The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and notes included in this report as

We are in the development stage and have incurred cumulative net losses since inception. We incurred negative cash flows from operating activities of $510,622 and $721,217 for the years ended November 30, 2008, and 2007, respectively. Our products are in the development stage and are subject to regulatory approval by the FDA. Although we are confident that the products under development will be successfully tested and commercialized, there can be no assurance that such approvals will be received.

Our ability to carry out our plan depends entirely upon our ability to obtain additional substantial equity, debt financing or licensing agreements and royalties. We cannot assure you that we will receive this financing. If we do not receive such funding, we will not be able to proceed with our intended business plans. We completed the private sale of 3,964,031 shares (this amount includes 64 shares for rounding) of our common stock at a price of $0.60 per share for aggregate gross proceeds of approximately $2.38 Million during November, 2005. During November 2007, we completed the private sale of 213,569 shares of our common stock at a price of $0.70 per share for aggregate gross proceeds of $149,500, and in 2008, we made a private placement of an additional 423,639 shares of our common stock, which sale generated net proceeds of $205,949. Substantial additional funds will still be required if we are to reach our goals that are outlined above. We currently have no arrangements or understandings that will assure that we can successfully raise any additional funds that may be required.

Our accountants have expressed substantial doubt about our ability to continue as a going concern as a result of our history of losses. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully complete the development and commercialization of our products and, once in the marketplace, to generate sufficient revenues to achieve positive cash flow and profitability.

Financial Position

The table below presents a summary of our consolidated balance sheets at November 30, 2008, and 2007.

                            SUMMARY OF BALANCE SHEET INFORMATION
                                      Year ended    Year ended      Increase
                                     Nov. 30, 2008 Nov 30, 2007    (Decrease)
Cash and cash equivalents              $    4,368  $    280,105  $    (275,737)
Total current assets                       98,762       283,977       (185,215)
Total assets                              265,857       474,542       (208,685)
Total current liabilities                 493,647        40,898         452,749
Deficit accumulated during             (3,612,298)   (2,347,754)    (1,264,545)
the development stage
Total stockholders' equity (deficit) $  (227,790)    $  433,644  $    (661,414)

We had $4,368 in cash as of November 30, 2008. This is a decrease of $275,737 from November 30, 2007. We had negative working capital of $(394,885) at November 30, 2008, as compared to positive working capital of $243,079 at November 30, 2007. This decrease was largely due to the operating loss for the fiscal year, coupled with capital expenditures and the lack of significant new funding.

Results of Operations

     Year Ended November 30, 2008, Compared to Year Ended November 30, 2007


   During the years ended November 30, 2008, and 2007, we had no revenue or
related cost of sales.



                                Year Ended  Year Ended
                               November 30,  November   Increase
                                   2008      30, 2007  (Decrease)
Research and Development
(excludes $131,662 and $33,747
of non-cash stock compensation
expense in 2008 and 2007)          $511,824  $ 455,579    $56,245
General and Administrative
(excludes $189,464 and
$104,993 of non-cash stock
compensation expense in 2008
and 2007)                           433,882    395,408     38,474
Stock-based compensation
expense                             321,126    138,740    182,386
Total operating expenses          1,266,832    989,727    277,105

Net loss                       $(1,264,545) $(968,454) $(296,091)

Research and development expenses ("R&D") for the years ended November 30, 2008, were $511,824, which excludes $131,662 of stock-based compensation expense. R&D expenses for the year ended November 30, 2007, were $455,579, which excludes $33,747 of stock-based compensation expense. The expense level in 2008 increased by $56,245 compared to 2007 expense level. The increase in 2008 expense is attributable to a $135,000 increase in consultant expenses, offset in part by reductions in a number of other expense areas. It is anticipated that R&D expenses will significantly increase as final design work on the generator is completed, the formulation of the tablet is finalized, test projects are initiated and the development work required for commercialization escalates.

General and administrative expenses for the year ended November 30, 2008, were $433,882, which excludes $189,464 of stock-based compensation expense, compared to $395,408, excluding $104,993 in stock-based compensation charges, for the year ended November 30, 2007, for an increase of $38,474. The 2008 increase results from a $64,800 increase in consultant expenses, offset in part by reductions in a number of other expense accounts.

The raising of additional funds, hiring of additional personnel, travel expenses, office rental, and other administrative expenses are all expected to increase throughout 2009.

Interest income of $2,387 was realized for the year ended November 30, 2008, from interest earned on invested funds. This is a reduction of $19,300 from the $21,687 earned during the year ended November 30, 2007. The decrease results from reduced funds on deposit, as cash was used to fund operations and capital expenditures.

The net loss for the year ended November 30, 2008, was $1,264,545. This compares to a net loss realized for the year ended November 30, 2007, of $968,454. We expect the net loss in 2009 to increase as additional consultants, personnel and resources are utilized to complete the testing, regulatory approval and commercialization of our products.

To date, we have financed our operations principally through private placements of equity securities. We used net cash for operating activities of $510,622 in the year ended November 30, 2008. This is a $210,595 reduction from the $721,217 used in the year ended November 30, 2007. As of November 30, 2008, our working capital deficit was $(394,885), and our current liabilities were $493,647.

Our working capital requirements for the foreseeable future will vary based on a number of factors, including the costs to complete development work, the cost of bringing products to commercial viability, the timing of the market launches, and the level of sales. As of November 30, 2008, we had accounts payable and accrued liabilities totaling

Pursuant to Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition," we will recognize revenue when the following criteria have been met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the price is fixed or determinable and (4) collectability is reasonably assured.

Product revenues will be recognized when persuasive evidence of an arrangement exists, risk of loss and title has transferred to our customers, the fee is fixed or determinable and collection is probable. Rights of return for manufactured product are dependent upon the agreement.

We regularly evaluate whether events or circumstances have occurred that indicate the carrying value of our long-lived assets may not be recoverable.
When factors indicate the asset may not be recoverable, we compare the related undiscounted future net cash flows to the carrying value of the asset to determine if impairment exists. If the expected future net cash flows are less than the carrying value, an impairment charge is recognized based on the fair value of the asset. No such impairments were recorded during the years ended November 30, 2008, and 2007.

We have elected to capitalize patent costs and will amortize them over the shorter of the life of the patent or the number of years for which it is estimated that economic benefit will be derived.

On March 23, 2007, the GeNOsys, Inc. 2007 Stock Option Plan ("Stock Option Plan") was approved by our Board of Directors and became effective on that date, subject to the Stock Option Plan being approved by the stockholders at the annual meeting. On June 27, 2007, our stockholders approved the Stock Option Plan. The Stock Option Plan provides that 3,000,000 shares of our authorized but unissued common stock be reserved pursuant to the terms and conditions of the Stock Option Plan. The Stock Option Plan allows us, under the direction of the Compensation Committee, to make broad-based grants of stock options, any of which may or may not require the satisfaction of performance objectives, to employees and non-employee directors. The purpose of these stock option grants is to attract and retain talented employees and further align employee and stockholder interests. The Stock Option Plan provides an essential component of the total compensation package offered to employees, reflecting the importance that we place on motivating and rewarding superior results with long-term, performance-based incentives. In March, June and November, 2007, our Board of Directors approved the grant of an aggregate of 1,200,000 stock option grants to certain employees and directors, resulting in non-cash charges of $632,058. In December 2007, our Board of Directors granted one of our officers an option to purchase 600,000 shares of common stock, resulting in a non-cash charge of $271,598. These non-cash charges are being expensed ratably over the vesting periods of the individual agreements. The total non-cash charge expense for the years ended November 30, 2008, and 2007 relating to these stock option grants was $321,126 and $138,740, respectively.

FAS 157 - In September 2006, the Financial Accounting Standards Board ("FASB") issued FAS No. 157, "Fair

FAS 159 - In February 2007, the FASB issued FAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of SFAS No. 115, 'Accounting for Certain Investments in Debt and Equity Securities.'" SFAS 159 allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair market value in situations in which they are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current period earnings. SFAS No. 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company elected not to measure any additional financial assets or liabilities at fair value at the time SFAS 159 was adopted on December 1, 2007. As a result, implementation of SFAS 159 will have no impact on the Company's financial statements.

FAS 141(R) - In December 2007, the FASB issued FAS 141(R), "Business Combination" ["FAS 141(R)"], which replaces FAS No. 141. FAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquired entity and the goodwill acquired.
FAS 141(R) also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. FAS 141(R) is effective for fiscal years beginning after December 15, 2008. The adoption of FAS 141(R) will have an impact on accounting for business combination once adopted, but the effect is dependent upon acquisitions at that time.

FAS 160 - In December 2007, the FASB issued FAS No. 160 "Non-controlling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No. 51" ("FAS 160"), which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent's ownership interest and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. The Statement also establishes reporting requirements that provide sufficient disclosure that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. FAS 160 is effective for fiscal years beginning after December 15, 2008. The adoption of FAS 160 will have an impact on business combination once adopted, but the effect is dependent upon acquisitions at that time.

FAS 161 - In March 2008 the Financial Accounting Standard Board ("FASB") released Statement of Financial Accounting Standards No 161, Disclosures about Derivative Instruments and Hedging Activities ("FAS 161"). FAS 161requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years.

FASB 162 - In May 2008 the Financial Accounting Standard Board ("FASB") released Statement of Financial Accounting Standards No 162, The Hierarchy of Generally Accepted Accounting Principles ("FASB 162"). FASB 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles ("GAAP") in the United States (the "GAAP hierarchy"). FASB believes that the

FASB 163 - In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts - an interpretation of FASB Statement No. 60 ("SFAS 163"). SFAS 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claim liabilities. The Statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The Company does not expect the adoption of SFAS 163 will have a material impact on its financial statements.

We have reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operation, financial position or cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on our current or future earnings or operations.

We lease office space under a five-year non-cancelable operating lease that commenced on November 1, 2006. Future minimum lease payments under the operating least at November 30, 2008 are $182,966.