Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

On May 22, 2008, we completed an acquisition of Genesis Electronics, Inc., a Delaware corporation. Genesis was originally formed in Delaware on October 22, 2001. Genesis is a developmental stage electronics company with a patented process for charging a battery from solar energy and efficiently transferring that energy to the battery of an electronic device. This increases the life and, as a result, the need to replace the devices' battery and eliminates the need to charge the device by plugging into the power grid with an adapter. Genesis has working prototypes of a solar charger designed for the Apple iPhone and expects to market this product and similar products in the near future.

Until its acquisition of Genesis, our business was solely focused on our internet shopping portal, and building and hosting websites for the small business sector. While we are still engaged in this business, our primary focus has now shifted towards the further development and marketing of the above described products.

In November 2008, we obtained, through a vote of majority of our shareholders, the approval to change our name to Genesis Electronics Group, Inc. In February 2009, we filed an amendment to our Articles of Incorporation with the Secretary of State of Nevada. We changed our name to Genesis Electronics Group, Inc.

PLAN OF OPERATIONS

We have only received minimal revenues. We only have sufficient cash on hand to meet funding requirements for the next 60-90 days. We do not have sufficient cash on hand to meet funding requirements for the next twelve months. Although we eventually intend to primarily fund general operations and our marketing program with revenues received from the sale of solar charger and related products and the Pricester Custom Designed Websites, hosting and transaction fees, our revenues are not increasing at a rate sufficient to cover our monthly expenses in the near future. We will have to seek alternative funding through debt or equity financing in the next twelve months that could result in increased dilution to the shareholders. No specific terms of possible equity or debt financing have been determined or pursued.

GOING CONCERN

As reflected in the accompanying consolidated financial statements, we had an accumulated deficit of $7,542,754, a working capital deficit of $1,202,354, had net losses for the three months ended March 31, 2009 of $28,857 and cash used in operations during the three months ended March 31, 2009 of $28,850. While we are attempting to increase sales, it has not been significant enough to support the registrant's daily operations. We will attempt to raise additional funds by way of a public or private offering. While we believe in the viability of our

19 strategy to improve sales volume and in our ability to raise additional funds, there can be no assurances to that effect. Our limited financial resources have prevented us from aggressively advertising our products and services to achieve consumer recognition. Our ability to continue as a going concern is dependent on our ability to further implement our business plan and generate increased revenues.

CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by management's applications of accounting policies. Critical accounting policies for the registrant include the useful life of property and equipment and web development costs.

Computer equipment and furniture is stated at cost less accumulated depreciation. Depreciation is computed over the assets' estimated useful lives (five to seven years) using straight line methods of accounting. Maintenance costs are charged to expense as incurred while upgrades and enhancements that result in additional functionality are capitalized.

We review the carrying value of intangibles and other long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value.

We have three primary revenue sources: website design, transaction fees, and hosting fees.

- Website design revenue is recognized as earned when the website is complete, control is transferred and the customer has accepted its website, usually within seven days of the order.

- Transaction fee income comprises fees charged for use of credit cards or other forms of payment in the purchase of items sold on the customers' websites. The transaction fee income is recognized as earned when funds transfers (via credit card or other forms of payments) between the buyer and seller has been authorized.

- Revenues from website hosting fees are recognized when earned. Web hosting fees received in advance are reflected as deferred revenue on the accompanying balance sheet.

20 - Effective January 1, 2006, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payment ("SFAS No. 123R"). SFAS No. 123R establishes the financial accounting and reporting standards for stock-based compensation plans. As required by SFAS No. 123R, we recognize the cost resulting from all stock-based payment transactions including shares issued in the financial statements.

Results of Operations.

For the three months ended March 31, 2009 compared to the three months ended March 31, 2008

Net sales for the three months ended March 31, 2009 were $30,544 as compared to net sales of $24,816 for the three months ended March 31, 2008, an increase of $5,728 or approximately 23%. We are continuing to create customer awareness for our products. Additionally, we have begun offering website hosting services. There can be no assurances that we will continue to recognize similar net revenue in future periods or that we will ever report profitable operations.

Total operating expenses for the three months ended March 31, 2009 were $58,288, a decrease of $378,944, or approximately 87%, from total operating expenses in the year ended March 31, 2008 of $437,232. This decrease is primarily attributable to:

- an increase of $2,250, or approximately 100%, in professional fees incurred in connection with our SEC filings. This increase is primarily related to increase in accounting fees,

- a decrease of $131,907, or approximately 93%, in consulting fees in connection with the issuance of our common stock for services rendered and amortization of prepaid expense in connection with deferred compensation in 2008. This decrease is primarily attributable to a decrease in issuance of our common stock for services rendered during the three months ended March 31, 2009 as compared to the same period in 2008,

- a decrease of $228,738, or 93%, in compensation expense to $18,532 for the three months ended March 31, 2009 as compared to $247,270 for the three months ended March 31, 2008. Compensation expense which includes salaries and stock based compensations to our employees. During the three months ended March 31, 2009, we did not issue shares of our common stock as compensation to our employees and is primarily attributable to this decrease. During the three months ended March 31, 2008, the Company issued in aggregate 3,000,000 shares of common stock to our CEO and an officer in connection with their employment agreements dated January 14, 2008,

- a decrease of $20,549, or approximately 45%, in other selling, general and administrative expenses as a result of decrease in general expenses and office expenses attributable to decreased spending due to limited financial resources.

21 We reported a loss from operations of $27,744 for three months ended March 31, 2009 as compared to a loss from operations of $412,416 for the three months ended March 31, 2008.

Total other expense for the three months ended March 31, 2009 were $1,113, an increase of $1,038, from total other expense for three months ended March 31, 2008 of $75. This increase is primarily attributable to an increase of $1,113 in interest expense as a result of the assumption of certain convertible debt in connection with a settlement agreement entered into on May 23, 2008.

We reported a net loss of $28,857 or (0.00) per share for the three months ended March 31, 2009 as compared to a net loss of $412,491 or $(0.01) per share for the three months ended March 31, 2008.

Liquidity and Capital Resources.

During the three months ended March 31, 2009, we received net proceeds of $34,325 and subscription receivable of $43,234 from the sale of our common stock. These funds were used for working capital purposes.

Net cash used in operating activities for the three months ended March 31, 2009 amounted to $28,850 and was primarily attributable to our net losses of $28,857 offset by depreciation of $169. Net cash used in operating activities for the three months ended March 31, 2008 amounted to $80,186 and was primarily attributable to our net losses of $412,491 offset by stock based compensation of $266,000, amortization of prepaid expense in connection with deferred compensation of $84,958, depreciation of $631, and add back of changes in assets and liabilities of $19,284.

Net cash flows provided by financing activities was $38,325 for the three months ended March 31, 2009 as compared to net cash provided by financing activities of $148,812 for the three months ended March 31, 2008, a decrease of $110,287. For the three months ended March 31, 2009, we received proceeds from the sale of common stock of $40,325 offset by payments on related party advances of $1,800. For the three months ended March 31, 2008, we received proceeds from the sale of common stock of $195,612, proceeds from related parties of $8,000 and offset by payments on related party advances of $54,800.

We reported a net increase in cash for the three months ended March 31, 2009 of $9,675 as compared to a net increase in cash of $68,626 for the three ended March 31, 2008. At March 31, 2009, we had cash on hand of $11,994.

RECENT ACCOUNTING PRONOUNCEMENTS

On January 1, 2008, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. In February 2008, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position, "FSP FAS 157-2-Effective Date of FASB

22 Statement No. 157" ("FSP 157-2"), which delays the effective date of SFAS 157 for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Excluded from the scope of SFAS 157 are certain leasing transactions accounted for under SFAS No. 13, "Accounting for Leases." The exclusion does not apply to fair value measurements of assets and liabilities recorded as a result of a lease transaction but measured pursuant to other pronouncements within the scope of SFAS 157. We do not expect that the adoption of the provisions of FSP 157-2 will have a material impact on its financial position, cash flows or results of operations.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). This statement requires companies to provide enhanced disclosures about (a) how and why they use derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect a company's financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. We will adopt the new disclosure requirements on or before the required effective date and thus will provide additional disclosures in its financial statements when adopted.

In April 2008, FASB Staff Position No. 142-3, Determination of the Useful Life of Intangible Assets (FSP 142-3) was issued. This standard amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. We have not determined the impact of this accounting standard on our financial statements.

In May 2008, the FASB issued FAS No. 162, The Hierarchy of Generally Accepted Accounting Principles" which identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This statement is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles". We do not expect that the adoption of this pronouncement will have a significant impact on its financial condition, results of operations and cash flows. In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60". SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and

23 measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on our financial position, statements of operations, or cash flows at this time.

In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation of earnings per share under the two-class method as described in FASB Statement of Financial Accounting Standards No. 128, "Earnings per Share." FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have a material effect on our financial position and results of operations if adopted.

In December 2008, the FASB issued FASB Staff Position (FSP) FAS 140-4 and FIN 46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities. The document increases disclosure requirements for public companies and is effective for reporting periods (interim and annual) that end after December 15, 2008. This FSP amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, to require public entities to provide additional disclosures about transfers of financial assets. It also amends FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, to require public enterprises, including sponsors that have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with variable interest entities. The registrant does not expect that the adoption of this pronouncement will have a significant impact on its financial condition, results of operations and cash flows.

In January 2009, the FASB issued FSP EITF 99-20-1, "Amendments to the Impairment Guidance of EITF Issue No. 99"Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets". FSP EITF 99-20-1 changes the impairment model included within EITF 99-20 to be more consistent with the impairment model of SFAS No. 115. FSP EITF 99-20-1 achieves this by amending the impairment model in EITF 99-20 to remove its exclusive reliance on "market participant" estimates of future cash flows used in determining fair value. Changing the cash flows used to analyze other- than-temporary impairment from the "market participant" view to a holder's estimate of whether there has been a "probable" adverse change in estimated cash flows allows companies to apply reasonable judgment in assessing whether an other-than-temporary impairment has occurred. The adoption of FSP EITF 99-20-1 did not have a material impact on our consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.