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 approximately $7.9 million, a working capital deficit of $1,135,438, had net losses for the nine months ended September 30, 2009 of $374,623 and cash used in operations during the nine months ended September 30, 2009 of $160,888. 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 strategy to improve sales volume and in our ability to raise additional funds, there can be no assurances to

22 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.
- 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.

23 Results of Operations.

For the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008

Net sales for the nine months ended September 30, 2009 were $69,172 as compared to net sales of $84,867 for the nine months ended September 30, 2008, a decrease of $15,695 or approximately 19%. We are continuing to create customer awareness for our products. The decrease in revenues is primarily attributable to the non renewal of subscribers who had completed their annual hosting commitment during the nine months ended September 30, 2009. 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 nine months ended September 30, 2009 were $244,456, a decrease of $446,700, or approximately 65%, from total operating expenses for the nine months ended September 30, 2008 of $691,156. This decrease is primarily attributable to:

- an increase of $10,927, or approximately 55%, in professional fees incurred in connection with our SEC filings. This increase is primarily related to increase in audit fees,

- a decrease of $163,939, or approximately 78%, 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 nine months ended September 30, 2009 as compared to the same period in 2008,

- a decrease of $277,007, or 82%, in compensation expense to $60,662 for the nine months ended September 30, 2009 as compared to $337,669 for the nine months ended September 30, 2008. Compensation expense which includes salaries and stock based compensations to our employees. During the nine months ended September 30, 2009, we did not issue shares of our common stock as compensation to our employees and is primarily attributable to this decrease. During the nine months ended September 30, 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. Additionally, the decrease is also attributable to the decrease in employees,

- a decrease of $16,681, or approximately 13%, 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.

We reported a loss from operations of $175,284 for nine months ended September 30, 2009 as compared to a loss from operations of $606,289 for the nine months ended September 30, 2008.

24 Total other expense for the nine months ended September 30, 2009 were $199,339, a decrease of $2,100,997, from total other expense for nine months ended September 30, 2008 of $2,300,336. This decrease is primarily attributable to:

- a decrease of $852,604 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 also recognized a gain on settlement of debt of $469,284 to a former officer of Genesis in connection with this settlement agreement during the nine months ended September 30, 2008.

- a decrease of $1,717,602 in impairment expense as a result of our acquisition of Genesis which resulted to a recognition of goodwill. We deemed the acquired goodwill to be impaired and wrote- off the goodwill on the acquisition date.

We reported a net loss of $374,623 or (0.00) per share for the nine months ended September 30, 2009 as compared to a net loss of $2,906,625 or $(0.06) per share for the nine months ended September 30, 2008.

For the three months ended September 30, 2009 compared to the three months ended September 30, 2008

Net sales for the three months ended September 30, 2009 were $14,511 as compared to net sales of $36,957 for the three months ended September 30, 2008, a decrease of $22,446 or approximately 61%. We are continuing to create customer awareness for our products. The decrease in revenues is primarily attributable to the non renewal of subscribers who had completed their annual hosting commitment during the three months ended September 30, 2009. 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 September 30, 2009 were $99,643, a decrease of $1,068, or approximately 1%, from total operating expenses for the three months ended September 30, 2008 of $100,711. This decrease is primarily attributable to:

- a decrease of $2,636, or approximately 25%, in professional fees incurred in connection with our SEC filings. This increase is primarily related to a decrease in accounting fees. During the nine months ended September 30, 2008, accounting fees were higher due to the acquisition of Genesis Electronics, Inc.

- an increase of $20,150, or approximately 291%, in consulting fees in connection with the issuance of our common stock for services rendered. The increase is primarily attributable to the issuance of 200,000 shares of our common stock for technical advisory services rendered during the three months ended September 30, 2009 as compared to the same period in 2008.

- a decrease of $26,079, or 55%, in compensation expense to $21,120 for the three months ended September 30, 2009 as compared to $47,199 for the three months ended September 30, 2008. Compensation expense which

25 includes salaries and stock based compensations to our employees. During the three months ended September 30, 2009, the decrease is primarily attributable to the decrease in employees,

- a slight increase of $7,497, or approximately 21%, in other selling, general and administrative expenses.

We reported a loss from operations of $85,132 for three months ended September 30, 2009 as compared to a loss from operations of $63,754 for the three months ended September 30, 2008.

- Total other expense for the three months ended September 30, 2009 and 2008 was $1,113.

We reported a net loss of $86,245 or (0.00) per share for the three months ended September 30, 2009 as compared to a net loss of $64,867 or $(0.00) per share for the three months ended September 30, 2008.

Liquidity and Capital Resources

During the nine months ended September 30, 2009, we received net proceeds of $160,329 and subscription receivable of $68,234 from the sale of our common stock. For the nine months ended September 30, 2009, we collected subscription receivable of $39,250. These funds were used for working capital purposes.

Net cash used in operating activities for the nine months ended September 30, 2009 amounted to $160,888 and was primarily attributable to our net losses of $374,623 offset by depreciation of $507, stock based expense of $8,090, interest expense of $196,000 in connection with the settlement of a related party loan and changes in assets and liabilities of $9,138. Net cash used in operating activities for the nine months ended September 30, 2008 amounted to $211,700 and was primarily attributable to our net losses of $2,906,625 offset by stock based compensation of $275,814, amortization of prepaid expense in connection with deferred compensation of $142,585, depreciation of $1,893, impairment expense of $1,717,602, interest expense of $1,049,717 in connection with the settlement agreement and add back of gain on settlement of debt of $469,284 and changes in assets and liabilities of $23,402.

Net cash flows provided by financing activities was $193,279 for the nine months ended September 30, 2009 as compared to net cash provided by financing activities of $220,312 for the nine months ended September 30, 2008, a decrease of $27,033. For the nine months ended September 30, 2009, we received proceeds from the sale of common stock and collection of subscription receivable of $199,579 offset by payments on related party advances of $6,300. For the nine months ended September 30, 2008, we received proceeds from the sale of common stock of $303,412, proceeds from related parties of $8,000 and offset by payments on related party advances of $91,100.

26 We reported a net increase in cash for the nine months ended September 30, 2009 of $32,391 as compared to a net increase in cash of $8,612 for the nine months ended September 30, 2008. At September 30, 2009, we had cash on hand of $34,710.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2008, the FASB ratified Emerging Issues Task Force Issue No. 07- 5, "Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity's Own Stock." EITF 07-5 mandates a two-step process for evaluating whether an equity-linked financial instrument or embedded feature is indexed to the entity's own stock. Warrants that a company issues that contain a strike price adjustment feature, upon the adoption of EITF 07-5, are no longer being considered indexed to the company's own stock. Accordingly, adoption of EITF 07-5 will change the current classification (from equity to liability) and the related accounting for such warrants outstanding at that date. EITF 07-5 is effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of EITF 07-5 did not have a material impact on our consolidated financial statements.

On October 10, 2008, the FASB issued FSP 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active," which clarifies the application of SFAS 157 when the market for a financial asset is inactive. Specifically, FSP 157-3 clarifies how
(1) management's internal assumptions should be considered in measuring fair value when observable data are not present, (2) observable market information from an inactive market should be taken into account, and
(3) the use of broker quotes or pricing services should be considered in assessing the relevance of observable and unobservable data to measure fair value. The Company is currently evaluating the impact of adoption of FSP 157-3 on the Company's consolidated financial.

In November 2008, the FASB issued EITF Issue No. 08-7, "Accounting for Defensive Intangible Assets," or EITF No. 08-7. EITF No. 08-7 discusses that when an entity acquired in a business combination or an asset acquisition an intangible asset that it did not intend to actively use, otherwise known as a defensive asset, the entity historically allocated little or no value to the defensive asset. However, with the issuance of SFAS No. 141(R) and SFAS No. 157 the entity must recognize a value for the defensive asset that reflects the asset's highest and best use based on market assumptions. Upon the effective date of both SFAS No. 141(R) and SFAS No. 157, acquirers will generally assign a greater value to a defensive asset than would typically have been assigned under SFAS No. 141. EITF No. 08-7 will be effective for the first annual reporting period beginning on or after December 15, 2008. EITF No. 08-7 will apply prospectively to business combinations for which the acquisition date is after fiscal years beginning on or after December 15, 2008. The adoption of EITF No. 08-7 did not have a material impact on our results of operations or financial condition.

In April 2009, the FASB issued SFAS No. 141 (R), "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies." SFAS No. 141 (R) amends and clarifies SFAS No. 141, "Business Combinations," in regards to the initial recognition and

27 measurement, subsequent measurement and accounting, and disclosures of assets and liabilities arising from contingencies in a business combination. FSP SFAS No. 141 (R) applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies that would be within the scope of SFAS No. 5, "Accounting for Contingencies", if not acquired or assumed in a business combination, except for assets or liabilities arising from contingencies that are subject to specific guidance in SFAS No. 141 (R). FSP SFAS No.
141 (R) will be effective for the first annual reporting period beginning on or after December 15, 2008. FSP SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is after fiscal years beginning on or after December 15, 2008. The adoption of SFAS No. 141 (R) did not have a material impact on our results of operations or financial condition.

In April 2009, the FASB issued FSP FAS 157-4, which provides guidance on how to determine the fair value of assets and liabilities when the volume and level of activity for the asset or liability has significantly decreased when compared with normal market activity for the asset or liability as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS 157-4 is effective for interim and annual periods ending after June 15, 2009. T he Company is currently evaluating the financial impact that FSP FAS. 157-4 will have, but expects that the financial impact, if any, will not be material on its Consolidated Financial Statements.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, which amends the requirements for the recognition and measurement of other-than- temporary impairments for debt securities by modifying the current "intent and ability" indicator. Under FSP FAS 115-2 and FAS 124-2, an other-than-temporary impairment must be recognized if the Company has the intent to sell the debt security or the Company is more likely than not will be required to sell the debt security before its anticipated recovery. In addition, FSP FAS 115-2 and FAS 124-2 requires impairments related to credit loss, which is the difference between the present value of the cash flows expected to be collected and the amortized cost basis for each security, to be recognized in earnings while impairments related to all other factors to be recognized in other comprehensive income. FSP FAS 115-2 and FAS 124-2 is effective for interim and annual periods ending after June 15, 2009. The Company is currently evaluating the financial impact that FSP FAS 115-2 and FAS 124-2 will have, but expects that the financial impact, if any, will not be material on its consolidated financial statements.

In April 2009, the FASB issued FSP 107-1 and 28-1. This FSP amends SFAS 107, to require disclosures about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. Prior to this FSP, fair values for these assets and liabilities were only disclosed annually. This FSP applies to all financial instruments within the scope of SFAS 107 and requires all entities to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments. This FSP shall be effective for interim periods ending after June 15, 2009, with early adoption permitted for periods ending

28 after March 15, 2009. An entity may early adopt this FSP only if it also elects to early adopt FSP 157-4 and 115-2 and 124-2. This FSP does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, this FSP requires comparative disclosures only for periods ending after initial adoption. The Company is currently evaluating the disclosure requirements of this new FSP.

In April 2009, the FASB issued Staff Position No. FAS 107-1 and APB 28- 1, Interim Disclosures about Fair Value of Financial Instruments (FAS 107-1 and APB 28-1), which requires publicly traded companies to include in their interim financial reports certain disclosures about the carrying value and fair value of financial instruments previously required only in annual financial statements and to disclose changes in significant assumptions used to calculate the fair value of financial instruments. FAS 107-1 and APB 28-1 is effective for all interim reporting periods ending after June 15, 2009, with early adoption permitted for interim reporting periods ending after March 15, 2009. The Company adopted FAS 107-1 and APB 28-1 in the second quarter of 2009. The adoption did not have a material impact on the Company's consolidated financial statements.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events (SFAS 165). SFAS 165 establishes general standards for accounting for and disclosure of events that occur after the balance sheet date but before financial statements are available to be issued (subsequent events). More specifically, SFAS 165 sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition in the financial statements, identifies the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that should be made about events or transactions that occur after the balance sheet date. SFAS 165 provides largely the same guidance on subsequent events which previously existed only in auditing literature. The statement was adopted by the Company in its second quarter and did not have an impact on its Consolidated Financial Statements.

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162 (SFAS 168). SFAS 168 establishes the FASB Standards Accounting Codification (Codification) as the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities and rules and interpretive releases of the SEC as authoritative GAAP for SEC registrants. The Codification will supersede all the existing non-SEC accounting and reporting standards upon its effective date and subsequently, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. SFAS 168 also replaces FASB Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles, given that once in effect, the Codification will carry the same level of authority. SFAS 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009.

29 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.