Table of Contents





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

| |           | 
| | --------- | 
| |           | 
| | FORM 10-K | 
| |           | 

|                                                 |                                                                                      
|------------------------------------------------ | -------------------------------------------------------------------------------------
|(MARK ONE)                                      
|                                                 |                                                                                      
|o                                                | ANNUAL REPORT PURSUANT TO SECTION
 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                 |                                                                                      
|FOR THE
 FISCAL YEAR ENDED DECEMBER 31, 2008    
|                                                
|OR                                              
|                                                 |                                                                                      
|x                                                | TRANSITION REPORT UNDER SECTION 13
 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  
|                                                 |                                                                                      
|FOR THE
 TRANSITION PERIOD FROM ______TO _______
|COMMISSION
 FILE NUMBER: 0-50773                

| |  | 
| |  | 
| |  | 

|                                                
|------------------------------------------------
|Genesis Electronics Group, Inc.                 
|Formerly Pricester.com, Inc.                    
|(Name of registrant as specified in its charter)

|                                                               |                                     
|-------------------------------------------------------------- | ------------------------------------
|Nevada                                                         | 41-2137356                          
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

|                                                    |                
|--------------------------------------------------- | ---------------
|5555
 Hollywood Blvd, Suite 303, Hollywood, FL      | 33021          
|(Address of principal executive offices)            | (Zip Code)     
|                                                    |                
|REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: | (954)
 272-1200

SECURITIES REGISTERED UNDER SECTION 12(b) OF
THE ACT:

|                    |                                          
|------------------- | -----------------------------------------
|TITLE OF EACH CLASS | NAME OF EACH EXCHANGE ON WHICH REGISTERED
|NONE                | NOT APPLICABLE                           

SECURITIES REGISTERED UNDER SECTION 12(g) OF
THE ACT:

|                               |  | 
|------------------------------ |  | 
|COMMON STOCK, PAR VALUE $0.001
|(Title of class)              
|                               |  | 
|                               |  | 

|                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------
|Indicate
 by check mark if the registrant is a well-known seasoned issuer, as defined
 in Rule 405 of the Securities Act.     
|o Yes  
x No                                                                                                                  
|                                                                                                                              
|Indicate
 by check mark if the registrant is not required to file reports pursuant to
 Section 13 or Section 15(d) of the Act.
|o Yes  
x No                                                                                                                  

Indicate
by check mark whether the registrant (1) has 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
o

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. o

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company:

| |                                                                    |   |                            |  
| | ------------------------------------------------------------------ | - | -------------------------- | -
| | Large
 accelerated filer                                           | o | Accelerated
 filer         | o
| | Non-accelerated
 filer (Do not check if smaller reporting company) | o | Smaller
 reporting company | x

|                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------
|Indicate
 by check mark whether the registrant is a shell company (as defined in Rule
 12b-2 of the Exchange Act)
|Yes o   No x                                                                                                     

State
the aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked prices of such common equity, as of the
last business day of the registrants most recently completed second fiscal
quarter. $1,333,021 on June 30, 2008.

Indicated
the number of shares outstanding of each of the registrants classes of common
stock, as of the latest practicable date. 123,292,739 shares of common stock are
issued and outstanding as of April 1, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

List
hereunder the following documents if incorporated by reference and the Part of
the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). None.







TABLE OF CONTENTS

|            |                                                                                                               |  |         
|----------- | ------------------------------------------------------------------------------------------------------------- |  | --------
|            |                                                                                                               |  | Page No.
|            |                                                                                                               |  |         
|Part I      |                                                                                                               |  |         
|Item 1.     | Business                                                                                                      |  | 4       
|Item 1A.    | Risk Factors                                                                                                  |  | 17      
|Item 1B.    | Unresolved Staff Comments                                                                                     |  | 22      
|Item 2.     | Properties                                                                                                    |  | 22      
|Item 3.     | Legal Proceedings                                                                                             |  | 22      
|Item 4.     | Submission of Matters to a Vote of Security Holders                                                           |  | 22      
|Part II     |                                                                                                               |  |         
|Item 5.     | Market for Registrants Common Equity, Related Stockholder Matters
 and Issuer Purchases of Equity Securities |  | 22      
|Item 6.     | Selected Financial Data                                                                                       |  | 23      
|Item 7.     | Managements Discussion and Analysis of Financial Condition and
 Results of Operation                         |  | 23      
|Item 7A.    | Quantitative and Qualitative Disclosures About Market Risk                                                    |  | 28      
|Item 8.     | Financial Statements and Supplementary Data                                                                   |  | 28      
|Item 9.     | Changes In and Disagreements With Accountants on Accounting and
 Financial Disclosure                         |  | 28      
|Item 9A.(T) | Controls and Procedures                                                                                       |  | 28      
|Item 9B.    | Other Information                                                                                             |  | 30      
|Part III    |                                                                                                               |  |         
|Item 10.    | Directors, Executive Officers and Corporate Governance                                                        |  | 30      
|Item 11.    | Executive Compensation                                                                                        |  | 31      
|Item 12.    | Security Ownership of Certain Beneficial Owners and Management and
 Related Stockholder Matters               |  | 33      
|Item 13.    | Certain Relationships and Related Transactions, and Director
 Independence                                    |  | 34      
|Item 14.    | Principal Accountant Fees and Services                                                                        |  | 34      
|Part IV     |                                                                                                               |  |         
|Item 15.    | Exhibits, Financial Statement Schedules                                                                       |  | 35      

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION

Certain
statements in this annual report contain or may contain forward-looking
statements that are subject to known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These forward-looking
statements were based on various factors and were derived utilizing numerous
assumptions and other factors that could cause our actual results to differ
materially from those in the forward-looking statements. These factors include,
but are not limited to, our ability to raise sufficient capital to fund our
ongoing operations and satisfy our obligations as they become due, our ability
to implement our strategic initiatives, economic, political and market
conditions and fluctuations, government and industry regulation, interest rate
risk, U.S. and global competition, and other factors. Most of these factors are
difficult to predict accurately and are generally beyond our control. You
should consider the areas of risk described in connection with any
forward-looking statements that may be made herein. Readers are cautioned not
to place undue reliance on these forward-looking statements and readers should
carefully review this annual report in its entirety, including the risks
described in Part I. Item 1A. Risk Factors. Except for our ongoing obligations
to disclose material information under the Federal securities laws, we
undertake no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the occurrence of
unanticipated events. These forward-looking statements speak only as of the
date of this annual report, and you should not rely on these statements without
also considering the risks and uncertainties associated with these statements
and our business.

OTHER PERTINENT INFORMATION

When
used in this annual report, the terms Genesis, Pricester, we, our, and
us refers to Genesis Electronics Group, Inc.

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PART I

|        |          
|------- | ---------
|ITEM 1. | BUSINESS.

Overview

Genesis
Electronics Group, Inc. formerly Pricester.com, Inc. was originally
incorporated in the State of Nevada on March 19, 1998 under the name Business
Advantage No. 22, Inc. Due to non-filing of annual reports, the corporate
charter of Business Advantage No. 22, Inc. was revoked. In June 2004, Business
Advantage No. 22, Inc. was reinstated. On June 4, 2004, Business Advantage No.
22, Inc. entered into an Agreement and Plan of Reorganization with
Pricester.com, Inc., a Florida Corporation to merge Pricester Florida into
Business Advantage No. 22, Inc. On June 4, 2004, in anticipation of the merger,
the name of Business Advantage No. 22, Inc. was changed to Pricester.com, Inc.

On February 9,
2005, pursuant to Articles of Merger, shareholders of Pricester Florida
received 21,262,250 common shares of Business Advantage No. 22, Inc. on a basis
of a one for one exchange for their common shares. Pricester.com, Inc.,
formerly Business Advantage No. 22, Inc., was the surviving corporation. The
articles of merger were filed with the states of Nevada and Florida. The number
of common shares held by Pricester Nevada before the merger was 1,044,620.

Pricester
Nevada was the acquirer for legal purposes and Pricester Florida was the
acquirer for accounting purposes. The transaction was accounted for as a
reverse acquisition.

Prior to the
merger with Pricester Florida on February 9, 2005, Pricester Nevada had no
significant operations and had no control over the operations of Pricester
Florida.

In November
2008, the Company obtained through a vote of majority of its shareholders the
approval to change the Companys name to Genesis Electronics Group, Inc.
Pursuant to Articles of Amendment filed on February 24, 2009, the name of the
registrant was changed to Genesis Electronics Group, Inc.

The registrant
was in a development stage company through December 31, 2005 and has a lack of
material revenues. Our products and services have been active since January
2004 and have only generated revenue of $111,518 for the year ended December
31, 2008 and $179,176 for the year ended December 31, 2007. We have yet to
generate substantial revenue because our primary marketing objective has been
to first build a large gathering of web based vendors, traditional small
businesses, and established national retailers, to offer a diverse and
extensive variety of goods and services.

As we acquire
new relationships with retailers and attract more small businesses to the site,
more and more products and services as well as vendor websites will be listed
on our site. Once these product offerings are in our system and additional
vendors are in place ready to open their doors to the public, we will follow up
with the implementation of marketing strategies that include national
television, radio and Internet marketing designed to bring the buyers and the
sellers together.

We operate
www.Pricester.com, which is an e-commerce website that enables any business of
any size or individual to establish a fully functional online retail presence
with no upfront costs or investment or in-house technical skill. Our website,
www.Pricester.com is an Internet marketplace which allows vendors to host their
website with product and service listings and promote them to a global
community 24 hours a day through our network. Additionally, Pricester.com
allows consumers to search for products and services that are listed on our
network and locate vendors, purchase items, post bids or trade items. We currently
have over 27,442 members of which 10,810 have setup websites.

We have
developed a technological framework that would overcome prohibitive cost
factors and exponentially increase the ease with which small business owners
could effectively enter the e-commerce community and credibly compete for
customers online.

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We created
proprietary applications that permit an economy for the construction of
professionally designed, customized, full-functioned e-commerce or
informational websites and for hosting large numbers of such websites. Our
applications are marketed to the small business sector, where the cost of
website design and development has been a barrier to achieving an Internet
presence. To complement our low-cost website design product, we also launched
an Internet shopping portal, www.pricester.com, a virtual shopping mall
providing additional exposure for its website clients.

As consumer
access to the Internet has become more widespread and continues to grow, a
website has emerged as an essential tool for small businesses. Small companies
and professional practices alike understand the value of a website for
establishing credibility and competing for clients and sales.

Our Products & Services

The registrant
provides services that allow any small business to have an Internet presence
with the website features that consumers want and expect.

Virtually all
major retailers and service providers have company websites. In contrast, the
owner-operated businessescollectively, the largest component of the entire
economystill only have a minor presence on the Internet. There are 23 million
small businesses in the U.S., including businesses with less than 5 employees
and those filing 1040 Schedule C returns (Source: U.S. Department of Commerce)
and millions still without a web presence through which they can sell and
promote their products and services. According to a research paper prepared
under contract for the Small Business Administration (Strategies for Small Business Success,
2002), only 35% of small firms had a website and The smallest firms (with
fewer than 10 employees) benefit the most from being online

As the cost of
computers has dropped significantly, the number of consumers using computers
and the Internet on a regular basis has increased dramatically. Today,
according to a Nielson/NetRatings report, over 75% of consumers have Internet
access and increasingly they are turning to this resource when searching for or
evaluating products and services. Concurrently, the demand and logical need for
small businesses to have a website is greater than ever.

The market for
affordable business websites is large and still expanding. The registrants
services are specifically geared to address this demand from the small business
sector. Additional funding is required to expand marketing efforts in order to
reach and further penetrate the market.

Our website
design technology permits the custom creation of websites by professional
designers at low cost. The savings are passed along to the
business owner, resulting in perhaps the lowest net cost custom website design
package offering available on the market today.

Competitors
offering similar services are operating within a far more labor intensive
environment and cannot compete with the registrants pricing strategy.

Clients
receive a customized multi-page website designed for free and agree to pay just
a competitive Internet hosting fee and a nominal set-up charge. Small
businesses find the deal irresistible, recognizing that theyve found a true low-cost
alternative to the traditionally cost-prohibitive barriers to developing and
hosting a website. The registrant prominently displays a Lowest Price
Guarantee seal on its website; to date it has never been challenged.

Over and above
the website design value that the registrant offers, every clients website is
also included in our online shopping portaladded exposure that no other
competitor offers.

The registrant
provides website design services, primarily geared to the needs and budgets of
small businesses.

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Closely
related services provided by the registrant include:

-   website
hosting

-   domain
registration

-   Internet
search engine and directory submission

-   Internet
marketing services (e.g., webpage optimization, pay-per- click campaign
development, etc.)

-   website
maintenance

-   design-related
services such as logo creation

-   integrated
shopping cart and online catalog for e-commerce websites

-   advanced
shopping cart and design options for highly customized websites

In addition to
these website design and intertwined services, the registrants online shopping
portal provides each client with additional exposure for their website and
products, as well as other online e-commerce opportunities.

Key features
of the registrants shopping portal include: free membership for consumers and
vendors, no listing fees and direct consumer access to vendors websites. The
shopping portal already has over 28,000 registered members and over 11,000
websites. The website receives ~100,000 visits and over 1,200,000 hits each
month from individuals worldwide.

Specialized
Products & Programs

-   Themed,
Corporate Sponsored Websites: A series of lifestyle websites, centered on
popular themes such as family, relationships, sports and more. These websites
include content provided by personalities with existing high-visibility media
exposure, as well as feature editorial supplied by corporate participants on a
fee-paid basis.

-   Industry
Specific Distribution Programs: Customized small-business website distribution
programs, prepared in conjunction with and to enhance the marketing efforts of
synergistic business groups, such as: banks, merchant service suppliers,
chambers of commerce and NFP organizations.

-   International
Shopping Portal: The registrant has launched a shopping portal that is
international in scope, currently covering 24 countries on six continents. The
website, www.copiaworld.com, features offerings from thousands of retail
stores, financial institutions and more, in a convenient to use, categorized
format.

At this time,
the registrant creates the majority of its sales by generating small business
leads using outbound automated telemarketing, and then following up by
telephone. Almost all sales are completely consummated over the phone.

Concurrently,
the registrant is endeavoring to develop strategic partnerships with other
companies and organizations that have an interest in the same small business
target market. Such partners are, in effect, volume distribution outlets for
our website services, complementing the direct marketing efforts to upstream
the growth process. The registrant delivers a product that is appealing and
important to small business owners. Therefore, logical targets for strategic
partnerships are large corporations that actively and competitively seek to
acquire service and retain small businesses as their customers; this is the
necessary synergy in the relationship. The registrants website service is
positioned as a valuable and timely addition to the partners existing product
or service, providing more market differentiation and a competitive edge.

Key target
groups for strategic partners include: mid to large banks, merchant service
providers, communications companies, computer manufacturers, appropriately
focused retail chains, certain business organizations as well as the
educational sector. Our website packages can be offered in tandem with and by
the strategic partner to augment and facilitate their existing sales/enrollment
process.

Our revenue
model is based upon selling our Custom Designed Websites and collecting
transaction and hosting fees. We have yet to generate substantial revenues in
transaction fees because our primary marketing objective has been to first
build a large gathering of web-based vendors in order to attract the consumer.

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Although we
average over 90,000-100,000 visitors a month and over 3,000,000 page hits per
month primarily from the United States, this is an extremely small amount
compared to our competitors. According to www.statbrain.com, Yahoo receives an
average of 2,852,912,100 visitors per month and Ebay receives an average of
2,009,982,330 visitors per month. A visitor coming to a web site may access one
or many web pages on a site, creating multiple page views. A hit means a single
request from a visitor for a single item from a web server. As a result, in
order for a visitor to display a page that contains 3 graphics, 4 hits would
occur at the server, 1 for the HTML page and one for each of the 3 graphics.
One visitor to our site can create many hits per visit to the site.
Additionally, a majority of our traffic is untargeted due to the use of general
search words with only approximately 200 visitors per day targeted to our
marketing materials. Further, up to 40% of our targeted traffic is foreign
visitors unable to use our system as the current system only supports United
States currency.

Members must
comply with our sites terms and conditions or their listings can be revoked
and repeated offenders could be banned from the site indefinitely.

For the
retailers, service businesses and individual collectors and hobbyists in the
United States without a web presence through which they can sell their products
or services online, we offer an affordable, easily implemented solution.

Setting up a
retail website involves many complex tasks that have to be bought from outside
vendors unless the retailer possessed the required array of diverse technical
skills or software. For most small businesses and individuals, as well as many
medium sized companies, programming tasks and the costs associated with
creating a retail website have been overwhelming and easily outweighed any
potential additional business that could be realized online or they had to sell
their merchandise through fee-based sites like Ebay and Yahoo.

The following
is a summary of the products and services currently offered or in development.
A further discussion of each product and service follows.

|                                    |  |                     |  |                                         |  |          | 
|----------------------------------- |  | ------------------- |  | --------------------------------------- |  | -------- | 
|Products
 and Services              |  | Status              |  | Fees                                    |  | Launched | 
|Pricester
 (do it yourself) Website |  | On Hold             |  | $0                                      |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Store                               |  | Active              |  | $0 listing
 fee - 1-4% transaction fee* |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Barter                              |  | Active              |  | $0 listing
 fee - 1-4% transaction fee* |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Auction                             |  | Active              |  | $0 listing
 fee - 1-4% transaction fee* |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Wanted                              |  | Active              |  | $0                                      |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Request for
 Quote                  |  | On Hold             |  | $0 listing
 fee - 1-4% transaction fee* |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Zip code
 search                    |  | On Hold             |  | $0                                      |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Pricester Custom
 Designed Websites |  | Active              |  | $29.95 setup
 - $2,500.00               |  | Feb 2006 | 
|                                    |  |                     |  |                                         |  |          | 
|Pricester
 Hosting                  |  | Active              |  | $8.95-$49.95                            |  | Feb 2006 | 
|                                    |  |                     |  |                                         |  |          | 
|Pricester
 Travel                   |  | On Hold             |  | Fees charged
 by World Choice Travel    |  |         | 
|                                    |  |                     |  |                                         |  |          | 
|Affiliates
 Program                 |  | Active              |  | $0                                      |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Pricester
 Tools Payment System     |  | Active              |  | $0                                      |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Pricester
 Search Engine Wizard     |  | Active              |  | $0                                      |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Pricester
 Community                |  | On Hold             |  | $0                                      |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Lead
 Generation Program            |  | In
 development     |  | Not yet
 determined                     |  | Unknown  | 
|                                    |  |                     |  |                                         |  |          | 
|Bold
 Listings                      |  | Active              |  | $.50 per
 item                          |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Highlight
 Option                   |  | Active              |  | $1.00 per
 item                         |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Special Icon                        |  | Active              |  | $.50 per
 item                          |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Featured
 Listing                   |  | Active              |  | $1.00 per
 item                         |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Premiere
 Listing                   |  | Inactive            |  | $5.00 per
 item                         |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Category
 Banners                   |  | Active              |  | $50.00 per
 month                       |  | Jan 2004 | 
|                                    |  |                     |  |                                         |  |          | 
|Specialty
 Stores                   |  | future
 development |  | Not yet
 determined                     |  | Unknown  | 

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* Note:
Transaction fees are currently suspended until our shopping mall reaches
critical mass at which time we will reinstate the following 1-4% sliding scale
which will operate as follows:

-   Transactions
ranging from $.01 through $400 are charged at 4% of the transaction

-   Transactions
ranging from $400.01 through $1,000 are charged at 3.25% of the transaction

-   Transactions
ranging from $1000.01 through $5,000 are charged at 3% of the transaction

-   Transactions
ranging from $5,000.01 through $50,000 are charged at 1.5% of the transaction

-   Transactions
ranging from $50,000.01 through $1,000,000 are charged at 1% of the transaction

We will
generate revenues through the following sources:

-   Store
Transaction Fees. A sliding scale transaction fee on the dollar amount of the
successfully completed auction of an item ranges from a low of 1% for items
over $1,000 to 4% for items less than $25 in value.

-   Store
Listing Fee. There are no listing fees for items listed in the Pricester Store
system.

-   Auction
Transaction Fees. A sliding scale transaction fee on the dollar amount of the
successfully completed auction of an item ranges from a low of 1% for items
over $1,000 to 4% for items less than $25 in value.

-   Auction
Listing Fee. Currently there are no listing fees for auction items.

-   Barter
Transaction Fees. A sliding scale transaction fee on the dollar amount of the
value specified for a successfully completed barter of an item that ranges from
a low of 1% for items over $1,000 to 4% for items less than $10 in value.

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-   Barter
Listing Fee. Currently there are no listing fees for barter items.

-   Bold
Listings. An added feature that makes the vendors listing more attractive to
the eye, which will attract more consumers to the listing(s). We will charge
$.50 per auction item or $.50 per month per listed store item.

-   Highlight
Option. An item is shown with a special background color of consumers choice
on the listing pages. We will charge $1.00 per auction item or $1.00 per month
per listed store item.

-   Special
Icon. A choice of icon will get listed alongside the auction title. We will
charge $.50 per auction item.

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-   Featured
Listing. The listing is displayed above all other listings at the top of their
respective categories, and any matching search results. We will charge $1.00
per auction item or $1.00 per month per listed store item.

-   Premiere
Listing. When displayed in listings, a premiere item displays the associated
premiere icon next to the item. Most importantly, premiere listing will also be
displayed on the main auction entry page at some point, regardless of which
category or subcategory. We will charge $5.00 per auction item or $5.00 per
month per listed store item.

Currently
Inactive

-   Category
Banners. These banners can be purchased for each category item. We will
initially charge $50.00 per month per category. We will charge more per month
per category and receive additional revenue from a banner rotation service.

-   Specialty
Stores. We will also introduce specialty stores which will be catered to
industries, allowing certain built in features to be included with the website.

-   Pricester
Custom Designed Websites. We will design and install fully functional
informational or e-commerce enabled websites for fees ranging from $29.95 to
$2,500.00. Hosting fees ranging from $8.95 to $49.95 apply.

The amount of
revenue from the products and services cannot be quantified any further than 1%
since each transaction fee will related directly to the cost of the item sold,
bartered, etc.

Note:
Transaction fees are currently suspended till our shopping mall reaches
critical mass at which time we will reinstate the 1-4% sliding scale fee
structure.

*PRICESTER
(DO IT YOURSELF) WEBSITE: Our do it yourself website allows any business or
aspiring business person, even a hobbyist with a handful of items to sell, to
set up a customized, fully functional retail outlet. The Pricester (do it
yourself) website is a content driven web site with a built in shopping cart
(e-commerce) that eliminates the need for a web-designer and the associated
costs.

*This service
is temporarily on hold while we focus on the Pricester Custom Designed Websites
marketing strategies.

Through our
website, all these tasks can be accomplished by anyone with a personal
computer, an Internet connection and something to sell online.

An entire
functioning retail site can be set up on www.pricester.com using the sites
array of menu driven, user-friendly website construction tools. We provide the
new e-tailer with everything an e-commerce site needs to execute and process
orders, including:

-   integration
of a payment system,

-   customer
order tracking and

-   shipping
calculators.

Our site
calculates shipping costs via an array of alternative shipping methods and
carriers. All the e-tailer has to do is fulfill the order by shipping the goods
to the customer.

The Pricester
Store enables the e-tailer to manage:

-   the
progress of sales,

-   payment
status,

-   shipping
status,

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-   confirmations and
cancellations and

-   includes email
notification to their customers.

STORE: Store items are listed in the Pricester.com
network as new or used with a fixed price attached.

BARTER: Single or multiple items, products or services
are traded or bartered for products or services. When a member lists a barter
transaction they are asked to list an approximate value for the listed item. It
is this value we use to charge the 1-4% transaction fee when a trader has been
located.

AUCTION: We conduct real-time online auctions where
sellers list their products or services. Consumers then bid competitively on
the item of interest.

The highest bidder at the close of the auction is
determined the winner and must pay the seller the price as indicated in the
winning bid.

We utilize technology that enables both seller and
bidder to actively view the auction in progress seeing the bid time remaining
as it changes without refreshing your screen.

WANTED: Item Watch is a feature that allows consumers
to inquire about a specific item, product or service without making a purchase
commitment. We actively search our databases periodically to find new listed
items. When a match is found an email alert is then sent to the consumer along
with a link to the seller of the product.

REQUEST FOR QUOTE: We recognize the need for
requesting estimates on products or services. This tool allows both consumers
and businesses to request quotes without any commitment to the other party.

*REGION OR ZIP CODE SEARCH: A search is conducted to
find local vendors by region or zip code area who provide a specific item,
product or service. The results will list the name and location(s) of
Pricester.com sellers who offer the item, product or service.

*Note: REGION OR ZIP CODE SEARCH is currently
suspended till our shopping mall reaches critical mass at which time we will
have enough data to support the service.

PRICESTER CUSTOM DESIGNED WEBSITES: Pricester Custom
Designed Websites are informational and/or e-commerce enabled websites or personal
web stores that are designed and installed for a one-time setup fee ranging
from $29.95 to $2,500.00. Hosting fees ranging from $8.95 to $49.95 apply. Fees
related to the maintenance and/or hosting of the website will need to be paid
to us.

Our technical staffers design and install Pricester
Customized Websites that includes formatting the text for pages such as but not
limited to:

-   Formatting the
text for pages such as: Home Page, About Us Page,

-   Contact Page and
a Privacy Statement

-   Setup of your
payment and shipping details page

-   Conversion of
your company logo and slogan/banner into a digital image format

-   Integration of
pictures and details of your first 10 products and services.

-   Integration of a
website payment system (Pay Pal) enabling you to accept all major credit cards.

-   Configuration of
your website manager, which manages your orders and items.

-   Registration of a
personalized domain name that will allow for promotion of personalized domain name
easily to friends, relatives and customers. Example: www.yourname.com

The website will have the ability to:

-   auction

-   buy

-   sell

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-   post items

-   barter and trade
with no listing or programming fees.

We developed this program to respond to the needs of
people who lack experience in developing websites, computer use or time.

PRICESTER TRAVEL: This service is currently on hold
while we evaluate the adequate 3rd party provider to provide the
services required by Pricester members.

AFFILIATES PROGRAM: Our Affiliates Program pays 10% to
the affiliate on all the fees we collect from new members transaction fees.
When a member refers another member to Pricester.com, they become the affiliate
of the new member.

If the new member incurs transaction fees on
Pricester.com and completes a payment, 10% of the collected payment will be
credited to the affiliates account.

This transaction takes place as follows:

-   Member A refers
member B using in house affiliate program

-   Member B incurs
fees for Pricester.com services

-   Member B makes
payment to their account and at that moment 10% of the fee collected by us is
credited to Member As account on Pricester.com. Once the member has $25 or
more credit in their account, they can request a payment from us via check by
mail.

PRICESTER TOOLS PAYMENT SYSTEM: Pricester Stores are
capable of accepting credit cards and checks immediately after setting up their
Pricester Store. All Stores have the option of using PayPal for their e-commerce
transactions. We have an oral agreement with PayPal to provide these services
to Pricester Stores, if desired. PayPal takes only minutes to setup with a bank
account to receive payments. PayPal is a registered payment company. PayPal
fees are billed separately.

PayPal collects the payments from the consumers and
deposits them into the vendors bank account. Members are required to have a
PayPal account to utilize the Pricester Nevada website e-commerce feature. When
a customer exits the Pricester.com shopping cart, the total value and vendor
PayPal ID is passed to PayPal for payment processing. PayPal charges the vendor
payment transaction fees that are automatically deducted from the amount
collect by PayPal. Once the transaction is confirmed by the vendor, a
transaction fee is charged to the members account. Routine billing processes
are performed on the www.Pricester.com site and the members are billed for the
transaction and optional listing fees they have incurred.

The registrant now allows the integration of
CardService International (merchant) payment processing in the Pricester tools
payment system. We have an oral agreement with CardService International to
provide these services to Pricester Stores via an API payment integration.
CardService International requires a merchant approval process conducted
directly between merchant and vendor. All payments are collected by merchant
and the funds are disbursed to vendor minus applicable transaction and monthly
fees.

PRICESTER.COM SEARCH ENGINE: An e-commerce web portal
connecting consumers, retailers and wholesalers to a proprietary network.
Pricester.com provides complete integration of buyer and seller, bringing the
consumer/business directly to the sellers site.

WIZARD: Pricester Wizard is a guided tour that walks
members through the process of:

-   creating
websites,

-   listing items,
and

-   managing their
Pricester website

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*PRICESTER COMMUNITY: An online forum dedicated to
providing answers to questions about:

-   sales,

-   purchases,

-   shipping tips and

-   experiences
between current members.

*Note: PRICESTER COMMUNITY is currently on hold due to
a shortage of members using the service. All help and support request are
handled directly via email, fax or telephone.

LEAD GENERATION PROGRAM. Currently in development, the
lead generation feature or program is based on leads provided through the
Pricester network. These leads are defined by the category they are listed
under. The member is prompted with an option to agree on a predetermined price
per lead that they will be charged when a referral has been collected and
delivered to their e-mail address. The referral is considered to be lead based
when a member receives an authorized discount or bonus by e-mail that was provided
by the host service provider. To indicate the presence of the lead generation
feature, the template will include a button, banner or other activation image
on the homepage of the vendors site or through a search query or directory
browse, which identifies the presence of a discount upon activation of the
image, for example, the words Click here to receive bonus/discount. When a
customer clicks on this image they are given the details of the bonus/discount
and an online form to fill out. They can then sign up as a member of the system
to receive benefit. The customer enters their contract information such as
their address, phone and e-mail on the form. Once the member confirms the
authenticity of this information, an email is sent to the customer with the
bonus/discount details attached. An email is also sent to the vendor/member
with the information about the lead and the fee charged to their account.
Subsequently, the host network applies a charge to the vendor/member account
equal to the amount of referral fee for the lead. While this feature was
created to satisfy a need in the online service industry, it is not limited to
service providers and can used for offering discounts and promotions for
product related items.

SERVICE INTERRUPTIONS AND DELAYS. Our service
interruptions and delays have been limited to less than 1% downtime. In order
to decrease the down time, we added redundancy equipment to our network that
provides alternative equipment to be used in the event of hardware failure.
This equipment includes multiple server, raid drives (multiple hard drives) and
rotational backups of our system and services.

COSTS OF OPERATION. In order to provide the above
services, we currently employ personnel for management, customer support,
technical support, Internet marketing and web design and contract for sales
personnel. We also lease the appropriate hardware and support the continued
development of our software that runs our web based services. To provide all of
the services listed above, our monthly expenses are approximately $18,400. The
breakdown of the $18,400 is as follows:

|                                        |  |   |        | 
|--------------------------------------- |  | - | ------ | 
|Payroll &
 Taxes                        |  | $ | 12,020 | 
|Rent                                    |  |   | 1,580  | 
|Electric                                |  |   | 300    | 
|Telecommunications
 .(Phones & Servers) |  |   | 2,000  | 
|Accounting
 services                    |  |   | 1,500  | 
|Insurance                               |  |   | 500    | 
|Legal                                   |  |   | 500    | 
|                                        |  | $ | 18,400 | 

We intend to give 10% of any net profits to charity. A
list of charities has not yet been compiled. This donation program will
commence at a yet to be determined time based on profitability.

OTHER PROGRAMS

NATIONAL
SCHOOL PROGRAM: A four hour course that educates and demonstrates the power of
e-commerce. The students will learn how to conduct business using the Internet.
It teaches how to convert a hobby into a business and sell unwanted items. At
the end of the course each student will have constructed a fully functional
website that is e-commerce enabled, operational and ready to do business.

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NON-PROFIT/CHARITABLE:
Gives churches, synagogues and fundraisers an opportunity to generate income
for their organization by selling and auctioning donated items from their
members and communities online.

REVENUE STREAMS

Although most of our products and services have been
active since January 2004, we have not generated significant revenues. This is
directly related to the number of vendors (currently 11,643) listing over
199,516 items. During 2006, we commenced marketing our Website design services
and hosting plans. As the number of vendors increases and marketing commences,
the number of visitors to our website should increase and our revenue stream
should increase significantly with collected fees and monthly hosting fees.

To date, we have focused on bringing vendors (members)
to populate the site in order that consumers can visit a populated community.
Once the site has been populated to a sufficient degree, we will introduce a
marketing campaign to bring the buyer and seller together.

We intend to track revenues by category if our
revenues increase. Our revenues have been generated by approximately 270
Pricester Website sales, miscellaneous service and transaction fees of $111,518
for the year ended December 31, 2008 and by 270 Pricester Website sales,
miscellaneous service and transaction fees of $179,176 for the year ended
December 31, 2007. To date, no marketing funds have been expensed to bring
consumers to the site.

In order to successfully expand our number of users of
our electronic commerce services, we must employ significant monetary resources
to the consistent development of applications and innovative tools to assist
the buyers and sellers interaction.

Intellectual Property and
Proprietary Rights

We currently utilize proprietary software to support
our Internet platform and proprietary processes and procedures related to
customer acquisitions. We protect our intellectual property through existing
laws and regulations and by contractual restrictions. We attempt to protect our
technology and trade secrets through the use of:

-   confidentiality
and non-disclosure agreements,

-   trademarks,

-   patents, and

-   by other security
measures.

Trademarks have been filed under Pricester.com and
Pricester Store e-commerce for all...,
garagesalesanywhere.com. We are preparing several other variations to be
trademarked.

On December 8, 2003, a provisional patent Application
No: 60/527/873 under the names of Bernard Gutman and Joe Puentes, officers and
directors of Pricester Nevada was filed with the United States Patent Office
covering our Automated Templated Based e-commerce system including the Lead
Generation Program which is in development. A provisional patent allows filing
without a formal patent claim, oath or declaration or any information
disclosure statement, provides the means to establish an early effective filing
date and allows the term Patent Pending to be applied. A provisional patent
allows an applicant up to a year in which to file the actual patent. We filed a
US Patent Application - Serial No: 10/988,747 on November 15, 2004. No update
on the status of the patent application has been made available by the US
patent office as of the date of this annual report. Messrs. Gutman and Puentes
have entered into a written agreement assigning Pricester.com, Inc. any and all
rights of the provisional patent for no consideration.

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Pricester domain names have been secured under the
variations:

-   pricester.com,
..net, .us, .ca (Canada).

Also secured:

-   your free
webstore.com,

-   pricebarter.com
and

-   pristore.com.

Marketing Strategies

We intend to establish a national market presence
using the following approaches in order to gain brand awareness:

Conducting public relations campaign using

-   television

-   radio

-   press releases

-   Internet marketing

-   newspaper and
magazines

We intend to target college students and non-profit
groups.

Third Party Providers

CI Host.com, a web hosting company provides us the
hardware and software to run our portal. They also provide ongoing phone
support and hardware maintenance and replacement in the event of failure. We
have orally renewed a 12 month lease starting as of April 8, 2005. This lease
automatically renews every year. Our monthly lease is $659.00. CI Hosts Terms
and Conditions of Use provide for discontinuation of services or denial of use
by CI Host at any time if we were to engage in unacceptable uses or cause harm
to the server or a customer.

On July 12, 2004, we entered into a written agreement
with Professional Microsystems Incorporated D/B/A as Xcent for the development
of our web based applications. We orally agreed that any work order we submit,
based on our needs to develop and improve our current portal, is provided at
the rate of $90 per man hour. Currently, we owe Xcent for ongoing work orders a
balance of $4,816. We may terminate any open work order by written notice to
Xcent. Xcent will be reimbursed for costs expended to date and other costs
resulting from the termination. We may also terminate the agreement for default
if Xcent becomes involved in bankruptcy or other legal proceedings that in our
opinion interferes with the performance of services or if Xcent fails to
perform under the agreement and does not cure within ten days after receipt of
written notice from the registrant.

Insurance

We have in force workmans comp and general liability
insurance. We currently have directors and officers insurance for which we pay
approximately $1,400.

Competition

We compete with many other providers of online web
hosting, Internet marketplace, travel service and electronic commerce services.
As we expand the scope of our Internet offerings, we will compete directly with
a greater number of Internet sites, media companies, and companies providing
business services across a wide range of different online services, including:

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-   companies
offering communications, Web search, commercial search, information, community
and entertainment services and Internet access either on a stand alone basis or
integrated into other products and media properties;

-   vertical
markets where competitors may have advantages in expertise, brand recognition,
available financial and other resources, and other factors;

-   online
employment recruiting companies; and

-   online
merchant hosting services.

In order to compete effectively, we may need to expend
significant internal engineering resources or acquire other technologies and
companies to provide or enhance our capabilities.

Companies such as Yahoo, Amazon and Ebay may have a
competitive advantage because they have greater access to content, maintain
billing relationships with more customers and have access to established
distribution networks.

There are various competitors who allow vendors to
sell their items online including Yahoo, Amazon and Ebay. Although most charge
ongoing fees including monthly fees and transaction fees, they have a
established customer base and instant market recognition. These competitors
have greater access to content and maintain billing relationships with more
customers and have access to established distribution networks. We have not yet
generated any material revenue from our business model compared to significant
revenue generated by these competitors.

If new competitors seize our product ideas and
e-commerce business model and produced competing web sites with similar product
matrixes, our ability to generate revenue would be negatively affected.
Additionally, these new competitors could be better capitalized and capture a
larger market share of our intended market.

We face competition from traditional retailers and
wholesalers. If consumers choose not to purchase their products through the
Internet, our ability to generate revenues will be negatively affected.

Government Regulation

We are subject to general business regulations and
laws, as well as regulations and laws directly applicable to the Internet. As
we continue to expand the scope of our properties and service offerings, the
application of existing laws and regulations to us relating to issues such as
user privacy, defamation, pricing, advertising, taxation, gambling,
sweepstakes, promotions, financial market regulation, consumer protection,
content regulation, quality of products and services, and intellectual property
ownership and infringement can be unclear. In addition, we will also be subject
to new laws and regulations directly applicable to our activities.

Further, the application of existing laws to our
operations regulating or requiring licenses for certain businesses of our vendors
including, for example, distribution of pharmaceuticals, alcohol, tobacco or
firearms, as well as insurance and securities brokerage and legal services, can
be unclear. Any existing or new legislation applicable to us could expose us to
substantial liability, including significant expenses necessary to comply with
such laws and regulations, and dampen the growth in use of the Web.

Several federal laws, including the following, could
have an impact on our business. The Digital Millennium Copyright Act is
intended, in part, to limit the liability of eligible online service providers
for listing or linking to third-party Websites that include materials that
infringe copyrights or other rights of others. The Childrens Online Protection
Act and the Childrens Online Privacy Protection Act are intended to restrict
the distribution of certain materials deemed harmful to children and impose
additional restrictions on the ability of online services to collect user
information from minors. In addition, the Protection of Children From Sexual
Predators Act of 1998 requires online service providers to report evidence of
violations of federal child pornography laws under certain circumstances. Such
legislation may impose significant additional costs on our business or subject
us to additional liabilities.

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We post our privacy policies and practices concerning
the use and disclosure of user data. Any failure by us to comply with our
posted privacy policies, the consent order, FTC requirements or other
privacy-related laws and regulations could result in proceedings by the FTC or
others which could potentially have an adverse effect on our business, results
of operations and financial condition. In this regard, there are a large number
of legislative proposals before the United States Congress and various state
legislative bodies regarding privacy issues related to our business. It is not
possible to predict whether or when such legislation may be adopted, and
certain proposals, if adopted, could materially and adversely affect our
business through a decrease in user registrations and revenues. This could be
caused by, among other possible provisions, the required use of disclaimers or
other requirements before users can utilize our services.

Due to the nature of the Web, it is possible that the
governments of other states and foreign countries might attempt to regulate Web
transmissions or prosecute us for violations of their laws. We might
unintentionally violate such laws, such laws may be modified and new laws may be
enacted in the future. Any such developments (or developments stemming from
enactment or modification of other laws) could increase the costs of regulatory
compliance for us or force us to change our business practices.

Employees

We currently have four full-time employees. As
operations increase and revenues allow, we will have to employ an undetermined
number of designers and programmers in addition to obtaining additional sales
persons on an independent contractor, commission only basis. We enjoy good employee
relations. None of our employees are members of any labor union and we are not
a party to any collective bargaining agreement.

|         |              
|-------- | -------------
|ITEM 1A. | RISK FACTORS.

Readers should carefully consider the following risk
factors and all other information contained in this Annual Report. Investing in
our common stock involves a high degree of risk. Any of the following risks
could adversely affect our business, financial condition and results of
operations and could result in a complete loss of your investment. No
assurances can be given that the risks and uncertainties described below are
the only risks and uncertainties that we face.

Risks Related To Our Business

OUR WEAK FINANCIAL CONDITION HAS RAISED, AND WILL
LIKELY CONTINUE TO RAISE, SUBSTANTIAL DOUBT REGARDING OUR ABILITY TO CONTINUE
AS A GOING CONCERN. WE HAVE EXPERIENCED HISTORICAL LOSSES. WE MAY HAVE TO
CEASE OPERATIONS IF WE DO NOT GENERATE MEANINGFUL REVENUE AND ACHIEVE
PROFITABILITY AND INVESTORS MAY LOSE THEIR INVESTMENT.

We have incurred substantial operating and net losses,
as well as negative operating cash flows, since our inception. For the fiscal
years ended December 31, 2008 and 2007, we experienced net losses of
$(3,076,697) and $(1,467,212), respectively. At December 31, 2008, we had an accumulated
deficit of $(7,513,897). Our operating results for future periods will include
significant expenses, including product development expenses, sales and
marketing costs, programming and administrative expenses, for which we may not
have offsetting revenues or available capital. As a result, we may never
generate meaningful revenue and/or achieve profitability in the future.

Our current working capital deficit at December 31,
2008, among other factors, resulted in our independent certified public accountants
modifying their audit report on our consolidated financial statements for the
fiscal years ended December 31, 2008 and 2007 to express substantial doubt as
to our ability to continue as a going concern. We remain in need of substantial
additional investment capital to fund our longer-term operating needs,
including the servicing of our remaining debt obligations and the conducting of
those marketing activities we believe necessary to achieve meaningful sales
growth.

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OUR
BUSINESS IS CAPITAL INTENSIVE AND ADDITIONAL FINANCING MAY NOT BE AVAILABLE, AS
SUCH, ESPECIALLY IN LIGHT OF OUR HISTORICAL LOSSES, WE MAY HAVE TO CEASE
OPERATIONS AND INVESTORS MAY LOSE THEIR INVESTMENT.

Our operations are capital intensive and our growth
and ongoing operations will consume a substantial portion of our available
working capital. We have engaged in numerous financing activities over the past
few years but have been unable to utilize the funds raised to achieve positive
financial results.

Furthermore, we will require additional capital in
order to fund our operations and research projects, and we do not have any
commitments for additional financing. Additional funding, if required, may not
be available, or if available, may not be available upon favorable terms.
Insufficient funds will prevent, or delay, us from implementing our business
strategy. Due to our small revenue base and low level of working capital, we
have been unable to aggressively pursue our product development strategy to
date. We will require significant additional financing and/or a strategic
alliance with a well-funded development partner to undertake our business plan.
Failure to receive additional funding or enter into a strategic alliance could
limit our growth, limit our likelihood of profitability and worsen our
financial condition and may correspondingly decrease the market price of our
common stock, or may cause us to cease operations all together.

OUR
CONTINUED SALE OF EQUITY SECURITIES WILL DILUTE EXISTING SHAREHOLDERS AND MAY
DECREASE THE MARKET PRICE FOR OUR COMMON STOCK.

Given our limited revenues and prospect for revenues
for the 2008 fiscal year, we will require additional financing which will
require the issuance of additional equity securities. We expect to continue our
efforts to acquire further financing in the future to fund additional marketing
efforts, product development expenses, programming and administrative expenses,
which will result in future dilution to existing outstanding shareholders.

WE
DEPEND ON THE CONTINUED SERVICES OF OUR EXECUTIVE OFFICERS AND THE LOSS OF A
KEY EXECUTIVE COULD SEVERELY IMPACT OUR OPERATIONS, CAUSE DELAY AND ADD EXPENSE
TO OUR OPERATION.

The execution of our present business plan depends on
the continued services of our executive officers. We do not currently maintain
key-man insurance on their lives. The loss of any of their services would be
detrimental to our business, financial condition and results of operations. We
may not retain or replace the services of our key officers.

WE
HAVE ELECTED NOT TO VOLUNTARILY ADOPT VARIOUS CORPORATE GOVERNANCE MEASURES,
WHICH MAY RESULT IN SHAREHOLDERS HAVING LIMITED PROTECTIONS AGAINST INTERESTED
DIRECTOR TRANSACTIONS, CONFLICTS OF INTEREST AND SIMILAR MATTERS.

Recent Federal legislation, including the
Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate
governance measures designed to promote the integrity of the corporate
management and the securities markets. We have not yet adopted these corporate
governance measures and, since our securities are not yet listed on a national
securities exchange or NASDAQ, we are not required to do so. However, to the
extent we seek to have our common stock listed on a national securities
exchange or NASDAQ, such requirements will require us to make changes to our
current corporate governance practices, which changes may be costly and time
consuming. Furthermore, the absence of such practices with respect to our
Company may leave our shareholders without protections against interested
director transactions, conflicts of interest and similar matters. As an example
of one Sarbanes-Oxley requirement, currently none of the members of our board
of directors are considered to be independent for purposes of Sarbanes-Oxley.
We may not be able to attract a sufficient number of directors in the future to
satisfy this requirement if it becomes applicable to us.

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WE
MAY BE EXPOSED TO POTENTIAL RISKS RELATING TO OUR INTERNAL CONTROLS OVER
FINANCIAL REPORTING AND OUR ABILITY TO HAVE THOSE CONTROLS ATTESTED TO BY OUR
INDEPENDENT AUDITORS.

As directed by Section 404 of the Sarbanes-Oxley Act
of 2002, the Securities and Exchange Commission adopted rules requiring public
companies to include a report of management on the companys internal controls
over financial reporting in their annual reports, including Form 10-K. In
addition, the independent registered public accounting firm auditing a
companys financial statements must also attest to and report on managements assessment
of the effectiveness of the companys internal controls over financial
reporting as well as the operating effectiveness of the companys internal
controls. We were not subject to these requirements for the fiscal year ended
December 31, 2007. We are evaluating our internal control systems in order to
allow our management to report on, and our independent auditors attest to, our
internal controls, as a required part of our Annual Report on Form 10-K
beginning with our report for the fiscal year ended December 31, 2008.

While we expect to expend significant resources in
developing the necessary documentation and testing procedures required by SOX
404, there is a risk that we will not comply with all of the requirements
imposed thereby. At present, there is no precedent available with which to
measure compliance adequacy. Accordingly, there can be no positive assurance
that we will receive a positive attestation from our independent auditors.

In the event we identify significant deficiencies or
material weaknesses in our internal controls that we cannot remediate in a
timely manner or we are unable to receive a positive attestation from our
independent auditors with respect to our internal controls, investors and
others may lose confidence in the reliability of our financial statements and
our ability to obtain equity or debt financing could suffer.

FAILURE
OF OUR INTERNAL SYSTEMS MAY CAUSE SYSTEM DISRUPTIONS, REDUCE LEVELS OF CUSTOMER
SERVICE, AND OTHERWISE DAMAGE OUR OPERATIONS WHICH COULD LEAD TO LOST SALES AND
MAY INCREASE OUR OVERHEAD WHICH WOULD ADD EXPENSE AND DELAY OUR OPERATIONS.

We use internally developed systems to operate our
service and for transaction processing, including billing and collections
processing. We must continually improve these systems in order to meet the
level of use. Furthermore, in the future, we may add features and functionality
to our products and services using internally developed or third party licensed
technologies. Our inability to:

a)
add software and hardware;

b)
develop and upgrade existing technology, transaction processing systems and
network infrastructure to meet increased volume through our processing systems;
or

c)
provide new features or functionality may cause system disruptions, slower
response times, reductions in levels of customer service, decreased quality of
the users experience, and delays in reporting accurate financial information.
Any such failure could result in a loss of business and worsen our financial
condition and may correspondingly decrease the market price of our common
stock.

Risks Related To Our Intellectual Property

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WE
MAY BE UNABLE TO PROTECT OUR PROPRIETARY RIGHTS, THEREBY PERMITTING COMPETITORS
TO DEVELOP THE SAME OR SIMILAR PRODUCTS AND TECHNOLOGIES TO OURS, WHICH COULD
ADD EXPENSE AND DELAY OPERATIONS.

Our future results and ability to compete will be
dependent, in large part, upon the marketing and sales of our developed
proprietary products and technologies, the development of future proprietary
products and technologies and the commercialization of our products. We intend
to rely primarily upon copyright, trade secret and trademark laws to protect
the proprietary components of our systems. While we have filed U.S. patent applications
covering certain of our systems, the patent applications may not result in the
issuance patent. Additionally, if granted, any patent may be successfully
challenged and will not provided us with meaningful proprietary protections or
that we may not have the financial resources to mount sustained patent defense.
We could also incur substantial costs in asserting our intellectual property or
proprietary rights against others or if others assert their rights against us.
The failure to successfully protect our intellectual property and proprietary
rights could enable others to duplicate or claim our rights products and
systems which may result in decreases in our results of operations, liquidity
and cash flows. Any such decreases may correspondingly decrease the market
price of our common stock.

Risks Related To Industries In Which We Operate

WE
FACE SEVERE COMPETITION FROM VARIOUS COMPANIES, MANY OF WHOM HAVE GREATER
RESOURCES THAN WE DO, WHICH COULD CAUSE US TO LOSE SALES ADD EXPENSE AND DELAY
OUR OPERATIONS.

We may be unable to effectively compete in the
marketplaces in which we operate.

Most of these competitors have a longer operating
history than we do and many of them have substantially greater financial and
other resources than we do. As a result, we will likely encounter greater
difficulty in implementing our business plans than will our competitors. The
introduction of similar or superior products by current or future competitors
may result in decreases in our results of operations, liquidity and cash flows.
Any such decreases may correspondingly decrease the market price of our common
stock.

Risk Related To Our Securities And Capital Structure

TRADING
IN OUR COMMON STOCK MAY BE LIMITED, SO OUR SHAREHOLDERS MAY NOT BE ABLE TO SELL
AS MUCH STOCK AS THEY WANT AT PREVAILING PRICES.

We expect shares of the common stock to be traded on
the OTCBB. If limited trading in the common stock exists, it may be difficult
for our shareholders to sell in the public market at any given time at
prevailing prices. Also, the sale of a large block of our common stock at any
time could depress the price of our common stock to a greater degree than a
company that typically has higher volume of trading of securities.

THE
LIMITED PRIOR PUBLIC MARKET AND TRADING MARKET MAY CAUSE POSSIBLE VOLATILITY IN
OUR STOCK PRICE WHICH MAY CAUSE YOU TO LOSE SOME OR ALL OF YOUR INVESTMENT.

There has only been a limited public market for our
common stock and an active trading market in our common stock may not be
maintained. The OTCBB is an unorganized, inter-dealer, over-the-counter market
that provides significantly less liquidity than NASDAQ, and quotes for stocks
included on the OTCBB are not listed in the financial sections of newspapers,
as are those for the NASDAQ Stock Market. In addition, the stock market in
recent years has experienced extreme price and volume fluctuations that have
particularly affected the market prices of many smaller companies. The trading
price of our common stock is expected to be subject to significant fluctuations
in response to variations in quarterly operating results, changes in analysts
earnings estimates, announcements of innovations by us or our competitors,
general conditions in the industry in which we operate and other factors. These
fluctuations, as well as general economic and market conditions, may decrease
the market price of our common stock.

THE
MARKET PRICE FOR OUR COMMON STOCK MAY BE SUBJECT TO EXTREME VOLATILITY, WHICH
MAY CAUSE YOU TO LOSE SOME OR ALL OF YOUR INVESTMENT.

The market for securities of high-technology
companies, including companies such as ours that participate in emerging
markets, has historically been more volatile than the market for stocks in
general. As a result, the price of our common stock may be subject to wide
fluctuations in response to factors some of which are beyond our control,
including, without limitation, the following:

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-   Quarter-to-quarter
variations in our operating results;

-   Our announcement
of material events;

-   Price
fluctuations in sympathy to others engaged in our industry; and,

-   The effects of
media coverage of our business.

PENNY
STOCK REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF THE
COMPANYS SECURITIES, WHICH MAY CAUSE YOU TO LOSE SOME OR ALL OF YOUR
INVESTMENT.

The Securities and Exchange Commission has adopted
regulations which generally define a penny stock to be any equity security
that has a market price (as defined) of less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to certain exceptions. As
a result, our common stock is subject to rules that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000
together with their spouse). For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchase of
such securities and have received the purchasers written consent to the
transaction prior to the purchase. Additionally, for any transaction involving
a penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a risk disclosure document mandated by the Securities and
Exchange Commission relating to the penny stock market.

The broker-dealer must also disclose the commission
payable to both the broker-dealer and the registered representative, current
quotations for the securities and, if the broker-dealer is the sole market
maker, the broker-dealer must disclose this fact and the broker-dealers
presumed control over the market. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the penny
stock rules may restrict the ability of broker-dealers to sell our securities
and may affect the ability of investors to sell our securities and the price at
which such purchasers can sell any such securities.

Our shareholders should be aware that, according to
the Securities and Exchange Commission, the market for penny stocks has
suffered in recent years from patterns of fraud and abuse. Such patterns
include:

-   Control of the
market for the security by one or a few broker-dealers that are often related
to the promoter or issuer;

-   Manipulation of
prices through prearranged matching of purchases and sales and false and
misleading press releases;

-   Boiler room
practices involving high pressure sales tactics and unrealistic price
projections by inexperienced sales persons;

-   Excessive and
undisclosed bid-ask differentials and markups by selling broker-dealers; and

-   The wholesale
dumping of the same securities by promoters and broker-dealers after prices
have been manipulated to a desired level, along with the inevitable collapse of
those prices with consequent investor losses.

Our management is aware of the abuses that have
occurred historically in the penny stock market.

WE HAVE NO HISTORY OF PAYING DIVIDENDS ON OUR COMMON
STOCK.

We have never paid any cash dividends on our shares of
common stock and do not anticipate paying any cash dividends on our common
stock in the foreseeable future. We plan to retain any future earnings to
finance growth. If we decide to pay dividends to the holders of the common
stock, such dividends may not be paid on a timely basis.

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IT IS NOT POSSIBLE TO FORESEE ALL RISKS WHICH MAY
AFFECT US. MOREOVER, WE CANNOT PREDICT WHETHER WE WILL SUCCESSFULLY EFFECTUATE
OUR CURRENT BUSINESS PLAN. EACH PROSPECTIVE PURCHASER IS ENCOURAGED TO
CAREFULLY ANALYZE THE RISKS AND MERITS OF AN INVESTMENT IN THE SHARES AND
SHOULD TAKE INTO CONSIDERATION WHEN MAKING SUCH ANALYSIS, AMONG OTHERS, THE
RISK FACTORS DISCUSSED ABOVE.

|         |                          
|-------- | -------------------------
|ITEM 1B. | UNRESOLVED STAFF COMMENTS

Not applicable.

|        |            
|------- | -----------
|ITEM 2. | PROPERTIES.

We lease an office facility from 234 Hollywood, LLC
pursuant to a lease that began September 1, 2007. The office facility is
located at 5555 Hollywood Blvd. Suite # 303 Hollywood, FL 33021. The facility
consists of 1,000 square feet for the minimum lease payments of $1,580 per
month and terminates in August 31, 2008. In August 2008, we entered into an
extension agreement which expires in August 2009. We believe that this facility
is sufficient for our current needs. The office lease agreement has certain
escalation clauses and renewal options. If we exercise the option to renew, the
base rent shall increase by 3% per each lease year.

|        |                   
|------- | ------------------
|ITEM 3. | LEGAL PROCEEDINGS.

The registrant is not involved in any legal
proceedings at this date.

|        |                                                     
|------- | ----------------------------------------------------
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF
 SECURITY HOLDERS

During the last quarter of the fiscal year ended
December 31, 2008, the shareholders approved a name change of the registrant to
Genesis Electronics Group, Inc. An amendment regarding the name change was
filed with the state of Nevada on February 24, 2009.

PART II

|        |                                                                                                  
|------- | -------------------------------------------------------------------------------------------------
|ITEM 5. | MARKET FOR REGISTRANTS COMMON
 EQUITY, RELATED MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Item
5(a)

a) Market Information. The registrant began trading publicly on the NASD Over the Counter
Bulletin Board in June 2006 under the symbol PRCC. The registrant is currently
preparing the necessary paperwork to obtain the required symbol change due to
the name change.

The following table sets forth the range of high and
low bid quotations for the registrants common stock as reported on the NASD
Bulletin Board. The quotations represent inter-dealer prices without retail
markup, markdown or commission, and may not necessarily represent actual
transactions.

|              |          |   |         |  |   |       | 
|------------- | -------- | - | ------- |  | - | ----- | 
|Quarter Ended | High Bid |   | Low Bid | 
|3/31/07       |          | $ | 0.32    |  | $ | 0.28  | 
|6/30/07       |          | $ | 0.19    |  | $ | 0.18  | 
|9/30/07       |          | $ | 0.042   |  | $ | 0.042 | 
|12/31/07      |          | $ | 0.04    |  | $ | 0.035 | 
|3/31/08       |          | $ | 0.32    |  | $ | 0.28  | 
|6/30/08       |          | $ | 0.19    |  | $ | 0.18  | 
|9/30/08       |          | $ | 0.042   |  | $ | 0.042 | 
|12/31/08      |          | $ | 0.04    |  | $ | 0.035 | 
|3/31/09       |          | $ | .018    |  | $ | 0.003 | 

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b) Holders. The approximate number of record holders
of the registrant is 254.

c) Dividends. Holders of the registrants common stock
are entitled to receive such dividends as may be declared by its board of
directors. No dividends on the registrants common stock have ever bee paid,
and the registrant does not anticipate that dividends will be paid on the
common stock in the foreseeable future.

d) Securities authorized for issuance under equity
compensation plans. No securities are authorized for issuance by the registrant
under equity compensation plans.

e) Performance graph. Not applicable.

f) Sale of unregistered securities. None.

Item 5(b) Use
of Proceeds. Not applicable.

Item 5(c)
Purchases of Equity Securities by the issuer and affiliated purchasers. None.

|        |                        
|------- | -----------------------
|ITEM 6. | SELECTED FINANCIAL DATA

Not
applicable to smaller reporting companies.

|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND
 ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

OVERVIEW

Through December 31, 2005,
we were a developmental stage e-commerce company. We currently operate an
e-commerce website that enables any business to establish a fully functional
online retail presence. Our website, Pricester.com, is an Internet marketplace
which allows vendors to host their website with product and service listings
and allows consumers to search for listed products and services.

On May 22, 2008, we
completed a merger with Genesis Electronics, Inc., a Delaware corporation.

The merger is being
accounted for as a purchase method acquisition pursuant to Statement of
Financial Accounting Standards No. 141 Business Combinations. Accordingly,
the purchase price was allocated to the fair value of the assets acquired and
the liabilities assumed. We are the acquirer for accounting purposes and
Genesis is the acquired company.

Genesis was originally
formed in Delaware on October 22, 2001 and is engaged on the development of
solar and alternative energy applications for consumer devices such as mobile
phones.

In November 2008, the Company obtained through a vote
of majority of its shareholders the approval to change the Companys 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 change our name to Genesis
Electronics Group, Inc.

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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 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 $7,513,897, a working capital deficit of $1,213,991, had net losses
for the year ended December 31, 2008 of $3,076,697 and cash used in operations
during the year ended December 31, 2008 of $(254,743). 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 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.

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-   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.

Year ended
December 31, 2008 compared to year ended December 31, 2007

Net sales for
the year ended December 31, 2008 were $111,518 as compared to net sales of
$179,176 for the year ended December 31, 2007, a decrease of $67,658 or
approximately 38%. The decrease in revenues is primarily attributable to the
non renewal of subscribers who had completed their annual hosting commitment
during the year ended December 31, 2008. We are continuing to create customer
awareness for our products. We have developed an aggressive strategy to
increase revenues by restructuring our sales force, revisiting the terms of
hosting and creating other attractive sales packages. Additionally, we have
increased our marketing efforts and began 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 year ended December 31, 2008 were $886,764, a
decrease of $759,624, or approximately 46%, from total operating expenses in
the year ended December 31, 2007 of $1,646,388. This decrease is primarily
attributable to:

-   an
increase of $10,860, or approximately 254%, in advertising expense incurred to
promote our website and products. The increase is due to the launched of our
Copia World International Shopping Portal division,

-   a
decrease of $29,256, or approximately 49%, in professional fees incurred in
connection with our SEC filings. This decrease is primarily related to decrease
in audit fees,

-   a
decrease of $443,493, or approximately 63%, 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 2007. This decrease
is primarily attributable to the decrease in fair values of our common stock during
the year ended December 31, 2008 as compared to the same period in fiscal 2007,

-   a
decrease of $266,769, or 38%, in compensation expense to $434,295 for the year
ended December 31, 2008 as compared to $701,064 for the year ended December 31,
2007. Compensation expense which includes salaries and stock based
compensations to our employees. During the year ended December 31, 2008, the
registrant 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. In addition, the registrant issued in aggregate 33,000,000 shares of
common stock to our CEO and an officer for services rendered. This decrease is
primarily attributable to the decrease in fair values of our common stock
during the year ended December 31, 2008 as compared to the same period in
fiscal 2007. Additionally, we have four full time employees during the year
ended December 31, 2008 as compared to eleven full time employees during the
year ended December 31, 2007,

-   a
decrease of $30,966, or approximately 17%, 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 $(775,246) for year ended December 31, 2008 as compared
to a loss from operations of $(1,467,212) for the year ended December 31, 2007.

Total other
expense for the year ended December 31, 2008 were $2,301,451, an increase of
$2,301,451, from total other expense for year ended December 31, 2007 of $0.
This increase is primarily attributable to:

|  |                                                                                                                                                                                                                                             
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | an increase
 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.

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|  |                                                                                                                                                                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | an increase
 of $1,053,058 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.

We reported a
net loss of $(3,706,697) or (0.05) per share for the year ended December 31,
2008 as compared to a net loss of $(1,467,212) or $(0.05) per share for the
year ended December 31, 2007.

Liquidity and
Capital Resources.

During the
year ended December 31, 2008, we received net proceeds of $340,812 and
subscription receivable of $25,150 from the sale of our common stock. These
funds were used for working capital purposes.

Net cash used
in operating activities for the year ended December 31, 2008 amounted to
$254,743 and was primarily attributable to our net losses of $3,076,697 offset
by stock based compensation of $341,214, amortization of prepaid expense in
connection with deferred compensation of $187,585, depreciation of $2,524,
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 $7,404. Net cash flows used
in operating activities for the year ended December 31, 2007 amounted to
$199,217 and was primarily attributable to our net losses of $1,467,212 offset
by donation of officers compensation of $15,000,stock based compensation of
$430,581, amortization of deferred compensation of $799,782, depreciation of
$3,128, and changes in assets and liabilities of $19,504.

Net cash flows
provided by financing activities was $256,212 for the year ended December 31,
2008 as compared to net cash provided by financing activities of $172,239 for
the year ended December 31, 2007, an increase of $83,973. For the year ended
December 31, 2008, we received proceeds from the sale of common stock of
$340,812, proceeds from related parties of $8,000 and offset by payments on
related party advances of $92,600. For the year ended December 31, 2007, we
received proceeds from the sale of common stock of $111,339, proceeds from
related parties of $38,000 and proceeds from loans payable of $65,000 offset by
repayment of loans payable of $7,000 and payments on related party advances of
$35,100.

We reported a
net increase in cash for the year ended December 31, 2008 of $1,469 as compared
to a net decrease in cash of $26,978 for the year ended December 31, 2007. At
December 31, 2008, we had cash on hand of $2,319.

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
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. The Company does 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.

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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. The Company 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. The
registrant has not determined the impact on its financial statements of this
accounting standard.

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. 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 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
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 the
registrants 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.

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.

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|         |                                                            
|-------- | -----------------------------------------------------------
|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable
to smaller reporting companies.

|        |                                             
|------- | --------------------------------------------
|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The response
to this item is being submitted as a separate section of this report beginning
on page F-1.

|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
 FINANCIAL DISCLOSURE.

On August 18,
2008, Baum & Company, P.A., its independent public accountant resigned due
to a material deficiency in the registrants internal control and lack of
corporate governance.

Baum &
Company, P.A. reports on the registrants financial statements for either of
the past two years, December 31, 2007 and 2006, did not contain an adverse
opinion or a disclaimer of opinion or was qualified or modified as to uncertainty,
audit scope or accounting principles.

During the
registrants two most recent fiscal years, December 31, 2007 and 2006, and the
subsequent period through the date of resignation, January 1, 2008 through
August 18, 2008, there were no disagreements on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope of
procedure which disagreement(s), if not resolved to the satisfaction of Baum
& Company, P.A., would have caused it to make reference to the subject
matter of the disagreement(s) in connection with its report as described in
Item 304 (a)(1)(iv) of Regulation S-B.

Subsequent to
the registrants quarter ended June 30, 2008, the auditor advised the
registrant that he believed there was a material deficiency in internal
controls and a lack of corporate governance regarding the registrants
acquisition of Genesis. Despite several requests, the auditor did not receive
the necessary documents and financial records to audit the financial records of
Genesis, prepare the required overdue 8K proforma financials of the acquisition
and to perform the review of the Form 10Q and related financial statements. The
auditor did not feel comfortable with management and their lack of due
diligence in their recent acquisition and other matters. The board of directors
discussed the subject matter of the disagreement with the former accountant and
the registrant has authorized the former accountant to respond fully to the
inquiries of the successor accountant concerning the subject matter of such disagreements.

On August 18,
2008, the board of directors of the registrant engaged the accounting firm of
Kramer, Weisman & Associates as principal accountants of the registrant for
the fiscal year ended December 31, 2008. The registrant did not consult with
Kramer, Weisman & Associates during the most recent two fiscal years and
the subsequent interim period preceding the engagement of Kramer, Weisman &
Associates on August 18, 2008 regarding the application of accounting principles
to a specific completed or contemplated transaction, or the type of audit
opinion that might be rendered on the registrants financial statements.
Neither written nor oral advice was provided that was an important factor
considered by Kramer, Weisman & Associates in reaching a decision as to the
accounting, auditing or financial reporting issue; or any matter that was the
subject of a disagreement or event identified in response to paragraph (a)
(1)(iv) of Item 304 of Regulation S-K.

|         |                         
|-------- | ------------------------
|ITEM 9A. | CONTROLS AND PROCEDURES.

Evaluation of
Disclosure Controls and Procedures:

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Table of Contents

We maintain
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act that are designed to insure that information required to
be disclosed in the reports we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the periods specified in
the Securities and Exchange Commissions rules and forms and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer (CEO) and Chief Financial Officer (CFO), or the persons
performing similar functions, to allow timely decisions regarding required
disclosure.

Under the
supervision and with the participation of our CEO and CFO, or the persons
performing similar functions, our management has evaluated the effectiveness of
our disclosure controls and procedures as of the end of the period covered by
this annual report. Based on that evaluation, our CEO and CFO, or the persons
performing similar functions, concluded that our disclosure controls and
procedures were not effective as of December 31, 2008.

Subsequent to
the registrants quarter ended June 30, 2008, the auditor advised the
registrant that he believed there was a material deficiency in internal
controls and a lack of corporate governance regarding the registrants
acquisition of Genesis. Despite several requests, the auditor did not receive
the necessary documents and financial records to audit the financial records of
Genesis, and to perform the review of the Form 10Q and related financial statements. The
auditor did not feel comfortable with management and their lack of due
diligence in their recent acquisition and other matters. The board of directors
discussed the subject matter of the disagreement with the former accountant and
the registrant has authorized the former accountant to respond fully to the
inquiries of the successor accountant concerning the subject matter of such disagreements.

Management has
implemented additional internal controls to ensure that similar situations do
not occur in the future.

Managements
Annual 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 the
process designed by and under the supervision of our CEO and CFO, or the
persons performing similar functions, to provide reasonable assurance regarding
the reliability of our financial reporting and the preparation of our financial
statements for external reporting in accordance with accounting principles
generally accepted in the United States of America. Management has evaluated
the effectiveness of our internal control over financial reporting using the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control over Financial Reporting  Guidance for Smaller
Public Companies.

Under the
supervision and with the participation of our CEO and CFO, or the persons
performing similar functions, our management has assessed the effectiveness of
our internal control over financial reporting as of December 31, 2008, and
concluded that it is not effective due to the reasons discussed above.

This annual
report does not include an attestation report of the registrants registered
public accounting firm regarding internal control over financial reporting.
Managements report was not subject to attestation by the registrants
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the registrant to provide only managements
report in this annual report.

Evaluation of
Changes in Internal Control over Financial Reporting:

Under the
supervision and with the participation of our CEO and CFO, or those persons
performing similar functions, our management has evaluated changes in our
internal controls over financial reporting that occurred during the fourth
quarter of 2008. Based on that evaluation, our CEO and CFO, or those persons
performing similar functions, did not identify any change in our internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

29

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Table of Contents

Important
Considerations:

The
effectiveness of our disclosure controls and procedures and our internal
control over financial reporting is subject to various inherent limitations,
including cost limitations, judgments used in decision making, assumptions
about the likelihood of future events, the soundness of our systems, the
possibility of human error, and the risk of fraud. Moreover, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions and the risk
that the degree of compliance with policies or procedures may deteriorate over
time. Because of these limitations, there can be no assurance that any system
of disclosure controls and procedures or internal control over financial
reporting will be successful in preventing all errors or fraud or in making all
material information known in a timely manner to the appropriate levels of
management.

|         |                         
|-------- | ------------------------
|ITEM 9B. | OTHER INFORMATION. None.

PART III

|         |                                                        
|-------- | -------------------------------------------------------
|ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive Officers

The Executive Officers and Directors are:

|                  |  |     |  |                       
|----------------- |  | --- |  | ----------------------
|Name              |  | Age |  | Position              
|Edward C.
 Dillon |  | 72  |  | CEO,
 Director        
|                  |  |     |  |                       
|Nelson Stark      |  | 52  |  | CFO,
 Director        
|                  |  |     |  |                       
|Raymond
 Purdon   |  | 40  |  | Chairman of
 the Board
|Lee Taylor        |  | 59  |  | Director              

Resumes

EDWARD C.
DILLON. Mr. Dillon has been chief executive officer since April 6, 2006 to
present. Mr. Dillon has been chief financial officer and executive vice
president of Pricester Nevada since June 4, 2004 to April 6, 2006. Mr. Dillon
remains a director of Pricester Nevada. He is also responsible for shareholder
relations and investments. From January 2004 to the merger with Pricester
Nevada, Mr. Dillon served as executive vice president for Pricester Florida and
he was also responsible for shareholder relations and investments. From
September 2004 to present, Mr. Dillon also serves as a director. In April 2003,
Mr. Dillon accepted a position as Contract Manager Consultant to the Florida
Turnpike for Jacobs Engineering a Fortune 500 Company. April 1996 to April
2002, Mr. Dillon retired to Florida for golf and relaxation. In May 1968,
Edward Dillon opened Bayshore Steel Construction in New Jersey where he served
as President and CEO until 1996. Bayshore Steel contracted to erect office
buildings, shopping centers and 20,000,000 sq. ft of warehouse space in central
New Jersey. From 1957 to 1968 he was employed as a Construction Supervisor for
a family owned steel business.

NELSON STARK.
Mr. Stark has been chief financial officer from April 6, 2006 to present. Mr.
Stark has been vice president of marketing and operations of Pricester Nevada
since June 4, 2004. Mr. Stark served as vice president of marketing and
operations of Pricester Florida from September 2003 until the merger with
Pricester Nevada. He has a Doctorate in International Business from Nova
Southeastern University in Ft. Lauderdale, Florida. He received his Degree in
May 1997. His areas of specialization are strategic and international
marketing. He started his career with the Australian Trade Commission in Miami
as their Marketing Manager in September of 1987 until November 1988. He then
became the Marketing Manager for M. & J. Import-Export International in New
York from January 1989 until October 1997. He was appointed Center Director for
Embry-Riddle Aeronautical Universitys Ft. Lauderdale Campus from November 1997
to October 1999. He was then appointed Vice President of Marketing for Softrain
U.S.A. from January 2000 until June of 2003.

30

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Table of Contents

RAYMOND PURDON
Mr. Purdon has over 17 years of experience in the securities industry,
including trading, investment banking, retail and institutional sales. He is
the founder and has been the principal of Grandview Capital Partners since its
launch in October 2006 and is responsible for the firms proprietary trading,
due diligence and investments. Ray oversees Pricesters merger and acquisition
committee. From July 2003 - October 2006, Mr. Purdon was a senior vice
president and branch manager of GunnAllen Financial. Mr. Purdon graduated in
1991 from Seton Hall University with a Bachelor of Arts degree.

LEE TAYLOR. Mr.
Taylor has a broad background in sales and marketing management, within both
B2B and B2C environments. He has held executive level and senior management
positions with corporations including Interval International, Gannett, Inc.,
TBS International, Tricom Pictures and Lens Express. Lee is responsible for
sales development and training, initiation of marketing programs, and
coordination with design and technical areas within the company.

HOWARD NEU.
Has been a practicing attorney for 35 years specializing in Domain Defense
Litigation, commercial litigation, and appeals. He is also a Certified Public
Accountant, has taught Taxation of Deferred Compensation at the University of
Miami School of Law as well as courses in accounting and business law for the Miami
Education Consortium. He has also lectured for the Florida Bar Continuing Legal
Education program. He received his B.B.A. degree from the University of Miami
after attending the University of Florida for 3 years, and his JurisDoctor
degree from the University of Miami Law School. He was elected to 3 terms as
Mayor of the City of North Miami, Florida, has served as Municipal Judge,
Councilman, and has been elected President of the North Dade Bar Association,
The Greater North Miami Chamber of Commerce, the Dade County League of Cities
and various other State and National organizations. In his career, he has done
considerable SEC work, successful Business Plans and Private Placement
Memoranda. He is married and has 3 beautiful daughters, four grandchildren and
a 17 year old stepson. He presently represents Domain King/Webfather Rick Schwartz, IwindomainsWin and
Mahoney, damir
Kruzicevik, Shepherd Sal
Sarid and a number of domain developers. He has also previously represented
John Zuccarini.

Section 16(a)
Beneficial Ownership Reporting Compliance

To the
registrants knowledge, no director, officer or beneficial owner of more than
ten percent of any class of equity securities of the registrant failed to file
on a timely basis reports required by Section 16(a) of the Exchange Act during
2008.

Code of Ethics
Policy

We have not
yet adopted a code of ethics that applies to our principal executive officer,
principal financial officer, principal accounting officer or controller or
persons performing similar functions.

Corporate
Governance

We have no
change in any state law or other procedures by which security holders may
recommend nominees to our board of directors. In addition to having no
nominating committee for this purpose, we currently have no specific audit
committee and no audit committee financial expert. Based on the fact that our
current business affairs are simple, any such committees are excessive and
beyond the scope of our business and needs.

|         |                        
|-------- | -----------------------
|ITEM 11. | EXECUTIVE COMPENSATION.

The following table
summarizes all compensation recorded by us in the last completed fiscal year
for

| |   |                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | o | our
 principal executive officer or other individual serving in a similar
 capacity,                                                                                                                                                        
| |   |                                                                                                                                                                                                                                             
| | o | our two most
 highly compensated executive officers other than our principal executive
 officer who were serving as executive officers at December 31, 2008 as that
 term is defined under Rule 3b-7 of the Securities Exchange Act of 1934.

31

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| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | o | up to two
 additional individuals for whom disclosure would have been required but for
 the fact that the individual was not serving as an executive officer at
 December 31, 2008.

For
definitional purposes in this annual report these individuals are sometimes
referred to as the named executive officers. The value attributable to any
option awards is computed in accordance with FAS 123R.

|                                             |  |                            |  |   |                  |  |               |  |   |                         |  |                          |  |                                                    |  |                                                         |  |                                    |  |   |                 | 
|-------------------------------------------- |  | -------------------------- |  | - | ---------------- |  | ------------- |  | - | ----------------------- |  | ------------------------ |  | -------------------------------------------------- |  | ------------------------------------------------------- |  | ---------------------------------- |  | - | --------------- | 
|                                             |  |                            |  |   |                  |  |               |  |   |                         |  |                          |  |                                                    |  |                                                         |  |                                    |  |   |                 | 
|                                             |  | SUMMARY COMPENSATION TABLE | 
|NAME AND
 PRINCIPAL
 POSITION
 (A)           |  | YEAR
 (B)                  |  |   | SALARY
 ($)
 (C) |  | BONUS
 ($)(D) |  |   | STOCK
 AWARDS
 ($)
 (E) |  | OPTION
 AWARDS
 ($)
 (F) |  | NON-EQUITY
 INCENTIVE PLAN
 COMPENSATION
 ($)
 (G) |  | NONQUALIFIED
 DEFERRED
 COMPENSATION
 EARNINGS ($)
 (H) |  | ALL
 OTHER
 COMPENSATION
 ($)
 (I) |  |   | TOTAL
 ($)
 (J) | 
|                                             |  |                            |  |   |                  |  |               |  |   |                         |  |                          |  |                                                    |  |                                                         |  |                                    |  |   |                 | 
|Edward C Dillon(1)
 Chief Executive
 Officer |  |                            |  |   |                  |  |               |  |   |                         |  |                          |  |                                                    |  |                                                         |  |                                    |  |   |                 | 
|                                             |  | 2008                       |  |   | 0                |  | $            |  | $ | 137,600                 |  | $                       |  | $                                                 |  | $                                                      |  | $                                 |  | $ | 137,600         | 
|                                             |  | 2007                       |  | $ | 13,050           |  | $            |  | $ | 388,850                 |  | $                       |  | $                                                 |  | $                                                      |  | $                                 |  | $ | 401,900         | 
|                                             |  |                            |  |   |                  |  |               |  |   |                         |  |                          |  |                                                    |  |                                                         |  |                                    |  |   |                 | 
|Nelson Stark (2)
 Chief Financial
 Officer   |  |                            |  |   |                  |  |               |  |   |                         |  |                          |  |                                                    |  |                                                         |  |                                    |  |   |                 | 
|                                             |  | 2008                       |  | $ | 7,500            |  | $            |  | $ | 200                     |  | $                       |  | $                                                 |  | $                                                      |  | $                                 |  | $ | 7,700           | 
|                                             |  | 2007                       |  | $ | 5,800            |  | $            |  | $ | 2,000                   |  | $                       |  | $                                                 |  | $                                                      |  | $                                 |  | $ | 7,800           | 

(1) Mr. Dillon has served as our president
and CEO since April 2006. Mr. Dillons fiscal 2008 in addition to his salary,
his compensation included stock awards of 18,500,000 shares of our common stock
which were valued at $137,600. Mr. Dillons fiscal 2007 in addition to his
salary, his compensation included stock awards of 1,500,000 shares of our
common stock which were valued at $388,850.

(2) Mr. Stark has
served as our CFO since April 2006. In addition to his salary, Mr. Starks
fiscal 2008 compensation included stock awards of 100,000 shares of our common
stock which were valued at $200. In addition to his salary, Mr. Starks fiscal
2007 compensation included stock awards of 50,000 shares of our common stock
which were valued at $2,000.

Outstanding Equity Awards at Fiscal Year-End

The following
table sets forth the outstanding stock options to the registrants sole
executive officer:

Option Awards

Outstanding
Equity Awards at December 31, 2008

|                                    |  |                                                              |  |                                                                                                          |  |                                                                                                             |  |                              |  |                                                          | 
|----------------------------------- |  | ------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------- |  | ---------------------------- |  | -------------------------------------------------------- | 
|(a)                                 |  | (b)                                                          |  | (c)                                                                                                      |  | (d)                                                                                                         |  | (e)                          |  | (f)                                                      | 
|Name                                |  | Number of
 Securities
 Underlying
 Unexercised
 options
 (#) |  | Equity
 Incentive
 Plan
 Awards:
 Number of
 Securities
 Underlying
 Unexercised
 Unearned
 Options
 (#) |  | Equity
 Incentive
 Plan
 Awards:
 Number of
 Securities
 Underlying
 Unexercised
 Unearned
 Options in
 (#) |  | Option
 Exercise
 Price
 ($) |  | Option
 Expiration
 Date
 ($)                            | 
|                                    |  |                                                              |  |                                                                                                          |  |                                                                                                             |  |                              |  |                                                          | 
|Edward
 C. Dillon
 Exec. Vice Pres. |  | 1,000,000                                                    |  |                                                                                                         |  |                                                                                                            |  | $.40                         |  | One
 year after the
 effective date of
 the registration | 

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Table of Contents

Option Awards (Continued)

Outstanding
Equity Awards at December 31, 2008

|                                    |  |                                                                           |  |                                                                                              |  |                                                                                                                   |  |                                                                                                                                     | 
|----------------------------------- |  | ------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------- | 
|                                    |  | (g)                                                                       |  | (h)                                                                                          |  | (i)                                                                                                               |  | (j)                                                                                                                                 | 
|Name                                |  | Number
 Number of
 Shares or
 Units of
 Stock
 that have
 not vested
 (#) |  | Market Value
 of Shares
 or Units
 of Shares
 or Units
 of Stock
 that have
 not vested
 ($) |  | Equity
 Incentive
 Plan Awards:
 Number of
 Unearned
 Shares,
 Units or
 Other Rights
 that have
 not vested
 (#) |  | Equity
 Incentive
 Plan Awards:
 Market or
 Payout
 Value of
 Unearned
 Shares,
 Units or
 Other Rights
 that have
 not vested
 ($) | 
|                                    |  |                                                                           |  |                                                                                              |  |                                                                                                                   |  |                                                                                                                                     | 
|Edward
 C. Dillon
 Exec. Vice Pres. |  |                                                                          |  |                                                                                             |  |                                                                                                                  |  |                                                                                                                                    | 

Employment
Contracts and Termination of Employment and Change-in Control Arrangements. The
registrant entered into an employment agreement on January 14, 2008 with Edward
C. Dillon, its chief executive officer which expires in January 2013. The
employment agreement calls for an issuance of 500,000 free trading shares of
our common stock. Additionally, based on this agreement, the registrant shall
issue 1,000,000 restricted shares of common stock during each fiscal year of
the term of this agreement.

The registrant
entered into an employment agreement on January 14, 2008 with Raymond Purdon,
an officer of the registrant which expires in January 2013. The employment
agreement calls for an issuance of 500,000 free trading shares of the
registrants common stock. Additionally, based on this agreement, the
registrant shall issue 1,000,000 restricted shares of common stock during each
fiscal year of the term of this agreement.

Directors
compensation. We do not have any standard arrangements by which directors are
compensated for any services provided as a director. No cash has been paid to
the directors in their capacity as such.

|         |                                                                                                
|-------- | -----------------------------------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
 RELATED STOCKHOLDER MATTERS

There are
currently 123,292,739 (common shares outstanding. The following tabulates
holdings of common shares and other securities of the registrant by each person
who, subject to the above, at April 1, 2009, holds of record or is known by
management to own beneficially more than 5.0% of the common shares and, in
addition, by all directors and officers of the registrant individually and as a
group.

33

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Table of Contents

Directors and Officers

|                                                                         |  |                          |                                         |        | 
|------------------------------------------------------------------------ |  | ------------------------ | --------------------------------------- | ------ | 
|Name and Address                                                         |  | Number & Class
of Shares | Percentage of
Outstanding
Common Shares |       
|Edward C. Dillon(1)
 3850 Washington St. Apt. 910
 Hollywood, FL 33021   |  | 19,668,000               |                                         | 16.42% | 
|                                                                         |  |                          |                                         |        | 
|Raymond Purdon
 25 Fox Hill Drive
 Little Silver, NJ 07739               |  | 17,000,000               |                                         | 14.20% | 
|                                                                         |  |                          |                                         |        | 
|Lee Taylor
 10919 SW 135thCourt CircleMiami, FL 33186                    |  | 278,500                  |                                         | 0.23%  | 
|                                                                         |  |                          |                                         |        | 
|Nelson Stark(2)
 5130 SW 40th Avenue, Apt. 3B
 Fort Lauderdale, FL 33314 |  | 416,000                  |                                         | 0.35%  | 
|                                                                         |  |                          |                                         |        | 
|Howard Neu
 1152 N. University Drive #201
 Pembroke Pines, FL 33024      |  | 2,446,000                |                                         | 2.04%  | 

(1)Mr. Dillon
paid a weighted average of $.18 for the common shares he currently owns.
(2)Nelson Stark received his common shares for services valued at $.10 per
common share.

Pursuant to
Rule 13d-3 under the Securities Exchange Act of 1934, as amended, beneficial
ownership of a security consists of sole or shared voting power (including the
power to vote or direct the voting) and/or sole or shared investment power
(including the power to dispose or direct the disposition) with respect to a security
whether through a contract, arrangement, understanding, relationship or
otherwise. Unless otherwise indicated, each person indicated above has sole
power to vote, or dispose or direct the disposition of all shares beneficially
owned, subject to applicable unity property laws.

All of the
directors would be deemed to be promoters of the registrant.

|         |                                                                            
|-------- | ---------------------------------------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
 INDEPENDENCE.

Edward Dillon,
Chief Executive officer of Genesis Technology Group, Inc. and Raymond Purdon,
an officer of Genesis Technology Group, Inc., advanced funds to us for working
capital purposes. The advances are non-interest bearing and are payable on
demand. At December 31, 2008, we owed these related parties $78,385.

Director
Independence

Our Board of
Directors are not independent as such term is defined by a national securities
exchange or an inter-dealer quotation system. During the fiscal year ended
December 31, 2008, there were no transactions with related persons other than
as described in the section above entitled Item 11. Executive Compensation.

|         |                                        
|-------- | ---------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees.
The aggregate fees billed for the fiscal year ended December 31, 2008 and 2007
for professional services rendered by Kramer, Weisman and Associates, LLP and
Baum and & Company, PA for the audit of the registrants annual financial
statements and review of the financial statements included in the registrants
Form 10-Q or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for the fiscal
year, were $13,500 and $21,000, respectively.

34

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Table of Contents

Audit related
fees. The aggregate fees billed for the fiscal year ended December 31, 2008 and
2007 for assurance and related services by Kramer, Weisman and Associates, LLP
and Baum & Company, PA that are reasonably related to the performance of
the audit or review of the registrants financial statements for the fiscal
year were $0 and $0.

Tax Fees. The
aggregate tax fees and expenses by Kramer, Weisman and Associates, LLP and Baum
& Company, PA for the 2008 and 2007 fiscal years for professional services
rendered for tax compliance, tax advice, and tax planning were $925 and $925,
respectively.

All Other Fees.
We did not incur any other fees from Kramer, Weisman and Associates, LLP and
Baum & Company, PA for the 2008 and 2007 fiscal years.

The board of
directors, acting as the Audit Committee considered whether, and determined
that, the auditors provision of non-audit services was compatible with
maintaining the auditors independence. All of the services described above for
fiscal year 2008 and 2007 were approved by the board of directors pursuant to
its policies and procedures. We intend to continue using Kramer, Weisman and
Associates, LLP solely for audit and audit-related services, tax consultation
and tax compliance services, and, as needed, for due diligence in acquisitions.

PART IV

|         |                                         
|-------- | ----------------------------------------
|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following
documents are filed as a part of this report or are incorporated by reference
to previous filings, if so indicated:

|ExhibitNo. |  | Description                                                        
|---------- |  | -------------------------------------------------------------------
|31.1       |  | Rule
 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer
|32.2       |  | Rule
 13a-14(a)/ 15d-14(a) Certification of Chief Financial officer
|32.1       |  | Section 1350
 Certification of Chief Executive Officer             
|32.2       |  | Section 1350
 Certification of Chief Financial Officer             

35

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Table of Contents

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.

GENESIS
ELECTRONICS GROUP, INC.

|                |                           | 
|--------------- | ------------------------- | 
|                | By: /s/
 Edward C. Dillon | 
|April 14,
 2009 | Edward C.
 Dillon         | 
|                | Chief
 Executive Officer  | 
|                |                           | 
|                | By: /s/
 Nelson Stark     | 
|April 14,
 2009 | Nelson Stark              | 
|                | Chief
 Financial Officer  | 

Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.

|                     |  |                          |  |          
|-------------------- |  | ------------------------ |  | ---------
|Signature            |  | Capacity                 |  | Date     
|                     |  |                          |  |          
|/s/Edward
 C. Dillon |  | CEO/Director             |  | 4/14/2009
|Edward
 C. Dillon    |  |                          |  |          
|                     |  |                          |  |          
|/s/Nelson
 Stark     |  | CFO/Director
 Controller |  | 4/14/2009
|Nelson
 Stark        |  |                          | 
|                     |  |                          |  |          
|/s/Raymond
 Purdon   |  | Director                 |  | 4/14/2009
|Raymond
 Purdon      |  |                          |  |          
|                     |  |                          |  |          
|/s/Lee
 Taylor       |  | Director                 |  | 4/14/2009
|Lee
 Taylor          |  |                          |  |          

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Table of Contents



GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



CONTENTS



Report of Independent Registered Public Accounting Firms

        F-2 to F-3Consolidated Financial Statements:Consolidated Balance Sheets

        F-4Consolidated Statements of Operations

        F-5Consolidated Statements of Changes in Stockholders Deficit

        F-6Consolidated Statements of Cash Flows

        F-7Notes to Consolidated Financial Statements

        F-8 to F-20


F-1

---

Table of Contents

REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board
of Directors 
Genesis Electronics Group, Inc.
Hollywood, Florida

We have
audited the accompanying consolidated balance sheet of Genesis Electronics Group, Inc. and
Subsidiary as of December 31, 2008, and the related consolidated statement of
operations, changes in stockholders deficit and cash flow for the year ended
December 31, 2008. This consolidated financial statement is the responsibility
of the Companys management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted
our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purposes of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining on a test
basis, evidence supporting the amount and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our
opinion, the consolidated financial statement referred to above present fairly,
in all material respects, the financial position of Genesis Electronics Group, Inc. and
Subsidiary as of December 31, 2008, and the result of their operations and
their cash flow for the year ended December 31, 2008, in conformity with
accounting principles generally accepted in the United States of America.

The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 8 to the
financial statements, the Company has an accumulated deficit of $7,513,897 and
has net losses and cash used in operations of $3,076,697 and $254,743,
respectively, for the year ended December 31, 2008. This raises substantial
doubt about its ability to continue as a going concern. Managements plans in
regards to these matters are also described in Note 8. The consolidated
financial statement does not include any adjustments that might result from the
outcome of this uncertainty.

|                                      
|--------------------------------------
|s/ Kramer, Weisman and Associates, LLP
|Certified Public Accountants          

Davie, Florida

April 1, 2009

F-2

---



Table of Contents

REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board
of Directors 
Genesis Electronics Group, Inc. 
Hollywood, Florida

We have
audited the accompanying consolidated balance sheet of Genesis Electronics Group, Inc. and
Subsidiary as of December 31, 2007, and the related consolidated statement of
operations, changes in stockholders deficit and cash flow for the year ended
December 31, 2007. This consolidated financial statement is the responsibility
of the Companys management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted
our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purposes of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining on a test
basis, evidence supporting the amount and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our
opinion, the consolidated financial statement referred to above present fairly,
in all material respects, the financial position of Genesis Electronics Group, Inc. and
Subsidiary as of December 31, 2007, and the result of their operations and
their cash flow for the year ended December 31, 2007, in conformity with
accounting principles generally accepted in the United States of America.

The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 7 to the
financial statements, the Company has an accumulated deficit of $4,437,200 and
has net losses and cash used in operations of $1,467,212 and $199,217,
respectively, for the year ended December 31, 2007. This raises substantial
doubt about its ability to continue as a going concern. Managements plans in
regards to these matters are also described in Note 7. The consolidated
financial statement does not include any adjustments that might result from the
outcome of this uncertainty.

|                            
|----------------------------
|s/ Baum & Company, PA       
|Certified Public Accountants

Fort
Lauderdale, Florida 
March 31, 2008

F-3

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Table of Contents

|                                              
|----------------------------------------------
|GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
|CONSOLIDATED BALANCE SHEETS                   
|Audited                                       

|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ---------- | ----------------- | - | ---------- | -
|                                                                                                                                                                      |  | Year ended        |           
|                                                                                                                                                                      |  | December 31, 2008 |            | December 31, 2007 |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|ASSETS                                                                                                                                                                |  |                   |            |                   |   |            |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|CURRENT ASSETS:                                                                                                                                                       |  |                   |            |                   |   |            |  
|Cash                                                                                                                                                                  |  | $                 | 2,319      |                   | $ | 850        |  
|Prepaid expense and other current asset                                                                                                                               |  |                   | 3,160      |                   |   | 144,280    |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|Total current assets                                                                                                                                                  |  |                   | 5,479      |                   |   | 145,130    |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|PROPERTY AND EQUIPMENT, net                                                                                                                                           |  |                   | 1,371      |                   |   | 3,895      |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|Total assets                                                                                                                                                          |  | $                 | 6,850      |                   | $ | 149,025    |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|LIABILITIES AND STOCKHOLDERS
DEFICIT                                                                                                                                 |  |                   |            |                   |   |            |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|CURRENT LIABILITIES:                                                                                                                                                  |  |                   |            |                   |   |            |  
|Accounts payable and accrued expenses                                                                                                                                 |  | $                 | 152,837    |                   | $ | 73,421     |  
|Convertible debt                                                                                                                                                      |  |                   | 931,919    |                   |   | 131,500    |  
|Note payable                                                                                                                                                          |  |                   | 15,647     |                   |   |           |  
|Loans payable                                                                                                                                                         |  |                   | 40,000     |                   |   |           |  
|Due to related parties                                                                                                                                                |  |                   | 78,385     |                   |   | 63,285     |  
|Deferred revenue                                                                                                                                                      |  |                   | 682        |                   |   | 1,692      |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|Total current liabilities                                                                                                                                             |  |                   | 1,219,470  |                   |   | 269,898    |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|STOCKHOLDERS DEFICIT:                                                                                                                                                |  |                   |            |                   |   |            |  
|Common stock, $0.001 par value, 300,000,000
 authorized, 106,602,989 and 28,948,873 issued and outstanding, at December
 31, 2008 and December 31, 2007, respectively |  |                   | 106,603    |                   |   | 28,949     |  
|Additional paid-in capital                                                                                                                                            |  |                   | 6,219,824  |                   |   | 4,287,378  |  
|Accumulated deficit                                                                                                                                                   |  |                   | (7,513,897 | )                 |   | (4,437,200 | )
|Subscription receivable                                                                                                                                               |  |                   | (25,150    | )                 |   |           |  
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|Total stockholders deficit                                                                                                                                           |  |                   | (1,212,620 | )                 |   | (120,873   | )
|                                                                                                                                                                      |  |                   |            |                   |   |            |  
|Total liabilities and stockholders deficit                                                                                                                           |  | $                 | 6,850      |                   | $ | 149,025    |  

See notes to audited consolidated financial statements.

F-4

---



Table of Contents

|                                              
|----------------------------------------------
|GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
|CONSOLIDATED STATEMENTS OF OPERATIONS         
|Audited                                       

|                                                                   |  |                                  |            |      |   |            |  
|------------------------------------------------------------------ |  | -------------------------------- | ---------- | ---- | - | ---------- | -
|                                                                   |  | For the Year Ended
 December 31, |           
|                                                                   |  | 2008                             |            | 2007 |  
|                                                                   |  |                                  |            |      |   |            |  
|Net Sales                                                          |  | $                                | 111,518    |      | $ | 179,176    |  
|                                                                   |  |                                  |            |      |   |            |  
|Operating expenses:                                                |  |                                  |            |      |   |            |  
|Advertising                                                        |  |                                  | 15,134     |      |   | 4,274      |  
|Professional fees                                                  |  |                                  | 30,925     |      |   | 60,181     |  
|Consulting fees                                                    |  |                                  | 255,389    |      |   | 698,882    |  
|Compensation                                                       |  |                                  | 434,295    |      |   | 701,064    |  
|Other selling, general and administrative                          |  |                                  | 151,021    |      |   | 181,987    |  
|                                                                   |  |                                  |            |      |   |            |  
|Total operating expenses                                           |  |                                  | 886,764    |      |   | 1,646,388  |  
|                                                                   |  |                                  |            |      |   |            |  
|Loss from operations                                               |  |                                  | (775,246   | )    |   | (1,467,212 | )
|                                                                   |  |                                  |            |      |   |            |  
|Other income (expenses):                                           |  |                                  |            |      |   |            |  
|Other expense                                                      |  |                                  | (75        | )    |   |           |  
|Gain on settlement of debt                                         |  |                                  | 469,284    |      |   |           |  
|Impairment expense                                                 |  |                                  | (1,717,602 | )    |   |           |  
|Interest expense                                                   |  |                                  | (1,053,058 | )    |   |           |  
|                                                                   |  |                                  |            |      |   |            |  
|Total other income (expenses)                                      |  |                                  | (2,301,451 | )    |   |           |  
|                                                                   |  |                                  |            |      |   |            |  
|Loss before provision for income taxes                             |  |                                  | (3,076,697 | )    |   | (1,467,212 | )
|                                                                   |  |                                  |            |      |   |            |  
|Provision for income taxes                                         |  |                                  |           |      |   |           |  
|                                                                   |  |                                  |            |      |   |            |  
|Net loss                                                           |  | $                                | (3,076,697 | )    | $ | (1,467,212 | )
|                                                                   |  |                                  |            |      |   |            |  
|Net loss per common share - basic and
 diluted                     |  | $                                | (0.05      | )    | $ | (0.05      | )
|                                                                   |  |                                  |            |      |   |            |  
|Weighted average number of shares
 outstanding - basic and diluted |  |                                  | 56,810,124 |      |   | 26,937,130 |  

See notes to audited consolidated financial statements.

F-5

---



Table of Contents

|                                                           
|-----------------------------------------------------------
|GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY             
|CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT
|FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007             



Common Stock, $.001 Par Value

        

        AdditionalPaid-inCapital

        

        AccumulatedDeficit

        

        TreasuryStock

        

        SubscriptionReceivable

        

        TotalStockholdersDeficitNumber ofShares

        

        AmountBalance, December 31, 2006

        

        24,481,617

        

        $

        24,482

        

        $

        3,123,523

        

        $

        (2,969,988

        )

        $

        (1,000

        )

        $

        

        

        $

        177,017Sale of common stock

        

        1,057,856

        

        

        1,058

        

        

        95,281

        

        

        

        

        

        

        

        

        

        

        

        96,339Sale of treasury stock for cash and services

        

        

        

        

        

        

        

        29,000

        

        

        

        

        

        1,000

        

        

        

        

        

        30,000Common stock issued for services

        

        3,409,400

        

        

        3,409

        

        

        869,672

        

        

        

        

        

        

        

        

        

        

        

        873,081Grant of stock options for services

        

        

        

        

        

        

        

        154,902

        

        

        

        

        

        

        

        

        

        

        

        154,902Donation of officers compensation

        

        

        

        

        

        

        

        15,000

        

        

        

        

        

        

        

        

        

        

        

        15,000Net loss for the year ended December 31, 2007

        

        

        

        

        

        

        

        

        

        

        (1,467,212

        )

        

        

        

        

        

        

        

        (1,467,212

        )Balance, December 31, 2007

        

        28,948,873

        

        

        28,949

        

        

        4,287,378

        

        

        (4,437,200

        )

        

        

        

        

        

        

        

        (120,873

        )Sale of common stock

        

        25,361,916

        

        

        25,362

        

        

        340,600

        

        

        

        

        

        

        

        

        (25,150

        )

        

        340,812Common stock issued for services

        

        37,600,000

        

        

        37,600

        

        

        295,950

        

        

        

        

        

        

        

        

        

        

        

        333,550Cancellation of common stock issued previously for services

        

        (3,100,000

        )

        

        (3,100

        )

        

        (7,130

        )

        

        

        

        

        

        

        

        

        

        

        (10,230

        )Common stock issued as a replacement for issuance of stock options in connection with a consulting agreement

        

        1,000,000

        

        

        1,000

        

        

        (55,902

        )

        

        

        

        

        

        

        

        

        

        

        (54,902

        )Common stock issued for prepaid services

        

        3,600,000

        

        

        3,600

        

        

        97,767

        

        

        

        

        

        

        

        

        

        

        

        101,367Common stock issued for settlement of related party loans

        

        66,000

        

        

        66

        

        

        31,734

        

        

        

        

        

        

        

        

        

        

        

        31,800Common stock issued for convertible debt

        

        11,218,830

        

        

        11,218

        

        

        106,580

        

        

        

        

        

        

        

        

        

        

        

        117,798Common stock issued in connection with the merger agreement

        

        1,907,370

        

        

        1,908

        

        

        55,236

        

        

        

        

        

        

        

        

        

        

        

        57,144Beneficial conversion on convertible debt

        

        

        

        

        

        

        

        1,049,717

        

        

        

        

        

        

        

        

        

        

        

        1,049,717Stock warrants issued for services

        

        

        

        

        

        

        

        17,894

        

        

        

        

        

        

        

        

        

        

        

        17,894Net loss for the period

        

        

        

        

        

        

        

        

        

        

        (3,076,697

        )

        

        

        

        

        

        

        

        (3,076,697

        )Balance, December 31, 2008

        

        106,602,989

        

        $

        106,603

        

        $

        6,219,824

        

        $

        (7,513,897

        )

        $

        

        

        $

        (25,150

        )

        $

        (1,212,620

        )




See notes to audited consolidated financial
statements.

F-6

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Table of Contents

|                                              
|----------------------------------------------
|GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
|CONSOLIDATED STATEMENTS OF CASH FLOWS         
|Audited                                       

|                                                                          |  |                                  |            |      |   |            |  
|------------------------------------------------------------------------- |  | -------------------------------- | ---------- | ---- | - | ---------- | -
|                                                                          |  | For the Year Ended
 December 31, |           
|                                                                          |  | 2008                             |            | 2007 |  
|                                                                          |  |                                  |            |      |   |            |  
|Cash flows from operating activities:                                     |  |                                  |            |      |   |            |  
|Net loss                                                                  |  | $                                | (3,076,697 | )    | $ | (1,467,212 | )
|Adjustments to reconcile net loss to net
 cash used in operations:        |  |                                  |            |      |   |            |  
|Depreciation and amortization                                             |  |                                  | 2,524      |      |   | 3,128      |  
|Common stock issued for services                                          |  |                                  | 323,320    |      |   | 430,581    |  
|Stock warrants issued for services                                        |  |                                  | 17,894     |      |   |           |  
|Amortization of prepaid expense in
 connection with deferred compensation |  |                                  | 187,585    |      |   | 799,782    |  
|Donation of former officers compensation                                 |  |                                  |           |      |   | 15,000     |  
|Gain on settlement of debt                                                |  |                                  | (469,284   | )    |   |           |  
|Interest expense in connection with the
 settlement agreement             |  |                                  | 1,049,717  |      |   |           |  
|Impairment of goodwill                                                    |  |                                  | 1,717,602  |      |   |           |  
|Changes in assets and liabilities:                                        |  |                                  |            |      |   |            |  
|Prepaid expenses and other                                                |  |                                  |           |      |   | (160       | )
|Deposits                                                                  |  |                                  |           |      |   | 1,302      |  
|Accounts payable and accrued expenses                                     |  |                                  | (6,394     | )    |   | 24,626     |  
|Deferred revenues                                                         |  |                                  | (1,010     | )    |   | (6,264     | )
|                                                                          |  |                                  |            |      |   |            |  
|Total adjustments                                                         |  |                                  | 2,821,954  |      |   | 1,267,995  |  
|                                                                          |  |                                  |            |      |   |            |  
|Net cash used in operating activities                                     |  |                                  | (254,743   | )    |   | (199,217   | )
|                                                                          |  |                                  |            |      |   |            |  
|Cash flows from financing activities:                                     |  |                                  |            |      |   |            |  
|Proceeds from sale of common stock                                        |  |                                  | 340,812    |      |   | 111,339    |  
|Proceeds from loans payable                                               |  |                                  |           |      |   | 65,000     |  
|Repayment of loans payable                                                |  |                                  |           |      |   | (7,000     | )
|Proceeds from related parties                                             |  |                                  | 8,000      |      |   | 38,000     |  
|Payments on related party advances                                        |  |                                  | (92,600    | )    |   | (35,100    | )
|                                                                          |  |                                  |            |      |   |            |  
|Net cash provided by financing activities                                 |  |                                  | 256,212    |      |   | 172,239    |  
|                                                                          |  |                                  |            |      |   |            |  
|Net increase (decrease) in cash                                           |  |                                  | 1,469      |      |   | (26,978    | )
|                                                                          |  |                                  |            |      |   |            |  
|Cash - beginning of the year                                              |  |                                  | 850        |      |   | 27,828     |  
|                                                                          |  |                                  |            |      |   |            |  
|Cash - end of the year                                                    |  | $                                | 2,319      |      | $ | 850        |  
|                                                                          |  |                                  |            |      |   |            |  
|Supplemental disclosure of cash flow
 information:                        |  |                                  |            |      |   |            |  
|Cash paid for:                                                            |  |                                  |            |      |   |            |  
|Interest                                                                  |  | $                                |           |      | $ |           |  
|Income taxes                                                              |  | $                                |           |      | $ |           |  
|                                                                          |  |                                  |            |      |   |            |  
|NON-CASH INVESTING AND FINANCING
 ACTIVITIES:                             |  |                                  |            |      |   |            |  
|Common stock issued for future services                                   |  | $                                | 101,367    |      | $ | 141,120    |  
|Common stock issued for settlement of loans                               |  | $                                | 149,598    |      | $ | 612,402    |  

See notes to audited consolidated financial statements.

F-7

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY 
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

NOTE 1 - BASIS
OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of
presentation

The
consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States of America (US GAAP). The
consolidated statements include the accounts of Genesis Electronics Group, Inc. formerly Pricester.com, Inc. and its
wholly-owned subsidiary. All significant inter-company balances and transactions
have been eliminated.

Organization

Genesis Electronics Group, Inc. formerly Pricester.com, Inc.
was incorporated under the name Pricester, Inc. on April 19, 2001 in the State
of Florida. Pursuant to Articles of Amendment filed on February 24, 2009, the name of the registrant
was changed to Genesis Electronics Group, Inc.

On February
11, 2005, Pricester.Com (the Company) merged into Pricester.com, Inc,
(BA22) a public non-reporting company (that was initially incorporated in
Nevada in March 1998 as Business Advantage #22, Inc). BA22 acquired 100% of the
Companys outstanding common stock by issuing one share of its common stock for
each share of the Companys then outstanding common stock of 21,262,250 shares.
The acquisition was treated as a recapitalization for accounting purposes.

Through
December 31, 2005, the Company was a developmental stage e-commerce company.
The Company currently operates an e-commerce website that enables any business
to establish a fully functional online retail presence. Pricester.com is an
Internet marketplace which allows vendors to host their website with product
and service listings and allows consumers to search for listed products and
services.

In May 2008,
the Company obtained through a vote of majority of its shareholders the
approval to increase the authorized common shares from 50,000,000 to
300,000,000 shares of common stock at $0.001 par value.

On May 22,
2008, the Company completed a merger with Genesis Electronics, Inc., a Delaware
corporation (Genesis) which is described below.

The merger is
being accounted for as a purchase method acquisition pursuant to Statement of
Financial Accounting Standards No. 141 Business Combinations.
Accordingly, the purchase price was allocated to the fair value of the assets
acquired and the liabilities assumed. The Company is the acquirer for
accounting purposes and Genesis is the acquired company.

Genesis was
originally formed in Delaware on October 22, 2001 and is engaged on the
development of solar and alternative energy applications for consumer devices
such as mobile phones.

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

Merger with
Options

On May 22,
2008, the Company entered into an Agreement of Merger and Plan of Share
Exchange (the Merger Agreement) by and among the Company, Genesis
Electronics, Inc. (Genesis) and the Genesis Stockholders. Upon closing of the
merger transaction contemplated under the Merger Agreement (the Merger), on
May 22, 2008 the Company merged with Genesis and became a wholly-owned
subsidiary of the Company.

F-8

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY 
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

The merger
consideration included the issuance of 1,907,370 shares of the Companys stock
valued at $0.03 per share (applying EITF 99-12 Determination of the
Measurement Date for the Market Price of Acquirer Securities Issued in a Purchase Business
Combination).The total purchase price was common stock valued at $57,144. The
Company accounted for the merger utilizing the purchase method of accounting in
accordance with Statement of Financial Accounting Standards (SFAS) No. 141,
Business Combinations. The Company is the acquirer for accounting purposes
and Genesis is the acquired company. Accordingly, the Company applied pushdown
accounting and adjusted to fair value all of the assets and liabilities
directly on the financial statements of the Subsidiary, Genesis Electronics,
Inc. The net purchase price, including acquisition costs paid by the Company,
was allocated to the liabilities assumed on the records of the Company as
follows:

|                     |  |   |            |  
|-------------------- |  | - | ---------- | -
|Goodwill             |  |   | 1,717,602  |  
|                     |  |   |            |  
|Liabilities
 assumed |  |   | (1,660,458 | )
|                     |  |   |            |  
|Net purchase
 price  |  | $ | 57,144     |  

Since the
Company has minimal revenues, has incurred losses and cash used in operations,
the Company deemed the acquired goodwill to be impaired and wrote-off the
goodwill on the acquisition date. Accordingly, for the year ended December 31,
2008, the Company recorded an impairment of goodwill of $1,717,602 on the
accompanying statement of operations.

Unaudited pro
forma results of operations data as if the Company and Options had occurred as
of January 1, 2007, are as follows:

|                                  |  |                                                               |            |                                                               |   |            |   |  |  | 
|--------------------------------- |  | ------------------------------------------------------------- | ---------- | ------------------------------------------------------------- | - | ---------- | - |  |  | 
|                                  |  | The Company and
 GenesisFor the Year
 endedDecember 31,
 2008 |            | The Company and
 GenesisFor the Year
 endedDecember 31,
 2007 |   |            |  
|Pro forma
 revenues               |  | $                                                             | 111,518    |                                                               | $ | 179,176    |   |  |  | 
|Pro forma
 loss from operations   |  |                                                               | (917,827   | )                                                             |   | (1,818,685 | ) |  |  | 
|Pro forma
 net loss               |  |                                                               | (3,245,084 | )                                                             |   | (1,895,325 | ) |  |  | 
|Pro forma
 loss per share         |  | $                                                             | (0.06      | )                                                             | $ | (0.07      | ) |  |  | 
|Pro forma
 diluted loss per share |  | $                                                             | (0.06      | )                                                             | $ | (0.07      | ) |  |  | 

Pro forma data
does not purport to be indicative of the results that would have been obtained
had these events actually occurred at January 1, 2007 and is not intended to be
a projection of future results.

Use of
Estimates

The
preparation of financial statements in conformity with generally accepted
accounting principles 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.
Actual results could differ from those estimates. Significant estimates in 2008
and 2007 include the valuation of stock-based compensation, and the useful life
of property, equipment, website development and valuation of beneficial
conversion feature in connection with convertible debt.

Cash and Cash
Equivalents

For purposes
of the consolidated statements of cash flows, the Company considers all highly
liquid instruments purchased with a maturity of three months or less and money
market accounts to be cash equivalents.

F-9

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY 
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

Fair Value of
Financial Instruments

Statement of
Financial Accounting Standards No. 107, Disclosures about Fair Value of
Financial Instruments, requires disclosures of information about the fair
value of certain financial instruments for which it is practicable to estimate
the value. For purpose of this disclosure, the fair value of a financial
instrument is the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced sale or
liquidation.

The carrying
amounts reported in the consolidated balance sheet for cash, accounts payable,
accrued expenses, loans payable, notes payable, due to related parties and
deferred revenue approximate their fair market value based on the short-term
maturity of these instruments.

Property and
Equipment

Property and
equipment are stated at cost. Depreciation and amortization are provided using
the straight-line method over the estimated economic lives of the assets, which
are from five to seven years. Expenditures for major renewals and betterments
that extend the useful lives of property and equipment are capitalized.
Expenditures for maintenance and repairs are charged to expense as incurred.

Website
Development

Costs that the
Company has incurred in connection with developing the Companys websites are
capitalized and amortized using the straight-line method over expected useful
lives of three years.

Impairment of
Long-lived Assets

In accordance
with Statement of Financial Accounting Standards (SFAS) No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, The Company periodically
reviews its long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be fully
recoverable. The Company recognizes an impairment loss when the sum of expected
undiscounted future cash flows is less than the carrying amount of the asset.
The amount of impairment is measured as the difference between the assets
estimated fair value and its book value. On May 22, 2008, the Company entered
into an Agreement of Merger and Plan of Share Exchange (the Merger Agreement)
by and among the Company, Genesis Electronics, Inc. (Genesis) and the Genesis
Stockholders. Upon closing of the merger transaction contemplated under the
Merger Agreement (the Merger), on May 22, 2008 the Company merged with
Genesis and became a wholly-owned subsidiary of the Company. The Company
accounted for the merger utilizing the purchase method of accounting in
accordance with Statement of Financial Accounting Standards (SFAS) No. 141,
Business Combinations. The purchase price was allocated to the
liabilities assumed based on their fair values. Since we have minimal revenues,
have incurred losses and used cash in operations, the Company deemed the
acquired goodwill to be impaired and wrote-off the goodwill on the acquisition
date. Accordingly, for the year ended December 31, 2008, the Company recorded
an impairment of goodwill of $1,717,602 on the accompanying statement of
operations.

Non-employee
Stock-Based Compensation

The cost of
stock based compensation awards issued to non-employees for services are
recorded at either the fair value of the services rendered or the instruments
issued in exchange for such services, whichever is more readily determinable,
using the measurement date guidelines enumerated in Emerging Issues Task Force
Issue (EITF) 96-18, Accounting for Equity Instruments That Are Issued to
Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services (EITF 96-18).

F-10

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY 
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

Stock-Based
Compensation

Effective
January 1, 2006, the Company 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, the Company
recognized the cost resulting from all stock-based payment transactions
including shares issued under its stock option plans in the financial
statements.

Prior to
January 1, 2006, the Company accounted for stock-based employee compensation
plans (including shares issued under its stock option plans) in accordance with
APB Opinion No. 25 and followed the pro forma net income, pro forma income per
share, and stock-based compensation plan disclosure requirements set forth in
the Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation (SFAS No. 123). For the year ended December 31,
2008, the Company did not grant any stock options to employees.

Net Loss per
Common Share

Basic loss per
share is computed by dividing net loss by the weighted average number of shares
of common stock outstanding during the period. The computation of diluted net
earnings per share does not include dilutive common stock equivalents in the
weighted average shares outstanding as they would be anti-dilutive. As of
December 31, 2008, there were options and warrants to purchase 2,525,000 shares
of common stock which could potentially dilute future earnings per share.

Income Taxes

Income taxes
are accounted for under Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, which is an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
Companys financial statements or tax returns.

Research and
Development

Research and
development costs, if any, are expensed as incurred.

Revenue
Recognition

The Company
follows the guidance of the Securities and Exchange Commissions Staff
Accounting Bulletin 104 for revenue recognition. In general, the Company
records revenue when persuasive evidence of an arrangement exists, services
have been rendered or product delivery has occurred, the sales price to the
customer is fixed or determinable, and collectibility is reasonably assured.
The following policies reflect specific criteria for the various revenues
streams of the Company:

F-11

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY 
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

The Company
has three primary revenue sources: website design, transaction fees, and
hosting fees.

| |   |                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | o | 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.                                                                                                                                            
| |  
| | o | 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.
| |  
| | o | 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.                                                                                                                                                          

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
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. The Company does 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. The Company 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. The Company has not
determined the impact on its financial statements of this accounting standard.

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 ofPresent Fairly in Conformity With Generally Accepted
Accounting Principles. The Company does not expect that the adoption of this
pronouncement will have a significant impact on its financial condition,
results of operations and cash flows.

F-12

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY 
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

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 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 the Companys
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 Company does not expect that the adoption of this pronouncement will have a
significant impact on its financial condition, results of operations and cash
flows.

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.

NOTE 2 -
PROPERTY AND EQUIPMENT

At December
31, 2008, property and equipment consist of the following:

|                                            |  |                       |   |  |   |         |  
|------------------------------------------- |  | --------------------- | - |  | - | ------- | -
|                                            |  | Useful Life 
 (Years) |   |  |  
|Computer equipment and software             |  |                       | 5 |  | $ | 12,542  |  
|Office furniture and fixtures and
equipment |  |                       | 7 |  |   | 4,328   |  
|                                            |  |                       |   |  |   | 16,870  |  
|Less accumulated depreciation               |  |                       |   |  |   | (15,499 | )
|                                            |  |                       |   |  | $ | 1,371   |  

For the years
ended December 31, 2008 and 2007, depreciation expense amounted to $2,524 and
$3,128, respectively.

F-13

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY 
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

NOTE 3  LOANS
PAYABLE

The former
chief technical officer advanced funds to the Company for working capital
purposes. The advances are non-interest bearing and are payable on demand. At
December 31, 2007, the Company owed $131,500 as reflected in the accompanying
balance sheet. In January 2008, the related party affiliates of the Company
assumed the total debt from the former chief technical officer of the Company
in exchange for shares of stocks owned by such related party affiliate. At
December 31, 2008, the Company owed $0 to the former chief technical officer.

On May 22,
2008, in connection with the Merger, the Company assumed loans payable from
certain third parties. These loans bear 8% interest per annum and are payable
on demand. As of December 31, 2008, loans payable and related accrued interest
amounted to $40,000 and $8,371, respectively.

NOTE 4 -
RELATED PARTY TRANSACTIONS

The former
chief technical officer donated compensation amounting to approximately $15,000
during the year ended December 31, 2007. The donation is recorded as additional
paid-in capital and a corresponding increase to operating expenses.

Certain
officers of the Company advance funds to the Company for working capital
purposes. The advances are non-interest bearing and are payable on demand. At
December 31, 2008 and 2007, the Company owed these related parties $78,385 and
$63,285, respectively.

NOTE 5 -
INCOME TAXES

The Company
accounts for income taxes under Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes SFAS 109. SFAS 109 requires the
recognition of deferred tax assets and liabilities for both the expected impact
of differences between the financial statements and the tax basis of assets and
liabilities, and for the expected future tax benefit to be derived from tax
losses and tax credit carryforwards. SFAS 109 additionally requires the
establishment of a valuation allowance to reflect the likelihood of realization
of deferred tax assets. The Company has a net operating loss carryforward for
tax purposes totaling approximately $4.4 million at December 31, 2008 expiring
through the year 2028. Internal Revenue Code Section 382 places a limitation on
the amount of taxable income that can be offset by carryforwards after a change
in control (generally greater than a 50 percent change in ownership).

Temporary
differences, which give rise to a net deferred tax asset, are as follows:

|                                          |  |      |            |      |  |     |    |   |          |   |  |     |   
|----------------------------------------- |  | ---- | ---------- | ---- |  | --- | -- | - | -------- | - |  | --- | --
|                                          |  | 2008 |            | 2007 | 
|Computed
 expected benefit              |  | $    | (1,046,077 | )    |  | (34 | %) | $ | (493,890 | ) |  | (34 | %)
|State tax
 benefit, net of federal effect |  |      | (123,068   | )    |  | (4  | %) |   | (58,105  | ) |  | (4  | %)
|Other
 permanent differences              |  |      | 1,058,381  |      |  | 34  | %  |   |         |   |  | 0   | % 
|Increase in valuation allowance           |  |      | 110,764    |      |  | 4   | %  |   | 551,995  |   |  | 38  | % 
|                                          |  | $    |           |      |  |    |    | $ |         |   |  |    |   

F-14

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

Deferred tax
assets and liabilities are provided for significant income and expense items
recognized in different years for tax and financial reporting purposes.
Temporary differences, which give rise to a net deferred tax asset is as
follows:

|                      |                                  |      |   |            |  
|--------------------- | -------------------------------- | ---- | - | ---------- | -
|                      |                                  | 2008 |  
|                      |                                  |      |   |           
|Deferred tax
 assets: |                                  |      |   |           
|                      | Net
 operating loss carryforward |      | $ | 1,662,201  |  
|                      |                                  |      |   |            |  
|                      | Less:
 Valuation allowance       |      |   | (1,662,201 | )
|                      |                                  |      |  |           

The valuation
allowance at December 31, 2008 was $1,662,201. The increase during fiscal 2008
was $110,764.

NOTE 6  NOTE
PAYABLE

On May 22,
2008, in connection with the Merger, the Company assumed a note payable from a
third party. These loans bear 8% interest per annum and is payable on demand.
As of December 31, 2008, note payable and related accrued interest amounted to
$15,647 and $6,228, respectively.

NOTE 7 
CONVERTIBLE DEBT

On May 22,
2008, in connection with the Merger, the Company assumed certain debts from a
third party, Corporate Debt Solutions (Corporate Debt) amounting to
$1,049,717. Corporate Debt assumed a total of $1,049,717 of promissory notes
issued by two former officers of Genesis and a certain third party. These
promissory notes were issued to the Companys subsidiary, Genesis. Immediately
following the closing of the Merger, on May 23, 2008, the Company entered into
a settlement agreement with Corporate Debt Solutions (Corporate Debt).
Pursuant to the settlement agreement, the Company shall issue shares of common
stock and deliver to Corporate Debt, to satisfy the principal and interest due
and owing through the issuance of freely trading securities of up to
100,000,000 shares. The parties have agreed that Corporate Debt shall have no
ownership rights to the Settlement Shares not yet issued until it has affirmed
to the Company that it releases the Company for the proportionate amount of
claims represented by each issuance. The said requested number of shares of
common stock is not to exceed 4.99% of the outstanding stock of the Company at
any one time. In connection with this settlement agreement, the Company
recorded and deemed such debt as a convertible liability with a fixed
conversion price of $0.01. Accordingly, the Company recognized a total debt
discount of $1,049,717 due to a beneficial conversion feature and such debt
discount was immediately amortized to interest expense during the year ended
December 31, 2008.

The Company
had an outstanding balance of approximately $1,399,490 to two former officers
of Genesis which had been included in current liabilities prior to this
settlement. Pursuant to this settlement agreement, the Company settled for
$930,206 (included in the $1,049,717 discussed above) and the Company was released
from further claim. The Company has recognized a gain from debt settlement of
$469,284 during the year ended December 31, 2008.

In June 2008,
the Company issued 2,223,456 shares in connection with the conversion of this
convertible debt. The fair value of such shares issued amounted to
approximately $23,346.

Between July
2008 and August 2008, the Company issued 8,995,374 shares in connection with
the conversion of this convertible debt. The fair value of such shares issued
amounted to approximately $94,452.

F-15

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

NOTE 8 - GOING
CONCERN

The
accompanying financial statements are prepared assuming the Company will
continue as a going concern. Going concern contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business
over a reasonable length of time. The Company was in the development stage
through December 31, 2005 and has an accumulated deficit of approximately $7.5
million at December 31, 2008, had net losses and negative cash flows from
operations for the year ended December 31, 2008 of $3,076,697 and $254,743,
respectively. While the Company is attempting to increase revenues, the growth
has not been significant enough to support the Companys daily operations.
During the year ended December 31, 2008, the Company sold 25,361,916 common
shares for net proceeds of $340,812.

Management is
attempting to raise additional funds by way of a public or private offering.
While the Company believes in the viability of its strategy to increase sales
volume and in its ability to raise additional funds, there can be no assurances
to that effect. The Companys limited financial resources have prevented the
Company from aggressively advertising its products and services to achieve
consumer recognition. These financial statements do not include any adjustments
relating to the recoverability and classifications of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.

NOTE 9 -
STOCKHOLDERS DEFICIT

Common Stock

During fiscal
2007, the Company received net proceeds of $111,339 from the sale of 1,057,856
shares of the Companys common stock and 1,000,000 shares of treasury stock. In
connection with the sale of the 1,000,000 shares of treasury stock, the Company
received gross proceeds of $15,000 and recognized stock based consulting
expense of $15,000 during the year ended December 31, 2007.

On February
20, 2007, the Company issued 180,000 shares of common stock for services
rendered to a director of the Company. The Company valued these common shares
at the fair market value on the date of grant at $.55 per share or $99,000. In
connection with issuance of these shares, the Company recorded stock-based
compensation expense of $99,000 during the year ended December 31, 2007.

On April 1,
2007, in connection with a twelve month consulting agreement, the Company
issued 400,000 shares of common stock for corporate advisory services. The
Company valued these common shares at the fair market value on the date of
grant at $.34 per share or $136,000. In connection with the issuance of these
shares during the year ended December 31, 2007 and December 31, 2008, the
Company recorded stock-based consulting expense of $102,000 and $34,000,
respectively.

In April 2007,
in connection with a three month consulting agreement, the Company issued
30,000 shares of common stock for business development services. The Company
valued these common shares at the fair market value on the date of grant at
$.37 per share or $11,100. In connection with issuance of these shares, the
Company recorded stock-based consulting expense of $11,100 during the year
ended December 31, 2007.

In April 2007,
in connection with a three month consulting agreement, the Company issued
100,000 shares of common stock for corporate advisory services. The
Company valued these common shares at the fair market value on the date
of grant at $.23 per share or $23,000. In connection with issuance of these
shares, the Company recorded stock-based consulting expense of $23,000 during
the year ended December 31, 2007.

F-16

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

On April 24,
2007, the Company agreed to issue 500,000 shares of common stock to the
Companys CEO for services to be rendered in the future. The Company valued
these common shares at the fair market value on the date of grant at $.26 per
share or $130,000. In connection with these shares, the Company recorded stock-
based compensation during the year ended December 31, 2007 of $130,000.

On April 24,
2007, the Company issued 1,000,000 shares of common stock to the Companys CEO
for past services rendered. The Company valued these common shares at the fair
market value on the date of grant at $.26 per share or $258,850. In connection
with the issuance of these shares, the Company recorded salaries for the Chief
Executive Officer of $258,850.

In May 2007,
the Company issued in aggregate 136,900 shares of common stock to various
employees of the Company for services rendered. The Company valued these common
shares at the fair market value on the date of grants ranging from $.20 to $.25
per share or $28,880 and has been recorded as stock-based compensation during
the year ended December 31, 2007.

In May 2007,
in connection with a three month consulting agreement, the Company issued
200,000 shares of common stock for corporate advisory services. The Company
valued these common shares at the fair market value on the date of grant at
$.38 per share or $76,000. Additionally, in June 2007 the Company issued
200,000 shares of common stock to extend the term of this consulting agreement
up to December 14, 2007. The Company valued these common shares at the fair
market value on the date of grant at $.13 per share or $26,000. In connection
with issuance of these shares during the year ended December 31, 2007, the
Company recorded stock-based consulting expense of $102,000.

On June 28,
2007, in connection with a twelve month consulting agreement, the Company
issued 350,000 shares of common stock for corporate advisory services. The
Company valued these common shares at the fair market value on the date of
grant at $.19 per share or $66,500. In connection with the issuance of these
shares during the year ended December 31, 2007 and December 31, 2008, the
Company recorded stock-based consulting expense of $33,614 and $32,886,
respectively.

In August 2007,
the Company issued in aggregate 105,000 shares of common stock to two employees
of the Company for services rendered. The Company valued these common shares at
the fair market value on the date of grant at $.09 per share or $9,450 and has
been recorded as stock-based compensation during the year ended December 31,
2007.

In December
2007, the Company issued in aggregate 207,500 shares of common stock to the
Companys officer, directors and certain employees of the Company for services
rendered. The Company valued these common shares at the fair market value on
the date of grant at $.04 per share or $8,300 and has been recorded as
stock-based compensation during the year ended December 31, 2007.

During the
year ended December 31, 2008, the Company received net proceeds of $340,812 and
subscription receivable of $25,150 from the sale of 25,361,916 shares of the
Companys common stock.

In January
2008, the Company issued 66,000 shares of common stock to officers of the
Company in connection with a settlement of related party loans of $31,800.

In January
2008, in connection with a three month consulting agreement, the Company issued
800,000 shares of common stock for investor relations services. The Company
valued these common shares at the fair market value on the date of grant at
$.07 per share or $56,000. In connection with issuance of these shares, the
Company recorded stock-based consulting expense of $56,000 during the year
ended December 31, 2008.

F-17

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

In January
2008, the Company issued in aggregate 3,000,000 shares of common stock to the
Companys CEO and an officer of the Company in connection with employment
agreements dated January 14, 2008. The Company valued these common shares at
the fair market value on the date of grant at $.07 per share or $210,000 and
has been recorded as stock-based compensation.

In February
2008, in connection with a twelve month consulting agreement, the Company
issued 500,000 shares of common stock for corporate advisory services. The
Company valued these common shares at the fair market value on the date of
grant at $.18 per share or $90,000. In connection with issuance of these
shares, during the year ended December 31, 2008, the Company recorded
stock-based consulting expense of $90,000.

In February
2008, the Company amended a consulting agreement entered into on June 28, 2007,
whereby the consultant will no longer receive the 1,000,000 options to purchase
the Companys common stock but instead shall receive 1,000,000 shares of the
Companys common stock. The Company valued these common shares at the fair
market value on the date of grant at $.10 per share or $100,000. The Company
has recognized stock-based consulting expense of $80,668 during fiscal 2007, in
connection with this agreement. Accordingly, as a result of this amended
agreement, the Company has recognized stock-based consulting expense of $19,332
and has reversed the unamortized portion of $54,902 in prepaid expense related
to the valuation of the stock options during the year ended December 31, 2008.

In June 2008,
in connection with a consulting agreement, the Company issued 3,100,000 shares
of common stock for investor relations services. The Company valued these
common shares at the fair market value on the date of grant at $.04 per share
or $136,400. In connection with issuance of these shares, the Company recorded
stock-based consulting expense of $11,367 and prepaid expense of $125,033 to be
amortized over the balance of the service period. In September 2008, the
Company terminated this agreement and accordingly cancelled the 3,100,000
shares of common stock. In connection with the return of the 3,100,000 shares
of common stock, the Company reduced stock-based compensation expense by
approximately $10,230 based on the fair market value of the common stock on the
date of cancellation of $0.003 per share and has reversed the unamortized
portion of $125,033 in prepaid expense related to the valuation of the stock
options during the year ended December 31, 2008.

In June 2008,
the Company issued 2,223,456 shares in connection with the conversion of this
convertible debt. The fair value of such shares issued amounted to
approximately $23,346.

Between July 2008
and August 2008, the Company issued 8,995,374 shares in connection with the
conversion of this convertible debt. The fair value of such shares issued
amounted to approximately $94,452.

In August
2008, the Company issued 250,000 shares of common stock for corporate advisory
services rendered. The Company valued these common shares at the fair market
value on the date of grant at $.0065 per share or $1,625. In connection with
issuance of these shares, the Company recorded stock-based consulting expense of
$1,625 during the year ended December 31, 2008.

In August
2008, the Company issued 150,000 shares of common stock for investor relation
services rendered. The Company valued these common shares at the fair market
value on the date of grant at $.0035 per share or $525. In connection with
issuance of these shares, the Company recorded stock-based consulting expense
of $525 during the year ended December 31, 2008.

In November
2008, the Company issued in aggregate 30,000,000 shares of common stock to the
Companys CEO and an officer of the Company for services rendered. The Company
valued these common shares at the fair market value on the date of grant at
$.002 per share or $60,000 and has been recorded as stock-based compensation.

F-18

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

In November
2008, the Company issued in aggregate 400,000 shares of common stock to certain
employees of the Company for services rendered. The Company valued these common
shares at the fair market value on the date of grant at $.002 per share or $800
and has been recorded as stock-based compensation.

Between
October and November 2008, the Company issued in aggregate 3,000,000 shares of
common stock to the Companys CEO and an officer of the Company pursuant to
amended employment agreements. The Company valued these common shares at the
fair market value on the date of grant ranging from $0.001 to $.002 per share
or $4,600 and has been recorded as stock-based compensation.

During fiscal
2008, in connection with the Merger Agreement, the Company issued 1,907,370,
shares of common stock valued at $0.03 per share or $57,144. The Company valued
these common shares at the fair market value on the date of grant.

Stock Options

On June 28,
2007, the Company granted one-year options to purchase 1,000,000 shares of
common stock in connection with a twelve month consulting agreement for
corporate advisory services at an exercise price of $.05 per share. The Company
valued these options utilizing the Black-Scholes options pricing model at
approximately $0.16 or $154,902. For the year ended December 31, 2007, in
connection with these options, the Company recorded stock based consulting
expense of $80,668 and prepaid expense of $74,234 to be amortized over the
service period. The Company amended this agreement in February 2008, whereby
the consultant will no longer receive the 1,000,000 options to purchase the
Companys common stock but instead shall receive 1,000,000 shares of the Companys
common stock. The Company valued these common shares at the fair market value
on the date of grant at $.10 per share or $100,000. The Company has recognized
stock-based consulting expense of $80,668 during fiscal 2007, in connection
with this agreement. Accordingly, as a result of this amended agreement, the
Company has recognized stock-based consulting expense of $19,332 and has
reversed the unamortized portion of $54,902 in prepaid expense related to the
valuation of the stock options during the year ended December 31, 2008.

A summary of
the stock options as of December 31, 2008 and changes during the periods is
presented below:

| |                                     |  |                     |            |                                    |   |      | 
| | ----------------------------------- |  | ------------------- | ---------- | ---------------------------------- | - | ---- | 
| |                                     |  | Number
 of
 Options |            | Weighted
 Average
 Exercise
 Price |  
| | Balance at beginning of
 year       |  |                     | 3,025,000  |                                    | $ | 0.28 | 
| | Granted                             |  |                     |           |                                    |   |     | 
| | Exercised                           |  |                     |           |                                    |   |     | 
| | Cancelled                           |  |                     | (1,000,000 | )                                  |   | 0.05 | 
| | Balance at end of year              |  |                     | 2,025,000  |                                    | $ | 0.40 | 
| |                                     |  |                     |            |                                    |   |      | 
| | Options exercisable at end
 of year |  |                     | 2,025,000  |                                    | $ | 0.40 | 

The following
table summarizes the Companys stock option outstanding at December 31, 2008:

| |                          |   |                                     |  |                                    |           |                                    |  |                                       |  |  |      | 
| | ------------------------ | - | ----------------------------------- |  | ---------------------------------- | --------- | ---------------------------------- |  | ------------------------------------- |  |  | ---- | 
| |                          |   | Options Outstanding and Exercisable | 
| | Range of
 Exercise Price |   | Number                              |  | Weighted
 Average
 Remaining
 Life |           | Weighted
 Average
 Exercise
 Price | 
| |                          | $ | 0.40                                |  |                                    | 2,025,000 |                                    |  | 1 year after
 effective
 registration |  |  | 0.40 | 

F-19

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Table of Contents

GENESIS ELECTRONICS GROUP, INC. AND SUBSIDIARY
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008

Stock Warrants

In May 2008,
the Company granted a two-year warrant to purchase 500,000 shares of common stock
in connection with a consulting agreement at an exercise price of $0.035 per
share. The Company valued these warrants utilizing the Black-Scholes options
pricing model at $0.03 per share or $17,894.

NOTE 10 -
COMMITMENTS

Operating
Leases

The Company
leases office space under an operating lease that expires in August 2008. In
August 2008, the Company has signed an extension agreement which will expire in
August 2009. The office lease agreement has certain escalation clauses and
renewal options. If the Company exercises the option to renew, the base rent
shall increase by 3% per each lease year. Future minimum rental payments
required under the operating lease are as follows:

| |                                |  |   |        | 
| | ------------------------------ |  | - | ------ | 
| | Period Ended December 31, 2009 |  | $ | 19,469 | 
| | Total                          |  | $ | 19,469 | 

Rent expense,
including common area charges and sales taxes, for the years ended December 31,
2008 and 2007 was $19,373 and $34,167, respectively.

Employment
Contracts

The Company
entered into an employment agreement on January 14, 2008 with its chief
executive officer which expires in January 2013. The employment agreement calls
for an issuance of 500,000 free trading shares of the Companys common stock.
Additionally, based on this agreement, the Company shall issue 1,000,000
restricted shares of common stock during each fiscal year of the term of this
agreement.

The Company
entered into an employment agreement on January 14, 2008 with an officer of the
Company which expires in January 2013. The employment agreement calls for an
issuance of 500,000 free trading shares of the Companys common stock.
Additionally, based on this agreement, the Company shall issue 1,000,000
restricted shares of common stock during each fiscal year of the term of this
agreement.

NOTE 11 
SUBSEQUENT EVENTS

Between January
2009 and March 2009, the Company received net proceeds of $36,825 and
subscription receivable of $29,734 from the sale of 16,689,750 shares of the
Companys common stock.

In February 2009, the Company filed an amendment to its Articles of Incorporation with the Secretary
of State of Nevada. The company changed its name to Genesis Electronics Group, Inc.

F-20

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