than a quorum, or by a sole remaining director. Our board may establish the authorized number of directors from time to time by resolution.

36Our executive officers are each appointed by the board and serve at the board’s discretion. There are no family relationships among our officers or directors.

~~ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.~~Executive Officers

38Russell Cameron. Mr. Cameron has been serving as the Chief Executive Officer, Chief Financial Officer and Director of the Company since June 2, 2020. Mr. Cameron has had a very diverse career. His first management position was the acquisition of television broadcast signal for KWBP-TV in Portland, Oregon. During the three years he and his partners owned and operated Portland’s WB affiliate. The station’s rapid growth drew the attention of WB Network Founder and CEO Jamie Kellner, who formed his own broadcast group and purchased the asset for $27 million. His passion for television production and the great outdoors led to investments in media companies and later his own production venture OMG Multi-Media, (“OMG”). Mr. Cameron served as OMG’s President and CEO from 1997 to March 2016. OMG has since created and distributed award-winning television programs including Fishing the West, America’s Outdoor Journal, Camp YMCA, Inside Passage and Western Sport Fishing with Lee Horsley which broadcast on national cable networks Versus, Outdoor Life Network, Fox Sports Network, Outdoor Channel and Comcast Sports Net to name a few. Mr. Cameron earned multiple Telly® Awards (the cable industry equivalent to the Emmy®) for his work, including Best Cable Outdoor Program in 2001 and 2005. From March 2016 to September 2018, he worked in the investment banking industry with Whitestone Investment Network. On September 27, 2018, he co-founded Health Professional Alliance Inc. Mr. Cameron’s extensive/in-depth experience in a variety of areas such as Business Development/Operations, Investment Banking and Finance are among the many attributes that uniquely qualify Mr. Cameron to serve as a member of the Board and CEO of the Company.

~~ITEM 13. Certain Relationships and Related Transactions and Director Independence~~Non-Employee Directors

39Warwick Kerridge. The Company’s Board appointed Warwick Kerridge to serve as Chairman of the Board, effective on March 9, 2020. Mr. Kerridge, has a distinguished corporate finance career spans nearly 30 years, including Legal, Banking and Financial services, with a particular focus on M&A by using a grounding in Law and expanding on that base through high level executive management experience. In addition to his transactional experience, Mr. Kerridge has led numerous valuation and strategic financial consulting engagements. He has worked extensively in several industries sectors including, but not limited to Biotech, Telco, Media, Property, Banking and Financial services, Film and Television, Funds Management, Mining and Resources. Prior to founding Capital land Advisory in February 2019, Mr. Kerridge between 2005 and 2009, held management positions with O’Connell Partner, Pitt Capital Partners (wholly-owned subsidiary of Australia’s oldest listed investment house, Washington H. Soul Pattinson & Company) and between 1987 and 2005 with Capital Finance Australia (Lloyds Banking Group and Bank of Scotland). Mr. Kerridge’s extensive experience in a variety of areas such as corporate finance, M&A, as well as executive management experience are among the many attributes that uniquely qualify Mr. Kerridge to serve as a Chairman of the Board of the Company.

~~ITEM~~On January 142, 2020, Roy Rose resigned as a chairman of the Board of the Company to pursue other opportunities. ~~Principal~~ ~~Accounting~~Mr. ~~Fees~~Rose’s ~~and~~resignation was ~~Services~~not in connection with any disagreement with the Company on any matter relating to its operations, policies or practices.

41On July 25, 2018, the Board of Directors (the “Board”) of Genesis Financial Inc. (the Company”) appointed Rahul Singh to fill an existing vacancy on the Board effective immediately. On October 20, 2019, Rahul Singh, the Company’s non-executive director, resigned to pursue other opportunities. Mr. Singh’s resignation was not in connection with any disagreement with the Company on any matter relating to its operations, policies or practices.

Involvement in Certain Legal Proceedings

None of our directors or executive officers has, during the past ten years:

●

has had any bankruptcy petition filed by or against any business of which he was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time;

●

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

●

been 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, futures, commodities or banking activities;

●

been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

●

been subject or a party to or any other event requiring disclosure under Item 401(f) of Regulation S-K.

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Securities Exchange Act of 1934, as amended, an officer, director, or greater-than-10% shareholder of the Company must file a Form 4 reporting the acquisition or disposition of Company’s equity securities with the Securities and Exchange Commission no later than the end of the second business day after the day the transaction occurred unless certain exceptions apply. Transactions not reported on Form 4 must be reported on Form 5 within 45 days after the end of the Company’s fiscal year. Such persons must also file initial reports of ownership on Form 3 upon becoming an officer, director, or greater-than-10% shareholder.

To our knowledge, based solely on our review of the copies of such reports received or written representations from certain Reporting Persons that no other reports were required, we believe that during the year ended December 31, 2018, all Reporting Persons timely complied with all applicable filing requirements.

Item 11. EXECUTIVE COMPENSATION

The following table sets forth the compensation awarded to, earned by or paid to our Named Executive Officers for services rendered during the fiscal years ended December 31, 2018 and 2017.

2018 Summary Compensation Table

Name	Principal Position	Years		Salary ($)		Bonus ($)		Stock Awards ($)		Options Awards ($)			Totals
Roy Rose	Chief Executive Officer		2018	$	46,125		-0-		-0-		-0-		$	46,125
			2017	$	-0-		-0-		-0-		-0-		$	-0-

Gary Larkin	Chief Executive Officer,		2018	$	108,625		-0-		-0-		-0-		$	108,625
	EPOINT Payment Corp.		2017	$	275,500		-0-		-0-		-0-		$	275,500

Mark Attinger	President and Chief		2018	$	82,500		-0-		-0-		1,398,250	(1)	$	432,063
	Operating Officer		2017	$	-0-		-0-		-0-		-0-		$	-0-

Murray Smith	Chief Financial Officer		2018	$	50,000		-0-		-0-		-0-		$	50,000
			2017	$	-0-		-0-		-0-		-0-		$	-0-

(1)

Amounts reflect the aggregate grant date fair value of the 1,750,000 shares of common stock underlying the stock option on the date of grant (with an exercise price of $3.00 per share) without regards to forfeitures, computed in accordance with ASC 718. This amount does not reflect the actual economic value realized by the named executive officer. The options issued vest quarterly over a two-year period. The assumptions used to calculate the value of the stock options are set forth in Note 6 in the Notes to Audited Consolidated Financial Statements contained in this Annual Report.

All Other Compensation

None

Outstanding Equity Awards at 2018 Fiscal Year-End

The following table sets forth all outstanding equity awards made to each of the Named Executive Officers that are outstanding as of December 31, 2018.

Option Awards (1)

Name

Grant Date

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

Option Expiration Date

Mark Attinger

May 22, 2018

437,500

1,312,500

3.00

May 22, 2028 (1)

(1)

1,750,000 options expired unexercised on January 23, 2019, 90 days after Mr. Attinger’s resignation from the Company.

Employment Agreements

We have agreements with certain of our named executive officers, which include provisions regarding post-termination compensation. We do not have a formal severance policy or plan applicable to our executive officers as a group. The following summaries of the employment agreements are qualified in their entirety by reference to the text of the employment agreements, as amended, which have been filed as Form 8-K dated February 22, 2018 and disclosed in our Form 8-K filed on June 7, 2018 but have been terminated as of the filing date of this Form 10-K.

Compensation of Directors

2018 Director Compensation

The following table sets forth information regarding compensation earned by or paid to our non-employee directors during the year ended December 31, 2018.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)			Total ($)
Roy Rose	$	-0-	$	-0-	$	-0-		$	-0-
Gary Larkin	$	-0-	$	-0-	$	-0-		$	-0-
Rahul Singh	$	-0-	$	-0-	$	24,750	(1)	$	24,750

(1)

Amounts reflect the aggregate grant date fair value of the 150,000 shares of common stock underlying the stock option on the date of grant (with an exercise price of $4.10 per share) without regards to forfeitures, computed in accordance with ASC 718. This amount does not reflect the actual economic value realized by the named executive officer. The options issued vest quarterly over a two-year period. The assumptions used to calculate the value of the stock options are set forth in Note 6 in the Notes to Consolidated Financial Statements on page F-12.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

The following table sets forth information as of August 13, 2020 as to each person or group who is known to us to be the beneficial owner of more than 5% of our outstanding voting securities and as to the security and percentage ownership of each of our executive officers and directors and of all of our officers and directors as a group. As of August 13, 2020, we had 56,688,110 shares of common stock outstanding.

Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power over securities. Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the stockholder.

Shares of common stock subject to options or warrants that are currently exercisable or exercisable within 60 days of the date of August 13, 2020 are considered outstanding and beneficially owned by the person holding the options for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

Name and Address (1)	Number of Common Shares Beneficially Owned (2)		Percent Beneficially Owned

Directors and Officers:
Russell Cameron, CEO, CFO and Director (3)		6,311,774		11.1	%

Warwick Kerridge, Chairman of the Board and Director		-		0.0	%

All directors and officers as a group (2 persons)		6,311,774		11.1	%

5% or more shareholders:
AD Securities America LLC (4)		10,825,807		19.1	%

Ballast Holdings Pte Ltd (5)		9,685,375		17.1	%

J. Otis Winters (6)		10,514,563		16.9	%

Ann Winters (7)		10,514,563		16.9	%

Beacon Financial Group Pty Ltd. (8)		7,983,162		14.1	%

(1) Unless otherwise noted, the address is c/o Genesis Financial, Inc., 445 Park Avenue, Suite 922, New York, New York 10022.

(2) Applicable percentages are based on 56,688,110 shares of Common Stock outstanding as of August 13, 2020. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days whether upon the exercise of options, warrants or conversion of notes. Unless otherwise indicated in the footnotes to this table, we believe that each of the shareholders named in the table has sole voting and investment power with respect to the shares of common stock indicated as beneficially owned by them.

(3) Held indirectly through the Cameron Group, LLC of which Russell Cameron has voting and dispositive control.

(4) Tim Alford holds sole voting and dispositive control of these securities. The address of AD Securities America LLC is 445 Park Avenue, Suite 922, New York, New York 10022.

(5) A Singapore company located at 51 Victoria Park Rd, Singapore (266525). Wayne Blazejczk is a director of Ballast Holdings Pte Ltd.

(6) Comprised of (i) 5,000,000 shares held directly by J. Otis Winters’s spouse, Ann Winters; (ii) 500,000 warrants held in the name of J. Otis Winters’s son, Paul Winters; (iii) 431,508 warrants held by J. Otis Winters; and (iv) 4,583,055 shares redeemable from a convertible note held by J. Otis Winters.

(7) Comprised of (i) 5,000,000 shares held directly; (ii) 500,000 warrants held in the name of Ann Winters’s son, Paul Winters; (iii) 431,508 warrants held by Ms. Winter’s spouse, J. Otis Winters; and (iv) 4,583,055 shares redeemable from a convertible note held by J. Otis Winters.

(8) An Australian company located at 90 Vulture Street, West End, Brisbane QLD 4101.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The following is a description of transactions since the beginning of the Company’s fiscal year ended December 31, 2018 as to which the amount involved exceeds the lesser of $120,000 or one percent (1%) of the average of our total assets at year-end for the last two completed fiscal years and in which any related person has or will have a direct or indirect material interest, other than equity and other compensation, termination and other arrangements which are described above under the headings “Compensation of Directors” and “Executive Compensation.” As of the date of this Annual Report on Form 10-K, there are no proposed transactions as described in the foregoing sentence.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

BF Borgers CPA, PC serves as our registered independent accountant and has audited our financial statements for the year ended December 31, 2018. Fruci & Associates II, PLLC served as our registered independent accountant and has audited our financial statements for the year ending December 31, 2017.

The following table presents fees for professional audit services rendered by BF Borgers CPA, PC for the year ended December 31, 2018 and Fruci & Associates II, PLLC for the year ended December 31, 2017 and fees billed for other services rendered.


Fiscal Year	2018		2017
Audit -Related Fees*	$	-	$	24,500
Tax Fees		-		-
All other Fees		-		-
Total Fees	$	-	$	24,500

* Audit fees for 2018 were not yet determined at the date of filing.

Audit fees include fees for services rendered for the audit of our annual financial statements and reviews of our quarterly financial statements. The Board of Directors acts as the Audit Committee.

PART IV

42Item 15. EXHIBITS.

~~ITEM~~(a) The ~~15. Exhibits~~following ~~and~~documents ~~Financial~~are ~~Statement~~filed ~~Schedules~~as part of this Annual Report:

421. Financial Statements

2The financial statements filed as part of this Annual Report are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report.

PART I

Report of Independent Registered Public Accounting Firm		F-1

Audited Consolidated Balance Sheets at December 31, 2018 and 2017		F-2

Audited Consolidated Statements of Stockholder’s Deficit for Years ended December 31, 2018 and 2017		F-4

Audited Consolidated Statements of Cash Flows for Years ended December 31, 2018 and 2017		F-5

Notes to Audited Consolidated Financial Statements for Years Ended December 31, 2018 and 2017		F-5

~~ITEM 1~~2. Financial ~~Business.~~Statement Schedules

~~CAUTIONARY~~All schedules ~~NOTE~~are ~~REGARDING~~omitted ~~FORWARD-LOOKING~~as ~~STATEMENTS~~the required information is inapplicable or the information is presented in the consolidated financial statements or notes to the consolidated financial statements within this Annual Report.

~~This annual report on Form 10-K contains many forward-looking statements, which involve risks and uncertainties, such as our plans, objective, expectations and intentions~~3. You can identify these statements by our use of words such as "may," "expect," "believe," "anticipate," "intend," "could," "estimate," "continue," "plans," or other similar words or phrases. Some of these statements include discussions regarding our future business strategy and our ability to generate revenue, income, and cash flow. We wish to caution the reader that all forward-looking statements contained in this Form 10-K are only estimates and predictions. Our actual results could differ materially from those anticipated as a result of risk facing us or actual events differing from the assumptions underlying such forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this Annual Report on Form 10-K. We undertake no obligation to update any of these factors or to publicly announce any change to our forward-looking statements made herein, whether as a result of new information, future events, changes in expectations or otherwise. Exhibits

~~OVERVIEW~~The exhibits listed below are filed or furnished as part of this Annual Report.

New Developments

Exhibit Number	Description	Filed as an Exhibit and Incorporated by Reference Herein.
2.1	Capital Stock Exchange Agreement dated September 8, 2017	Exhibit 2 to Form 8-K filed September 11, 2017
3.1	Articles of Incorporation	Exhibit 3.1 to Form SB-2 filed February 20, 2003
3.2	Amended and Restated Articles of Incorporation	Exhibit 3.2 to Form SB-2 filed February 20, 2003
3.3	Articles of Amendment Creating Series A Cumulative Preferred Stock	Exhibit 3.3 to Form SB-2 Amendment No. 3 filed July 3, 2003
3.4	Articles of Amendment Creating Series B Preferred Stock	Exhibit 3.1 to Form 8-K filed December 8, 2010
3.5	Bylaws	Exhibit 3.6 to Form SB-2 filed February 20, 2003
3.6	Articles of Amendment November 13, 2017	Exhibit 3.2 to Form 8-K filed November 21, 2017
3.7	Articles of Domestication	Exhibit 3 to Form 8-K filed February 16, 2016
4.1	Form of Warrant issued February 15, 2019	Exhibit 4.1 to Form 8-K filed February 22, 2018
10.1	Management and Loan Servicing Agreement with Genesis Holdings, Inc. dated April 16, 2004	Exhibit 10.1 to Form 10-K filed April 23, 2010
10.2	Management and Loan Servicing Agreement with Genesis Holdings II, Inc. dated July 15, 2008	Exhibit 10.2 Form 10-K filed August 11, 2010
10.3	Promissory Note with American West Bank dated October 14, 2004	Exhibit 10.2 to Form 10-K filed April 23, 2010
10.4	Warehousing Line of Credit Promissory Note Agreement with Coghlan Family Corporation dated April 18, 2006	Exhibit 10.3 to Form 10-K filed April 23, 2010
10.5	Promissory Note with Riverbank dated June 29, 2009	Exhibit 10.1 to Form 10-K filed August 11, 2010
10.6	Form of Flyback Energy, Inc. Series B Preferred Stock Purchase Agreement including Stock Warrant	Exhibit 10.6 to Form 10-K filed April 13, 2012
10.7	Form of Flyback Energy, Inc. Amended and Restated Investor Rights Agreement	Exhibit 10.7 to Form 10-K filed April 13, 2012
10.8	Form of Promissory Note relating to Flyback Energy, Inc.	Exhibit 10.8 to Form 10-K filed April 13, 2012
10.9	Form of Purchase Agreement with AWG International, Inc. dba AWG International Water Corp	Exhibit 10.9 to Form 10-K filed April 13, 2012
10.10	Form of Common Stock Purchase Warrant AWG International, Inc. dba AWG International Water Corp	Exhibit 10.10 to Form 10-K filed April 13, 2012
10.11	Warehousing Line of Credit Agreement with Coghlan Family Corporation dated January 1, 2010	Exhibit 10.3 to Form 10-K filed August 11, 2010
10.12	Warehousing Line of Credit Agreement with Coghlan Family Corporation dated January 1, 2008	Exhibit 10.4 to Form 10-K filed August 11, 2010
10.13	Corporate Restructuring Agreement with Genesis Financial Corporation dated December 27, 2008, effective January 1, 2009	Exhibit 10.2 to Form 10-K filed August 11, 2010

On September 8, 2017, Genesis Financial, Inc. (the "Company") entered into a Capital Stock Exchange Agreement (the “Exchange Agreement”) with EPOINT Payment Corp., a Delaware corporation ("EPOINT"). The anticipated target closing date is no later than February 15, 2018, or such earlier date as may be determined by the parties. During the first quarter of 2018, the Company will proceed to perform its obligations under the Exchange Agreement. For additional details please review the Exchange Agreement filed on our Current Report filed on September 11, 2017.28

Following the acquisition of EPOINT and in accordance with the Exchange Agreement's provisions, the Company plans to immediately commence the disposal and discharge of its pre-acquisition assets and the majority of its liabilities. The combined companies will focus their business efforts on financial services delivering a range of products and services including but not limited to, micro credit advances, mobile phone device financing, money transfers, mobile wallet and prepaid debit cards, bill payments, mobile top up, check processing, insurance and travel.

Exhibit Number	Description	Filed as an Exhibit and Incorporated by Reference Herein.
10.14	Form of $250,000 Convertible Note Agreement between John R. Coghlan and Genesis Financial dated December 15, 2010	Exhibit 10.14 to Form 10-K filed April 13, 2012
10.15	Form of $250,000 Convertible Note Subscription Agreement between John R. Coghlan and Genesis Financial dated December 15, 2010	Exhibit 10.15 to Form 10-K filed April 13, 2012
10.16	Form of Security Agreement related to $250,000 Convertible Promissory Note Agreement with John R. Coghlan dated December 15, 2010	Exhibit 10.16 to Form 10-K filed April 13, 2012
10.17	September 29, 2010 documentation regarding the assignment of certain properties and the business note to Coghlan Family Corporation	Exhibit 10.17 to Form 10-K filed April 13, 2012
10.18	First Amendment to Warehouse Line of Credit Promissory Note	Exhibit 10.18 to Form 10-K filed March 25, 2014
10.19	$50,000 Promissory Note with Placer Creek	Exhibit 10.19 to Form 10-K filed March 25, 2014
10.20	$100,000 Promissory Note with Placer Creek	Exhibit 10.20 to Form 10-K filed March 25, 2014
10.21	Amendment to Warehouse Line of Credit	Exhibit 10.1 to Form 10-Q filed November 4, 2016
10.22	Loan Agreement and Promissory Note November 13, 2017	Exhibit 10.22 to Form 10-K filed February 14, 2018
10.23	Membership Interest Exchange Agreement dated as of February 13, 2018 between Genesis Financial, Inc. and Fintech Holdings LLC.	Exhibit 10.1 to Form 8-K filed February 22, 2018
10.24	Membership Interest Purchase Agreement dated as of February 13, 2018 between Epoint Payment Corp., as Purchaser, WNLI Holdings, Inc., as Seller, and Smartpay Leasing LLC.	Exhibit 10.2 to Form 8-K filed February 22, 2018
10.25*	Employment Agreement dated as of February 15, 2018 between Roy Rose and Genesis Financial, Inc.	Exhibit 10.3 to Form 8-K filed February 22, 2018
10.26*	Employment Agreement dated as of February 15, 2018 between Gary Larkin and Genesis Financial, Inc.	Exhibit 10.4 to Form 8-K filed February 22, 2018
10.27*	Employment Agreement dated as of February 15, 2018 between Murray Smith and Genesis Financial, Inc.	Exhibit 10.5 to Form 8-K filed February 22, 2018
10.28*	License Agreement between Fintech Investments, Inc. and 3rd Rock Communications, Inc. dated December 15, 2014 and all subsequent amendments.	Exhibit 10.6 to Form 8-K filed February 22, 2018
10.29*	Asset Sale and Purchase Agreement dated as of February 15, 2018 between Genesis Financial Inc. and Coghlan Family Corporation.	Exhibit 10.7 to Form 8-K filed February 22, 20918
10.30	Share and Business Sale Agreement, dated as of October 21, 2019 between Genesis Financial, Inc. and Beacon Financial Group Pty Ltd.	Exhibit 10.1 to Form 8-K filed October 30, 2019
10.31	First Amendment to Membership Interest Purchase Agreement dated May 10, 2018 by and among Genesis Financial Inc., WNLI Holdings, Inc. and SmartPay Leasing LLC	Exhibit 10.1 to Form 8-K filed March 16, 2018
10.32	Share Purchase Agreement, dated June 30, 2020, by and among, Ballast Holdings Pte Ltd, Ballast Holdings Pty Ltd, Wayne Blazejczk and Genesis Financial, Inc.	Filed herewith
14	Code of Ethical Conduct	Exhibit 14 to Form 10-K filed April 23, 2010
16.1	Letter to the Securities and Exchange Commission from Peterson Sullivan LLP	Exhibit 16.1 to Form 8-K filed March 24, 2020
21.1	Subsidiaries of the Registrant	Filed herewith
31.1	CEO and CFO Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002	Filed herewith
32.1	CEO and CFO Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002	Filed herewith
101.SCH**	XBRL Inline Taxonomy Extension Schema Document.	Furnished herewith
101.CAL**	XBRL Inline Taxonomy Extension Calculation Linkbase Document.	Furnished herewith
101.DEF**	XBRL Inline Taxonomy Extension Definition Linkbase	Furnished herewith
101.LAB**	XBRL Inline Taxonomy Extension Label Linkbase Document.	Furnished herewith
101.PRE**	XBRL Inline Taxonomy Extension Presentation Linkbase Document.	Furnished herewith
104**	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	Furnished herewith

On* ~~December~~Management contracts ~~12,~~and ~~2017,~~compensatory ~~the Company implemented a twenty for one (20:1) reverse split~~plans. ~~In this annual report unless otherwise noted, all references to share activity are retrospectively adjusted to post-split figures.~~

~~INTRODUCTION.~~**These ~~Genesis~~interactive ~~Financial,~~data ~~Inc.~~files ~~("GFI")~~are furnished ~~was incorporated in the State of Washington on January 24, 2002 for the purpose of purchasing~~ and ~~reselling~~deemed ~~seller~~not ~~financed~~filed ~~real estate loans (also referred to as "loans"~~ or ~~"real~~part ~~estate~~of ~~notes"~~a orregistration ~~"portfolio").~~statement ~~On January 25, 2016, the Company moved its corporate domicile from Washington State to Wyoming State. All loans purchased~~ or ~~originated,~~prospectus ~~are held~~ for ~~sale,~~purposes ~~and~~of ~~are~~Sections ~~carried~~11 ~~on the financial statements at cost~~ or ~~fair~~12 ~~value,~~of ~~whichever is less. We purchase seller financed real estate loans from sellers directly or from sellers who are introduced to GFI by brokers. When~~ the ~~owner~~Securities Act of a1933, ~~real~~as ~~estate loan wishes to sell the loan~~amended, ~~the owner may contact a broker or GFI directly. Seller financed real estate loans~~ are ~~originated~~deemed bynot ~~the~~filed ~~selling~~for ~~owner~~purposes of ~~real~~Section ~~property. This~~18 ~~is an unconventional form~~ of ~~financing~~the ~~which~~Securities ~~does~~Exchange ~~not~~Act ~~involve~~of ~~banks or mortgage companies. When we commenced business~~1934, weas ~~initially focused on purchasing residential and commercial real estate loans and business notes from $25~~amended,~~000~~ ~~to $250,000 in value,~~ and otherwise ~~the~~are ~~brokering~~not ofsubject ~~larger transactions. As the business grew, we expanded our services~~ to ~~include~~liability ~~larger~~under ~~loans~~those ~~and other forms of cash flow investment instruments~~sections.

~~In 2007, the sub-prime real estate markets started to experience problems, and by mid-2008, the market was in a free-fall~~Item 16. ~~The~~ ~~Company~~FORM started to experience increased delinquencies, and the collapse of the financial markets eliminated any chance of our payors being able to refinance or sell their properties, which resulted in increased loan defaults and repossessions. Effective January 1, 2009, the Company out10-~~sourced~~K all its operations and servicing functions to reduce expenses during this downturn. Management tightened up the Company's underwriting parameters. Management focused its efforts on maintaining the performing portions of the portfolio, selling repossessed collateral properties, and reducing debt.SUMMARY

INDUSTRY BACKGROUND. Sellers have used real estate notes ever since men started claiming parcels of land as their own. Historically, no market existed for sale of real estate notes, so a holder of a note typically collected the payments from the borrower, and held the note to maturity. It is only in the last 25 years or so that an active market for selling real estate loans on a large scale has developed.None

In the latter part of 2008, national economic conditions made any real estate lending very precarious, forcing the Company to againevaluate its business plan. Real estate loans again became our primary target. GFI has been forced to focus its business towards more commercial real estate lending.29

3SIGNATURES

~~COMPETITIVE ADVANTAGE.~~ In accordance ~~this~~with ~~competitive~~Section ~~environment,~~13 ~~GFI~~or ~~sought~~15(d) ~~to distinguish its offering from those~~ of our competitors through excellent service, rapid customer response, and consistent and fair underwriting evaluations and procedures. We believed that our market focus on superb service and our existing contacts in the ~~industry~~Securities ~~would~~Exchange ~~provide~~Act aof ~~sustainable competitive advantage. We also believed that our ability to diversify into other related markets~~1934, ~~such as commercial real estate lending, would give us a competitive advantage. From January 1, 2009 through December 31, 2011,~~ the ~~Company~~registrant ~~out-sourced~~caused ~~all~~this ~~its~~amended ~~operations~~report ~~and servicing functions~~ to ~~reduce~~be ~~expenses, and further tightened underwriting parameters, while management focused~~ signed on ~~selling~~its ~~repossessed~~behalf ~~collateral properties and reducing company debt. We outsourced portfolio management to Genesis Finance Corporation, a company owned and controlled~~ by ~~Mike~~the ~~Kirk~~undersigned, athereunto ~~former~~duly ~~executive officer and director of Genesis Financial, Inc~~authorized.

Since January 1, 2011 the Company has operated with one part time paid employee and outsourcing the portfolio management in exchange for office expenses incurred by Genesis Finance Corporation.

	GENESIS FINANCIAL, INC.

Dated: August 13, 2020	By:	/s/ Russell Cameron
		Russell Cameron
		Chief Executive Officer, Chief Financial Officer, Chairman of the Board and Director
		(Principal Executive Officer) (Principal Financial and Accounting Officer)

~~INVESTMENT~~Pursuant to ~~POLICIES.~~the Werequirements ~~purchase seller financed real estate loans, originate commercial real estate loans, and pursue other forms~~ of ~~cash flow instruments that make sense. The real estate loans that we purchase are primarily in~~ the ~~sub-prime~~Securities ~~market,~~Exchange ~~and~~Act ~~may~~of ~~be secured by residential property~~1934, ~~commercial~~as ~~property~~amended, ~~and/or~~this ~~unimproved~~amended ~~land.~~report Wehas ~~will~~been ~~look~~signed atbelow ~~each~~by ~~individual~~the ~~loan~~following persons ason abehalf ~~unique opportunity. The principal balance~~ of ~~loans~~the orregistrant ~~interests~~and in ~~loans that we purchase is generally discounted to provide us with a target return of 12 – 15% interest per annum or more and will be secured by real properties. We will evaluate~~ the ~~adequacy~~capacities ~~of the underlying real property value which will serve as collateral for our purchase on a case by case basis~~indicated.

This evaluation may include reviewing a property's title report, the loan documentation including payment histories and credit information, when available. We may conduct a physical inspection and may obtain an appraisal of the property's value. The primary factor utilized in the purchase of a seller financed real estate loan is the ratio between the property value and the investment amount that we pay the seller. Based on these factors, we will purchase the loan at a discount to the principal balance. It is management’s intent to hold loans for less than a year but due to the economic circumstances, loans many be held for longer periods.

Signatures	Title	Date

/s/ Russell Cameron	Chief Executive Officer, Chief Financial Officer, Chairman of the Board and Director	August 13, 2020
Russell Cameron	(Principal Executive Officer)
	(Principal Financial and Accounting Officer)

/s/ Warwick Kerridge	Chairman of the Board and Director	August 13, 2020
Warwick Kerridge

In regard to our commercial lending, GFI focused on "hard money lending" which was typically a short term loan collateralized with non-conforming types of real property with a borrower who may have a compromised credit rating. GFI followed two general underwriting principles in its "hard money" lending, (1) only make a loan if you want to own the collateral and (2) never lend an amount of money which might exceed the price you would be willing to pay for the collateral as a purchaser. Hard money loans are normally equity based, not credit based. GFI originally targeted a 50% maximum loan-to-value ratio.30

HISTORICAL INVESTMENT RETURNS. During the past four years our investment returns have been negative when factoring in the non-performing delinquent loans and real estate owned (“REO”: real estate acquired through a loan foreclosure). Until we are able to sell the REO's we will not be able to determine the actual rates of return. In some geographic regions real estate market values have flattened, or have begun to rise, but in most areas values continue to deflate and sales of REO's remains weak.

MARKETING. We will undertake to maintain our marketing presence through contacts, individual and corporate, made over the previous eleven years.

PRODUCTS. We invest in seller financed real estate loans, originate commercial real estate loans, and pursue other forms of cash flow instruments which we believe will support our investment guidelines.

We may purchase longer term loans (three to five year terms) with the intent to hold until maturity. We may also purchase long term loans or properties with the intent to hold for resale in the future. Should the secondary institutional markets open back up, we may also pursue sales into those markets.

BROKERED LOAN AND REFERRAL FEES. From time to time, we will be presented with residential and commercial financing requests that do not conform to our current investment policies. In these cases, we refer them to other financing sources which may fund the transaction. In such cases, we may earn referral or finder’s fees for simply referring the prospective transaction. In some cases, we may agree to prepare purchase documents and close the transaction in a "simultaneous closing" in which the funding source remits the purchase funds to the closing agent and pays us the referral fee that we earned on the transaction.

OTHER TYPES OF RESIDENTIAL REAL ESTATE LOANS. In most instances, our purchases of seller financed real estate loans involve the purchase of the entire loan balance. In some instances, this method may be modified in various ways to increase our return and/or mitigate our risk.

NON-REAL ESTATE CASH FLOWS. There are a number of cash flow products available to purchase which are not secured by real estate but are paid by credit worthy payors (e.g. annual lottery payments paid by state governments, structured settlements payable by large companies, insurance company annuities paid over time, etc.). Lucrative yields can be earned by purchasing these types of products. The secondary market for these products has been very limited in past years. However, the exodus of investors from the real estate markets has caused these products to become highly desirable, but this elevated competitive interest has driven profitability margins to such a low level that GFI cannot be competitive as a funder. GFI may take advantage of opportunities to broker such products on a case-by-case basis.

INTEREST ONLY AND BALLOON PAYMENT LOANS. From time to time, GFI may purchase loans calling for “interest only” payments for a stated number of installment periods. Interest only loans may be subject to greater degrees of risk than loans requiring principal and interest payments because the borrower in an interest only contract is not demonstrating a present ability to repay the principal. Similar risks exist in loans with balloon payment obligations. While the risk associated with investment in these types of loans may be higher, GFI believes that it is in a position to control the risk through the underwriting process. When higher risk loans are proposed, our underwriter will adjust pricing or review the collateral position to assess the repayment and collateral value risks. GFI is primarily a collateral based lender, so this type of risk assessment on interest only or balloon payment loans is very similar to the risk assessment undertaken on other seller financed real estate loans and with commercial real estate loans. In many instances, GFI may not have access to borrower credit reports, payment histories or other forms of information available to traditional lenders.

These loans were created through the sale of real estate property between private parties, where the property seller provides the sale financing, rather than the buyer acquiring financing through conventional channels. At some point in time, after the property sale, the seller then decides to sell the loan. The differences in this type of loan from a conventional loan in the secondary markets are:

there is no standardization of documentation; these loans could be secured by a Note and Deed of Trust, Note and Mortgage, or a Real Estate Contract prepared by the seller or his/her attorney.

there is no buyer credit qualifying documentation, as the seller normally did not require any at the time of sale.

there is no appraisal, or other property information that would substantiate the sales price, because the buyer normally would not have required that information at the time of sale.

there is no payment history showing buyer performance, unless the seller has a third-party servicer collecting the payments.

By placing a higher degree of reliance on the collateral offered, the underwriters are able to match the pricing of the transaction and the targeted return with the risk of non-payment. In general, interest only loans will result in a lower loan to value percentage than comparable loans with principal and interest amortization schedules. In present market conditions, loans with balloon payments are viewed as very high risk if the balloon is due within a couple years, as the availability of refinancing is very limited, and many properties have mortgage debt exceeding the present value of the property securing the debt.

SUBMITTING BROKER’S QUALIFICATIONS. GFI will be very selective in choosing the brokers from whom it will accept real estate loan submissions. Due to limited personnel resources, and the volatile real estate values, GFI will not accept submissions from unknown or inexperienced brokers. Loan packages must be complete and accurate, and take into account present market conditions and property values. In our opinion, only experienced brokers are capable and reliable for meeting our investment policies. We use brokers who specialize in our type of contract loan products.

COMMERCIAL REAL ESTATE LENDING. GFI was a small scale commercial real estate lender prior to 2004, supplementing the Company’s seller financed loan acquisitions business. In the latter part of 2004, due to the competitiveness of the seller financed loan market, management decided to expand the Company’s efforts in the commercial lending market. Our broker network supplied us with potential borrowers. Since the management and staff of GFI had considerable previous experience with commercial lending, it was a natural and comfortable adjustment. As with any business venture, the Company looked throughout the commercial lending industry for a “niche”. We determined that GFI was best suited to do “Hard Money” commercial lending. Hard money lenders focus on those loans which are usually smaller in size, shorter terms (more of an interim financing), often collateralized by non-conforming property types, or the borrowers do not qualify for conventional financing due to credit history problems. Typically, hard money loans command a higher interest rate providing a smaller, high cost-of-funds lender like GFI with the opportunity to earn a favorable return on investment.

Although hard money loans carry a higher degree of risk due to the non-conforming nature of the loans, that risk is partially offset with the lower loan-to-value ratios, which seldom exceed 60%, providing a collateral cushion for the lender if the property were to be repossessed and resold. Throughout 2008, as real estate values throughout the nation continued to decline, it became apparent that loan to value ratios as low as even 50% - 60% were insufficient to provide that cushion for the lender, because values had dropped in some geographic areas as much as 50% - 70%. As of December 31, 2012 it appears that the market has stabilized.

COMPETITION. When GFI formally entered the hard money markets in the latter half of 2004, the market was very competitive and fragmented. Most hard money lenders operated on a local basis limiting their lending to borrowers and collateral properties located a short distance from their base of operations. They also marketed only to the retail market, ignoring brokers and dealing directly with the borrowers.

Beginning in late 2007, we noticed that some of the commercial lenders were cutting back and tightening their lending parameters. Some were even exiting the business, or closing operations due to high delinquencies and repossessions. By the end of 2010, a large percentage of the lenders had exited the business or suspended operations, and virtually every remaining commercial real estate lender had severely tightened their parameters. The Company expects this trend to continue.

MARKET ANALYSIS. The hard money market was quite strong in 2004, at the time of the Company’s increased focus in making these loans, and continued that way throughout 2006. Frequent foreclosure litigation and collateral repossessions are an expected part of the hard money industry, in contrast to the conventional markets. With the exception of those few transactions with unusual circumstances affecting the outcome, most problem loans were eventual settled and the Company experienced a loss.

In 2007, the Company started to experience increased delinquencies, primarily due to a slow-down in the borrower’s business, resulting in reduced cash flows. The prior workouts that resulted in a payoff before repossession declined dramatically. This appeared to be due to the fact that the borrowers could not refinance their collateral properties, nor could they sell their properties to pay off the loan. This resulted in more repossessions, and the Company learned that it could not sell those repossessed properties as easily or for their appraised values.

From December 31, 2007 through December 31, 2010 the real estate markets throughout the country were experiencing dramatic down-turns in values, and at the same time the lending markets were tightening up making refinancing very difficult, regardless of the property type. The Company was experiencing increasing delinquencies resulting in increased foreclosure litigation expense and eventual collateral repossession. In several cases, it was apparent that the value of the collateral had dropped below the principal loan balance which indicated the potential for significant future financial losses. The Company is currently concentrating on the collection and liquidation of prior loans and real estate and is making few new loans.

On January 1, 2009, management decided to make some major adjustments to the Company’s business plans. These adjustments included: overhead expense reduction by outsourcing the day-to-day operations of the Company, focus on reducing the Company’s debt through a restructuring of terms with our credit facilitators, to pursue the sale of Company assets, to continue acquisitions and originations only on pre-sold loans, focus on managing delinquent accounts through increased collection activity and workouts, increase the focus on maintenance and resale of REO assets, and diversify asset acquisitions into non-real estate assets.

As of January 1, 2011, the Company had down-sized enough to manage a sizable portion of its own affairs and renegotiated its outsourcing agreement with Genesis Finance Corporation by lowering the monthly fee. As of January 1, 2012 the monthly fee was terminated and the outsourcing services were offset by general office expenses paid by the Company on behalf of Genesis Finance Corporation, a company owned by Michael A. Kirk, an affiliate of Genesis Financial, Inc. On January 1, 2011, GFI hired one employee, Virginia Walters, to manage its affairs going forward.

As a result of the poor economic conditions and declining real estate values, GFI was compelled to seek out additional avenues to build shareholder value. Management believed that investments in local startup companies could prove to be a good investment for the Company and provide an avenue of diversification.

As part of the diversification plan the Company invested a portion of its assets in privately held companies as follows:

Flyback Energy, Inc.:

On November 23, 2010, the Company closed the purchase of an equity interest in Flyback Energy, Inc. (FEI), for $1,200,000. The purchase was for 2,666,667 shares of Series “B” Preferred Stock from Flyback Energy, Inc., a closely held Washington corporation payable on an installment basis. On April 25, 2011, the Company purchased 85,274 shares of Series “C” Preferred Stock for $50,000 which is convertible at $0.60 per share and bears a 5% dividend rate.

The Flyback Series "B" Preferred shares are convertible into Flyback common shares on a one for one (1:1) basis and the conversion pricing is subject to adjustments for certain diluting issues of common stock, subdivisions or combinations of common stock, reclassifications, exchanges and/or substitutions of stock. The Company is due 421,480 shares of common stock because of the dilution provision.

Flyback Energy, Inc. is a privately-held company that has developed a unique and proprietary electronic switch design that offers control over electrical power and magnetic fields.

The founders of Flyback Energy, Inc. have solved an electromagnetic energy loss problem. They focused their research on totally controlling the rise and collapse of magnetic fields present in inductive circuits, equipment and processes. After years of methodical experimentation, the Flyback team has created and patented practical breakthrough magnetic energy recovery (MER) technology.

With this patented technology, Flyback Energy is actively developing reliable products to capture and recover magnetic energy losses and then insert that otherwise wasted energy back into the power circuit. The Flyback technology also mitigates problematic harmonic resonance, electromagnetic interference (EMI), excessive heat and other induction issues.

This technology provides control of induction and resistive devices, and power conversion processes between AC and DC electrical systems. Flyback solutions result in lower energy cost, cooler operating temperatures and longer useful life for lighting system components, transformers, motors and controllers.

Flyback’s Magnetic Energy Recovery technology creates value across a wide range of electromagnetic applications. Most electrical input supply can be cost effectively switched and controlled, including such traditional sources as AC grid power, fuel-fired and hydro-generated power, and DC sources such as solar cells, wind generation and battery arrays. Flyback is currently developing products to serve a special purpose – where energy savings and high electrical efficiency are valued.

Genesis Financial, Inc. reduced the carrying value of its Flyback Energy common shares to $0.067 per share, the last known arm’s length common share sale. Flyback Energy, Inc. is still a development stage company being financed by outside sources of capital. At this time, we believe the Flyback has some financing capital to develop certain defined products.

Digi Outdoor Media, Inc.

In 2014, the Company loaned Placer Creek Mining Company (“Placer”) $150,000. The loan interest rate was 5.0% and the Company has an option to convert any or all of the amount due into an equity private placement of Placer. The Placer transaction was a related party transaction. (see Note 11:Michael Lavigne)

On February, 24, 2015, the Company converted the note into 300,000 shares of common stock of Digi Outdoor Media, Inc. (“Digi”), the successor in interest to Placer. The Company determined that the fair value of the shares received on the conversion to be $150,000 based upon the note receivable balance of $150,000 because Digi is not publicly traded and has had no recent cash sale of its common stock.

Digi Outdoor Media, Inc. is a startup company in the business of building and leasing outdoor advertising signs.

On December 31, 2017, the Company due to legal action concerning Digi Outdoor Media booked an impairment charge of $150,000 to reduce the carrying value to $-0-.

Ambient Water Corporation (Formerly AWG International Water Corp.):

The Ambient Water Corporation is located in Spokane, Washington. In 2010 and 2011, the Company purchased a total of 7,380,433 common shares of the Ambient Water Corporation common stock for $500,000, at that time the purchase represented approximately 10% of the total outstanding shares.

On May 19, 2016, by board action, the Company sold its interest in Ambient Water Corporation to John R. Coghlan (see Note 11) for $0.0003 per share, the fair value of the stock on the day of sale, $2,213, resulting in a recognized loss of $497,787.

Rental Properties:

At the end of 2013, the Company foreclosed a $85,534 loan held for sale in Lebanon, Oregon through the bankruptcy courts, the property is currently being operated as Duffy’s Bar. The bar was subsequently leased on a three (3) year lease agreement for $1500 per month, with the tenant paying all utilities and insurance. During the years ended December 31, 2016 and 2017, the company recognized $18,000 and $3,000 in rental income. This is a commercial building being depreciated over thirty-nine (39) years. Depreciation accrues at $179 per month. The company recorded depreciation of $2,143 and $-0- for the years ended December 31, 2016 and 2017. On March 8, 2017, by board action, the Company sold this property to Coghlan Family Corporation for $77,585, resulting in a gain on sale of $342.

In September 2016, the Company foreclosed on a loan previously held for sale in Lewiston, Idaho through the bankruptcy courts, the property is being operated as Emperor of Indian restaurant. The property was placed into real estate owned during the six month ended June 30, 2016. It was held at a net carrying value of $69,761. The restaurant was subsequently leased on a two year lease agreement for $1,200 per month with an option to purchase for $45,000. During the year ended December 31, 2016 and 2017 the company recognized $2,175 and $8,925 in rental income. Fair value of the property was determined to be $45,000 on the date of transfer based on appraisal and contract terms of the lease. This is a commercial building being depreciated over thirty-nine (39) years. The Company recorded depreciation of $692 and $577 for the year ended December 31, 2016 and 2017. On July 17, 2017, by board action, the Company sold this property to Coghlan Family Corporation for $30,000, resulting in a loss of ($17,670).

Real Estate Leasehold Interest:

Halliday, North Dakota: During 2013 the Company completed the acquisition of a real property leasehold interest that consists of approximately 63 acres in the city of Halliday, North Dakota. The lease term is fifteen (15) years and commenced on September 15, 2012. The Company has an option to renew the lease for an additional 15 year term. Presently, the property consists of fifty (50) residential type lots. The monthly rent on the lease is Fifty ($50.00) Dollars for each occupied and rented trailer, cabin or lot. The Company is obligated to pay any and all real and personal property taxes, general taxes, special assessments and other charges levied against the property and its improvements. During the lease term, the Company will own title to all of the improvements and personal property. At the expiration of the lease or termination, all improvements and personal property located on the premises will revert to the Lessors.

Limited Liability Corporations:

In 2013, the Company formed Hermiston 353, LLC to hold real property interests resulting from a loan foreclosure with multiple note interest holders of which Genesis holds a 13.1% interest valued at $54,691 as of December 31, 2017. In 2014, the Company formed North Edwards 435, LLC, another REO purposed entity to hold the real property interests resulting from a loan foreclosure with multiple note interest holders. The Company's interest in North Edwards is 31.95% valued at $48,894 as of December 31, 2017. The LLC’s are passive investments which each hold a single real estate REO property for sale.

DEFAULT PROCEDURES. Loans will be sold after short holding periods and defaults going forward are expected to be minimal. Some defaults will occur, however and we will take steps after we become aware of the default to protect our interests. GFI operates under the policy that any loan payment over 90 days delinquent is a loan default. In a default situation, we will pursue one or more of the following alternatives: discussion with the submitting broker, if any, concerning ways to remedy the default; an offer to re-write or modify the loan for the borrower/buyer as a means to cure the default, provided good evidence is available that the modification will be honored by the borrower/buyer; sale of the loan with the delinquency disclosed (possibly at a loss); acceptance of a property deed in lieu of foreclosure; and/or foreclosure and REO property sale.

SECONDARY MARKET RESALES

OVERVIEW. Since inception, GFI has purchased loans and originated loans with the goal of resale to various secondary market and private investors. GFI attempts to resell the loans as soon as possible with a view toward optimizing gains on resale. With the elimination of the secondary market and the participating secondary market buyers, the primary buyers have been accredited private investors. The Company feels that these conditions will continue for the foreseeable future, but will continue to monitor the financial markets. We will continue to establish new relationships with any secondary market buyers as they become available.

GOVERNMENTAL REGULATION

Commercial real estate lending does not require special licensing and is not subject to governmental regulation. GFI does not originate residential loans and therefore is not subject to governmental regulation as a lender, bank, mortgage broker, or other regulated financial institution. Our business focuses on transactions that are not subject to governmental regulation and we intend to maintain this business focus for the foreseeable future.

EMPLOYEES

As of December 31, 2017 the Company had one part-time employee Virginia Walters.

REPORTS TO SECURITY HOLDERS. The Company voluntarily files periodic reports with the United States Securities and Exchange Commission in accordance with the requirements of Section 15(d) of the Securities Exchange Act of 1934. The Company files quarterly reports on Form 10-Q, annual reports on Form 10-K and current reports on Form 8-K. The Company is currently classified as a Smaller Reporting Company under applicable SEC regulations.

Copies of all materials that we file with the SEC may be inspected and read without charge at the Public Reference Room of the SEC, 100 “F” Street NE, Washington, D.C. 20549. Interested persons may obtain information regarding the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Copies of this material may be obtained at prescribed rates from the Public Reference Section of the Commission at 100 “F” Street NE, Washington, DC. 20549. The Securities and Exchange Commission also maintains a Web site (http://www.sec.gov) through which the information we file with the SEC can be retrieved.

ITEM 1A. Risk Factors

Not applicable to Smaller Reporting Companies.

ITEM 1B. Unresolved Staff Comments

Not applicable to Smaller Reporting Companies.

2. Properties

The Company’s principal executive offices are located at 3773 West 5th Avenue, Suite 301, Post Falls, ID 83854. We have a month-to-month tenancy for our executive offices with West 3773 Fifth, LLC. We believe that our office facilities are adequate for our present business activities. Our annual rent is $14,500. The premises are owned by West 3773 Fifth, LLC which is 100% owned by John and Wendy Coghlan. During fiscal year 2017, John Coghlan was the chairman of our board of directors, President, CEO and CFO.

The majority of the properties owned by the Company were acquired through foreclosure of various loans in our loan portfolio. As of December 31, 2017, our REO properties have a total net carrying value of $-0- and Rental properties of $-0-. The following table summarizes our REO properties:

Description	Location	Date Acquired	Units/Acres
One (1) lot and % RV park with clubhouse	Cusick, WA	2008	1 RV lot and 1.36% of RV park
Commercial Building	Lebanon, OR	2013	Commercial building and lot
Commercial Building	Lewiston, ID	2016	Commercial Building and lot

During fiscal year 2017 these three properties were sold to Coghlan Family Corporation. See the "Related Party" footnotes for additional details.

ITEM 3. Legal Proceedings

Presently, we are not subject to any material legal proceedings which might have an adverse impact on our financial statements. In the normal course of business, the Company is the initiator of legal proceedings associated with judicial real estate foreclosures and title insurance matters related to our loan portfolio collateral interests.

ITEM 4. Mine Safety Disclosures

Not applicable.

PART II

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market For Registrant's Common Equity And Related Stockholder Matters

Our common stock is quoted on the OTC Markets QB under the stock symbol GNFL. The following table sets forth the high and low bid prices of our “post-split” common stock for the quarters ending December 31, 2016 and 2017 and interim periods. The quotations set forth below reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Table No. 1

Quarter Ended:
Fiscal 2016	High	Low
March 31	$5.80	$2.60
June 30	$4.00	$3.00
September 30	$3.01	$2.00
December 31	$3.60	$3.60
Fiscal 2017	High	Low
March 31	$2.40	$1.60
June 30	$2.00	$1.40
September 30	$3.40	$1.50
December 31	$4.00	$2.80

During the fourth quarter of 2017, the Company implemented a twenty for one (20:1) reverse stock split resulting in a higher share prices. The market prices reported above have be adjusted to give retroactive effect to the reverse split.

(a) Holders

As of December 31, 2017 our company had approximately 133 shareholders of record of its common stock holding 879,763 common shares.

(b) Dividends

There are no restrictions imposed on the Company, which limit its ability to declare or pay dividends on its common stock, except for corporate state law limitations. No cash dividends have been declared or paid to date and none are expected to be paid in the foreseeable future.

During the fourth quarter the Company did not offer or sell any equity securities.

(d) Securities Authorized for Issuance under Equity Compensation Plans

Equity Compensation Plan Information

None

ITEM 6. Selected Financial Data

Smaller Reporting Companies are not required to provide this data.

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the financial information included elsewhere in this Annual Report on Form 10-K.

The purpose of this section is to discuss and analyze our financial condition, liquidity and capital resources and results of operations. You should read this analysis in conjunction with the financial statements and notes that appear elsewhere in this Annual Report on Form 10-K. This section contains certain "forward-looking statements" within the meaning of federal securities laws that involve risks and uncertainties, including statements regarding our plans, objectives, goals, strategies and financial performance. The Company’s actual results could differ materially from the results anticipated in these forward-looking statements as a result of factors set forth under "Disclosure Regarding Forward-Looking Statements" in this Annual Report on Form 10-K.

Genesis Financial, Inc. is engaged in the business of buying and selling seller financed real estate loans ("loans"), and originating commercial real estate hard money loans. We purchase loans at a discount and hold them for sale for a relatively short period to provide seasoning and value appreciation. After the holding period, we sell the loans. We expect to derive operating revenues from resales of loans at a profit, and from interest income derived from loans during the holding period. We originate commercial real estate loans and sell the loan, or participations in those loans, to accredited private investors. From time to time, we also consider other forms of cash flow instruments when warranted. GFI has also invested in two private companies with a view toward diversifying its investment portfolio.

PLAN OF OPERATIONS

RESULTS OF OPERATIONS

Revenues

Fiscal Year ended December 31, 2017 compared to year ended December 31, 2016.

During the years ended December 31, 2017 and 2016, the Company recognized revenues of $48,911 and $87,023, respectively, comprised of interest, processing fees, rental income and other revenues. The decrease in 2017 was due to decreased rental and interest income.

Revenues were not sufficient to support our operations. Net loss from operations for the years ended December 31, 2017 and 2016 were ($523,036) and ($660,031), respectively. The primary reasons for the losses were on the sale of rental property, fair value adjustments, and legal and auditing expenses related to public company reporting requirements.

At December 31, 2017 and 2016, loans held for sale totaled $306,109 and $347,755, respectively. The decrease in 2017 was due to loans being paid down and fair value adjustments.

Of the loans held for sale at December 31, 2017 and 2016, 50% and 52% of loans, respectively, were in default. The default loan balance values were $159,292, at December 31, 2017 and $180,912, at December 31, 2016. At December 31, 2017 one of the six loans in default is the subject of a judicial proceeding where the Company seeks to foreclose upon the real property securing the defaulted loans.

At December 31, 2017 and 2016, real estate owned (REO) totaled $-0- and $14,999, respectively. The decrease in REO is the result of the sale of all of the REO properties. These properties were sold to Coghlan Family Corporation a related party (see Note 11).

In 2016 we foreclosed one commercial property and subsequently leased it on a two-year lease at $1,200 per month with granting the lessee an option to purchase the premises for $45,000. In 2017 we did not complete any loan foreclosures.

Generally in each instance of payment default, it is GFI’s policy to stop accruing interest income when delinquency status is reached. GFI also performs a review of the adequacy of collateral on each default and records a write-down to market value if the collateral value is less than the loan’s principal balance on an aggregate basis by loan type. For this purpose, GFI categorizes loans as residential, commercial, land, and other.

General and Administrative Expenses

General and administrative expenses (“G&A”) for fiscal years ended December 31, 2017 and 2016 were $225,567 and $228,912, respectively. G&A primarily consists of executive compensation, rent and professional fees for legal, accounting and public relations, utilities, depreciation and maintenance. The year over year increases and (decreases) for the fiscal years ended December 31, 2017 and 2016 were ($3,345) and $19,109, respectively. The primary reasons for the changes were as follows:

Fiscal year ended December 31,	Increase (decrease)	Primary reasons for change
2017	($ 3,345)	Decrease due to reduction of depreciation and amortization expense
2016	$ 19,109	Increase due to Insurance and Public Company expense

Interest Expense

For the years December 31, 2017 and 2016, interest expense amounted to $28,512 and $26,547, respectively. The reason for the increase in interest expense is due to borrowing from the RiverBank line of credit and the new loan with Coghlan Family Corporation.

Interest expense was associated with our lines of credit with (1) RiverBank, an unaffiliated lender, (2) our line of credit with Coghlan Family Corporation, a related party and (3) note payable to Coghlan Family Corporation, a related party.

Loan Portfolio Composition

For the years ended December 31, 2013 through 2017, the loan portfolio of purchased, sold and originated is as follows.

Table No. 3

Loan Types Purchased, Sold and Originated

2013
		Residential		Commercial		Land		Other
Originated	-	$0	1	$100,000	1	$10,400	2	$378,857
Purchased	-	$0	-	$0	-	$0	-	$0
Sold	2	$52,221	1	$288,368	-	$0	3	$408,857
2014
		Residential		Commercial		Land		Other
Originated	-	$0	-	$0	-	$0	-	$0
Purchased	-	$0	-	$0	-	$0	-	$0
Sold	2	$31,205	3	$239,437	4	$50,278	-	$0
2015
		Residential		Commercial		Land		Other
Originated	-	$0	-	$0	1	$15,000	1	$10,000
Purchased	-	$0	-	$0	-	$0	-	$0
Sold	1	$43,725	-	$0	2	$25,337	-	$0
2016
		Residential		Commercial		Land		Other
Originated	1	$40,000	-	$0	-	$0	1	$31,366
Purchased	-	$0	1	$134,714	-	$0	-	$0
Sold	2	$55,251	-	$0	-	$0	-	$0

2017
		Residential		Commercial		Land		Other
Originated	-	$0	-	$0	-	$0	-	$0
Purchased	-	$0	-	$0	-	$0	-	$0
Sold	-	$0	1	$5,440	1	$13,700	-	$0

LIQUIDITY AND CAPITAL RESOURCES

The Company’s principal sources of cash have been from loan sales, related party loans, unaffiliated party loans, funding agreements, rental and lease agreements and common and preferred stock private placements. The Company anticipates that its primary uses of cash will be adequate in order to meet the demands upon its current operations, and there will not be a need for additional funds to finance ongoing acquisitions of seller financed real estate loans and originations of commercial real estate hard money loans, and the expense of loan foreclosure and the maintenance and resale costs associated with REO properties.

At December 31, 2017 and December 31, 2016, we had cash available of $5,215 and $10,639, respectively, and $55,000 and $70,000, respectively was available under our bank line of credit for the same periods. Management considers the capital resources to be adequate to meet the current operating needs of the Company for the next twelve months.

GFI is currently operating under a primary $250,000 line of credit with Riverbank, an unaffiliated lender, with an variable interest rate of 5.50%. The line of credit also included a one-half percent origination fee. Coghlan Family Corporation advanced GFI $175,441.43 and discharged the Riverbank loan on February 1, 2018.

At December 31, 2017, the Company had a $2,500,000 Line of Credit Agreement with the Coghlan Family Corporation (“CFC”) with a balance of $930,000. CFC is an affiliated company controlled by an officer, director and principal beneficial shareholder of the Company. Originally, the interest rate on the line is a variable interest rate equal to the prime rate index (as published in the Wall Street Journal) plus 1%. The line has a term of 12 months and an origination fee of 1/2% or $12,500. The credit line is collateralized by all of GFI’s assets but is subordinate to the RiverBank line of credit loan agreement. Borrowings under the line are personally guaranteed by an officer of the Company. Because of the weak economic conditions, effective January 1, 2012, CFC had agreed to (1) extend the due date to January 1, 2016, waive all interest beginning October 1, 2010, (2) waive the 12% default rate, (3) waive the financial covenants and (4) waive the commitment fee. (See 8-K filed February 8, 2016) Effective August 1, 2016, the company amended the Warehouse Line of Credit Promissory Note Agreement to four (4%) percent interest to be paid monthly in common stock. In addition, the Company issued 2,500 “post-split” shares of its common stock valued at $5,000 as a loan renewal fee. Effective July 1, 2017, CFC has waived the interest and commitment fee.

In 2016 the Company, by board action, exchanged a loan held for sale with a basis of $10,000 and exchanged its 9.1756% interest in a limited liability company valued at $300,000 for a reduction in the line of credit of $310,000.

On November 13, 2017, the Company entered into a Promissory Note Loan Agreement with Coghlan Family Corporation, a related party (the "Lender"). The Loan Agreement is essentially a revolving line of credit with an initial advance of $25,000 with subsequent advances as requested by the Company. This indebtedness will survive the proposed Epoint Payment Corp. acquisition transaction. The loan bears interest at the rate of 6.0% interest and is due and payable on, or before May 15, 2018. As an inducement to the Lender, the Company agreed to grant one share of post-reverse split common stock for each $2.50 of aggregate principal amount loaned ("Bonus Shares"). The Bonus Shares are due at the loan's maturity date which is May 15, 2018. At December 31, 2017 the balance was $47,002.

Our capital resources have been adequate to fund our operations at a reasonable level during the year ended December 31, 2017 covered by this Annual Report. We have paid close attention to our loan portfolio and maintained our funding requirements within our available resources. We receive interest and principal reductions (typically monthly) on loans which we hold in inventory. We would require an increase in our capital base and an improvement in the real estate markets in order to increase revenue and create profitability.

For the years ending December 31, 2017 and 2016, our net cash flows used by operating activities were $140,973 and $167,827, respectively. The reason for decrease for the year ended December 31, 2017 was the sale rental properties.

For the period ended December 31, 2017 and 2016 the cash flows used by investing activities was $121,932 and $138,814, respectively. The reason for the decrease in 2017 compared to 2016 was the Company sold fewer assets in 2017.

For the years ending December 31, 2017 and 2016, our net cash provided by financing activities was $13,617 and $8,351, respectively. The reason for the increase for the period ended December 31, 2017 resulted from borrowing under a new loan payable.

We consider the terms of the lines of credit to be acceptable. As of December 31, 2017 and 2016, the total combined balances on the lines of credit were and $1,125,000 and $1,130,000, respectively. Interest expense on the lines of credit will fluctuate in future periods with loan reductions. The changes for the lines of credit for the years December 31, 2017 and 2016, were ($5,000) and ($300,000), respectively.

On December 15, 2010, the Company entered into a convertible note agreement with John R. Coghlan. The note accrues interest at 8% per annum with interest and balance due on December 15, 2012. The note is convertible at any time by Mr. Coghlan into one (1) share of the Company’s Series “B” Preferred Stock for every $1.00 Dollar outstanding of the note payable and related accrued interest. In connection with the issuance of this note, the Company recognized a beneficial conversion feature of $128,750 that resulted in a discount to the note payable. The discount is being amortized into earnings over the term of the note. The note is collateralized by 14,500 “post-split” shares of the Company’s Series “B” Preferred Stock. The beneficial conversion feature was based upon the difference between the fair value of the preferred stock into which the note is convertible at the date of issue ($378,750) less the face value of the note ($250,000). The fair value of the preferred stock at the date of issue was calculated based upon the fair value of the shares of common stock (2.5 shares of common stock for each single share of preferred stock or 31,250 “post-split” shares) into which the preferred stock was convertible at the date of issue. On February 8, 2016, Mr. Coghlan elected to convert his note into shares of the Company’s common stock. The note was originally convertible into 12,500 “post-split” shares of Series "B", or 31,250 “post-split” shares of common stock equivalents, at the option of Mr. Coghlan. However, Mr. Coghlan agreed to accept 36,250 “post-split” common shares in lieu of full payment. The 5,000 additional “post-split” common shares represents a financing cost to the Company and as such, financing expense of $29,000 was recognized. (See 8-K filed February 8, 2016)

As discussed in detail in Item 13 concerning related party transactions, we entered into a variety of business transactions with John R. Coghlan, Coghlan Family Corporation, Coghlan, LLC, West 3773 Fifth, LLC and Genesis Finance Corporation. These transactions served two distinct and different cash generating business purposes. As a part of the Company's operations, it had sold loan interests from time to time to investors. Historically, Coghlan, LLC and Coghlan Family Corporation have acted as investors by purchasing loans from the Company. We believe that these loan sale transactions have been and will be offered to other investors in arms-length type transactions. Generally, all transactions between the Company and John Coghlan related parties represent transactions designed to generate liquidity for the Company's business operations including note payments to Riverbank. In the case of these Coghlan related transactions, prior to 2017, Michael Kirk had been solely responsible for setting the transaction values. In 2017, the board of directors performed this function.

The Company’s principal sources of cash are from loan sales, related party loans, unaffiliated third party loans, funding agreements, rental and lease agreements and common and preferred stock private placements. The Company anticipates that our primary sources of cash are adequate in order to meet the demands upon its current operations, as well as funds to finance ongoing acquisitions of seller financed real estate loans, the originations of commercial real estate hard money loans, the expense of litigating the delinquent loans and the maintenance and resale costs of repossessed properties.

The following table presents cash flow data for the periods indicated.

CASH FLOW DATA:		2017		2016
Net cash used by operating activities	$	(140,973)	$	(167,827)
Net cash provided by (used in) investing activities	$	121,932	$	138,814
Net cash provided by (used in) financing activities	$	13,617	$	8,351

The primary reasons for the changes in cash provided by (used in) operating activities were as follows:

Fiscal year ended December 31,	Increase (decrease)	Primary reason for change
2017	$ 26,854	Prior year impairment and loss on sales of real estate owned and rental property.
2016	$ (150,903)	Impairment of available for sale security and loss on real estate limited liability company.

The primary reasons for the changes in cash provided by (used in) investing activities were as follows:

Fiscal year ended December 31,	Increase (decrease)	Primary reason for change
2017	$ (16,882)	Sale of rental property and real estate owned.
2016	$ 212,075	Sale or transfer of our interest in limited liability companies.

The primary reasons for the changes in cash provided by (used in) financing activities were as follows:

Fiscal year ended December 31,	Increase (decrease)	Primary reason for change
2017	$ (5,266)	New loan payable and loan fees
2016	$ 48,642	Decrease in credit line borrowing

Our capital resources have occasionally been strained, but were adequate to support our operations at a reasonable level during the fiscal year covered by this Annual Report. We have paid close attention to our loan portfolio and have managed our cash flow within our available financial resources. We were able to control our funding rate by adjusting our pricing, tightening our underwriting, and/or discontinuing certain product lines. The strains on our capital have been largely caused by increased foreclosure litigation expenses, as well as increased repossession maintenance, holding and resale costs, coupled with lower resale values. We received interest and principal reductions (typically monthly) on loans pending sale, and the interest rate spread between the cost of our lines of credit, or the participation sales to private investors, and our weighted average contract yield provided operating capital which sustained our operations during the reported periods. We would require an increase in cash, and an improvement in the real estate markets, in order to grow the company, and create profitability. Until such time as that happens, we believe that cash utilized to grow our asset base will continue to decline in both size and value, and capital resources will remain strained.

OFF-BALANCE SHEET ARRANGEMENTS.

The Company has no off-balance sheet arrangements.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS.

Please see Note 1 of our consolidated financial statements that describes the impact, if any, from the adoption of Recent Accounting Pronouncements.

ITEM 7A. Quantitative and Qualitative Disclosure About Market Risk

Not applicable to small reporting companies.

ITEM 8. Financial Statements and Supplementary Data.

802 N Washington

Spokane, WA 99201

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Genesis Financial, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Genesis Financial, Inc. (the Company) as of December 31, 2017, and the related statements of operations and comprehensive income (loss), stockholders’ equity (deficit), and cash flows for the year ended December 31, 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Fruci & Associates II, PLLC

We have served as the Company’s auditor since 2017.

Spokane, WA

February 14, 2018

	GENESIS FINANCIAL, INC.
	Balance Sheets
			December 31,		December 31,
			2017		2016
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents	$	5,215	$	10,639
	Interest and other receivables		2,635		16,748
	Investments in real estate limited liability companies		103,584		104,940
	Loans held for sale		306,109		347,755
	Real estate owned		-		14,999
	Total current assets		417,543		495,081
NON-CURRENT ASSETS:
	Long-term investment		212,619		362,619
	Real estate leasehold interest, net of accumulated amortization of $80,848 and $70,527, respectively		93,000		204,423
	Rental property, net of accumulated depreciation of $8,145 and $7,568, respectively		-		121,895
	Office equipment, net of accumulated depreciation of $7,422 and $6,865, respectively		511		1,067
	Total non-current assets		306,130		690,004
Total assets		$	723,673	$	1,185,085
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
	Line of credit, affiliated company	$	930,000	$	950,000
	Line of credit, bank		195,000		180,000
	Note payable, affiliated company		47,002		-
	Note payable		-		28,385
	Other current liabilities		10,902		1,115
	Total current liabilities		1,182,904		1,159,500
LONG-TERM LIABILITIES:
	Convertible note payable to officer		-		-
COMMITMENT AND CONTINGENCIES (Notes 5 and 6)			-		-
STOCKHOLDERS’ EQUITY:
	Series B Preferred stock, $1.00 par value; 2,290,000 authorized and none issued and outstanding		-		-
	Common stock, $.001 par value; 100,000,000 authorized, 879,763 and 860,033 issued and outstanding, respectively		880		860
	Additional paid-in capital		8,653,072		8,614,872
	Accumulated deficit		(9,113,183)		(8,590,147)
	Accumulated other comprehensive loss		-		-
	Total stockholders’ equity (deficit)		(459,231)		25,585
Total liabilities and stockholders' equity (deficit)		$	723,673	$	1,185,085

See accompanying notes to financial statements.

GENESIS FINANCIAL, INC.
Statements of Operations and Other Comprehensive Income (Loss)
		December 31,
		2017		2016
REVENUE:
Interest (net of write-offs), processing fees and other income	$	36,986	$	59,523
Rental income		11,925		27,500
Total revenues		48,911		87,023
OPERATING EXPENSES:
Fair value adjustments		121,102		168,940
Loss on impairment on long term investment		150,000		-
Bad debt		16,986		42,893
Loss (gain) on rental property		17,329		-
Loss (gain) on real estate limited liability corporations		6,149		(271,238)
Loss on sale of available for sale security		-		497,787
Salaries		36,000		44,750
Interest expense and fees, related party		18,219		22,563
Interest expense, other		10,293		3,984
Financing expense, related party		-		29,000
Depreciation		1,134		3,795
Amortization of rental property		10,321		20,642
Rental property expense		6,302		24,213
Office occupancy and other		178,112		159,725
Total operating expenses		571,947		747,054
NET LOSS		(523,036)		(660,031)
OTHER COMPREHENSIVE INCOME (LOSS):
Reclassification of unrealized loss on available for sale security	$	-	$	497,787
Unrealized loss on available for sale security		-		(24,357)
Total comprehensive income (loss)		-		473,430
COMPREHENSIVE INCOME (LOSS)	$	(523,036)	$	(186,602)
BASIC AND DILUTED LOSS PER SHARE	$	(0.60)	$	(0.78)
WEIGHTED AVERAGE SHARE OUTSTANDING BASIC AND DILUTED		873,655		848,167

See accompanying notes to financial statements.

GENESIS FINANCIAL, INC.
Statements of Cash Flows
				December 31, 2017		December 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$	(523,036)	$	(660,031)
Noncash items included in net loss:
	Fair value adjustments			121,102		168,940
	Loss on sale of rental properties			17,329		-
	Write-off of interest and other receivables			16,986		21,506
	Financing expense, related party			-		29,000
	Depreciation and amortization			11,455		24,437
	Common stock issued for note interest and fees			18,219		20,408
	Stock based compensation			20,000		35,988
	Loss (gain) on sale of real estate limited liability companies			6,149		(271,238)
	Loss on sale of available for sale security			-		497,787
	Loss on impairment of long term investments			150,000		-
Changes in assets and liabilities:
	Interest and other receivables			(2,873)		32,655
	Loans held for sale			18,051		(42,893)
	Real estate owned			(4,141)		(12,461)
	Other current liabilities			9,786		(11,925)
		Net cash used in operating activities		(140,973)		(167,827)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Investment in real estate limited liability company			(4,793)		(37,626)
	Proceeds from sale of rental properties			107,585		-
	Proceeds from sale of real estate owned			19,140		-
	Proceeds from sale of real estate limited liability companies			-		174,227
	Proceeds from sale of available for sale security			-		2,213
		Net cash provided (used) by investing activities		121,932		138,814
CASH FLOWS FROM FINANCING ACTIVITIES:
	Borrowing from note payable with affiliate company, net			47,002		-
	Repayment line of credit with affiliated company, net			(20,000)		-
	Repayment of line of credit from bank			(22,500)		-
	Borrowings from line of credit from bank			37,500		10,000
	Repayment of note payable			(28,385)		(1,649)
		Net cash provided by financing activities		13,617		8,351
NET DECREASE IN CASH
	AND CASH EQUIVALENTS			(5,424)		(20,662)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR				10,639		31,301
CASH AND CASH EQUIVALENT, END OF YEAR			$	5,215	$	10,639
SUPPLEMENTAL DISCLOSURE OF CASH FLOW ACTIVITIES:
	Interest paid in cash		$	9,186	$	6,805
NONCASH INVESTING AND FINANCING ACTIVITIES:
	Convertible note payable to officer converted to common stock		$	-	$	250,000
	Loans held for sale converted to REO			-		62,770
	Investment in real estate limited liability company exchanged for reduction of line of credit with affiliated company			-		300,000
	Loans held for sale exchanged for reduction in line of credit with affiliated company			-		10,000
	REO converted to rental property		$	-	$	45,000

See accompanying notes to financial statements.

GENESIS FINANCIAL, INC.
Statements of Changes in Stockholders' Equity (Deficit)
For the Years Ended December 31, 2016 and 2017
	Common Stock			Preferred Stock				Additional Paid-in		Accumulated other comprehensive income (loss)		Accumulated
	Shares		Amount	Shares		Amount		Capital				(Deficit)		Total
BALANCES, DECEMBER 31, 2015	809,944		810	-0-		-0-		8,279,527		(473,430)		(7,930,116)		(123,210)
Convertible note converted to stock	36,250		36					278,964						279,000
Common stock issued for services	5,000		5					14,995						15,000
Common stock issued for line of credit interest and fees	8,839		9					20,399						20,408
Compensation expense for stock options								20,988						20,988
Other comprehensive gain										473,430				473,430
Net loss												(660,031)		(660,031)
BALANCES, DECEMBER 31, 2016	860,033	$	860	-0-	$	-0-	$	8,614,873	$	-0-	$	(8,590,147)	$	25,585
Common stock issued for line of credit interest and fees	9,717		10					18,209						18,219
Common stock issued for services	10,000		10					19,990						20,000
20:1 reverse split roundup share	13		0					0						0
Net loss												(523,036)		(523,036)
BALANCES, DECEMBER 31, 2017	879,763	$	880	-0-		-0-		8,653,072		-0-		(9,113,183)		(459,232)

See accompanying notes to financial statements.

Genesis Financial, Inc.

Notes to Financial Statements

NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization:

Genesis Financial, Inc. (“the Company” or “GFI”) was incorporated in Washington State on January 24, 2002 and on January 26, 2016 we moved our corporate domicile to the State of Wyoming. The Company is primarily engaged in the business of purchasing and selling real estate receivable loans and periodically providing bridge capital funding. Loans consist of real estate loans and mortgage notes collateralized by primarily first position liens on residential and commercial real estate. The loans collateralized by real estate are typically non-conventional either because they are originated as a result of seller financing, or the underlying property is non-conventional.

The Company invests in loans, equity funds and funds generated from external borrowings including a line of credit facility from a related party.

Summary of Significant Accounting Policies:

Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates used herein include those relating to management’s estimate of fair value of loans held for sales, real estate owned, investments in limited liability companies, stock based compensation, long-term investments and allowance for net operating losses. It is reasonably possible that actual results could differ from those and other estimates used in preparing these financial statements and such differences could be material.

Cash and cash equivalents – Cash and cash equivalents consist of demand deposits, including interest-bearing accounts, held in a local bank. The Company maintains cash balances in various depository institutions that periodically exceed federally insured limits. Management periodically evaluates the creditworthiness of such institutions. The Company considers all highly liquid investments purchased, with an original maturity of three months or less, to be a cash equivalent.

Fair value measurements - The following information for each class of assets and liabilities that are measured at fair value is disclosed:

the fair value measurement;

the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3);

for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following:

total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations;

the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported;

purchases, sales, issuances, and settlements (net); and

transfers into and/or out of Level 3.

the amount of the total gains or losses for the period in (3)(a) included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of operations; and

in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period.

Genesis Financial, Inc.

Notes to Financial Statements

Investments available for sale - The cost of marketable equity securities sold is determined by the specific identification method. Net unrealized holding gains and losses based upon the fair value of the securities, determined using Level 1 inputs, are reported as other comprehensive income, a separate component of stockholders’ equity. Declines in the fair value of individual available-for-sale securities below their cost that are other than temporary result in a write-down of the individual security to its fair value; write-downs are reflected in earnings. Factors affecting the determination of whether an other-than-temporary impairment has occurred include a significant deterioration in the financial condition of the issuer or that management would not have the intent or ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value.

Long term investments – Investments not readily marketable are recorded at cost when purchased. The investments in equity securities of privately held companies in which the Company holds less than 20% voting interest and on which the Company does not have the ability to exercise significant influence are accounted for using the cost method. Under the cost method, these investments are carried at the lower of cost or fair value, determined using Level 3 inputs. The Company recognizes an impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. In making this determination, the Company reviews several factors to determine whether the losses are other-than-temporary, including but not limited to: (i) the length of time the investment was in an unrealized loss position, (ii) the extent to which fair value was less than cost, (iii) the financial condition and near term prospects of the investment and (iv) the Company's intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value.

Investment in real estate limited liability companies – Investments in real estate companies are recorded as cost when initially acquired. For investment in real estate limited liability companies in which the Company does not have joint control or significant influence, the cost method is used. Under the cost method, these investments are carried at the lower of cost or fair value. For investment in real estate companies in which there is joint control between the parties, the equity method is utilized whereby the Company’s share of the underlying real estate limited liability companies’ earnings and losses is included in the statement of operations. For investments in real estate limited liability companies where the Company holds more than 50% of the voting interest and has significant influence, company is consolidated with the presentation of non-controlling interest if material to the financial statements. Otherwise, the investment is presented similar to the equity method whereby the Company’s share of the underlying earnings and losses is included in the statement of operations. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and its representation on the company’s board of directors. The Company recognizes an impairment charge when a decline in the fair value of its investments below the carrying amount is judged to be other-than-temporary.

Real estate leasehold interest and rental properties – Leasehold interests in real estate and rental properties are stated at cost unless circumstances indicate that cost cannot be recovered, in which case, an adjustment to the carrying value of the property is made to reduce it to its estimated fair value. Costs clearly associated with the development of the leasehold interest and rental properties are capitalized. Amortization expense is recognized over the term of the leasehold interest and over 39 years for rental properties. Income received on the interests and rental properties is recognized in the period earned.

Loans held for sale – Loans held for sale are initially recorded at the lower of cost or fair value. Loans held for sale are measured at fair value on a recurring basis. Fair value for these loans is determined by assessing the probability of borrower default using historical payment performance and available cash flows to the borrower, then projecting the amount and timing of cash flows, including collateral liquidation if repayment weaknesses exist. The Company considers any valuation inputs related to loans held for sale to be Level 3 inputs. Interest on loans held for sale is included in interest income during the period held for sale. Typically, the Company attempts to sell loans three to twelve months after acquisition. It is the policy of the Company not to hold any loans for investment purposes.

Real estate owned – Real estate owned (“REO”) (acquired through a loan default) is recorded at fair value on a non-recurring basis. Upon transfer of a loan held for sale to REO, properties are recorded at amounts which are equal to fair value of the properties based on the following inputs: (1) appraisal provided by a certified appraiser, (2) BPO (Broker’s Pricing Opinion) provided by a qualified real estate broker, (3) site inspection by qualified management of the Company, or (4) a combination of all of the above. Periodically, non-recurring fair value adjustments to REO are recorded to reflect partial write-downs based on the same inputs. The Company considers any valuation inputs related to REO to be Level 3 inputs. The individual carrying values of these assets are reviewed for impairment at least annually and any additional impairment charges are expensed to operations.

Loan sales – Loans are considered sold when the Company surrenders control over the loan to the investors, with standard representations and warranties, and when the risks and rewards inherent in owning the loans have been transferred to the buyer.

Income tax – Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets, subject to a valuation allowance, are recognized for future benefits of net operating losses being carried forward.

Genesis Financial, Inc.

Notes to Financial Statements

Earnings per share – Basic earnings per common share have been computed on the basis of the weighted-average number of common shares outstanding during the period presented. Diluted earnings per common share are computed on the basis of the number of shares that are currently outstanding plus the number of shares that would be issued pursuant to outstanding warrants and stock options unless such shares are deemed to be anti-dilutive. The dilutive effect of outstanding securities, in periods of future income, would be as follows as of December 31, 2017 and December 31, 2016:

	December 31,
	2017	2016
Stock options	-0-	-0-
Convertible debt	-0-	-0-
Total possible dilution	-0-	-0-

Share-Based Compensation – The Company periodically issues common shares or options to purchase shares of the Company’s common shares to its officers, directors or other parties. These issuances are valued at fair value. The Company uses a Black Scholes valuation model for determining fair value of options, and compensation expense is recognized ratably over the vesting periods on a straight line basis. Compensation expenses for grants that vest upon issue are recognized in the period of grant.

New Accounting Pronouncements – Accounting Standard Update (ASU) 2014-09, Revenue from Contracts with Customers creates a new, principal-based revenue recognition framework that will affect nearly every revue-generating entity. The guidance in ASU 2014-09 is effective for public entities for annual reporting periods beginning after December 15, 2016. Management has not determined the effect, if any; this new standard will have on its financial statements.

Accounting Standard Update (ASU) 2016-02 Leases (Topic 842) modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. Management has not determined the effect, if any; this new standard will have on its financial statements.

Accounting Standard Update (ASU) 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We do not expect this update to have a material impact on our financial statements.

Accounting Standard Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments changes how entities will measure and disclose credit losses for most financial assets and certain other instruments that are not measured at fair value through net income and replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information in determining credit loss estimates. ASU 2016-13 also requires enhanced disclosures. ASU 2016-13 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for all entities for annual periods beginning after December 15, 2018. The Company is currently evaluating the potential effect of this ASU.

Reclassifications – Certain reclassifications have been made to conform prior periods’ data to the current presentation. These reclassifications have no effect on the results of reported operations or stockholders’ equity.

NOTE 2 — LOANS HELD FOR SALE

The Company's fair value of loans held for sale consisted of the following:

		December 31, 2017		December 31, 2016
Residential	$	79,425	$	120,912
Commercial		226,684		226,843
Other		-
Total	$	306,109	$	347,755

Genesis Financial, Inc.

Notes to Financial Statements

The following table presents a reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2017 and 2016:

		Years Ended December 31,
		2017		2016
Beginning Balance	$	347,755	$	503,890
New loans		-		206,079
Principal payments, collections		(21,977)		(167,211)
Loan losses		-		(42,893)
Converted to REO		-		(62,770)
Loan exchanged for reduction of line of credit		-		(10,000)
Fair value adjustments		(20,000)		(146,258)
Repossession expenses		331		66,918
Ending Balance	$	306,109	$	347,755

NOTE 3- REAL ESTATE OWNED

The Company's fair value of REO consisted of the following:

		December 31, 2017		December 31, 2016
Land	$	-	$	14,999
Commercial		-		-
Total	$	-	$	14,999

The following table presents the change in balance sheet carrying values associated with REO for the years ended December 31, 2016 and 2015:

		Years Ended December 31,
		2017		2016
Beginning Balance	$	14,999	$	27,451
Proceeds from sales of REO		(19,140)		(2,704)
Fair value adjustments		-		(22,682)
Net change in holding costs		-		(4,836)
Transferred from loans held for sale		-		62,770
REO converted to rental property		-		(45,000)
Gain on sale of REO		4,141
Ending Balance	$	-0-	$	14,999

NOTE 4 — OTHER ASSETS

Long term investments:

Flyback Energy, Inc.:

On November 23, 2010, the Company closed the purchase of an equity interest in Flyback Energy, Inc., for $1,200,000. The purchase was for $1,200,000 of Series “B” Preferred Stock and Common Stock Purchase Warrants from Flyback Energy, Inc., a closely held Washington corporation payable on an installment basis. On April 25, 2011, the Company purchased 85,274 shares of Series “C” Preferred Stock for $50,000 which is convertible at $0.60 per share and bears a 5% dividend rate.

Genesis Financial, Inc.

Notes to Financial Statements

Flyback Energy, Inc. is a privately-held company that has developed a unique and proprietary electronic switch design that offers control over electrical power and magnetic fields.

In December 2015, the Company reduced the carrying value of its Flyback Energy common shares to $0.067 per share, or $212,619, and recorded an impairment charge of $1,037,381 based on the last known common share sale. Flyback Energy, Inc. is still a development stage company being financed by outside sources of capital.

Digi Outdoor Media, Inc.:

On December 31, 2017, the Company due to legal action concerning Digi Outdoor Media booked an impairment charge of $150,000 to reduce the carrying value to $-0-.

Digi Outdoor Media, Inc. is a startup company in the business of building and leasing outdoor advertising signs.

Investments in Available for Sale Securities:

Ambient Water Corporation (Formerly AWG International Water Corp.):

The Company purchased 109,906 shares of the AWG International Water Corp, a Nevada corporation, (“AWGI”) common stock for $500,000 ($250,000 each in 2010 and 2011). In July 2012, AWGI was acquired by MIP Solutions, Inc. in a share exchange transaction (the "Acquisition"). In connection with the Acquisition, the Company’s 109,906 shares of AWGI common stock were converted into 7,380,433 shares of AWG International Water Corp (formerly MIP Solutions, Inc.).

On May 19, 2016 by board action, the Company sold its interest in Ambient Water Corporation to John R. Coghlan (see Note 11) for $0.0003 per share, the fair value of the stock on the day of sale for proceeds of $2,213, resulting in a recognized loss of $497,787.

Investments in Real Estate Limited Liability Companies:

At the end of 2012, the Company, on behalf of itself and note interest holders, through collateralized loan foreclosures, acquired two real property interests, one in Pennsylvania and the other in Washington. The Company formed two Washington limited liability companies, 21 Bay Street, LLC and Wenatchee Riverview, LLC for the purpose of holding these multiple property interests. The Company's collective interests were valued at $225,000.

In 2013, the Company, on behalf of itself and note interest holders, through collateralized loan foreclosure, acquired a real property interest in Hermiston, Oregon. The Company formed Hermiston 353, LLC to hold the property. The Company's 12.9% interest was valued at $51,600.

In 2014, the Company, on behalf of itself and note interest holders, through collateralized loan foreclosure, acquired a real property interest in Pennsylvania. The Company formed Tioga, LLC to hold the property. The Company's 31.95% interest was valued at $47,925.

These companies are 100% controlled and managed by John Coghlan, related party. (see Note 11)

The investments are accounted for using the equity method. During the years ended December 31, 2017 and 2016, the Company recorded loss (income) of $6,149 and ($271,238), respectively, which represent realized sales of interest and its portion of the real estate company’s loss (income) for the same periods. During the years ended December 31, 2017 and 2016, the Company advanced $4,793 and $37,626 for property taxes and interest owing on the underlying real estate owned by these limited liability companies.

Genesis Financial, Inc.

Notes to Financial Statements

During the year ended December 31, 2016, Wenatchee Riverview, LLC was sold for $399,934, resulting in a gain of $139,821.On May 18, 2016, by board action the Company exchanged its 9.1756% interest in Wenatchee Riverview, LLC to Coghlan Family Corporation “CFC” (see Note 11) for $300,000, resulting in a gain on sale of real estate limited liability company of $131,417. The transaction was made by reducing the balance payable to Coghlan Family Corporation’s revolving line of credit. As required by the operating agreement of Wenatchee, LLC operating agreement the offer was shown to all other members to participate or bid higher for the interest. No members made an offer and the Board of Directors of the Company approved the sale.

Rental Properties:

At the end of 2013, the Company foreclosed on a loan previously held for sale in Lebanon, Oregon through the bankruptcy courts, and is accounting for the company’s carrying value of $85,534 as a rental property. The property, being operated as Duffy's Bar, was subsequently leased on a three year lease agreement for $1,500 per month. During the years ended December 31, 2017 and 2016, the company recognized $3,000 and $18,000 per year in rental income. This is a commercial building being depreciated over thirty-nine (39) years. For the years ended December 31, 2017 and 2016, the company recorded depreciation of $-0- and $2,143. On March 8, 2017, by board action the Company sold this property to Coghlan Family Corporation (see Note 11) for $77,585, resulting in a gain on sale of $342. The purpose of the sale was to generate working capital for the Company.

In September 2016, the Company foreclosed on a loan previously held for sale in Lewiston, Idaho through the bankruptcy courts, the property is being operated as Emperor of India restaurant. The property was placed into real estate owned during the quarter ended June 30, 2016. It was held at a net carrying value of $69,761. The restaurant was subsequently leased on a two-year lease agreement for $1,200 per month with an option to purchase for $45,000 less a $400 monthly credit toward the option price. During the year ended December 31, 2017 and 2016 the company recognized $8,925 and $2,175 in rental income. Fair value of the property was determined to be $45,000 on the date of transfer based on appraisal and contract terms of the lease. In July the Company sent out a notice of default and decided to sell the interest to a related party. On July 17, 2017, by board action, the Company sold a commercial rental property to Coghlan Family Corporation (see Note 11) for $30,000 resulting in a loss of ($17,670), respectively.

Real Estate Leasehold Interest:

On May 31, 2013, the Company completed the acquisition of a real property leasehold interest in approximately 63 acres with fifty (50) RV/residential lots located in Dunn County, North Dakota, (the "Halliday Project"). Total consideration for the leasehold interest was $619,250. The Company may place recreational vehicles, mobile homes, or construct cabins on the lots and offer them for rent or lease. In 2015 the Company purchased two travel trailers for $30,000 from JC Housing, LLC, a related party (see Note 11). The Company recorded amortization of $-0- and $20,642 for the years ended December 31, 2017 and 2016, respectively. The Company had 0 and 13 lots leased and had rental income of $-0- and $7,325 the years ended December 31, 2017 and 2016, respectively.

The lease consists of approximately 63 acres in the city of Halliday, North Dakota. The lease term is fifteen years and commenced on September 15, 2012. The Company has an option to renew the lease for an additional fifteen year term. The monthly rent on the lease is Fifty ($50.00) Dollars for each occupied and rented trailer, cabin or lot. The Company is obligated to pay any and all real and personal property taxes, general taxes, special assessments and other charges levied against the property and its improvements. During the lease term, the Company will own title to all of the improvements and personal property. At the expiration of the lease or termination, all improvements and personal property located on the premises will revert to the Lessors.

At December 31, 2017, the Company decided to adjust the carrying value of the property to a fair value estimated of $93,000, based on management’s estimate of discounted cash flows received from the property.

NOTE 5 — LINES OF CREDIT

GFI has renewed a $250,000 line of credit with Riverbank. At December 31, 2017 and 2016 the balance owing is $195,000 and $180,000, respectively. The line of credit had a term of twelve months, and an origination fee of 1/2%, or $1,250. Accrued interest is paid monthly. The Riverbank line of credit is senior to the Coghlan Family Corporation, Inc. (“CFC”) line of credit and is collateralized by the assets of GFI. On December 7, 2016 the line of credit was extended to February 1, 2018, at which time the loan renewed at a four and a half (4.5%) percent interest rate with a renewal fee of ½%, or $1,250. At December 31, 2017 the interest rate was 5.50%. The Riverbank line prohibits the CFC line from being paid down below the amount owed to Riverbank during the loan term. The line is payable on demand and is personally guaranteed by John R. and Wendy B. Coghlan, related parties of the Company.

Genesis Financial, Inc.

Notes to Financial Statements

The Company has a $2,500,000 Warehouse Line of Credit Promissory Note Agreement with the CFC. At December 31, 2017 and December 31, 2016 the balance owing was $930,000 and $950,000, respectively. CFC is an affiliated company controlled by John R. Coghlan and Wendy B. Coghlan. At the time the agreement was made the default interest rate was twelve (12%) percent. Interest was payable monthly. The line had a term of 12 months and an origination fee of 1/2% or $12,500. The credit line is collateralized by all of GFI’s assets and is subordinate to the Riverbank line of credit. The line of credit agreement requires that the Company maintain a debt to equity ratio of no greater than 3.0. Because of the economic conditions, CFC agreed to waive the interest and origination fees starting October 1, 2010 and also agreed to waive the 3.0 debt to equity ratio requirement as well as the 12% default rate.

Effective August 1, 2016, the Company amended the Warehouse Line of Credit Promissory Note Agreement to four (4%) percent interest to be paid monthly in common stock. In addition, the Company issued 50,000 shares of its common stock valued at $5,000 as a loan renewal fee. In addition, the Company issued 50,000 shares of its common stock valued at $5,000 as a loan renewal fee. Effective July 1, 2017 CFC agreed to waive the interest and origination fees until December 31, 2017, or earlier if the Epoint Capital Stock Exchange Agreement fails to close.

In 2016, the Company, by board action authorization, exchanged two assets for a $310,000 principal reduction in the CFC Warehouse Line of Credit. The Company (1) exchanged a loan held for sale with a cost basis of $10,000 and (2) exchanged its 9.1756% interest in a limited liability company valued at $300,000.

For the year ended December 31, 2017 and December 31, 2016 the Company had issued 9,717 shares and 6,339 shares, respectively, of the Company common stock for a value of $18,219 and $15,407 in interest, respectively.

NOTE 6 — NOTES PAYABLE

Convertible Note Payable to Officer:

On December 15, 2010, the Company entered into a convertible note agreement for $250,000 with John R. Coghlan, a related party (see Note 11). The note accrued interest at eight (8%) percent per annum with interest and balance initially due on December 15, 2012. The note was convertible at any time by Mr. Coghlan into one (1) share of the Company’s Series “B” Preferred stock for every $1.00 outstanding of the note payable and related accrued interest. The note was collateralized by 14,500 shares of the Company’s Series “B” Preferred stock. On October 16, 2012, the Company and Coghlan agreed to extend the due date of the note to December 15, 2016.

On February 8, 2016, Mr. Coghlan elected to convert his note into shares of the Company’s common stock. The note was originally convertible into 12,500 “post-split” shares of Series "B", or 31,250 “post-split” shares of common stock equivalents, at the option of Mr. Coghlan. However, Mr. Coghlan agreed to accept 36,250 “post-split” common shares in lieu of full payment. The 5,000 additional “post-split” common shares represents a financing cost to the Company and as such, financing expense of $29,000 was recognized for the year ended December 31, 2016. The value was calculated by using the market price on the date of conversion.

Note Payable:

In 2013, the Company assumed a note payable totaling $62,699 relating to a loan it had made in 2005. When the Company funded the loan in 2005, it sold 100% of its interest to various investors. During 2013, the Company began foreclosure proceedings on behalf of the investors because the borrower was delinquent on payments. During the proceedings, it was determined that the Company had failed to obtain first position in the underlying property and that a separate creditor was in first position. To uphold its agreement with the investors, the Company assumed the balance of the note with the creditor and recognized a loss for the entire amount in 2013. The term of the assumed note is 9.5% until paid in full and monthly payments are $832. On August 30, 2017, the Company paid the note in full. At December 31, 2016 and 2017, the balance owing was $28,385 and $-0-, respectively.

Note Payable, related party:

On November 13, 2017, the Company entered into a Promissory Note Loan Agreement with Coghlan Family Corporation, a related party (the "Lender"). The Loan Agreement is essentially a revolving line of credit with an initial advance of $25,000 with subsequent advances as requested by the Company. This indebtedness will survive the proposed Epoint Payment Corp. acquisition transaction. The loan bears interest at the rate of 6.0% interest and is due and payable on, or before May 15, 2018. As an inducement to the Lender, the Company agreed to grant one share of post-reverse split common stock for each $2.50 of aggregate principal amount loaned ("Bonus Shares"). The Bonus Shares are not due until the loan's maturity date which is May 15, 2018. At December 31, 2017 the balance was $47,002.

Genesis Financial, Inc.

Notes to Financial Statements

NOTE 7 — EQUITY

Series B Preferred Stock

On November 11, 2010 the Company filed Articles of Amendment to the Amended and Restated Articles of Incorporation creating 2,290,000 “pre-split” shares of Series B Preferred Stock. The designated Series B Preferred Stock consists of 2,290,000 “pre-split” shares with a par value $1.00; is non-dividend bearing, convertible to Common Stock at $.40 per share subject to any recapitalization. The holders of the Preferred Stock will be entitled to receive, prior and in preference to any Distributions of any assets of the Corporation to the holders of the Common Stock. Each share of the Preferred Stock is convertible into two and one-half common stock shares at the option of the holder. Each share of Series B Preferred Stock can automatically converted immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act of 1933 or upon the receipt by the Corporation of a written request for such request for such conversion from the holders of the majority of the Series B Preferred Stock holders.

On May 18, 2015, the Company by majority consent of Preferred Shareholder agreed to convert all of the outstanding shares of Series B Preferred to common stock. On June 26, 2015, 1,649,500 “pre-split” shares of Series B Preferred were converted into 4,123,750 “pre-split” common shares.

As of December 31, 2017 no shares of Series B convertible Preferred stock are issued and outstanding.

Common Stock

Effective August 1, 2016 the terms of the amended Warehouse Line of Credit changed to issuing stock for the interest due on the line of credit monthly. For the year ended December 31, 2016, 6,339 “post-split” shares of common stock were issued for interest and 2,500 “post-split” shares of common stock were issued for renewal fee for a value of $20,407, respectively. For the year ended December 31, 2017, 9,717 “post-split” shares of common stock were issued for interest for a value of $18,219, respectively. As of July 1, 2017 the interest and fee have been waived. (See Note 5)

On April 19, 2017, the Company issued 10,000 shares of common stock as director compensation valued at Two Dollars per share.

On December 12, 2017, the Company implemented a twenty for one (20:1) reverse stock split. This reverse split resulted in reducing the common stock in the amount of 16,715 as of December 31, 2017 with an offsetting increase to additional paid-in capital.

NOTE 8 - STOCK OPTIONS

On April 10, 2002, the Board of Directors approved the Genesis Financial, Inc. Stock Option Plan (the Plan), and the Plan was subsequently approved by the Shareholders of the Company on May 2, 2002. The plan allows for issuance of Incentive Stock Options (ISOs) and Non-statutory Stock Options (NSOs). The maximum number of shares that may be subject to option and exercised under the Plan is 65,000 “post-split” shares. The ISOs and NSOs expire 30 days after the recipient ceases to be an employee for the Company or one year after the recipient’s death. No options are available for future grants under the plan. No options were issued or exercised in 2017 or 2016.

Compensation expense relating to stock options granted was $-0- and $20,988 during the years ended December 31, 2017 and 2016, respectively, and is classified as ‘office occupancy and other expenses’.

On November 21, 2016, the outstanding stock options were terminated by all holders, the value of the remaining stock options were determined to be immaterial.

Transactions concerning stock options pursuant to our stock option plans are summarized as follows:

	Shares Subject to Options	Weighted Average Exercise Price	Weighted Average Remaining Term
Outstanding at December 31, 2015	261,000	$0.28	2.9 years
Terminated, November 21, 2016	(261,000)	-
Outstanding at December 31, 2017 and 2016	-0-	$0.0	0 years
Exercisable at December 31, 2017 and 2016	-0-	$0.0

Genesis Financial, Inc.

Notes to Financial Statements

NOTE 9 – INCOME TAX:

Components of the Company’s deferred income tax assets are as follows:

	December 31,
	2017	2016
Net operating loss carry forward	$ 1,207,000	$ 1,099,000
Fair value adjustment	1,104,000	1,045,000
Capital loss not deductible	31,500-	194,000
Stock-based compensation	97,000	90,000
Reserves	77,500	-0-
PPE/Impairment	436,000	389,000
Deferred tax asset	2,953,000	2,817,000
Less valuation allowance	(2,953,000)	(2,817,000)
Net deferred tax asset	$ 0	$ 0

Tax Rate Reconciliation are as follows:

	2017		2016
Book income (loss) at statutory rate	$ (183,000)	-35.00%	$ (231,000)	-35.00%
Effect of state taxes	(21,000)	-4.00%	(29,000)	-4.40%
Increase in valuation allowance	204,000	39.00%	260,000	39.40%
	$ (0)	(0)	$ (0)	(0)

The deferred tax assets were calculated assuming a 21% tax rate at December 31, 2017 and December 31, 2016.

The federal tax rates changed from 35% to 21%, resulting in a decrease in deferred taxes and related valuation allowance as of 12/31/16 and 12/31/17 in the amount of 676,000 and 744,000, respectively

At December 31, 2017, the Company had a federal net operating loss carry forward available for income tax purposes of approximately $5,100,000 expiring over the years 2029 through 2035. Because management does not believe it is more likely than not that the carry forward will be utilized, the deferred tax assets have been fully reserved.

The Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns and have recognized that certain tax positions taken in the 2014 through 2017 years could result in adjustments to the fair value adjustments for tax purposes. However, these adjustments would not result in a tax provision as they would result in revisions to the net operating loss carryforward amount.

Management has determined that the Company is subject to examination of income tax filings in the United States for the 2014 through 2017 tax years. In the event that the Company is assessed penalties and/or interest, penalties will be charged to other operating expense and interest will be charged to interest expense.

NOTE 10 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents and lines of credit approximate fair value. The carrying values of the convertible note payable to officer and note payable approximate fair market value as it is based on market rates of interest. The fair value of the long-term investment at December 31, 2017 is approximately $213,000 based upon management’s estimate of the fair value of the common stock of the underlying investment.

The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Genesis Financial, Inc.

Notes to Financial Statements

		Fair value at December 31, 2016
		Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	10,639	$	10,639	$	-	$	-
Loans held for sale		347,755		-		-		347,755

		Fair value at December 31, 2017
		Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	5,215	$	5,215	$	-	$	-
Loans held for sale		306,109		-		-		306,109

The Company’s cash and cash equivalent instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

The Company’s available for sale investments were valued using quoted market prices, and accordingly, is included in Level 1.

The fair value of the Company’s loans held for sale is determined by assessing the probability of borrower default using historical payment performance and available cash flows to the borrower, then projecting the amount and timing of cash flows, including collateral liquidation if repayment weaknesses exist. The Company considers any valuation inputs related to loans held for sale to be Level 3 inputs. See changes in the fair value of this Level 3 valuation in Note 2.

NOTE 11— RELATED-PARTY TRANSACTIONS

Related parties are defined as Officers, Directors, and/or those Shareholders owning or controlling more than 5% of the common stock of GFI, or any entities that are owned or controlled by Officers, Directors, and/or those Shareholders owning or controlling more than 5% of the common stock of GFI.

Coghlan Family Corporation, Coghlan, LLC and West 3773 Fifth, LLC are controlled by John R. Coghlan, a Company director, CFO and majority shareholder. Coghlan Family Corporation is owned 100% by Coghlan, LLC, which is owned by the Coghlan family members. John R. and Wendy B. Coghlan (husband and wife) collectively own 35.65% of Coghlan, LLC and are co-managers. West 3773 Fifth, LLC is owned 100% by John and Wendy Coghlan (husband and wife). JC Housing, LLC is owned 33.33% by John R. Coghlan and 33.33% by Clint Lohman. Mr. Lohman is a director of GFI. Genesis Financial Corporation is a company which is owned 100% by Michael Kirk, who is a former director and officer of GFI. GFI provides accounting, office services and supplies, and office space for his services provided to Genesis Financial Corporation. The services are valued at $1,500 per month. As of January 1, 2012 the management fee was removed and the outsourcing services were offset by general offices expenses paid by the Company on behalf of Genesis Finance Corporation. Genesis Finance Corporation and John R. Coghlan has managing agreement with the real estate limited liability companies. Michael Lavigne is an officer and director of Placer Creek Mining Company. Mr. Lavigne is a director of GFI.

In addition to transactions described in Notes 4, 5 and 6, Genesis Financial, Inc. had the following related party transactions for the year ended December 31, 2017 and 2016.

John R. Coghlan

As of December 31, 2017, the Company continues a managing agreement for the investment in real estate limited liability companies. The agreements are stated in the operating agreement of each limited liability companies.

On December 7, 2017, John R. Coghlan personally guaranteed our Riverbank line of credit.

On November 13, 2017, John R. Coghlan resigned as Chief Executive Officer and President of the Company.

On April 19, 2017, the Company issued 2,500 “post-split” shares of common stock for as director compensation valued at Two Dollars per share.

On November 21, 2016, John R. Coghlan terminated his stock options agreement with the Company.

Genesis Financial, Inc.

Notes to Financial Statements

On November 2, 2016, John R. Coghlan purchased 15,767 “post-split” common shares of Genesis Financial, Inc. from Michael Kirk, a former officer of the company.

On May 19, 2016, by board action the Company sold 7,380,433 common shares of Ambient Water Corporation for $2,213 or $0.0003 per share the fair value on that date to John R Coghlan.

On February 8, 2016, John R. Coghlan converted his $250,000 note for 36,250 “post-split” shares of common stock. The note was originally convertible into 12,500 “post-split” shares of Series "B", or 31,250 “post-split” shares of common stock equivalents, at the option of Mr. Coghlan. However, Mr. Coghlan agreed to accept 36,250 “post-split” common shares in lieu of full payment. The 5,000 “post-split” additional common shares represent a financing cost to the Company and as such, financing expense of $29,000 was recognized in the year ended December 31, 2016. (see Note 6)

Coghlan Family Corporation “CFC”

On February 6, 2018, Coghlan Family Corporation entered into a Debt Forgiveness Agreement with Genesis Financial, Inc. and forgave the sum of $441,080.

On February 1, 2018, Coghlan Family Corporation advanced Genesis Financial, Inc. the sum of $175,441.43 by paying off the Riverbank loan balance in full.

July 17, 2017, by board action the Company sold a rental property for $30,000, resulting in a loss of ($17,670).

March 8, 2017, by board action the Company sold a rental property for $77,585, resulting in a gain on sale of $342. The Company also sold two REO with a basis of $14,999 for $19,140 for a gain of $4,141.

On May 18, 2016, by board action the Company exchanged its 9.1756% interest in Wenatchee Riverview, LLC to CFC for a $300,000 reduction in the line of credit with CFC, a gain of $131,417 was realized by the Company.

On May 19, 2016, by board action the Company exchanged a loan held for sale for a $10,000 reduction in the line of credit with CFC.

Effective August 1, 2016 the terms of the amended Warehouse Line of Credit changed to issuing stock for the interest due on the line of credit monthly. The table below shows the issue dates, number of shares issued and amount of interest being paid. As of July 1, 2017 interest is waived. (see Note 5)

Issue date	Shares Issued “post-split”	Interest Amount
June 30, 2017	1,887	$3,019
May 31, 2017	1,952	$3,123
April 30, 2017	1,887	$3,019
March 31, 2017	1,952	$3,123
February 28, 2017	1,171	$2,811
January 31, 2017	868	$3,123
1st & 2nd Quarter 2017 Totals	9,717	$18,219
December 31, 2016	868	$3,123
November 30, 2016	839	$3,019
October 31, 2016	1,562	$3,123
September 30, 2016	1,509	$3,019
August 31, 2016	1,562	$3,123
2016 Total	6,339	$15,407

Genesis Financial, Inc.

Notes to Financial Statements

On August 1, 2016, CFC amended the Warehouse Line of Credit and 2,500 “post-split” shares of common stock were issued. (See Note 5)

Coghlan, LLC

There was no activity for the years ending December 31, 2017 and 2016.

JC Housing, LLC

There was no activity for the year ended December 31, 2017 and 2016.

For the year ended December 31, 2015, the Company purchased two travel trailers from JC Housing, LLC for $30,000.

West 3773 Fifth, LLC

As of December 31, 2017, the Company continued a month-to-month tenancy with West 3773 Fifth, LLC, a company owned and controlled by John and Wendy Coghlan. The monthly rent is $1,250. Other office expenses are shared by all of the tenants of which the Company’s portion is estimated at $2,500 per month.

Genesis Finance Corporation “GFC”

Michael Lavigne

On November 10, 2017, Michael Lavigne resigned as Executive Secretary and Director of the Company.

On April 19, 2017, the Company issued 2,500 “post-split” shares of common stock as director compensation valued at Two Dollars per share.

On March 1, 2017, the Board of Directors appointed Michael Lavigne to hold the Executive Officer position of Secretary and Company Director.

For the year ended December 31, 2015, the Company converted the Placer Creek Mining Company loan of $150,000 to 300,000 shares of Digi Outdoor Media, Inc., the successor to Placer Creek Mining Company. (See Note 4)

Clint Lohman, Director

On April 19, 2017, the Company issued 2,500 “post-split” shares of common stock as director compensation valued at Two Dollars per share.

There was no activity for the year ended December 31, 2016.

For the year ended December 31, 2015, the Company purchased two travel trailers from JC Housing, LLC for $30,000, which Mr. Lohman has a 33% interest in.

NOTE 12— SUBSEQUENT EVENTS

Genesis Financial Riverbank Loan:

On February 1, 2018, Coghlan Family Corporation advanced Genesis Financial, Inc. the sum of $175,441.43 by paying off the Riverbank loan balance in full.

Coghlan Family Corporation Warehouse Line of Credit:

On February 6, 2018, Coghlan Family Corporation entered into a Debt Forgiveness Agreement with Genesis Financial, Inc. and forgave the sum of $441,080.

ITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

We have had no disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures with any of our accountants for the years ended December 31, 2017 and 2016, or any interim periods. We have not had any other changes in, nor have we had a disagreement, whether or not resolved, with our accountants on accounting and financial disclosures during our recent fiscal year or any later interim period.

ITEM 9A. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission ("SEC") reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of and Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. With the participation of our Chief Executive and Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2017 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control – (2013) Integrated Framework. Based upon such evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2017 based on the COSO framework criteria, as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by a single individual without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of December 31, 2017.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers from the internal control audit requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the period ended December 31, 2017 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Limitations

Our management, including our Chief Executive Officer and Principal Financial Officer (Chairman of the Board), does not expect that our disclosure controls or internal controls over financial reporting will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to its costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any design may not succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

ITEM 9B. Other Information.

None.

PART III

ITEM 10. Directors, Executive Officers and Corporate Governance

Director Independence

The Board has determined that we do not have a majority of independent directors as that term is defined under Rule 4200(a) (15) of the NASDAQ Marketplace Rules, even though such definition does not currently apply to us, because we are not listed on NASDAQ.

The following sets forth information concerning our Management and key personnel:

DIRECTORS AND EXECUTIVE OFFICERS

As of December 31, 2017, the Directors and Executive officers were as follows:

Name	Age	Position	Term of Office
Roy Rose	59	President, CEO, Director	11/10/17-Present
John R. Coghlan	75	CFO, Chairman of the Board, Director	01/02/06-Present
Virginia Walters	44	Secretary*, Treasurer, Director	10/20/11-Present
Clint Lohman	55	Director	10/22/13-Present

* Ms. Walters became Secretary on November 13, 2017.

As of December 31, 2017, GFI operated with three Executive Officers and a four member Board of Directors. The following are brief biographical descriptions of the current Executive Officers and Directors of GFI.

ROY ROSE, Chief Executive Officer, President, Director, age 59. Mr. Rose joined the Company on November 10, 2017. He has over thirty years of experience in the private equity market as a financial professional. His experience includes leadership and expertise structuring and investing in leveraged buyouts, real estate, mergers and management buyouts since 1985. Mr. Rose is the Chief Executive Officer of Whitestone Investment Network, located in Lake Oswego, Oregon since 2014. Whitestone identifies small and mid-cap companies in which it can accumulate equity interests helping those companies improve shareholder equity. During 2013, Mr. Rose was an independent financial consultant. From 2009 to 2011 he was the cofounder, business development of Patron Company. From 2011-2012 he was the Chief Executive Officer of Patron Company. Patron was an online retail enterprise which provided funding to schools K-12. We believe that Mr. Rose's business skills and attributes qualify him to be a member of the Company's board of directors.

JOHN R. COGHLAN, Chief Financial Officer, Director and Chairman of the Board, age 75. Mr. Coghlan became a Director on January 2, 2006. Mr. Coghlan is a retired C.P.A. Mr. Coghlan became responsible for the overall management of operations on January 1, 2010. Prior to that time, he acted in an advisory capacity to the Board of Directors. Mr. Coghlan graduated from the University of Montana with a degree in Business Administration and has held the designation of Certified Public Accountant since 1966. Mr. Coghlan was a founder of Labor Ready, Inc., a New York Stock Exchange traded company, and served as Chief Financial Officer and Director of Labor Ready from 1987 through 1996, when he retired. Since his retirement, the Coghlan Family Corporation, a privately held family business that manages family investment accounts, has employed Mr. Coghlan. Coghlan Family Corporation is 100% owned by the Coghlan Family LLC. John and Wendy Coghlan, husband and wife, own minority interests in Coghlan, LLC and control both the LLC and the Corporation through the LLC management agreement. The remaining interests in the Coghlan, LLC are owned by Mr. Coghlan’s children and grandchildren.

VIRGINIA WALTERS, Secretary, Treasurer and Director, age 44. For the past six years, Ms. Walters has been an employee of Genesis Financial, Inc. She has acted in a variety of roles, including, accounting manager and custodian of the corporate records. Her role has included assisting company president and board of directors in the preparation of internal reports relating to the company’s real estate loans investment business. Ms. Walter’s skills and attributes demonstrated in these positions over the past six years qualify her for promotion to the office of Secretary, Treasurer and as a member of the board of directors.

CLINT LOHMAN, Director, age 55. Since 2000, Mr. Lohman has resided in Bozeman, Montana, where he owns and operates Rocky Mountain Gaming. Moreover Mr. Lohman has ownership in several businesses represented within Eastern Montana and Western North Dakota. Mr. Lohman has developed and maintains close relationships with farmers, business people and long-standing residents in the Williston Basin. The combination of Mr. Lohman’s business expertise and relationships specific to the Williston Basin provides the Company with significant advantages in conducting business operations in Montana – North Dakota area. Mr. Lohman attended and graduated from North Dakota College of Science. Mr. Lohman's wide range of business skills and attributes qualify him as a member of our Company's board of directors.

Involvement in Certain Legal Proceedings

To the Company's knowledge, none of the events described in Item 401(f) have occurred during the past ten (10) years and that are material to an evaluation of the ability or integrity of any director, person nominated to become a director or executive officer of the Company.

TRANSACTIONS WITH AFFILIATES AND CONFLICTS OF INTEREST.

In all transactions between the Company and an affiliated party, the transaction will be presented to the Board of Directors and may only be approved if (1) if the transaction is on terms that are no less favorable to the Company than those that can be obtained from unaffiliated third parties and, (2) all of the directors who do not have an interest in the transaction must unanimously approve of the action. We will pay for legal counsel to the independent directors if they want to consult with counsel on the matter. We believe that the requirement for approval of affiliated transactions by disinterested independent directors will assure that all activities of the Company are in the best interest of the Company and its shareholders.

We intend to consider investment in other businesses from time to time. When presented with an investment opportunity, we may decline the investment because of the timing, other commitments, size, suitability standards, or any number of other sound business reasons. In such circumstances, it is possible that some or all of our officers and directors may choose to make the investment from personal funds. In order to fulfill their fiduciary responsibilities to the Company and our shareholders, each officer and director is aware that he or she must make business opportunities that are consistent with our business plan available to the company first. If we decline to participate, the individual officers and directors may then participate individually. Beyond the obligation to present opportunities to the Company first, there are no restrictions on participation in business opportunities by our officers and directors.

CODE OF ETHICAL CONDUCT

Our board of directors adopted our Code of Ethical Conduct which applies to all of our employees and directors, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. We believe the adoption of our Code of Ethical Conduct is consistent with the requirements of the Sarbanes-Oxley Act of 2002.

ITEM 11. Executive Compensation

Compensation Discussion and Analysis

Compensation expenses for 2017 and 2016 were $36,000 and $44,750, respectively.

The following table set forth the compensation information on executive officers Roy Rose, John Coghlan and Virginia Walters for the fiscal years ending December 31, 2017 and 2016.

Name and Principal Position	Years	Salary ($)	Bonus ($)	Stock Awards ($)	Options Awards ($)(1)	Non-Equity Incentive Comp ($)	All Other Compensation ($)	Totals
Roy Rose	2017	$ -0-	-0-	-0-	-0-	-0-	-0-	$ -0-
John Coghlan	2016	$ -0-	-0-	-0-	-0-	-0-	-0-	$ -0-
President	2017	$ -0-	-0-	-0-	-0-	-0-	-0-	$ -0-
Virginia Walters	2016	$44,750	-0-	-0-	-0-	-0-	-0-	$44,750
Secretary	2017	$36,000	-0-	-0-	-0-	-0-	-0-	$36,000

(1)

Represents vesting value of outstanding options during each fiscal year. Options were terminated November 21, 2016.

Our board of directors has responsibility for approving the compensation arrangements for our executives. We do not have a standing compensation committee so our board acts in the capacity of a compensation committee. The principal responsibilities of the board of directors in the area of compensation are to establish policies and periodically determine matters involving executive compensation, recommend changes in employee benefit programs, grant or recommend the grant of stock options and stock awards under our individual compensation agreements with employees and provide counsel regarding key personnel selection.

GFI has no employment agreements in place with any employee, including executive officers. All employment is “at will”.

Director fees for 2017 and 2016 were $20,000 and $-0-, respectively.

The following table set forth the compensation information on directors John Coghlan, Virginia Walters, Clint Lohman and Michael Lavigne for the fiscal years ending December 31, 2017 and 2016.

Name	Years	Salary ($)	Bonus ($)	Stock Awards ($)	Non-Equity Incentive Comp ($)	All Other Compensation ($)	Totals
John Coghlan	2016	$ -0-	-0-	-0-	-0-	-0-	-0-
Director	2017	$ -0-	-0-	$5,000	-0-	-0-	$5,000
Virginia Walters	2016	$ -0-	-0-	-0-	-0-	-0-	-0-
Director	2017	$ -0-	-0-	$5,000	-0-	-0-	$5,000
Clint Lohman	2016	$ -0-	-0-	-0-	-0-	-0-	-0-
Director	2017	$ -0-	-0-	$5,000	-0-	-0-	$5,000
Michael Lavigne (1)	2016	$ -0-	-0-	-0-	-0-	-0-	-0-
Director	2017	$ -0-	-0-	$5,000	-0-	-0-	$5,000

(1)

Michael Lavigne resigned as Director on November 10, 2017.

Grants of Plan-Based Awards

There were not equity grants outstanding at December 31, 2017.

There was no compensation to any Director during the fiscal year ended December 31, 2016.

Outstanding Equity Awards at Fiscal Year-End

There were no outstanding equity awards to any Executive Officer at the end of the fiscal year ended December 31, 2017.

Director Compensation

During the year ended December 31, 2017 we compensated each of our directors with 2,500 “post-split” common shares valued at $2.00 per share.

Meetings and Committees of the Board of Directors

We presently have no formal independent Board committees. Until further determination, the full Board of Directors will undertake the duties of the audit committee, compensation committee and nominating and governance committee. The members of the Board of Directors performing these functions as of December 31, 2017, are Roy Rose, John R. Coghlan, Virginia Walters and Clint Lohman.

Compensation Committee

The board of directors, in its Compensation Committee role, has discontinued all compensation for the Officers and Directors for the foreseeable future, with the exception of its Treasurer, Virginia Walters.

Audit Committee

The Board of Directors, in its Audit Committee’s role, will be responsible for selecting the Company’s independent auditors, approve the scope of audit and related fees, and review financial reports, audit results, internal accounting procedures, related-party transactions, when appropriate, and programs to comply with applicable requirements relating to financial accountability. The Audit Committee’s function will include the development of policies and procedures for compliance by the Company and its officers and directors with applicable laws and regulations. The audit committee has reviewed and discussed the attached audited financial statements with management. The audit committee has received written disclosures from the independent accountant required by Independence Standard Board Standard No. 1, as amended, as adopted by the PCAOB in Rule 3600T and has discussed the independence of the company’s certifying accountant. Based on this review and discussion, the Board of Directors, in its audit committee role, recommended that the audited financial statements be included in this Annual Report.

Nomination and Governance Committee

The Board of Directors, in its Nomination and Governance Committee role, will be responsible for recommendations to the Board of Directors respecting corporate governance principles; prospective nominees for Director; Board member performance and composition; function, composition and performance of Board committees; succession planning; Director and Officer liability insurance coverage; and Director’s responsibilities.

Audit Committee Financial Expert

John R. Coghlan, a former Certified Public Accountant, is the Company’s audit committee financial expert.

Shareholder Communications

The Company does not currently have a process for security holders to send communications to the Board.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following tables set forth the ownership of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending arrangements that may cause a change in control. However, it is anticipated that there will be one or more changes of control, including adding members of management, possibly involving the private sale or redemption of our principal shareholder's securities or our issuance of additional securities, at or prior to the closing of a business combination.

The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the U.S. Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.

This table is based upon information derived from our stock records. We believe that each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned; except as set forth above. Applicable percentages are based upon 879,763 “post-split” shares of common stock outstanding as of December 31, 2017, except as modified by Rule 13d-3(d)(1)(i). In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to conversion of preferred stock and options held by that person that are currently exercisable or exercisable within 60 days of December 31, 2017. We did not deem those shares outstanding, however, for the purpose of computing the percentage ownership of any other person. It should be noted that the Company implemented a twenty for one (20:1) reverse stock split on December 12, 2017.

(a) Security Ownership of Certain Beneficial Owners

Our stock ownership records do not indicate that the Company has any beneficial owners owing 5% or more of our securities, except for management as set forth below.

(b) Security Ownership of Management.

Common Stock “post-split”

Title of Class	Name and address of beneficial owner	Amount and nature of beneficial ownership “post-split” (1)	Percent of Class(3)
Common	Roy Rose (2)	-0-	0%
Common	John R. Coghlan (2)	390,898(4)	44.43%
Common	Virginia Walters (2)	9,050 (5)	1.03%
Common	Clint Lohman (2)	49,013 (6)	5.57%
Directors and Officers as Group		448,961	51.03%

(1) All ownership is direct unless stated otherwise in these footnotes.

(2) Address is 3773 West 5th Avenue, Suite 301, Post Falls, ID 83854

(3) Pursuant to Rule 13d-3(d)(1)(i) the percentage calculations use different totals of outstanding securities for the purpose of determining ownership. Any securities not outstanding which are subject to such options, warrants, rights or conversion privileges shall be deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person but shall not be deemed to be outstanding for the purpose of computing the percentage of the class by any other person.

(4) Represents 104,530 owned by Coghlan Family Corporation, 20,216 owned by Coghlan, LLC, 650 owned by West 3773 Fifth, LLC, 265,502 owned by John R. Coghlan. Mr. Coghlan has voting control over Coghlan Family Corporation, Coghlan LLC, and West 3773 Fifth LLC.

(5) Represents 9,050 common shares owned by Ms. Walters.

(6) Represent 49,013 common shares owned by Mr. Lohman.

ITEM 13. Certain Relationships and Related Transactions and Director Independence

Affiliates and related parties are defined as Officers, Directors, and/or those Shareholders owning or controlling more than 5% of the common stock of GFI, or any entities that are owned or controlled by Officers, Directors, and/or those Shareholders owning or controlling more than 5% of the common stock of GFI.

Coghlan Family Corporation, Coghlan, LLC, and West 3773 Fifth, LLC are controlled by John R. Coghlan, a Company director, CFO and affiliate shareholder. Coghlan Family Corporation is owned 100% by Coghlan, LLC, which is owned by the Coghlan family members. John R. and Wendy Coghlan (husband and wife) collectively own 35.65% of Coghlan, LLC and are co-managers. West 3773 Fifth, LLC is 100% owned by John and Wendy Coghlan (husband and wife).

JC Housing, LLC is owned 33.33% by John R. Coghlan and 33.33% by Clint Lohman. Mr. Lohman is a director of GFI. See Financial Statement footnote 11.

Genesis Finance Corporation is a company which is owned 100% by Michael Kirk, who is a former director and officer of GFI.

Placer Creek Mining Company is an Idaho Corporation, which Michael Lavigne is President. Mr. Lavigne was a Director of GFI until his resignation on November 10, 2017.

Genesis Financial, Inc. had the following related party transactions for the years ended December 31, 2016 and 2017.

It should be noted that the Company implemented a twenty for one (20:1) reverse stock split on December 12, 2017 and the shares set forth below are post-split share totals.

Years Ended December 31, 2017 and 2016:

Michael Kirk and Genesis Finance Corporation

On January 1, 2009, the Company entered into a Management and Servicing Agreement with Genesis Finance Corporation, a Washington Corporation. Mike Kirk is the president of Genesis Finance Corporation. As of January 1, 2011, the Company had down-sized enough to manage a sizable portion of its own affairs, and renegotiated its outsourcing agreement with Genesis Finance Corporation, lowering the management fee to $1,500. As of January 1, 2012 the management fee was removed and the outsourcing services were offset by general offices expenses paid by the Company on behalf of Genesis Finance Corporation.

As of December 31, 2017 Genesis Finance Corporation continues a management agreement with the real estate limited liability companies. These agreement are state in the operating agreement of each company and may vary.

John R. Coghlan

As of December 31, 2017, the Company continues a managing agreement for the investment in real estate limited liability companies. The agreement are stated in the operating agreement of each limited liability companies.

On December 7, 2017, John R. Coghlan personally guaranteed our Riverbank line of credit.

On November 13, 2017, John R. Coghlan resigned as Chief Executive Officer and President of the Company.

On April 19, 2017, the Company issued 2,500 shares of common stock for as director compensation valued at Two Dollars per share.

On November 21, 2016, John R. Coghlan terminated his stock options agreement with the Company.

On November 2, 2016, John R. Coghlan purchased 15,767 common shares of Genesis Financial Inc. from Michael Kirk, a former officer of the company.

On May 19, 2016, by board action the Company sold 7,380,433 common shares of Ambient Water Corporation for $2,213 or $0.0003 per share the fair value on that date to John R Coghlan.

On February 8, 2016, John R. Coghlan converted his $250,000 note for 36,250 shares of common stock. The note was originally convertible into 12,500 shares of Series "B", or 31,250 shares of common stock equivalents, at the option of Mr. Coghlan. However, Mr. Coghlan agreed to accept 36,250 common shares in lieu of full payment. The 5,000 additional common shares represents a financing cost to the Company and as such, financing expense of $29,000 was recognized in the quarter ended March 31, 2016.

Coghlan Family Corporation “CFC”

On November 13, 2017, the Company entered into a Promissory Note Loan Agreement with Coghlan Family Corporation, a related party (the "Lender"). The Loan Agreement is essentially a revolving line of credit with an initial advance of $25,000 with subsequent advances as requested by the Company. This indebtedness will survive the proposed Epoint Payment Corp. acquisition transaction. The loan bears interest at the rate of 6.0% interest and is due and payable on, or before May 15, 2018. As an inducement to the Lender, the Company agreed to grant one share of post-reverse split common stock for each $2.50 of aggregate principal amount loaned ("Bonus Shares") The Bonus shares will be payable at the loan's maturity date May 15, 2018. At December 31, 2017 the balance was $47,002. (see Note 6)

July 17, 2017, by board action the Company sold a rental property for $30,000, resulting in a loss of ($17,670).

On May 19, 2016, by board action the Company exchanged a loan held for sale for a $10,000 reduction in the line of credit with CFC.

Issue date	Shares Issued “post-split”	Interest Amount
June 30, 2017	1,887	$3,019
May 31, 2017	1,952	$3,123
April 30, 2017	1,887	$3,019
March 31, 2017	1,952	$3,123
February 28, 2017	1,171	$2,811
January 31, 2017	868	$3,123
1st & 2nd Quarter 2017 Totals	9,717	$18,219
December 31, 2016	868	$3,123
November 30, 2016	839	$3,019

October 31, 2016	1,562	$3,123
September 30, 2016	1,509	$3,019
August 31, 2016	1,562	$3,123
2016 Total	6,339	$15,407

On August 1, 2016, CFC amended the Warehouse Line of Credit and 2,500 shares of common stock were issued. (See Note 5)

Coghlan, LLC

There was no activity for the years ending December 31, 2017 and 2016.

JC Housing, LLC

There was no activity for the years ending December 31, 2017 and 2016.

For the year ended December 31, 2015, the Company purchased two travel trailers from JC Housing, LLC for $30,000.

West 3773 Fifth, LLC

As of December 31, 2017, the Company continued a month-to-month tenancy with West 3773 Fifth, LLC, a company owned and controlled by John and Wendy Coghlan. The monthly rent is 1,250. Other office expenses are shared by all of the tenants of which the Company’s portion is estimated at $2,500 per month.

Genesis Finance Corporation “GFC”

Michael Lavigne

On November 10, 2017, Michael Lavigne resigned as Executive Secretary and Director of the Company.

On April 19, 2017, the Company issued 2,500 shares of common stock as director compensation valued at Two Dollars per share.

On March 1, 2017, the Board of Directors appointed Michael Lavigne to hold the Executive Officer position of Sectary and Company Director.

There was no activity for the year ended December 31, 2016.

Clint Lohman, Director

On April 19, 2017, the Company issued 2,500 shares of common stock for as director compensation valued at Two Dollars per share.

There was no activity for the year ended December 31, 2016.

For the year ended December 31, 2015, the Company purchased two travel trailers from JC Housing, LLC for $30,000.

Director Independence

ITEM 14. Principal Accounting Fees and Services.

Fruci & Associates II, PLLC serve as our registered independent accountant and has audited our financial statements for the years ending December 31, 2017. DeCoria, Maichel &Teague, P.S. serves as our registered independent accountant and has audited our financial statements for the years ending December 31, 2016.

The following table presents fees for professional audit services rendered by Fruci & Associates II, PLLC and DeCoria, Maichel &Teague, P.S. for the audit or review of GFI’ financial statements for the years ended December 31, 2017 and 2016, and fees billed for other services rendered.

Fiscal Year	2017	2016
Audit Fees	$ 24,500	$ 32,400
Audit Related	-	-
Tax Fees	-	-
All other Fees	-	-
Total Fees	$ 24,500	$ 32,400

(1)Audit fees include fees for services rendered for the audit of our annual financial statements and reviews of our quarterly financial statements. Above fees are estimates and may vary.

The Board of Directors acts as the Audit Committee.

PART IV

ITEM 15. Exhibits and Financial Statement Schedules

(a) List Financial Statements filed as a part of this Annual Report

Description Page No.

Report of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations and Comprehensive Income (Loss)

Statements of Cash Flows

Statement of Changes in Stockholders’ Equity

Notes to Financial Statements

21-32

List all Exhibits Required by Item 601

Exhibit Number	Description	Location of Exhibit
2.1	Capital Stock Exchange Agreement dated September 8, 2017	8-K filed September 11, 2017
3.1	Articles of Incorporation	SB-2 filed February 20, 2003
3.2	Amended and Restated Articles of Incorporation	SB-2 filed February 20, 2003
3.3	Articles of Amendment Creating Series A Cumulative Preferred Stock	SB-2 Amendment No. 3 filed July 3, 2003
3.4	Articles of Amendment Creating Series B Preferred Stock	8-K filed December 8, 2010
3.5	Bylaws	SB-2 filed February 20, 2003
3.6	Articles of Amendment November 13, 2017	8-K filed November 21, 2017
3.7	Articles of Domestication	8-K filed February 16, 2016
10.1	Management and Loan Servicing Agreement with Genesis Holdings, Inc. dated April 16, 2004	10-K filed April 23, 2010
10.2	Management and Loan Servicing Agreement with Genesis Holdings II, Inc. dated July 15, 2008	10-K filed August 11, 2010
10.3	Promissory Note with American West Bank dated October 14, 2004	10-K filed April 23, 2010
10.4	Warehousing Line of Credit Promissory Note Agreement with Coghlan Family Corporation dated April 18, 2006	10-K filed April 23, 2010
10.5	Promissory Note with Riverbank dated June 29, 2009	10-K filed August 11, 2010
10.6	Form of Flyback Energy, Inc. Series B Preferred Stock Purchase Agreement including Stock Warrant	10-K filed April 13, 2012
10.7	Form of Flyback Energy, Inc. Amended and Restated Investor Rights Agreement	10-K filed April 13, 2012
10.8	Form of Promissory Note relating to Flyback Energy, Inc.	10-K filed April 13, 2012
10.9	Form of Purchase Agreement with AWG International, Inc. dba AWG International Water Corp	10-K filed April 13, 2012
10.10	Form of Common Stock Purchase Warrant AWG International, Inc. dba AWG International Water Corp	10-K filed April 13, 2012
10.11	Warehousing Line of Credit Agreement with Coghlan Family Corporation dated January 1, 2010	10-K filed August 11, 2010
10.12	Warehousing Line of Credit Agreement with Coghlan Family Corporation dated January 1, 2008	10-K filed August 11, 2010
10.13	Management and Servicing Agreement titled Corporate Restructuring Agreement with Genesis Financial Corporation dated December 27, 2008, effective January 1, 2009	10-K filed August 11, 2010
10.14	Form of $250,000 Convertible Note Agreement between John R. Coghlan and Genesis Financial dated December 15, 2010	10-K filed April 13, 2012
10.15	Form of $250,000 Convertible Note Subscription Agreement between John R. Coghlan and Genesis Financial dated December 15, 2010	10-K filed April 13, 2012

10.16	Form of Security Agreement related to $250,000 Convertible Promissory Note Agreement with John R. Coghlan dated December 15, 2010	10-K filed April 13, 2012
10.17	September 29, 2010 documentation regarding the assignment of certain properties and the business note to Coghlan Family Corporation	10-K filed April 13, 2012
10.18	First Amendment to Warehouse Line of Credit Promissory Note	10-K filed March 24, 2014
10.19	$50,000 Promissory Note with Placer Creek	10-K filed March 24, 2014
10.20	$100,000 Promissory Note with Placer Creek	10-K filed March 24, 2014
10.21	Amendment to Warehouse Line of Credit	8-K filed February 16, 2016
10.22	Loan Agreement and Promissory Note November 13, 2017	Filed herewith
14	Code of Ethical Conduct	10-K filed April 23, 2010
31.1	CEO Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002	Filed herewith
31.2	CFO Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002	Filed herewith
32.1	CEO Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002	Filed herewith
32.2	CFO Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002	Filed herewith
101	The following materials from Genesis Financial, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2017 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) Statement of Stockholders' Deficit, (iv) the Statements of Cash Flow, and (iv) Notes to Financial Statements.	Filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: February 14, 2018

Genesis Financial, Inc.

(Registrant)

/s/ Roy Rose

________________________

By: Roy Rose

Title: President, Chief Executive Officer

(Principal Executive Officer)

/s/ John R. Coghlan

________________________

By: John R. Coghlan

Title: Chief Financial Officer (Principal Accounting 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 and on the dates indicated.

Dated: February 14, 2018

/s/ Roy Rose

________________________

By: Roy Rose, Director

/s/ John R. Coghlan

________________________

By: John R. Coghlan

Title: Director

/s/ Virginia Walters

________________________

By: Virginia Walters

Title: Director

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