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

                                   FORM 10-KSB
(Mark One)

|X|      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the fiscal year ended September 30, 2006

|_|      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the transition period from _____ to _____

                        Commission file number: 333-86347

                         GENESIS TECHNOLOGY GROUP, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

                     FLORIDA                           65-1130026
         -------------------------------           -------------------
         (State or other jurisdiction of             I.R.S. Employer
         incorporation or organization)            Identification No.)

               7900 Glades Road, Suite 420
                   Boca Raton, Florida                         33434
         ----------------------------------------           ----------
         (Address of principal executive offices)           (Zip Code)

                    Issuer's Telephone Number: (561) 988-9880

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:  None

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. |_|

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 |_|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |X|

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

State issuer's revenues for its most recent fiscal year. The issuer's revenues
for the fiscal year ended September 30, 2006 were $6,750,229.

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 price of such common equity, as of a
specified date within the past 60 days. The aggregate market value of the
issuer's common stock held by non-affiliates, as of December 20, 2006 based upon
the average bid and asked price of such common stock as reported on the OTC
Bulletin Board, was $11,628,831.

As of December 31, 2006, there were 84,532,112 shares of the issuer's common
stock outstanding.

Documents incorporated by reference: None

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

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                                Table of Contents
                                -----------------

                                                                            Page
                                                                            ----
PART I

     Item 1.    Description of Business.....................................   4

     Item 2.    Description of Property.....................................  19

     Item 3.    Legal Proceedings...........................................  19

     Item 4.    Submission of Matters to a Vote of Security Holders.........  20


PART II

     Item 5.    Market for Common Equity and Related Stockholder Matters ...  20

     Item 6.    Management's Discussion and Analysis or Plan of Operation...  21

     Item 7.    Financial Statements........................................  31

     Item 8.    Changes In and Disagreements With Accountants on Accounting
                  and Financial Disclosure..................................  31

     Item 8A.   Controls and Procedures.....................................  31

     Item 8B.   Other Information...........................................  32


PART III

     Item 9.    Directors, Executive Officers, Promoters, Control Persons
                and Corporate Governance; Compliance with Section 16(a) of
                the Exchange Act............................................  32

     Item 10.   Executive Compensation......................................  34

     Item 11.   Security Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters..................  42

     Item 12.   Certain Relationships and Related Transactions, and
                Director Independence.......................................  43

     Item 13.   Exhibits....................................................  43

     Item 14.   Principal Accountant Fees and Services......................  44



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           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

         Certain statements in this annual report on Form 10-KSB 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, economic, political and market
conditions and fluctuations, government and industry regulation, interest rate
risk, global competition, and other factors as relate to our doing business
within the People's Republic of China. 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, which speak only as of the date of this report.
Readers should carefully review this annual report in its entirety, including
but not limited to our financial statements and the notes thereto and the risks
described in "Item 1. Description of Business--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.

         When used in this annual report, the terms the "Company," "Genesis,"
"GTEC," "we," "us," "our," and similar terms refers to Genesis Technology Group,
Inc., a Florida corporation, and our subsidiaries. The information which appears
on our web site www.genesis-china.net is not part of this report.


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<PAGE>

                                     PART 1

ITEM 1.  DESCRIPTION OF BUSINESS

         We are a business development and marketing firm that specializes in
advising and providing a turn key solution for Chinese small and mid-sized
companies entering Western markets. We dedicate our expertise and capital
resources to expand the potential of Chinese partner companies. We provide the
marketing strategy, counsel, and plans to support our clients' business,
financial, or marketing goals. We work closely with top management to define
their strategy and business model to develop effective tactics to support
business development. Our business mission is to create substantial, incremental
stockholder value for emerging growth companies by executing strategy-driven
programs that professionally incubate and mature Chinese companies and prepare
them for Western markets.

         We provide strategy and execution services to Chinese clients who
believe that penetrating US markets is critical to achieving their core
operating and financial objectives. We assist in the sourcing of merger and
acquisitions opportunities for our contract clients. We play a key role in a
Chinese company's conversion to and operation of a U.S. public company. We
assist in the appointment of qualified independent directors, assist in the
creation Western marketing materials (including a professional website), and
assist in the oversight and the functions of the Chinese companies U.S.-based
offices, including staffing, communications, and the numerous required reporting
and filing documents. Our goal is to be a long-term, well-qualified consultant
to our Chinese contract clients, with a mutual goal of enhancing shareholder
value.

GENESIS EQUITY PARTNERS, LLC

         Effective June 20, 2005, we formally established Genesis Equity
Partners LLC ("GEP") in which we own 51% and strategic partners own the
remaining 49%.

         GEP is a Limited Liability Corporation, established in the State of
Florida on June 25, 2005. Each member, known as a Manager/Owner (also referred
to as "partners"), shall contribute to the success of the GEP in the areas of
(a) sourcing qualified Chinese contract companies; (b) identifying suitable
Western public companies or shells; (c) funding the basic working capital, legal
and auditing requirements to complete our contract services and the merger; (d)
providing other consulting services as requested by the post-merger public
company; and (e) assisting the post-merger company with establishing relations
with financial intermediaries as a source of capital and shareholder support
including public/investor relations guidance to increase the value of the
company to benefit of its shareholders, investors, employees, and GEP. We own
51% of GEP, China West, LLC owns 25%, and a company owned by Dr. Shaohua
(Joshua) Tan, a member of our Board of Directors, owns the remaining 24% of GEP.
China West is an independent LLC, owned by parties with no management
involvement with GTEC.

         Our company, together with China West LLC, are the managing members of
GEP. Only the managing members have the ability to legally bind GEP. A managing
member cannot be removed except by the affirmative vote of the majority of the
percentage interests with 30 days notice. Members do not have the right to
withdraw from GEP or reduce their capital contribution except in the event of
dissolution of GEP or in accordance with the terms of the operating agreement.
Meetings of the members may be called by members holding at least 25% of the
membership interests. Membership interests can be transferred, subject to the
terms of the operating agreement including the right of first refusal granted to
the non-transferring members. GEP can be dissolved upon the sale or distribution
of all of its property and assets or upon unanimous agreement of the members.

         Other than the initial capital contributions made by the three members,
there are no requirements for any additional capital contributions by the
members and the members of GEP are not liable for any obligations or liabilities
of GEP in excess of the individual member's capital contribution. All profits
and losses of GEP for a year are allocated to the members pro rata in accordance
with their percentage of membership interest. No losses can be allocated to a

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member if the allocation causes the member to have an adjusted capital account
deficit; all losses in excess of this limitation will be allocated to the other
members in accordance with the member's positive capital account balance until
all members are subject to this limitation and thereafter in accordance with the
members' percentage interests in GEP.

         If GEP should distribute cash or other assets, 75% of the amount is
first distributed to the member(s) who have provided financing for a particular
transaction which is related to the distribution on a pro rata basis, and the
remaining 25% to the other members on a pro rata basis in accordance with their
percentage interests in GEP until such time as the amount equivalent to their
respective financing contributions has been distributed to the member. Any
remainder is distributed pro rata in accordance with the percentage interests.

         GEP assists Chinese and Western companies in formulating strategies to
increase equity value, establishing relationships with financial intermediaries
as a source of capital and shareholder support. The core strength of GEP
management is creating a first rate plan to create investor awareness and
introduction to institutional investors. GEP can enhance market perception to
gain investor awareness by using tested channels of communications by
articulating the companies' stories. GEP has built successful channels with
expertise in screening and selecting Chinese companies that possess solid
business histories and professional management, and North American public
companies and vehicles that possess a shareholder base and a history of auditing
and filing, as required by the US Securities & Exchange Commission.

         Most commonly, GEP approaches qualified Chinese companies with the
following or similar statement: "Based on the information provided by the
Chinese candidate company and GEP's own resources and experience, GEP can devise
a realistic program and introductions for the Chinese company to access the US
markets to raise capital. A program considering both the short term and long
term interest will be developed, and the ultimate target will be set to achieve
long-term goals.

         Usually, GEP shall benefit in two basic ways by completing the mergers
of Chinese and Western companies. The lesser profit center shall be fees charged
for providing consulting services. This is, customarily, a difficult challenge
for Chinese companies. It is not a matter of cash availability, but historically
the Chinese are unaccustomed to paying appropriately for services rendered.
Nonetheless, GEP shall seek reasonable fees when possible. The greater profit
center will be equity positions earned by fulfilling its service agreements.

         On March 15, 2006, GEP signed a General Partnership Agreement with
Beijing Liang Fang Pharmaceutical Co., Ltd. ("Liang Fang"), a company registered
in the People's Republic of China. Liang Fang is based in Beijing and is a drug
development, medical device, and retail drug store enterprise with 10 retail
outlets. Among Liang Fang's best selling products is Valsartan Capsules, a
medication for primary hypertension or high blood pressure. Valsartan first came
to market in America in 1996, known as Diovan. On August 28, 2006, GEP and the
members of Liang Fang established Lotus Pharmaceutical International, Inc., a
Nevada company ("Lotus"). On September 6, 2006, Lotus and the stockholders of
100% of Lotus' common stock (the "Lotus Stockholders") executed a Share Exchange
Agreement ("Exchange Agreement") by and among Lotus Pharmaceutical
International, Inc., a Nevada corporation ("Lotus") with S.E. Asia Trading
Company, Inc., a publicly-trading company ("SEAA"). The Exchange Agreement
closed on September 28, 2006 and GEP received 13,209,600 restricted common
shares of SEAA for services performed in helping Lotus facilitate the merger
with SEAA and for other business development services. Separately, Lotus has
entered into consulting service agreements and equity-related agreements with
Liang Fang and Beijing En Zhe Jia Shi Pharmaceutical Co., Ltd. ("En Zhe Jia"),
both of which are limited liability companies headquartered in the People's
Republic of China ("PRC") and organized under the laws of the PRC. GEP may
receive on-going consulting fees for coordination and oversight of its U.S.
business activities. Under our General Partnership Agreement, we are required to
assist Lotus with establishing relationships with financial intermediaries as a
source of capital. If we are successful in establishing these relationships and
Lotus secures funding through these relationships, our partnership agreement
with extent and we will provide additional consulting services for a monthly
fee.

                                       5
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         We valued the 13,209,600 shares received at $.51 per share based on an
accredited business valuation performed by an independent party. Accordingly,
for the year ended September 30, 2006, we recorded revenue of $6,736,896 related
to the receipt of these restricted marketable equity securities, which accounted
for 99.9% of our revenues. On September 28, 2006, we immediately distributed
3,170,304 shares of SEAA to Shaohua Tan, Inc, the 24% owner of GEP who is owned
by our director, Dr. Shaohua (Joshua) Tan, , which represented 24% of the shares
we received as compensation for our services. Of the remaining 10,039,296
shares, we retain control over 6,736,896 shares and China West, LLC controls
3,302,400 shares of SEAA. The value of the shares held by our company is
reflected on our balance sheet at September 30, 2006 which appears elsewhere in
this report in restricted marketable equity securities, at market and the value
of the SEAA securities controlled by China West, LLC is reflected on our balance
sheet as restricted marketable equity securities, at market - related party.

         In December 2005, GEP entered into an 18-month General Partnership
Agreement with The Jin Ma Group Company, Ltd. ("Jin Ma"), a real estate
development company in Western China, to globalize its operations in the areas
of real estate, construction, and hospitality. Jin Ma has been active in its
industry since its founding in 1980. Under the terms of the agreement GEP is to
provide various consulting services to Jin Ma related to its efforts to
establishing a U.S. public company and, once this process is completed, to
provide certain ongoing consulting services. Upon completion of the first phase
of the project GEP will receive a significant equity position in Jin Ma. GEP is
responsible for the costs associated with the provision of its services,
together with the cost of any public shell Jin Ma may wish to engage in a
reverse merger with and all legal or professional fees attendant to any reverse
merger transaction. Currently, Jin Ma is finalizing an audit of its financial
statements by an independent accounting firm. Subsequent to completion of the
first phase of the project and at such time as Jin Ma has raised at least
$1,500,000, as compensation for its ongoing consulting services GEP will receive
additional compensation of $10,000 per month, payable in cash or options to
purchase shares of stock which will be exercisable at a 30% discount to market
price. The agreement can be terminated by either party upon 60 days notice.
Through September 30, 2006, GEP has incurred approximately $100,500 of legal,
audit and other related fees and expenses in connection with the signing of this
agreement which have been recorded as deferred contract costs in the
accompanying consolidated balance sheet. These fees will be expensed if the
Agreement is not completed or is terminated.

         To source additional Chinese partner companies for the GEP program, the
Company relies on the skills and connections of its Chinese network. GEP has
formulated a due diligence questionnaire that screens prospective candidates.
Also, it engages an experienced Chinese accountant and a Shanghai law firm to
conduct a preliminary review. Once the screened Chinese company negotiates and
executes the GEP General Partnership Agreement, then the Company engages U.S.
auditing and legal firms. The entire private-to-public process should take from
4-8 months, barring unforeseen setbacks. GEP pays for all related costs,
including but not limited to, auditing, legal, marketing (web site) and
acquisition of the public entity.

         While conducting our business development services, we use the name and
do business as "Genesis China".

OUR BUSINESS, PRODUCTS AND SERVICES

         We continue to develop our cross-Pacific consulting company. We seek to
foster bilateral commerce between Western and Chinese companies. Previously, we
specialized in assisting Western companies in entering the Chinese markets for
business development. We have evolved and now act as a resource for Chinese
companies that desire expertise in marketing, distribution, manufacturing,
forming joint ventures, or establishing a base in the United States. In refining
our business model, the basic business activities of the Company clearly are
those initiated by GEP and described, in detail, on our own website,
www.GEP888.com. The Company established and manages this website.

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<PAGE>

         One area of focus is the life and health science arena in China. Life
and health science is compromised of different but related industries such as
pharmaceuticals, environmental science, biotechnology, and health care
development. These industries range from water, soil, and air testing and
remediation to hospital facility development and management. These are new and
robust areas in China. We had one promising client under contract, the China
Vocational Education Satellite Network. China Vocational Education Satellite
Network ("CVE") is the premier distance learning platform sponsored by the
National Center for Education Development & Research of Ministry of Education of
People's Republic of China, owned and operated by Shanghai Aerospace Computer
System Engineering Co., Ltd. During 2006, the Company realized that its
commitment to CVE was clearly long-term, and the Company had neither the
resources nor personnel to execute the cooperation agreement with CVE. As a
consequence, the Company advised CVE that it should consider aligning with
another Western company and it has attempted to accommodate CVE for establishing
such an alliance. In summary, the GEP business model appears so time-consuming
and potentially rewarding, plus requires a significant financial and personnel
commitment that the Company has committed to that program, essentially to the
exclusion of other business development.

         Our management has been responsible for negotiating contracts in China
for over 14 years. We are able to bring experience in the areas of marketing,
finance and business development to our clients, and to help guide those
companies in marketing their products and services in China. We have established
working relationships with various governmental agencies, public institutions,
and private industries in China at both national and provincial levels. In
addition, we will also seek to assist small to mid-sized Chinese private
companies that desire growth to expand their business with our active
participation and operational support.

OUR EXPANSION STRATEGY

         In the past, we had invested substantial time evaluating and
considering numerous proposals for possible mergers or acquisitions developed by
management or presented by investment professionals, our advisors and others.
Although we continue to consider mergers or acquisitions, business combinations,
or start up proposals, which could be advantageous to shareholders, we have
concentrated our efforts on our GEP business activities discussed elsewhere in
this annual report. No assurance can be given that any such project or
acquisition will be concluded.

MARKETING

         We have established what we believe to be effective relationships and
contacts with various governmental agencies, public institutions, and private
industries in China at both the national and provincial levels. Our director,
Dr. Shaohua Tan, serves as our marketing arm in China and sources private
companies in China seeking to access the U.S. capital markets. This is done
through a variety of marketing techniques; sponsor symposiums, individual
relationships and trade conferences. We also have developed a business
conference program in China. We occasionally sponsor a series of business
conferences which seek to educate the private sector in China on ways to access
the U.S. Capital markets. The business conference program has been instrumental
in promoting the name of GEP to the private sector in China. Indisputably,
however, it is "guanxi" or the years of developing important relationships in
China and the U.S. that is most effective in delivering sustainable success.

OUR HISTORY

         We were formed under the laws of the State of Idaho on January 29, 1999
originally under the name Psychicnet.Com, Inc. to provide "new age" services and
products on the Internet. On April 6, 1999 we entered into an Agreement and Plan
of Reorganization with Virginia City Gold Mines, Inc. The transaction was
accounted for as a reverse acquisition under the purchase method for business
combinations. Accordingly, the combination of the two companies was recorded as
a recapitalization of our company, pursuant to which our company was treated as
the continuing entity. Subsequent to the share exchange, we changed our name to
Newagecities.com, Inc.

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         On August 1, 2001, we completed the Agreement and Plan of
Reorganization and Stock Purchase Agreement entered into on July 23, 2001 with
Genesis Systems, Inc., a Minnesota corporation and the shareholders of Genesis,
Yongwen Zhuang, Fugen Li and Master Financial Group, Inc. As a result of the
acquisition, we issued 10,312,500 shares of our common stock with a fair market
value of $701,250 in exchange for all of the capital stock of Genesis Systems.
We accounted for this acquisition using the purchase method of accounting. The
purchase price exceeded the fair value of net assets acquired by $359,379. The
excess was applied to goodwill. Currently, the Company is inactive.

         On August 14, 2001, we entered into a Stock Purchase Agreement with
PropaMedia, Inc. and the shareholders of PropaMedia. Under this agreement, we
acquired all of the issued and outstanding capital stock of PropaMedia in
exchange for all of the shares of Member Net, Inc., a wholly-owned subsidiary of
our company. Upon effectiveness of the Stock Purchase Agreement, PropaMedia
became a wholly-owned subsidiary of our company and the former shareholders of
PropaMedia acquired a wholly-owned interest in Member Net, Inc. from us. We
accounted for this acquisition using the purchase method of accounting. In
September 2002, we decided to discontinue the operations of PropaMedia.

         On August 22, 2001, we entered into a Stock Purchase Agreement with
Shanghai G-Choice Science and Technology Development Company Ltd. ("G-Choice")
and the shareholders of G-Choice. G-Choice is a Chinese company with principal
offices in Shanghai, China. Under this agreement, the shareholders of G-Choice
exchanged 80% of the issued and outstanding capital stock of G-Choice in
exchange for 800,000 shares of our common stock. Effective June 30, 2002, we
sold our 80% interest in G-Choice to the NETdigest.com, Inc. in exchange for
1,549,791 shares of its common stock. As a part of this transaction, G-Choice's
executive management received a total of 8,155,474 shares of the NETdigest.com's
common stock and received from G-Choice an additional 210,526 shares of the
NETdigest.com's common stock in exchange for 400,000 shares of our common stock.
As a result of the sale of G-Choice, we recorded a $475,304 gain from the sale
of G-Choice in the quarter ended June 30, 2002.

         On October 12, 2001 our shareholders approved an Agreement and Plan of
Merger providing for the merger of our company with and into Genesis Technology
Group, Inc., a Florida corporation, which was a wholly-owned subsidiary. The
purpose of the merger was to change our corporate domicile from Idaho to
Florida. In addition, our name was changed to Genesis Technology Group, Inc., to
better reflect our current business plan.

         In October 2001 we formed Biosystems Technologies, Inc. for the purpose
of commercialization, marketing and distribution of biomedical products and
technologies used to diagnose and treat HIV/AIDS, cancer and other
immune-related diseases. We own 85% of Biosystems Technologies, with the
remaining 15% owned by Dr. Ronald Watson, a noted immunology professor and
researcher. Currently, Biosystems Technologies has no revenues and is inactive.

         In May 2001, we had acquired 20% of Yastock Investment Consulting
Company, Limited for $18,000. On December 1, 2001, we entered into a Stock
Purchase Agreement with Yastock and Messrs. Robert Zhuang and Lawrence Wang, the
majority shareholders of Yastock. Yastock is an investment consulting firm
located in Shanghai, China that specializes in raising capital and consulting in
a number of areas, including trading information, public relations, corporate
management, corporate strategic evaluations and human resources. Mr. Zhuang is
Dr. Wang's brother and a former member of our board of directors and Mr.
Lawrence Wang is Dr. Wang's brother. As a result of the acquisition, we issued
92,000 shares of our common stock with a fair market value of $48,760 in
exchange for 80% of the capital stock of Yastock. We accounted for this
acquisition using the purchase method of accounting. The purchase price exceeded
the fair value of net assets acquired by $4,889. The excess was applied to
goodwill. On August 1, 2002, the Company completed the addition of additional
management, which ultimately had a different vision than the existing
management. The outcome was an agreement to select a single management team and
business model. On December 13, 2004, in connection with a Separation and
Severance Agreement with our former President and Chairman, Dr. James Wang, we
agreed to transfer our ownership interest in Yastock, free and clear of all

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liens, pledges, hypothecation, option, contract and other encumbrance, to the
previous owners, Messrs. Robert Zhuang and Lawrence Wang. Additionally, Yastock
agreed to transfer to us all rights and privileges of certain agreements to us
for our future use and benefit. The Separation and Severance Agreement contains
certain non-compete and non-circumvention clauses and we also transferred to
Yastock 95,000 shares of Dragon International Group Corp. common stock
contemporaneously with the execution of the agreement. See Item 10. Executive
Compensation - Separation and Severance Agreement.

         Effective September 9, 2004, we acquired controlling interest in
Extrema LLC, a Miami-based computer hardware wholesaler with a 22-year history.
Extrema marketed equipment between North and South America, and we sourced and
added new products from China to expand Extrema's inventory and sales
opportunities. We own 60% of Extrema and founding management retains 40%. We
accounted for this acquisition using the purchase method of accounting in
accordance with SFAS No. 141. In connection with the acquisition, we issued
1,369,697 shares of common stock, valued at $0.16 per share for an aggregate of
$219,151, together with $63,500 in cash to the seller, Fernando Praca. The value
of the shares issued was determined based on the average market price of our
common shares over the five-day period before and after the acquisition date of
September 8, 2004. Additionally, in connection with the acquisition, Mr. Praca
retained an accounts receivable in the amount of approximately $106,000 which
was applied to the purchase price. The purchase price exceeded the fair value of
net assets acquired by $395,062. For accounting purposes, we applied $150,000 of
the excess to customer lists based on the present value of future cash flows of
pending sales orders, which was being amortized over a 36 month period and
$15,000 to the fair market value of property and equipment acquired. The
remaining excess of $293,562 has been applied to goodwill. On May 1, 2005, the
shareholders of Extrema unanimously agreed to discontinue the operations of
Extrema because of (a) the disappointing performance of Extrema including
continuing operating losses; (b) Extrema's lack of ability to obtain working
capital loans to finance the purchase of inventory and to finance accounts
receivable; and (c) the Company's decision to consolidate all trading and
sourcing activities into its now inactive subsidiary located in Hong Kong, GHK.
Extrema is reported as a discontinued operation, and prior periods have been
restated in the Company's financial statements and related footnotes to conform
to this presentation.

         On November 15, 2001, we entered into a Stock Purchase Agreement with
Shanghai Chorry Technology Development Company, Limited ("Chorry") and Wang
Wuzhang, Chorry's then sole shareholder. Chorry, a Chinese company with
principal offices in Shanghai, China, was an information technology company that
integrates sales and technology with services. As a result of the acquisition,
we issued 400,000 shares of our common stock with a fair market value of
$220,000 in exchange for 80% of the capital stock of Chorry. We accounted for
this acquisition using the purchase method of accounting. The purchase price
exceeded the fair value of net assets acquired by $5,651. The excess was applied
to goodwill. In November 2, 2005, we entered into a stock purchase agreement
with Dragon Capital Group Corp. (Pink sheets symbol: DRGV), a Nevada public
corporation, for the sale of its majority-owned subsidiary Chorry. We closed on
this transaction on February 14, 2006.

         The agreement included the following provisions:

   (1)   We delivered 100% of our shares in Chorry, representing its 80%
         ownership of that subsidiary, to DRGV.

   (2)   DRGV paid to us 17,159,965 shares of DRGV's common stock at a price
         calculated at the average closing price at the initial closing date on
         December 15, 2005 of $.027 per share or $463,319. Accordingly, in
         connection with the sale of Chorry, for the year ended September 30,
         2006, we recorded a gain from sale of discontinued operations of
         $237,377.

         Accordingly, Chorry is reported as a discontinued operation, and prior
periods have been restated in our financial statements and related footnotes to
conform to this presentation.

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COMPETITION

         We potentially face competition from a variety of sources. We face
competition from other companies sharing our market niche. We face competition
from a variety of U.S. and international firms as well as niche companies
specializing in the Chinese marketplace. In identifying, evaluating and
selecting target businesses, we may encounter intense competition from other
entities having a business objective similar to ours, including leveraged buyout
and other private equity funds, operating businesses and other entities and
individuals, foreign and domestic, competing for business combinations with
Chinese-based companies. Many of these entities are well established and have
extensive experience identifying and effecting business combinations directly or
through affiliates. Most of these competitors possess greater financial,
marketing, technical, human and other resources than we do, and our financial
resources will be relatively limited when contrasted with those of many of these
competitors. While we believe there are numerous potential target businesses
that may be available to us through the leverage of our relationships with our
consulting clients as well as an alliances, our ability to compete in acquiring
certain sizable target businesses will be limited by our available financial
resources.

         We compete with a range of companies, from large management consulting
companies that offer a broad range of consulting services, to small firms and
independent contractors that provide specialized services. Some of our
competitors have significantly more financial resources, larger professional
staffs and greater brand recognition than we do. Since our consulting business
depends in a large part on professional relationships, our business has low
barriers of entry for competitors. We believe that our ability to successfully
compete for new consulting clients and to retain our existing clients is
dependent upon our ability to offer a wide range of services and to effectively
respond to our client's needs on a timely and cost effective basis. We cannot
assure you that we will compete successfully for new business opportunities or
retain our existing clients.

GOVERNMENTAL REGULATION

         DOING BUSINESS IN THE PRC

         We consult with businesses which are located in China and have
considered acquiring one or more operating companies which are located in China.
Accordingly, we may be subject to the PRC legal system. Since 1979, many laws
and regulations addressing economic matters in general have been promulgated in
the PRC. Despite development of its legal system, the PRC does not have a
comprehensive system of laws. In addition, enforcement of existing laws may be
uncertain and sporadic, and implementation and interpretation thereof
inconsistent. The PRC judiciary is relatively inexperienced in enforcing the
laws that exist, leading to a higher than usual degree of uncertainty as to the
outcome of any litigation. Even where adequate law exists in the PRC, it may be
difficult to obtain swift and equitable enforcement of such law, or to obtain
enforcement of a judgment by a court of another jurisdiction. The PRC's legal
system is based on written statutes and, therefore, decided legal cases are
without binding legal effect, although they are often followed by judges as
guidance. The interpretation of PRC laws may be subject to policy changes
reflecting domestic political changes. As the PRC legal system develops, the
promulgation of new laws, changes to existing laws and the preemption of local
regulations by national laws may adversely affect foreign investors. The trend
of legislation over the past 20 years has, however, significantly enhanced the
protection afforded foreign investors in enterprises in the PRC. However, there
can be no assurance that changes in such legislation or interpretation thereof
will not have an adverse effect upon our future business operations or
prospects.

         A NEW CHINESE LAW MAY IMPACT OUR ABILITY TO MAKE ACQUISITIONS OF
CHINESE BUSINESSES

         On August 8, 2006, six PRC regulatory agencies namely, the PRC Ministry
of Commerce, the State Assets Supervision and Administration Commission
("SASAC"), the State Administration for Taxation, the State Administration for
Industry and Commerce, the China Securities Regulatory Commission ("CSRC"), and
the State Administration of Foreign Exchange ("SAFE"), jointly adopted the

                                       10
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Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign
Investors (the "New M&A Rule"), which became effective on September 8, 2006. The
New M&A Rule purports, among other things, to require offshore special purpose
vehicles, or SPVs, formed after the effective date, for overseas listing
purposes, through acquisitions of PRC domestic companies and controlled by PRC
companies or individuals, to obtain the approval of the CSRC prior to publicly
listing their securities on an overseas stock exchange. Through the used of a
U.S. public entity, we intend to make acquisitions of Chinese businesses in the
future. There are uncertainties regarding the interpretation and application of
current or future PRC laws and regulations, including the NEW M&A Rule and there
uncertainties could make it difficult or impossible to make acquisitions of
Chinese businesses in the future.

         ECONOMIC REFORM ISSUES

         Since 1979, the Chinese government has reformed its economic systems.
Because many reforms are unprecedented or experimental, they are expected to be
refined and improved. Other political, economic and social factors, such as
political changes, changes in the rates of economic growth, unemployment or
inflation, or in the disparities in per capita wealth between regions within
China, could lead to further readjustment of the reform measures. We cannot
predict if this refining and readjustment process may negatively affect our
operations in future periods.

         Over the last few years, China's economy has registered a high growth
rate. Recently, there have been indications that rates of inflation have
increased. In response, the Chinese government recently has taken measures to
curb this excessively expansive economy. These measures have included
devaluations of the Chinese currency, the RMB, restrictions on the availability
of domestic credit, reducing the purchasing capability of certain of its
customers, and limited re-centralization of the approval process for purchases
of some foreign products. These austerity measures alone may not succeed in
slowing down the economy's excessive expansion or control inflation, and may
result in severe dislocations in the Chinese economy. The Chinese government may
adopt additional measures to further combat inflation, including the
establishment of freezes or restraints on certain projects or markets.

         To date reforms to China's economic system have not adversely impacted
our operations and are not expected to adversely impact operations in the
foreseeable future; however, there can be no assurance that the reforms to
China's economic system will continue or that we will not be adversely affected
by changes in China's political, economic, and social conditions and by changes
in policies of the Chinese government, such as changes in laws and regulations,
measures which may be introduced to control inflation, changes in the rate or
method of taxation, imposition of additional restrictions on currency conversion
and remittance abroad, and reduction in tariff protection and other import
restrictions.

         Regardless of its dedication and experience, however, Genesis
discourages investors from supporting such Chinese companies unless they are
keenly aware that China presents opportunities of seeming unusual value because
the risks are commensurately great. As a case in point, Slate Magazine offered
an illuminating article warning "Don't buy any Chinese stocks", written by Henry
Blodget. This is a must-read for would-be or even current investors in Chinese
companies. Another informative piece appeared in late October 2006, on the
Stratfor Strategic Forecasting website. Entitled "The Enduring Allure of China".

         CHINA'S ACCESSION INTO THE WTO

         On November 11, 2001, China signed an agreement to become a member of
the World Trade Organization (WTO), the international body that sets most trade
rules, further integrating China into the global economy and significantly
reducing the barriers to international commerce. China's membership in the WTO
was effective on December 11, 2001. China had agreed upon its accession to the
WTO to reduce tariffs and non-tariff barriers, remove investment restrictions,
provide trading and distribution rights for foreign firms, and open various
service sectors to foreign competition. China's accession to the WTO may
favorably affect our business in that reduced market barriers and a more
transparent investment environment will facilitate increased investment

                                       11
<PAGE>

opportunities in China, while tariff rate reductions and other enhancements will
enable us to develop better investment strategies for our clients. In addition,
the WTO's dispute settlement mechanism provides a credible and effective tool to
enforce members' commercial rights.

         FOREIGN CURRENCY EXCHANGE ISSUES

         We may generate revenue and incur expenses and liabilities in both
Chinese RMB and U.S. dollars. As a result, we may be subject to the effects of
exchange rate fluctuations with respect to any of these currencies. For example,
the value of the Chinese RMB depends to a large extent on the PRC's domestic and
international economic and political developments, as well as supply and demand
in the local market. Since 1994, the official exchange rate for the conversion
of Chinese RMB to U.S. dollars has generally been stable and the Chinese RMB has
appreciated slightly against the U.S. dollar. However, given recent economic
instability and currency fluctuations, we can offer no assurance that the
Chinese RMB will continue to remain stable against the U.S. dollar or any other
foreign currency.

         Although Chinese governmental policies were introduced in 1996 to allow
the convertibility of Chinese RMB into foreign currency for current account
items, conversion of Chinese RMB into foreign exchange for capital items, such
as foreign direct investment, loans or security, requires the approval of the
State Administration of Foreign Exchange, or SAFE, which is under the authority
of the People's Bank of China. These approvals, however, do not guarantee the
availability of foreign currency. We cannot be sure that Chinese regulatory
authorities will not impose greater restrictions on the convertibility of the
Chinese RMB in the future. Because a significant amount of our revenues are in
the form of Chinese RMB, any future restrictions on currency exchanges will
limit our ability to utilize revenue generated in Chinese RMB to fund our
business activities outside the PRC.

         SOCIO-POLITICO ISSUES

         While China's economic growth continues at an annual rate of
approximately 10%, and it has now replaced Italy as the world's 6th largest
economy, numerous factors challenge its future and, thus, the opportunities of
Western companies to succeed in business there. These include--but are not
limited to: (a) social unrest caused by uneven distribution of wealth and
opportunities for its enormous population; (b) a weak and corrupt banking and
political system; and (c) the outbreak of diseases, such as SARS, which
significantly impacted the Company's ability to perform in the past. Overall,
the relationship between the U.S. and China could present problems of a Force
Majeure nature that are clearly beyond the control and influence of the Company.

         INVESTMENT COMPANY ACT OF 1940

         U.S. companies that have more than 100 shareholders or are publicly
traded in the U.S. and are, or hold themselves out as being, engaged primarily
in the business of investing, reinvesting or trading in securities are subject
to regulation under the Investment Company Act of 1940. While we do not believe
Genesis is an "investment company" within the scope of the Investment Company
Act of 1940, historically we have accepted shares of a consulting client's
securities as compensation for our services. While our business model has not
changed, by virtue of the percentage of the value of marketable equity
securities we hold (which were received as compensation for our services and not
purchased as an investment) under certain circumstances we could be subject to
the provisions of the Investment Company Act of 1940.

         Because Investment Company Act regulation is, for the most part,
inconsistent with our strategy of providing business consulting services, we
cannot feasibly operate our business as a registered investment company. It is
not our intent to become subject to the Investment Company Act of 1940 and
intend on authorizing our officers to take such actions as are necessary,
including the periodic liquidation of any marketable equity securities we may
own to reduce those holdings below the threshold level as prescribed by the
Investment Company Act of 1940. If we are deemed to be, and are required to
register as, an investment company, we will be forced to comply with substantive
requirements under the Investment Company Act of 1940, including:

                                       12
<PAGE>

         * limitations on our ability to borrow;
         * limitations on our capital structure;
         * restrictions on acquisitions of interests in associated companies;
         * prohibitions on transactions with affiliates;
         * restrictions on specific investments; and
         * compliance with reporting, record keeping, voting, proxy disclosure
           and other rules and regulations.

INTELLECTUAL PROPERTY

         Currently, we do not have any intellectual property.

EMPLOYEES

         Currently, we have two full-time employees in the United States. We
employ our chief financial officer on an outsourced basis. In Beijing, China, we
have one full-time employee and use the services of a director on a consulting
basis. No employee of Genesis is covered by a collective bargaining agreement
nor is represented by a labor union. Genesis considers its employee relations to
be stable.

RISK FACTORS

         Before you invest in our securities, you should be aware that there are
various risks. You should consider carefully these risk factors, together with
all of the other information included in this annual report, before you decide
to purchase our securities. If any of the following risks and uncertainties
develop into actual events, our business, financial condition or results of
operations could be materially adversely affected and you could lose your entire
investment in our company.

SUBSTANTIALLY ALL OF OUR REVENUE FOR FISCAL 2006 WAS GENERATED FROM ONE CLIENT
COMPANY OF OUR GEP SUBSIDIARY WHICH WAS PAID IN SECURITIES OF THE CLIENT
COMPANY. THERE ARE NO ASSURANCES WE WILL BE ABLE TO GENERATE SIMILAR REVENUES IN
FUTURE PERIODS.

         $6,736,896 of our total revenue of $6,750,229 for fiscal 2006 is
attributable to the value of the shares of SEAA GEP received as compensation for
its services. This does not represent recurring revenue and GEP may not report
revenue from similar transactions in future periods. Other than revenue from
GEP's operations we do not presently have any operating subsidiaries. While GEP
is a party to an additional agreement which may generate revenues during fiscal
2007, investors should not place undue reliance on our results of operations for
fiscal 2006 as we may not report similar results in future periods.

WE MAY BE UNABLE TO PAY OUR INCOME TAXES ON A TIMELY BASIS.

         For the year ended September 30, 2006, due to net operating loss and
capital loss carryovers, we did not record income tax expense on our net income.
As we report profitable operations we are required to record income tax expenses
on those operations. As the majority of our revenues are paid to us in
securities, some of which are not freely saleable by us at the time received,
our revenue model creates a risk that we will not have sufficient cash resources
to satisfy our tax obligations as they become due. We will need to raise
additional working capital to pay income taxes. We cannot assure you that we
will be able to raise the working capital as needed in the future on terms
acceptable to us, if at all. If we do not raise funds as needed, we may be
unable to timely pay our income taxes.

WE HAVE REPORTED REVENUES BASED UPON A VALUATION ASSIGNED TO SHARES OF A CLIENT
COMPANY RECEIVED BY GEP AS PAYMENT FOR ITS SERVICES. WE MAY NEVER RECEIVE CASH
EQUAL TO THE VALUE OF THE SHARES.

         After giving effect to the distribution of 24% of the shares GEP
received to Shaohua Tan, Inc., a minority partner of GEP and a company owned by
Dr. Tan, a member of our Board of Directors, and the control of an additional
25% of those shares being attributable to China West, LLC, the other minority
partner of GEP, we presently control 6,736,896 shares of SEAA. While our balance
sheet at September 30, 2006 reflects a value attributable to those shares of
$.51 per share, these securities are not readily saleable by us and we cannot
predict when, if ever, that these shares will be registered so as to permit the

                                       13
<PAGE>

liquidation thereof. Upon the completion of a private placement by SEAA, a
portion of our SEAA shares may be included in a registration statement on Form
SB-2. Upon effectiveness of this registration statement, which is out of our
control, we will attempt to liquidate a portion of our holdings. Accordingly,
while we have reported revenues of $6,736,896 during fiscal 2006 which is
attributable to this one transaction, we may never receive cash which is equal
to the amount of revenues.

WE HAVE A HISTORY OF LOSSES, A SUBSTANTIAL ACCUMULATED DEFICIT AND WE CANNOT
ASSURE YOU THAT WE WILL ACHIEVE CONTINUED PROFITABILITY IN THE FUTURE. AS A
RESULT, YOU COULD LOSE YOUR ENTIRE INVESTMENT IN OUR COMPANY.

         While we reported net income of $2,909,606 for the fiscal year ended
September 30, 2006, we reported a net loss of $3,726,929 for the fiscal year
ended September 30, 2005 and we have an accumulated deficit of $16,568,619 at
September 30, 2006. Our operating results for future periods will include
significant expenses, including compensation expense, travel expense,
professional fees, marketing costs, and administrative and general overhead
expenses, which we will incur as we continue to implement our business model to
expand our operations. If we continue to accept stock as compensation for our
services, we may not have sufficient cash to satisfy our operating expenses.
There can be no assurances whatsoever that we will be able to successfully
implement our business model, pay our operating expenses or continue our
business as it is presently conducted.

         The success of our business model is dependent upon our ability to
identify and close contacts with key contract clients in China. The cost of
providing our services is costly and such contracts may not enhance our
financial condition.

         Our primary business and operational focus is on our GEP operations. We
expect to expend significant resources to undertake business, financial and
legal due diligence on our potential and existing clients and there is no
guarantee that we will complete our commitments or obtain the client after
completing due diligence. The process of identifying a client and consummating
our contract could result in the use of substantial amounts of cash, potentially
dilutive issuances of equity securities and we may incur substantial
liabilities. If we are successful in closing on one or more contracts, there are
no assurances that we will enhance our future financial conditions. As the
majority of our revenues are paid to us in securities, some of which are not
freely saleable by us at the time received, our revenue model creates a risk
that we will not have sufficient cash resources to satisfy our obligations as
they become due and may not have sufficient operating capital. We will need to
raise additional working capital for working capital purposes. We cannot assure
you that we will be able to raise the working capital as needed in the future on
terms acceptable to us, if at all. If we do not raise funds as needed, we may be
unable to sustain our operations.

WE WILL NEED ADDITIONAL FINANCING WHICH WE MAY NOT BE ABLE TO OBTAIN ON
ACCEPTABLE TERMS.

         Historically, our operations have been financed primarily through the
issuance of equity securities. Working capital is typically needed to fund our
operations and to fund the operations of GEP, which required working capital to
pay professional fees, travel expenses and for the potential acquisition of a
public entity. Our future capital requirements, however, depend on a number of
factors, including our ability to grow our revenues, manage our business and
control our expenses. While we recently have funded our operations through the
sale of marketable equity securities that we received for services rendered, in
the near future, we will need to raise additional capital or liquidate our
holdings of marketable equity securities to fund our ongoing operations. As the
majority of our revenues are paid to us in securities, some of which are not
freely saleable by us at the time received, our revenue model creates a risk
that we will not have sufficient cash resources to satisfy our obligations as
they become due and may not have sufficient operating capital or cash to pay any
income taxes due. We will need to raise additional working capital for working
capital purposes. We cannot assure you that we will be able to raise capital on
terms acceptable to us, if at all, or to sell our marketable equity securities
on a timely basis due to lack of marketability, trading volume or trading
restrictions. If we do not raise funds as needed, our ability to continue our
business and operations is in jeopardy.

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<PAGE>

ADDITIONAL CAPITAL RAISING EFFORTS IN FUTURE PERIODS MAY BE DILUTIVE TO OUR THEN
CURRENT SHAREHOLDERS OR RESULT IN INCREASED INTEREST EXPENSE IN FUTURE PERIODS.

         In our future capital raising efforts, we may seek to raise additional
capital through the sale of equity and debt securities or a combination thereof.
If we raise additional capital through the issuance of debt, this will result in
increased interest expense. If we raise additional funds through the issuance of
equity or convertible debt securities, the percentage ownership of our company
held by existing shareholders will be reduced and those shareholders may
experience significant dilution. In addition, new securities may contain certain
rights, preferences or privileges that are senior to those of our common stock.

OUR DETERMINATION NOT TO BECOME AN INVESTMENT COMPANY COULD LIMIT OUR ABILITY TO
ACCEPT EQUITY POSITIONS IN OUR CLIENT COMPANIES OR TO ACCEPT EQUITY FROM OUR
CLIENT COMPANIES AS COMPENSATION FOR OUR SERVICES.

         The Investment Company Act of 1940 restricts the operations of
companies that are deemed to be "investment companies." We accept equity in our
client companies as compensation for our services. In addition, under existing
contracts with client companies we are entitled to receive equity as
compensation for services rendered to our client companies. We do not, however,
intend to become an investment company and thereby be subject to the Investment
Company Act of 1940. Because of this, in the future our abilities to accept
engagements from clients who wish to compensate us for our services in equity
may be limited. To the extent that we are required to reduce the amount of stock
we accept as payment for our business consulting services to avoid becoming an
investment company, our future revenues from our business consulting services
may substantially decline if our client companies cannot pay our fees in cash
which will materially adversely effect our financial condition and results of
operations in future periods. In addition, at such time, if ever, that one of
our client companies establishes the type of joint venture which would result in
our company being issued equity in that venture, our ability to accept such an
interest may be limited or we may be required to structure the transaction in
such a fashion that it does not fall within the definition of an "investment"
which could limit our future financial benefits. We do not believe these
restrictions will materially adversely effect our results of operations in the
near future. Any future change in our fee structure for our business consulting
services could also severely limit our ability to attract business-consulting
clients in the future. If, however, we should inadvertently become subject to
the Investment Company Act of 1940 and if we should fail to comply with the
requirements of that act, we would be prohibited from engaging in business or
selling our securities, and could be subject to civil and criminal actions for
doing so. Any failure to comply with the Investment Company Act would therefore
seriously harm our business.

THE VALUE OF THE EQUITY SECURITIES WE OCCASIONALLY ACCEPT AS COMPENSATION IS
SUBJECT TO ADJUSTMENT WHICH COULD RESULT IN LOSSES TO US IN FUTURE PERIODS.

         During fiscal 2006, GEP accepted equity securities in one of its client
companies as compensation for its services. These securities are reflected on
our balance sheet as either "restricted marketable equity securities, at market"
or "restricted marketable equity securities, at market - related party." We
evaluate quarterly the carrying value of each investment for a possible increase
or decrease in value. Because we do not want to be considered an investment
company, it is to our benefit to keep the carrying values of these securities as
low as possible. This review may result in an adjustment to their carrying value
which could adversely affect our operating results for the corresponding
quarters in that we might be required to reduce our carrying value of the
investments. In addition, if we are unable to liquidate these securities, we
will be required to write off the investments which would adversely affect our
financial position.

THE EXERCISE OF OPTIONS AND WARRANTS AND THE CONVERSION OF SHARES OF OUR SERIES
A 6% CUMULATIVE CONVERTIBLE PREFERRED STOCK WILL BE DILUTIVE TO OUR EXISTING
SHAREHOLDERS.

         As of September 30, 2006, we had outstanding options and warrants to
purchase a total of 22,911,611 shares of our common stock with a weighted
average exercise price of $0.133 per share. In addition, as of the date of this
annual report, we had 15,400 shares of Series A 6% Cumulative Convertible

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<PAGE>

Preferred Stock which is convertible into 663,793 shares of our common stock
issued and outstanding. The conversion of the Series A 6% Cumulative Convertible
Preferred Stock and the exercise of outstanding options and warrants may
materially adversely affect the market price of our common stock and will have a
dilutive effect on our existing shareholders.

PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS MAY DELAY OR PREVENT A
TAKE-OVER WHICH MAY NOT BE IN THE BEST INTERESTS OF OUR SHAREHOLDERS.

         Provisions of our articles of incorporation and bylaws may be deemed to
have anti- takeover effects, which include when and by whom special meetings of
our shareholders may be called, and may delay, defer or prevent a takeover
attempt. In addition, certain provisions of the Florida Business Corporation Act
also may be deemed to have certain anti-takeover effects which include that
control of shares acquired in excess of certain specified thresholds will not
possess any voting rights unless these voting rights are approved by a majority
of a corporation's disinterested shareholders.

         In addition, our articles of incorporation authorize the issuance of up
to 20,000,000 shares of preferred stock with such rights and preferences as may
be determined from time to time by our board of directors, of which 15,400
shares of Series A 6% Cumulative Convertible Preferred Stock are issued and
outstanding as of the of this annual report. Our board of directors may, without
shareholder approval, issue preferred stock with dividends, liquidation,
conversion, voting or other rights that could adversely affect the voting power
or other rights of the holders of our common stock.

WE HAVE NOT VOLUNTARILY IMPLEMENTED VARIOUS CORPORATE GOVERNANCE MEASURES, IN
THE ABSENCE OF WHICH, STOCKHOLDERS MAY HAVE MORE 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.
Some of these measures have been adopted in response to legal requirements.
Others have been adopted by companies in response to the requirements of
national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on
which their securities are listed. Among the corporate governance measures that
are required under the rules of national securities exchanges and NASDAQ are
those that address board of directors' independence, audit committee oversight,
and the adoption of a code of ethics. Although we have adopted a Code of Ethics,
we have not yet adopted any of these other 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. We have not adopted corporate governance
measures such as an audit or other independent committees of our board of
directors. If we expand our board membership in future periods to include
additional independent directors, we may seek to establish an audit and other
committees of our board of directors. It is possible that if we were to adopt
some or all of these corporate governance measures, stockholders would benefit
from somewhat greater assurances that internal corporate decisions were being
made by disinterested directors and that policies had been implemented to define
responsible conduct. For example, in the absence of audit, nominating and
compensation committees comprised of at least a majority of independent
directors, decisions concerning matters such as compensation packages to our
senior officers and recommendations for director nominees may be made by a
majority of directors who have an interest in the outcome of the matters being
decided. Prospective investors should bear in mind our current lack of corporate
governance measures in formulating their investment decisions.

BECAUSE OUR STOCK CURRENTLY TRADES BELOW $5.00 PER SHARE, AND IS QUOTED ON THE
OTC BULLETIN BOARD, OUR STOCK IS CONSIDERED A "PENNY STOCK" WHICH CAN ADVERSELY
AFFECT ITS LIQUIDITY.

         As the trading price of our common stock is less than $5.00 per share,
our common stock is considered a "penny stock," and trading in our common stock
is subject to the requirements of Rule 15g-9 under the Securities Exchange Act
of 1934. Under this rule, broker/dealers who recommend low-priced securities to
persons other than established customers and accredited investors must satisfy
special sales practice requirements. The broker/dealer must make an
individualized written suitability determination for the purchaser and receive
the purchaser's written consent prior to the transaction.

                                       16
<PAGE>

         SEC regulations also require additional disclosure in connection with
any trades involving a "penny stock," including the delivery, prior to any penny
stock transaction, of a disclosure schedule explaining the penny stock market
and its associated risks. These requirements severely limit the liquidity of
securities in the secondary market because few broker or dealers are likely to
undertake these compliance activities. In addition to the applicability of the
penny stock rules, other risks associated with trading in penny stocks could
also be price fluctuations and the lack of a liquid market.

RISKS RELATED TO DOING BUSINESS IN CHINA

WE ARE MATERIALLY RELIANT ON REVENUES GENERATED FROM OUR BUSINESS ACTIVITIES IN
THE PRC. THERE ARE SIGNIFICANT RISKS ASSOCIATED WITH DOING BUSINESS IN THE PRC
WHICH MAY CAUSE YOU TO LOSE YOUR ENTIRE INVESTMENT IN OUR COMPANY.

         While our goal is to diversify our sources of revenues, our business
model remains centered on exploiting the ongoing economic reforms taking place
in China. In the foreseeable future, our growth and success will remain tied to
our existing operations in the PRC as well as expanding our business to
incorporate additional sources of revenues which may derived from our experience
in operating in the PRC. Therefore, a downturn or stagnation in the economic
environment of the PRC could have a material adverse effect on our financial
condition which could result in a significant loss of revenues and liquidity in
future periods.

EVEN IF THE CHINESE GOVERNMENT CONTINUES ITS POLICIES OF ECONOMIC REFORM, WE MAY
BE UNABLE TO TAKE ADVANTAGE OF THESE OPPORTUNITIES IN A FASHION THAT WILL
PROVIDE FINANCIAL BENEFIT TO OUR COMPANY. OUR INABILITY TO SUSTAIN OUR
OPERATIONS IN CHINA AT CURRENT LEVELS COULD RESULT IN A SIGNIFICANT REDUCTION IN
OUR REVENUES WHICH WOULD RESULT IN ESCALATING LOSSES AND LIQUIDITY CONCERNS

         China's economy has experienced significant growth in the past decade,
but such growth has been uneven across geographic and economic sectors and has
recently been slowing. There can be no assurance that such growth will not
continue to decrease or that any slow down will not have a negative effect on
our business. The Chinese economy is also experiencing deflation which may
continue in the future. We cannot assure you that we will be able to capitalize
on these economic reforms, assuming the reforms continue. Given our material
reliance on our operations in the PRC, any failure on part to continue to take
advance of the growth in the Chinese economy will have a materially adverse
effect on our results of operations and liquidity in future periods.

OUR FOCUS IN ON BUSINESSES WITH OPERATIONS LOCATED IN CHINA AND WE MAY BE
ADVERSELY AFFECTED BY CHANGES IN THE POLITICAL AND ECONOMIC POLICIES OF THE
CHINESE GOVERNMENT.

         Our client's business operations may be adversely affected by the
political environment in the PRC. The PRC has operated as a socialist state
since 1949 and is controlled by the Communist Party of China. In recent years,
however, the government has introduced reforms aimed at creating a "socialist
market economy" and policies have been implemented to allow business enterprises
greater autonomy in their operations. Changes in the political leadership of the
PRC may have a significant effect on laws and policies related to the current
economic reforms program, other policies affecting business and the general
political, economic and social environment in the PRC, including the
introduction of measures to control inflation, changes in the rate or method of
taxation, the imposition of additional restrictions on currency conversion and
remittances abroad, and foreign investment. Moreover, economic reforms and
growth in the PRC have been more successful in certain provinces than in others,
and the continuation or increases of such disparities could affect the political
or social stability of the PRC.

         Although we believe that the economic reform and the macroeconomic
measures adopted by the Chinese government have had a positive effect on the
economic development of China, the future direction of these economic reforms is
uncertain and the uncertainty may decrease the attractiveness of our company as
an investment, which may in turn have material and negative impact on the market
price of our stock. In addition, the Chinese economy differs from the economies
of most countries belonging to the Organization for Economic Cooperation and
Development ("OECD"). These differences include:

                                       17
<PAGE>

         * economic structure;
         * level of government involvement in the economy;
         * level of development;
         * level of capital reinvestment;
         * control of foreign exchange;
         * methods of allocating resources; and
         * balance of payments position.

         As a result of these differences, our business may not develop in the
same way or at the same rate as might be expected if the Chinese economy were
similar to those of the OECD member countries.

THE CHINESE GOVERNMENT EXERTS SUBSTANTIAL INFLUENCE OVER THE MANNER IN WHICH WE
MUST CONDUCT OUR BUSINESS ACTIVITIES.

         The PRC only recently has permitted provincial and local economic
autonomy and private economic activities. The government of the PRC has
exercised and continues to exercise substantial control over virtually every
sector of the Chinese economy through regulation and state ownership.
Accordingly, government actions in the future, including any decision not to
continue to support recent economic reforms and to return to a more centrally
planned economy or regional or local variations in the implementation of
economic policies, could have a significant effect on economic conditions in the
PRC or particular regions thereof, and could require us to divest ourselves of
any interest we then hold in Chinese properties.

FUTURE INFLATION IN CHINA MAY INHIBIT ECONOMIC ACTIVITY IN CHINA.

         In recent years, the Chinese economy has experienced periods of rapid
expansion and high rates of inflation. During the past 10 years, the rate of
inflation in China has been as high as 20.7% and as low as -2.2%. These factors
have led to the adoption by the PRC government, from time to time, of various
corrective measures designed to restrict the availability of credit or regulate
growth and contain inflation. While inflation has been more moderate since 1995,
high inflation may in the future cause the PRC government to impose controls on
credit and/or prices, or to take other action, which could inhibit economic
activity in China, and thereby adversely affect the market for our products.

ANY RECURRENCE OF SEVERE ACUTE RESPIRATORY SYNDROME ("SARS"), BIRD FLU, OR
ANOTHER WIDESPREAD PUBLIC HEALTH PROBLEM, COULD ADVERSELY AFFECT OUR OPERATIONS.

         A renewed outbreak of SARS, bird flu epidemic, or another widespread
public health problem in China, where all of our revenue is derived, could have
a negative effect on our operations. Our operations may be impacted by a number
of health-related factors, including the following:

         *  quarantines or closures of some of our offices which would severely
            disrupt our operations,
         *  the sickness or death of our key officers and employees, and
         *  a general slowdown in the Chinese economy.

         Any of the foregoing events or other unforeseen consequences of public
health problems could adversely affect our operations.

WE MAY BE UNABLE TO ENFORCE OUR RIGHTS DUE TO POLICIES REGARDING THE REGULATION
OF FOREIGN INVESTMENTS IN CHINA.

         The PRC's legal system is a civil law system based on written statutes
in which decided legal cases have little value as precedents, unlike the common
law system prevalent in the United States. The PRC does not have a
well-developed, consolidated body of laws governing foreign investment
enterprises. As a result, the administration of laws and regulations by
government agencies may be subject to considerable discretion and variation, and
may be subject to influence by external forces unrelated to the legal merits of
a particular matter. China's regulations and policies with respect to foreign
investments are evolving. Definitive regulations and policies with respect to
such matters as the permissible percentage of foreign investment and permissible
rates of equity returns have not yet been published. Statements regarding these
evolving policies have been conflicting and any such policies, as administered,
are likely to be subject to broad interpretation and discretion and to be

                                       18
<PAGE>

modified, perhaps on a case-by-case basis. In the fall of 2005, the Chinese
court decided in favor of US-based Starbuck's in a copyright infringement case,
and the result was received favorably by the US government and the Western
business communities. The uncertainties regarding such regulations and policies
present risks which may affect our ability to achieve our business objectives.
If we are unable to enforce any legal rights we may have under our contracts or
otherwise, our ability to compete with other companies in our industry could be
materially and negatively affected.

ITEM 2.  DESCRIPTION OF PROPERTY

         In April 2005, we entered into an operating lease approximately 1,500
square feet for our corporate headquarters in Boca Raton, Florida that expires
is May 2008. Monthly rent under this operating is approximately $3,500 per month
plus common expenses and is subject to certain escalation clauses. Currently, we
lease an executive suite in Beijing, China on a month-to month basis. The cost
per month is less than $500 for all normal office activities. We are
contemplating establishing a more formal and costly office location in Beijing
in early 2007.

         All of the foregoing facilities are in good condition and are adequate
for currently anticipated needs. We believe that in the event that the leases
with respect to any of the aforementioned facilities should not be renewed,
alternative space will be available at comparable rates.

ITEM 3.  LEGAL PROCEEDINGS

         Except as discussed below, we are not a party to any pending legal
proceeding, nor are we aware of any legal proceedings being contemplated against
us by any governmental authority. We are not aware of any legal proceeding in
which any of our officers, directors, affiliates or security holders is a party
adverse to us or in which any of them have a material interest adverse to us.

Fernando Praca vs. Extrema, LLC and Genesis Technology Group, Inc., a Florida
Corporation - Case No. 50 2005 CA 005317, Dade County, Florida
--------------------------------------------------------------------------------

         Fernando Praca, former Director of the Company and former President of
our discontinued subsidiary, Extrema LLC, filed an action in Dade County,
Florida against Extrema, LLC and the Company in June 2005 relating to damages
arising from the sale of Extrema LLC to the Company. Praca has filed a Motion of
Temporary Injunction but has not proceeded to move this case forward. There has
been minimal action in this case since September of 2005, and this case not
currently set for trial. If the case proceeds, the Company intends to respond
aggressively to the litigation and it is too soon to determine the likelihood or
amount of loss.

Keke Zhang a/k/a Katherine Zhang vs. Genesis Technology Group, Inc., a Florida
Corporation and Gary L. Wolfson - Case No. 50 2006 CA 003447, Palm Beach County,
Florida
--------------------------------------------------------------------------------

         In April 2006, a former employee of the Company filed a lawsuit against
the Company and our Chief Executive Officer alleging breach of an employment
agreement, loss of compensation, and losses from the value associated with
denied stock options. As of the date of this report, we are unable to estimate a
loss, if any, we may incur related to this lawsuit. We plan to vigorously defend
our position and believe that any settlement will not have a material adverse
effect on our financial condition.

Genesis Technology Group, Inc. vs. Li Shaoqing. - Case No. 06-80478-Civ-United
States District Court, Southern District of Florida
--------------------------------------------------------------------------------

         On November 21, 2006, in connection with the settlement of this case,
we entered into a settlement and Release Agreement (the "Release Agreement"),
whereby Li Shaoqing agreed to return all shares of Genesis common stock owned by
him (representing 1,575,000 shares of Genesis common stock) to Genesis. We will
cancel these shares. The parties agreed to release each other from further
action and have dismissed this lawsuit with prejudice.

                                       19
<PAGE>

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

         None

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock is traded over-the-counter and quoted on the OTC
Bulletin Board under the symbol "GTEC". The reported high and low sale prices
for the common stock are shown below for the periods indicated. The prices
reflect inter-dealer prices, without retail mark-up, markdown or commissions,
and may not always represent actual transactions. As of December 31, 2006, we
had approximately 2,800 stockholders of record.

                                             High        Low
Fiscal 2005
Quarter ended December 31, 2004            $  0.17     $  0.10
Quarter ended March 31, 2005               $  0.11     $  0.06
Quarter ended June 30, 2005                $  0.08     $  0.06
Quarter ended September 30, 2005           $  0.08     $  0.04

Fiscal 2006
Quarter ended December 31, 2005            $  0.06     $  0.03
Quarter ended March 31, 2006               $  0.48     $  0.04
Quarter ended June 30, 2006                $  0.35     $  0.16
Quarter ended September 30, 2006           $  0.19     $  0.10

         On December 31, 2006, the closing bid price of our common stock was
$.137.

SPECIAL CONSIDERATIONS RELATED TO PENNY STOCK RULES

         To the extent the price of our Common Stock remains below $5.00 per
share or we have a net tangible assets of $2,000,000 or less, our common shares
will be subject to certain "penny stock" rules promulgated by the SEC. Those
rules impose certain sales practice requirements on brokers who sell penny stock
to persons other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000). For transactions covered by the penny stock rules, the
broker must make a special suitability determination for the purchaser and
receive the purchaser's written consent to the transaction prior to the sale.
Furthermore, the penny stock rules generally require, among other things, that
brokers engaged in secondary trading of penny stocks provide customers with
written disclosure documents, monthly statements of the market value of penny
stocks, disclosure of the bid and asked prices and disclosure of the
compensation to the brokerage firm and disclosure of the sales person working
for the brokerage firm. These rules and regulations adversely affect the ability
of brokers to sell our common shares and limit the liquidity of our securities.

DIVIDEND POLICY

         We have never paid cash dividends on our common stock. We intend to
keep future earnings, if any, to finance the expansion of our business, and we
do not anticipate that any cash dividends will be paid in the foreseeable
future. Our future payment of dividends will depend on our earnings, capital
requirements, expansion plans, financial condition and other relevant factors.
Our retained earnings deficit currently limits our ability to pay dividends.

RECENT SALES OF UNREGISTERED SECURITIES

         None

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The following table sets forth securities authorized for issuance under
equity compensation plans, including individual compensation arrangements, by us
under our 2002 Stock Option Plan, our 2003 Stock Option and our 2004 Stock Plan,
as amended, and any compensation plans not previously approved by our
stockholders as of September 30, 2006.

                                       20
<PAGE>
<TABLE>
<CAPTION>
                                                                                   Number of Securities
                                                                                 Remaining Available for
                                Number of Securities to     Weighted-average      Future Issuance Under
                                Be Issued Upon Exercise    Exercise Price of     Equity Compensation Plan
                                of Outstanding Options,   Outstanding Options,    (excluding securities
                                  Warrants and Rights     Warrants and Rights     reflected in column a)
                                -----------------------   --------------------   ------------------------
<S>                             <C>                        <C>                   <C>
PLAN CATEGORY

2002 Stock Option Plan and
 2003 Stock Option Plan ........            none                 $   -                     none

2004 Stock Plan ................          31,052                 $.108                     none

Equity compensation plans not
 approved by stockholders (1) ..      19,917,198                 $.108                     none
                                -----------------------   --------------------   ------------------------
Total                                 19,948,250                 $.108                     none
                                =======================   ====================   ========================
</TABLE>
   (1)    Equity compensation plan not approved by shareholders is comprised of
          options granted and/or restricted stock to be issued to employees and
          non-employees, including directors, consultants, advisers, suppliers,
          vendors, customers and lenders for purposes including to provide
          continued incentives, as compensation for services and/or to satisfy
          outstanding indebtedness to them.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following analysis of our consolidated financial condition and
results of operations for the years ended September 30, 2006 and 2005, should be
read in conjunction with the consolidated financial statements, including
footnotes, and other information presented elsewhere in this Form 10-KSB. When
used in this section, "fiscal 2006" means our fiscal year ended September 30,
2006 and "fiscal 2005" means our fiscal year ended September 30, 2005.

OVERVIEW

         During fiscal 2005 our operations were related to our computer
equipment and accessories division, and our consulting services division. In
November 2005 we entered into an agreement to sell our computer services
division and the transaction closed in February 2006. The operations of our
computer services division are reported as discontinued operations in the
financial statements which are included elsewhere in this annual report and
prior periods have been restated to conform to this presentation.

         Following the sale of our computer services division, we have focused
substantially all of our time and our resources on our consulting division. In
June 2005 we formally established GEP, a limited liability partnership of which
we are a 51% owner. Our consulting services are offered through GEP. The
minority members of GEP include China West, LLC, holding 25% of GEP, and Shaohua
Tan, Inc., a company owned by Dr. Shaohua Tan, a member of our Board of
Directors, holding 24% of GEP. We, along with China West, are the managing
members of GEP.

         GEP is a full service advisory company specializing in small
Chinese-based companies which are traded on the U.S. public markets. We offer a
comprehensive suite of services tailored to the specific needs of our clients.
The menu of services offered by GEP includes:

         *  U.S. representative offices
         *  General business consulting services
         *  Merger and acquisition strategy planning and analysis
         *  Advice on U.S. capital markets including assessment of potential
            sources of investment capital
         *  Coordination of professional resources
         *  Corporate asset evaluation
         *  Public relations
         *  Advice and structure assistance for strategic alliances,
            partnerships and joint ventures

                                       21
<PAGE>

         GEP enters into agreements with its consulting clients which provide
for a fixed fee to it for its services. The amount of fee varies based upon the
scope of the services GEP renders. For the year ended September 30. 2006, all of
GEP's fees were paid in shares of its client's securities which are valued at
fair market value for the purposes of revenue recognition. The shares received
are unregistered shares. Our policy is to sell securities we receive as
compensation as soon as we remove any restriction and not to hold these
securities as investments.

         In March 2006, GEP signed a General Partnership Agreement with Beijing
Liang Fang Pharmaceutical Co., Ltd. ("Liang Fang"), a company registered in the
People's Republic of China. In August 2006, GEP and the members of Liang Fang
established Lotus Pharmaceutical International, Inc., a Nevada company ("Lotus")
and in September 2006, Lotus and its stockholders closed a reverse merger with
S.E. Asia Trading Company, Inc., a publicly-trading company ("SEAA"). At
closing, GEP received 13,209,600 restricted, common shares of SEAA for services
performed in assisting Lotus facilitate the merger with SEAA and for other
business development services. Separately, Lotus has entered into consulting
service agreements and equity-related agreements with Liang Fang and Beijing En
Zhe Jia Shi Pharmaceutical Co., Ltd. We valued the 13,209,600 shares received at
$.51 per share based on an accredited business valuation performed by an
independent party . Accordingly, for the year ended September 30, 2006, we
recorded revenue of $6,736,896 related to the receipt of these restricted
marketable equity securities, which accounted for 99.9% of our revenues. The
balance of our revenues for fiscal 2006 was from the amortization of deferred
revenues related to a contract we signed in a previous year. Our revenues in
fiscal 2005 were generated from consulting the receipt of 475,000 shares of
Dragon International Corp. common shares at $.24 per share or $114,000 for
services rendered and other consulting contracts with U.S.

         On September 28, 2006, GEP immediately distributed 3,170,304 shares of
SEAA to Shaohua Tan, Inc., a company owned by Dr. Tan, which represented 24% of
the shares received as compensation for our services. Of the remaining
10,039,296 shares, we retain control over 6,736,896 shares and China West, LLC
controls the balance of 3,302,400 shares. The value of the shares held by our
company is reflected on our balance sheet at September 30, 2006 which appears
elsewhere in this report in restricted marketable equity securities, at market
and the value of the SEAA securities controlled by China West, LLC is reflected
on our balance sheet as restricted marketable equity securities, at market -
related party.

         While it is not our policy to hold securities we accept as payment for
services as long-term investments, we are not always able to immediately
liquidate such securities as a result of either market conditions or
restrictions on resale imposed by Federal securities laws. These unsold
securities comprise substantially all of our assets. Our balance sheet reflects
investments in marketable securities, which are securities which are freely
saleable by us, and restricted investments in marketable securities held for
sale, which represent securities which are not freely saleable under Federal
securities laws. Realized gains or losses on securities are recognized at the
time the securities are sold. Unrealized gains or losses on trading securities
are recognized on a monthly basis in our statement of operations based upon the
changes in the fair market value of the securities. Unrealized gains or losses
on investment in marketable securities held for sale are recognized as a
component of comprehensive income on a monthly basis based on changes in the
fair market value of the securities. These changes in valuations of the
securities can have the effect of significantly increasing our net income and
comprehensive income, if the price of the securities increases from the original
value assigned to it at the time the related revenue was recognized. Conversely,
if the price were to decline, such decreases could negatively impact our net
income and comprehensive income.

         Our revenues for fiscal 2005 and fiscal 2006 were materially dependent
on a limited number of consulting clients. In addition, under our present
business model, our ability to generate revenues from our consulting contracts
is dependent upon factors which may be out of our control. Accordingly, while we
could enter into agreement with companies which may produce revenue for us in
future periods, it is also possible that the events necessary for us to receive
payment for our services may never occur. In addition, we are responsible for
the payment of various fees and expenses to third parties related to the

                                       22
<PAGE>

services we provide, which such payments are not conditioned upon our receipt of
payment from our client. While we do not believe it to be likely, it is possible
that we could expend significant funds on behalf of a particular client and
never earn our fee from that client.

         We believe that as we further develop our consulting services segment,
more opportunities to expand our operations through acquisitions will also be
presented to us. It is critical to our long-term business model to both increase
our revenues from the consulting services segment of our existing business, as
well as to diversify our revenue base. By virtue of the nature of our consulting
services and the professional experience of our management and directors, we
interact with a number of both U.S. and Chinese companies. Through this
broadening of our relationship base, we believe that we will be able to not only
provide better services to our client companies, but we will have certain
advantages over other companies our size when it comes to identifying and
closing acquisitions. Currently, we are not actively pursuing any acquisitions.

CRITICAL ACCOUNTING POLICIES

         The discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an on-going basis, we evaluate our estimates based on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

         A summary of significant accounting policies is included in Note 1 to
the audited consolidated financial statements included in this Form 10-KSB.
Management believes that the application of these policies on a consistent basis
enables us to provide useful and reliable financial information about the
company's operating results and financial condition.

         Accounting for Stock Based Compensation - Effective October 1, 2005, 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 under our stock option plans in the
financial statements. The adoption of SFAS No. 123R will have a negative impact
on our future results of operations.

         Marketable equity securities consist of investments in equity of
publicly traded and non-public domestic companies and are stated at market value
based on the most recently traded price of these securities at September 30,
2006. We have marketable securities classified as trading and available for sale
securities at September 30, 2006. Realized and unrealized gains and losses on
trading securities are included in earnings. Unrealized gains and losses on
available for sale securities, determined by the difference between historical
purchase price and the market value at each balance sheet date, are recorded as
a component of Accumulated Other Comprehensive Income in Stockholders' Equity.
Realized gains and losses are determined by the difference between historical
purchase price and gross proceeds received when the marketable securities are
sold. Realized gains or losses on the sale or exchange of equity securities and
declines in value judged to be other than temporary are recorded in gains
(losses) on equity securities, net. Marketable equity securities are presumed to
be impaired if the fair value is less than the cost basis continuously for three
consecutive quarters, absent evidence to the contrary.

         Revenue recognition - We follow the guidance of the Securities and
Exchange Commission's Staff Accounting Bulletin 104 for revenue recognition. In
general, we record 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 collectability is reasonably assured.
The following policies reflect specific criteria for our revenues stream:

                                       23
<PAGE>

         Consulting income is recognized on a straight-line basis over the
period of the service agreement. Deferred revenues relates to consulting
revenues that is being recognized over the period of the service agreement.

         Substantially all of the services we provide are paid in common shares
issued by our clients. These instruments are classified as marketable equity
securities on the consolidated balance sheet, if still held at the financial
reporting date. These instruments are stated at fair value in accordance with
the provision of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" (SFAS No.
115) and EITF 00-8 "Accounting by a grantee for an equity instrument to be
received in conjunction with providing goods or services." Primarily all of the
equity instruments are received from small public companies.

RESULTS OF OPERATIONS

YEAR ENDED SEPTEMBER 30, 2006 COMPARED THE YEAR ENDED SEPTEMBER 30, 2005
<TABLE>
<CAPTION>
                                          Fiscal Year September 30,                       % Change
                                            2006            2005           $ Change         (+/-)
                                        ------------    ------------      ----------      --------
<S>                                     <C>             <C>               <C>             <C>
Net revenues ........................   $  6,750,229    $    154,580       6,595,649        +4267%
                                        ------------    ------------      ----------

Operating expenses:
Cost of services performed ..........        318,916               -         318,916         +100%
Consulting ..........................        137,506         211,510         (74,004)         -35%
Salaries and non-cash compensation ..        965,803       1,921,101        (955,298)         -50%
Severance expense ...................              -         329,343        (329,343)        -100%
Selling, general and administrative .        652,219         679,305         (27,086)          -4%
                                        ------------    ------------      ----------
     Total operating expenses .......      2,074,444       3,141,259      (1,066,815)         -34%
                                        ------------    ------------      ----------

Income (loss) from operations .......      4,675,785      (2,986,679)      7,662,464            NM
                                        ------------    ------------      ----------

Other income (expense):
Gain on sale of marketable securities      1,046,916               -       1,046,916         +100%
Loss on impairment of marketable
  securities ........................        (20,300)              -         (20,300)        -100%
Loss on abandonment of property .....              -          (2,444)          2,444            NM
Interest income .....................         17,351           2,911          14,440         +496%
                                        ------------    ------------      ----------
     Total other income (expense) ...      1,043,967             467       1,043,500            NM
                                        ------------    ------------      ----------

Income (loss) before discontinued
  operations, income taxes and
  minority interest .................      5,719,752      (2,986,212)      8,705,964            NM

Total gain (loss) from discontinued
  operations ........................        246,501        (742,914)        989,415            NM

Provision for income taxes ..........              0               0               0             0

Minority interest in income (loss)
 of subsidiary ......................     (3,056,647)          2,197      (3,058,844)           NM
                                        ------------    ------------      ----------

Net income (loss) ...................   $  2,909,606    $ (3,726,929)      6,636,535            NM
                                        ------------    ------------      ----------

NM = not meaningful
</TABLE>

                                       24
<PAGE>

REVENUES

         For the year ended September 30, 2006, we had consolidated revenues of
$6,750,229 as compared to $154,580 for the year ended September 30, 2005, an
increase of $6,595,649 or 4,267%. The increase in revenue is primarily
attributable to a Share Exchange Agreement closed on September 28, 2006 by and
among SEAA whereby GEP, our 51%-owned subsidiary, received 13,209,600 restricted
common shares of SEAA for services performed in helping Lotus facilitate the
merger with SEAA and for other business development services. We valued these
shares at $.51 per share based on an accredited business valuation performed by
an independent party. Accordingly, we recorded revenue of $6,736,896 related to
the receipt of these restricted marketable equity securities. These shares do
not represent recurring revenues. As set forth above, GEP immediately
distributed 3,170,304 shares of SEAA to Shaohua Tan, Inc., a company owned by
Dr. Tan, which represented 24% of the shares received as compensation for our
services, and of the remaining 10,039,296 shares, we retain control over
6,736,896 shares and China West, LLC controls the balance of 3,302,400 shares.
We currently have a limited number of client companies, and for the year ended
September 30, 2006, one of our clients represented approximately 99.9% of our
total revenues. While we continue to market our consulting services, we may need
to raise additional working capital to fund our daily operations and the
commitments to our client contracts. Accordingly, we may be limited in the
amount of engagements we accept from additional consulting clients, thereby
limiting our ability to generate revenues in future periods. We cannot assure
you that we will ever be able to successfully implement our expanded business
model or increase our revenues in future periods.

OPERATING EXPENSES

         For the year ended September 30, 2006, operating expenses which
includes cost of services performed, consulting fees, compensation expense,
professional fees and other selling, general and administrative, were $2,074,444
compared to $3,141,259 for the year ended September 30, 2005, a decrease of
$1,066,815 or 34%.

         The decrease in operating expenses was primarily attributable to the
following:

       * Our cost of services performed increased to $318,916 for the year ended
September 30, 2006 as compared to $0 for the year ended September 30, 2005. Our
cost of services include direct costs we incur in rendering the services to our
client companies, which include marketing, travel, legal and accounting fees
directly related to the particular client. In addition, we may engage certain
third party consultants to assist us in providing the contracted services to our
client company and the costs of those third party consultants are included in
our cost of services. Our arrangements with our consulting clients generally
provide that our fee will cover the costs of various professional resources
including but not limited to attorneys, accounting personnel and auditors
providing services on behalf of the client company. As these professionals
generally will not provide services on a fixed fee basis, and the scope of the
services necessary for a particular client company can vary from project to
project, our cost of services can ultimately be significantly higher than
initially projected which can adversely impact our profits.

         * Our consulting expense decreased to $137,506 for the year ended
September 30, 2006 from $211,510 for the year ended September 30, 2005, a
decrease of $74,004 or 35%. The decrease was due to a decline in the use of
consultants and a change in our business model and the sectors of our focus. For
the year ended September 30, 2006, stock-based consulting expense amounted to
$122,581 as compared to $96,600 in the 2005 period. This increase was offset by
a decrease in payments to consultants during fiscal 2006 of $99,985.

         * Compensation expense, which includes salaries and stock-based
compensation expense, decreased to $965,803 for the year ended September 30,
2006 from $1,921,101 for year ended September 30, 2005, a decrease of $955,298
or 50%. Included in our compensation expense for fiscal 2006 is approximately
$114,500 which represents cash compensation and approximately $851,303 which
represents stock-based compensation, as compared to $407,904 and $1,513,197,

                                       25
<PAGE>

respectively, for fiscal 2005. The decrease in compensation expense was
attributable to a decrease in the amount of stock-based compensation recognized
in connection with the granting of common stock and stock options to officers,
employees, and directors and the amortization of deferred compensation.
Additionally, we had a decrease of approximately $165,000 attributable to a
decrease in staff in our US and China business development offices as we focused
our efforts on our GEP operations. Additionally, at September 30, 2006, we had
deferred compensation of $235,032, which will be amortized into expense during
fiscal 2007. As of September 30, 2006, the total future compensation expense
related to stock options not yet recognized in the consolidated statement of
operations is $1,552,770.

         * During the year ended September 30, 2005, we recorded severance
expense of $329,343 related to a severance and separation agreement we signed
with a former officer/director of the Company. In connection with this
agreement, we paid cash of $100,000, issued common shares with a value of
$61,875, reduced a subscription receivable of $26,250, distributed marketable
securities with a value of $22,800, and incurred severance expense of $121,608
related to the distribution of the net assets of Yastock. We have no comparable
expense during the year ended September 30, 2006.

         * Other selling, general and administrative expenses decreased to
$652,219 for the year ended September 30, 2006 from $679,305 for the year ended
September 30, 2005, a decrease of $27,086 or 4%. Other selling, general and
administrative expenses included the following:

                                                   2006              2005
                                                ----------       ----------
         Professional fees ..................   $  250,171       $  150,790
         Rent ...............................       50,536           79,555
         Travel and entertainment............       88,883           82,764
         Other selling, general and
           administrative ...................      262,629          366,196
                                                ----------       ----------
              Total .........................   $  652,219       $  679,305
                                                ==========       ==========

         In fiscal 2006, professional fees increased by $99,381 or 66% due to an
increase in legal fees of $107,986 related to general corporate matters,
litigation matter against a former employee, and other legal matters in which we
are the plaintiff, and an increase in the use of other professionals of $895.
This increase was offset by a decrease in audit fees of $9,500.

         Rent expense decreased to $50,536 for the year ended September 30, 2006
from $79,555 for year ended September 30, 2005, a decrease of $29,019. The
decrease in rent was attributable to the relocation of our offices to a smaller,
less expensive office facility and the closing of our office in Shanghai, China
due to the discontinuation of our Chorry operations and our effort on our GEP
operations in Beijing, China.

         During the year ended September 30, 2006, travel related expenses
increased by $6,119 or 7% as compared to fiscal 2005 and was attributable to
increase in travel to China.

         Other selling, general and administrative expenses include office
expenses and supplies, telephone and communications, and other expenses. In
fiscal 2006, other selling, general and administrative expenses amounted to
$262,629 compared to $366,196 during fiscal 2005, a decrease of $103,567 or 28%.
The decrease was attributable to the closing of our Shanghai office, the
reduction in marketing activities, and cost cutting measures. We expect our
selling, general and administrative expenses to decrease as we continue to cut
costs.

INCOME FROM OPERATIONS

         We reported income from operations of $4,675,785 for the year ended
September 30, 2006 as compared to a loss from operations of $(2,986,679) for the
year ended September 30, 2005, an increase of $7,662,464 or approximately 257%.

                                       26
<PAGE>

GAIN FROM SALE/DISPOSAL OF MARKETABLE SECURITIES

         In fiscal 2006, we recorded a gain from the sale of marketable
securities of $1,046,916 compared to $0 for the year ended September 30, 2005.
The gain from the sale of marketable securities relates to marketable securities
that we had previously received for business development services rendered by us
and which we had previously valued and recorded as revenue over the contract
period. The gain represents the difference in the sale price of the marketable
securities and the fair value of services provided which was previously recorded
as revenue. Additionally, in connection with services previously rendered, we
were granted warrants to purchase marketable securities which we exercised at a
price less than fair market value. These marketable securities were sold and
contributed to the gain from sale of marketable securities.

LOSS ON IMPAIRMENT OF MARKETABLE SECURITIES

         In fiscal 2006, we recorded an impairment loss of $20,300 related to
the reduction in the fair market value of certain marketable equity securities
that management deemed to be other than temporary. These securities represented
shares of Com-Guard.com, Inc. which we had received as compensation for our
services in fiscal 2004. At the time of receipt we recognized revenue of $22,000
related to these securities. We have no comparable impairment loss for the year
ended September 30, 2005.

INTEREST INCOME

         Interest income was $17,351 for the year ended September 30, 2006 as
compared to interest income of $2,911 for the year ended September 30, 2005, an
increase of $14,440 or 496%. The increase was attributable to an increase in
interest-bearing cash balances.

INCOME BEFORE DISCONTINUED OPERATIONS, INCOME TAXES AND MINORITY INTEREST

         For the year ended September 30, 2006 our income before discontinued
operations, income taxes and minority interest is $5,719,752 as compared to a
loss before discontinued operations, income taxes and minority interest of
$(2,986,212) for the year ended September 30, 2005, an increase of $8,705,964 as
a result of increased net revenues.

GAIN (LOSS) FROM DISCONTINUED OPERATIONS

         For the year ended September 30, 2006, we recorded a gain from
discontinued operations of $9,124 associated with the discontinuation of our
Chorry subsidiary which was sold on February 14, 2006 and from Extrema. For the
year ended September 30, 2005, we recorded a loss from discontinued operations
of $365,568 due to the closure of our Extrema subsidiary and the discontinuation
of our Chorry subsidiary.

         On November 2, 2005, we entered into a stock purchase agreement with
Dragon Ventures (OTC: DRGV), a Nevada public corporation, for the sale of our
majority-owned subsidiary Chorry. In connection with this agreement, we
delivered 100% of our shares in Chorry, representing our 80% ownership of that
subsidiary, to DRGV, we received 17,159,965 common shares of DRGV valued at
closing at approximately $463,000 calculated at the average closing price of
$.027 per share on December 15, 2005. In connection with the sale of Chorry, for
the year ended September 30, 2006, we reported a gain from the sale of Chorry of
$237,377 compared to a loss of $377,346 for the disposition of Extrema for the
year ended September 30, 2005.

         The following table sets forth for the fiscal years indicated selected
financial data of the Company's discontinued operations.

                                       27
<PAGE>

                                                          2006         2005
                                                      -----------  ------------
Revenues ...........................................  $ 7,398,358  $ 27,293,816
Cost of sales ......................................    7,259,500    26,747,801
                                                      -----------  ------------
Gross profit .......................................      138,858       546,015
Operating and other non-operating expenses .........      129,734       911,583
                                                      -----------  ------------
Gain (loss) from discontinued operations ...........        9,124      (365,568)

Gain (loss) from disposal of discontinued operations      237,377      (377,346)
                                                      -----------  ------------

Total gain (loss) from discontinued operations .....  $   246,501  $   (742,914)
                                                      ===========  ============

Minority interest

         For the year ended September 30, 2006, we reported a minority interest
expense of $3,056,647 as compared to minority interest income of $2,197 for the
year ended September 30, 2005. In fiscal 2006, the minority interest is
attributable to GEP's minority LLC members, and had the effect of reducing our
net income.

OVERALL

         We reported a net income for the year ended September 30, 2006 of
$2,909,606 compared to a net loss for the year ended September 30, 2005 of
$3,726,929. This translates to an overall basic and diluted per-share income
available to shareholders of $.03 for the year ended September 30,
2006,respectively, compared to basic and diluted per-share loss of $.06 for year
ended September 30, 2005.

LIQUIDITY AND CAPITAL RESOURCES

         Liquidity is the ability of a company to generate funds to support its
current and future operations, satisfy its obligations and otherwise operate on
an ongoing basis. The following table provides certain selected balance sheet
comparisons between September 30, 2006 and September 30, 2005:
<TABLE>
<CAPTION>
                                                                        $ Change
                                                 September 30,          2006 vs.     % Change
                                               2006         2005          2005         (+/-)
                                           -----------   ----------   -----------    --------
<S>                                        <C>           <C>          <C>            <C>
Working capital ........................   $   868,915   $  289,311       579,604       +200%
Cash ...................................   $   592,610   $   17,887       574,723      +3213%
Marketable equity securities, at market    $   601,565   $  274,302       327,263       +119%
Assets from discontinued operations ....   $         0   $1,331,887    (1,331,887)         NM
Deferred contract costs ................   $   100,503   $        0       100,503       +100%
Total current assets ...................   $ 1,301,408   $1,624,076      (322,668)       -20%
Restricted marketable equity securities,
 at market .............................   $ 4,184,917   $        0     4,184,917          NM
Restricted marketable securities, at
 market - related party ................   $ 1,684,224   $        0     1,684,224          NM
Total assets ...........................   $ 7,231,773   $1,719,042     5,512,731          NM

Accounts payable and accrued expenses ..   $   207,504   $   54,177       153,327       +283%
Deferred revenue .......................   $         0   $   13,333       (13,333)      -100%
Liabilities from discontinued operations   $   150,709   $1,267,255    (1,116,546)         NM
Due to related party ...................   $    75,000   $        0        75,000       +100%
Total current liabilities ..............   $   433,213   $1,334,765      (901,552)         NM

Minority interest ......................   $ 1,577,395   $   10,053     1,567,342          NM

Total stockholders' equity .............   $ 5,221,165   $  374,224     4,846,941       +1295
</TABLE>

                                       28
<PAGE>

         At September 30, 2006, we had cash on hand of approximately $593,000
and working capital of approximately $870,000. Our current assets primarily
include approximately $602,000 in investments in trading marketable equity
securities, and $100,500 in deferred contract costs associated with on-going
client contracts. Our current liabilities primarily consist of $207,504 of
accounts payable and accrued expenses, $75,000 due to Dr. Tan for services
rendered, and $150,709 of liabilities from discontinued operations. Subsequent
to September 30, 2006, we sold approximately $510,000 of our investments in
trading marketable equity securities to fund our operations.

         At September 30, 2006, our marketable equity securities consist of the
following:

                 Description                          Fair Market Value
                 -----------                          -----------------
Un-restricted marketable equity securities:
--------------------------------------------
  Sunwin International Neutraceuticals, Inc. .........    $   28,400
  Dragon International Corp ..........................        54,340
  Com-guard.com, Inc. ................................         1,190
  Other mutual funds .................................       517,635
                                                          ----------
                                                          $  601,565
                                                          ==========
Restricted marketable equity securities:
--------------------------------------------
  S.E. Asia Trading Company. Inc. (SEAA.OB) ..........    $3,435,817
  Dragon Capital Group (DRGV.PK) .....................       749,100
                                                          ----------
                                                          $4,184,917
                                                          ==========

         While the value of investments in restricted marketable equity
securities held for sale represent substantially all of our assets, we are not
presently able to liquidate these securities and generate cash to pay our
operating expenses. Under Federal securities laws these securities cannot be
readily resold by us generally absent a registration of those securities under
the Securities Act of 1933. We have been advised by the client company that
intends to register a portion of our shares in a registration statement if it is
successful in finalizing its private placement in the near future. We cannot
predict when, if ever, that we will be able to liquidate those securities or the
amount of proceeds we can expect to receive from the sale. While under generally
accepted accounting principles we are required to reflect the fair value of
these securities on our balance sheet, they are not readily convertible into
cash.

         We have recently met our obligations from cash proceeds received from
the sale of marketable equity securities. Although proceeds from sales of
marketable equity securities have allowed us to meet our obligations in the
recent past, there can be no assurances that our present methods of generating
cash flow will be sufficient to meet future obligations. Historically, we have,
from time to time, been able to raise additional capital from sales of our
capital stock, but there can be no assurances that we will be able to raise
additional capital in this manner.

         Net cash used in operations was $914,353 for the year ended September
30, 2006 as compared to net cash used in operations of $1,443,081 for the year
ended September 30, 2005. For the year ended September 30, 2006, we used cash to
fund our net income of $2,909,606 ($2,663,105 from continuing operations and
$246,501 from discontinued operations) and recorded revenues from the receipt of
restricted marketable securities for services of $6,736,896, add back of
non-cash items such as stock-based compensation of $981,672, depreciation and
amortization expense of $7,915, loss on impairment of marketable securities of
$20,300, loss on impairment of cost-method investment of $34,000, minority
interest expense of $3,056,647 as well as changes in assets and liabilities of
$113,488 offset by gain on sale of marketable securities of $1,046,916. For the
year ended September 30, 2005, we used cash to fund our net loss of $3,726,929
(2,984,015 from continuing operations and $742,914 from discontinued operations)
recorded income from the receipt of marketable securities for services of
$114,000 offset by non-cash items such as stock-based compensation of
$1,603,445, depreciation expenses of $10,435 and severance expense of $232,533
as well as other non-cash items and changes in assets and liabilities of
$28,318.

                                       29
<PAGE>

         Net cash provided by investing activities for the year ended September
30, 2006 was $812,976 as compared to net cash used in investing activities for
the year ended September 30, 2005 of $6,682. For the year ended September 30,
2006, we received cash from the sale of marketable securities of $1,413,307. In
fiscal 2006, we exercised stock warrants and purchased marketable securities for
$600,331. For the year ended September 30, 2005, we used cash for capital
expenditures of $6,682.

         Net cash provided by financing activities was $675,930 for the year
ended September 30, 2006 as compared to net cash provided by financing
activities of $25,983 for the year ended September 30, 2005. For the year ended
September 30, 2006, net cash provided by financing activities related to
proceeds received from the exercise of stock options and warrants of $548,380
and contributions from LLC members of $127,550. For the year ended September 30,
2005, net cash provided by financing activities related primarily to proceeds
from the exercise of stock options of $25,983.

         We currently have no material commitments for capital expenditures.

         Our future growth is dependent on our ability to raise capital for
working capital purposes and expansion, and to seek additional revenue sources.
In order to fund our GEP contracts or if we decide to pursue any acquisition
opportunities or other expansion opportunities, we may need to raise additional
capital, although there can be no assurance such capital-raising activities
would be successful. There are no assurances that such capital will be available
to us when needed or upon terms and conditions which are acceptable to us. If we
are able to secure additional working capital through the sale of equity
securities, the ownership interests of our current stockholders will be diluted.
If we raise additional working capital through the issuance of debt or
additional dividend paying securities our future interest and dividend expenses
will increase. If we are unable to secure additional working capital as needed,
our ability to grow our sales or meet our operating obligations as they become
due and continue our business and operations could be in jeopardy and we could
be forced to limit or cease our operations.

RECENT ACCOUNTING PRONOUNCEMENTS

         The Financial Accounting Standards Board has recently issued several
new accounting pronouncements:

         In February 2006, the FASB issued SFAS 155, which applies to certain
"hybrid financial instruments," which are instruments that contain embedded
derivatives. The new standard establishes a requirement to evaluate beneficial
interests in securitized financial assets to determine if the interests
represent freestanding derivatives or are hybrid financial instruments
containing embedded derivatives requiring bifurcation. This new standard also
permits an election for fair value re-measurement of any hybrid financial
instrument containing an embedded derivative that otherwise would require
bifurcation under SFAS 133. The fair value election can be applied on an
instrument-by-instrument basis to existing instruments at the date of adoption
and can be applied to new instruments on a prospective basis. The adoption of
SFAS No.155 did not have a material impact on the Company's financial position
and results of operations.

         In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing
of Financial Assets, an amendment of FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
This statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization and impairment requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and servicing liabilities at fair value eliminates the necessity for
entities that manage the risks inherent in servicing assets and servicing
liabilities with derivatives to qualify for hedge accounting treatment and
eliminates the characterization of declines in fair value as impairments or
direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year
beginning after September 15, 2006. The adoption of this statement is not
expected to have a significant effect on the Company's future reported financial
position or results of operations.

                                       30
<PAGE>

         In July 2006, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109." This interpretation provides guidance
for recognizing and measuring uncertain tax positions, as defined in SFAS No.
109, "Accounting for Income Taxes." FIN No. 48 prescribes a threshold condition
that a tax position must meet for any of the benefit of an uncertain tax
position to be recognized in the financial statements. Guidance is also provided
regarding de-recognition, classification, and disclosure of uncertain tax
positions. FIN No. 48 is effective for fiscal years beginning after December 15,
2006. The Company does not expect that this interpretation will have a material
impact on its financial position, results of operations, or cash flows.

         In September 2006, the FASB issued Statement of Financial Accounting
Standards No. 157, "Fair Value Measurements" ("FAS 157"). This Statement defines
fair value as used in numerous accounting pronouncements, establishes a
framework for measuring fair value in generally accepted accounting principles
and expands disclosure related to the use of fair value measures in financial
statements. The Statement is to be effective for the Company's financial
statements issued in 2008; however, earlier application is encouraged. The
Company is currently evaluating the timing of adoption and the impact that
adoption might have on its financial position or results of operations

         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.

ITEM 7.  FINANCIAL STATEMENTS

         See "Index to Financial Statements" for the financial statements
included in this Form 10-KSB.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.

ITEM 8A. CONTROLS AND PROCEDURES

         Our Chief Executive Officer and Chief Financial Officer (collectively,
the "Certifying Officers") are responsible for establishing and maintaining
disclosure controls and procedures for us. Based upon such officers' evaluation
of these controls and procedures as of a date as of the end of the period
covered by this annual report(as defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended), and subject to the limitations
noted hereinafter, the Certifying Officers have concluded that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in this annual report is accumulated and communicated to
management, including our principal executive officers as appropriate, to allow
timely decisions regarding required disclosure.

         The Certifying Officers' evaluation has also concluded that there have
been no occurrences during the fourth quarter of the fiscal year covered by this
annual report that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting (as defined in
Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

         Our management, including each of the Certifying Officers, does not
expect that our disclosure controls or our internal controls will prevent all
error and fraud. A control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the
control system are met. In addition, the design of a control system must reflect
the fact that there are resource constraints, and the benefits of controls must
be considered relative to their costs. Because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within a company have
been detected. These inherent limitations include the realities that judgments
in decision-making can be faulty, and that breakdowns can occur because of
simple error or mistake. Additionally, controls can be circumvented by the

                                       31
<PAGE>

individual acts of some persons, by collusion of two or more people or by
management override of the control. The design of any systems of controls also
is based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions. Over time, control may
become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of these inherent
limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.

ITEM 8B. OTHER INFORMATION

         None.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

DIRECTORS AND EXECUTIVE OFFICERS

         The following table includes the names, positions held and ages of our
executive officers and directors.

NAME                               AGE                   POSITION
-----------                        ---                   -----------------------
Gary Wolfson                       58                    CEO and Director
Adam Wasserman                     42                    Chief Financial Officer
Kenneth Clinton                    36                    President and Director
Dr. Shaohua Tan                    44                    Director
Rodrigo Arboleda                   65                    Director

         GARY WOLFSON. Mr. Wolfson was appointed Chief Executive Officer in
August, 2002. From 1992 until joining our company, Mr. Wolfson was President and
a director of Pacific Rim Consultants, a private Sino-American liaison
consulting firm. In this capacity, he served as Director of China Operations for
four U.S. companies, including Walt Disney Memorial Cancer Institutes (1997 to
1998), CMI Power/Kansas City Power & Light (1993 to1995), Nanjing
Valley/Atlantic Gulf Communities (1995 to1997) and Shanghai Travel & Business
Bureau (1994 to 1999). In addition, he served as Director of U.S. Operations for
three Chinese companies, including Motorola China (1994 to 1996), China Academy
of Sciences (1995 to 1998) and World Trade Center - Jiangsu Province (1995 to
1997). From 1971 to 1991 Mr. Wolfson was an owner of an international
thoroughbred horse breeding and racing enterprise.

         ADAM C. WASSERMAN. Mr. Wasserman has served as our Chief Financial
Officer since October, 2001. Mr. Wasserman devotes approximately 20% of his time
to our company. As our business grows, we will either seek to increase the
amount of time Mr. Wasserman devotes to our company or hire a full-time chief
financial officer. Since November 1999 Mr. Wasserman has been CEO of CFO Oncall,
Inc., a Weston, Florida based provider of consultant accounting services
specializing in financial reporting, budgeting and planning, mergers and
acquisitions, audit preparation services, accounting, automated systems, banking
relations and internal controls. Mr. Wasserman has also served as the Chief
Financial Officer of Transax International Limited since May 2005 and S.E. Asia
Trading Company, Inc. since October 2006. From June 1991 to November 1999 he was
Senior Audit Manager, American Express Tax and Business Services, in Fort
Lauderdale, Florida where his responsibilities included supervising, training
and evaluating senior staff members, work paper review, auditing, maintaining
positive client relations, preparation of tax returns and preparation of
financial statements and the related footnotes. From September 1986 to May 1991
Mr. Wasserman was employed by Deloitte & Touche, LLP. During his employment, his
significant assignments included audits of public (SEC reporting) and private
companies, tax preparation and planning, management consulting, systems design,
staff instruction, and recruiting. Mr. Wasserman holds a Bachelor of
Administration from the State University of New York at Albany. He is a CPA (New
York) and a member of The American Institute of Certified Public Accountants and
is a director and the treasurer of Gold Coast Venture Capital Association.

                                       32
<PAGE>

         KENNETH CLINTON. Mr. Clinton has been Chief Operating Officer and a
member of the board of directors since May 2003. Mr. Clinton initially joined
our company in January 2002, serving as marketing director until August 2002
when he was made a vice president. He held the position of vice president until
being named COO in May 2003. Mr. Clinton has more than a decade of journalism,
public relations, and marketing expertise. From 1998 to 2002, Mr. Clinton was
Vice President of Marketing for Leapfrog, Inc., software and hardware technology
company concentrating in the Pacific Rim.

         DR. SHAOHUA TAN. Dr. Tan has been a member of our Board of Directors
since March 2005. Shaohua Tan, Inc., a company owned by Dr. Tan also holds a 24%
interest in GEP. Dr. Tan is a tenured professor at Peking University. In
addition to his academic achievements, he is a global business leader, with a
focus on public companies and telecommunications. Dr. Tan, earning his Ph.D. at
Universiteit Leuven in Belgium, has a stellar history of leading technology
companies in the West and China. These include: Founder and Chairman of such
Chinese technology companies as Beijing Beida Xi Xin Software Technology Co.
Ltd., Beijing Xin Chuang Yi Fang Software Technology Co. Ltd., Beijing CVC
Communications Co. Ltd. and Beijing Tianji Software Technology Co. Ltd. Dr. Tan
was the Founder and CEO of CN2U Technology Ltd. that specialized in financing
for telecom services businesses through direct investment. He also served as the
M&A Founder and CTO of Aptronix Asia Pacific Electronics Ltd., helping develop,
manufacture, and market multimedia communications systems and terminal products.
Dr. Tan is a principal and investor in the U.S. public company, China Voice
Corporation (CHCV.PK), which is not in a market sector competing with Genesis.
He is a self-employed entrepreneur, with business interests in China, the U.S.
and Western Europe. Dr. Tan has held various posts as Professor, Research
Fellow, Senior Scientist and other research roles held in countries like Europe,
U.S., Japan, China, and Singapore.

         RODRIGO ARBOLEDA. Mr. Arboleda has been a member of the Board of
Directors since November 30, 2006. Mr. Arboleda has 40 years of experience in
top executive positions in the private sector. Prior to forming the business
development firm, The Globis Group LLC., Mr. Arboleda was the Executive VP of
Ogden Corporation of NY, a Fortune 100 Service multinational corporation with
worldwide interests in Aviation, Energy and Entertainment. Mr. Arboleda was
responsible for the Business Development efforts in Latin America and Spain for
almost 10 years. He lead the efforts of opening 10 bases of Airport services in
Latin America and in Spain, of being awarded the largest airport management
privatization project in the world, 33 airports in Argentina, in consortium with
Malpensa 2000 of Milan, Italy, and a local Argentinean entrepreneur. He directed
the construction of the largest Fair and Exhibit complex in Latin America, at La
Rural de Palermo, in Buenos Aires, Argentina, a joint venture with the
emblematic Sociedad Rural Argentina. Mr. Arboleda holds a Bachelor of
Architecture degree from MIT.

         Our directors are elected at each annual meeting of stockholders. Our
directors hold office until the next annual meeting of stockholders. Executive
officers are elected by and serve at the discretion of the Board of Directors.

         There are no family relationships among any of our officers and
directors.

COMMITTEES OF THE BOARD OF DIRECTORS; DIRECTOR INDEPENDENCE, AUDIT COMMITTEE OF
THE BOARD OF DIRECTORS AND AUDIT COMMITTEE FINANCIAL EXPERT

         Through September November 29, 2006, none of our directors are
"independent" within the independence standards applicable to small business
issuers as set forth in Regulation S-B. All of the members of our Board of
Directors, except Mr. Arboleda, are individuals who are an integral part of the
business. As a result of our operating history and minimal resources, small
companies such as ours generally have difficulty in attracting independent
directors. In addition, we will require additional resources to obtain directors
and officers insurance coverage which is generally necessary to attract and
retain independent directors. Effective November 30, 2006, Mr. Arboleda became
our independent director. As we grow, in the future our Board of Directors
intends to seek additional members who are independent, have a variety of
experiences and backgrounds, who will represent the balanced, best interests of
all of our stockholders and at least one of which who is an "audit committee
financial expert" described below.

                                       33
<PAGE>

         The functions of the Audit Committee are currently performed by the
entire Board of Directors. At such time as we expand our Board of Directors to
include additional independent directors, we intend to establish an Audit
Committee of our Board of Directors. We are not currently subject to any law,
rule or regulation, however, requiring that all or any portion of our Board of
Directors include "independent" directors, nor are we required to establish or
maintain an Audit Committee of our Board of Directors.

         None of our directors is an "audit committee financial expert" within
the meaning of Item 401(e) of Regulation S-B. In general, an "audit committee
financial expert" is an individual member of the audit committee or Board of
Directors who:

         o  understands generally accepted accounting principles and financial
            statements,
         o  is able to assess the general application of such principles in
            connection with accounting for estimates, accruals and reserves,
         o  has experience preparing, auditing, analyzing or evaluating
            financial statements comparable to the breadth and complexity to our
            financial statements,
         o  understands internal controls over financial reporting, and
         o  understands audit committee functions

CODE OF ETHICS

         In January 2006 we adopted a Code of Ethics and Business Conduct to
provide guiding principles to our officers, directors and employees. Our Code of
Ethics and Business Conduct also strongly recommends that all directors and
employees of our company comply with the code in the performance of their
duties. Generally, our Code of Ethics and Business Conduct provides guidelines
regarding:

         o  compliance with laws, rules and regulations,
         o  conflicts of interest,
         o  insider trading,
         o  corporate opportunities
         o  competition and fair dealing,
         o  discrimination and harassment,
         o  health and safety,
         o  record-keeping,
         o  confidentiality,
         o  protection and proper use of company assets, and
         o  payments to government personnel.

         Our Code of Ethics and Business Conduct also provides guiding
principles to our Chief Executive Officer and Senior Financial Office in the
performance of their duties A copy of our Code of Ethics and Business Conduct is
included as an exhibit to this annual report.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

         We are not subject to Section 16(a) of the Securities Exchange Act of
1934, which requires our directors and executive officers, and persons who own
more than 10% of our common stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
Common Stock.

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table sets forth information relating to all compensation
awarded to, earned by or paid by us during the past three fiscal years to: (a)
our Chief Executive Officer; and (b) each of our executive officers who earned
more than $100,000 during the last three fiscal periods ended September 30,
2006, 2005 and 2004:

                                       34
<PAGE>
<TABLE>
<CAPTION>
                                                                                Long-Term
                                    Annual Compensation                        Compensation
                      --------------------------------------------  ------------------------------------
                                                                    Restricted  Securities      All
                                                      Other Annual    Stock     Underlying     Other
Name and Principal                  Salary    Bonus   Compensation    Awards      Options   Compensation
Position              Fiscal Year     ($)      ($)        ($)          ($)         SAR (#)      ($)
--------------------  -----------  --------  -------  ------------  ----------  ----------  ------------
<S>                   <C>          <C>       <C>      <C>           <C>         <C>          <C>
Gary Wolfson,           2006(1)    $167,750  $     -    $815,408            -    5,653,125           -
Chief Executive         2005(2)    $152,500  $     -    $ 50,781     $359,375    1,953,125    $ 77,676
Officer and Director    2004(3)    $130,000  $60,060    $109,375     $      -    1,562,500           -

Dr. James Wang,         2005(4)    $ 29,165  $     -    $      -     $      -            -    $184,675
Former Chairman of      2004(5)    $117,833  $60,060    $109,375     $      -    1,562,500           -
The Board and Former
President

Kenneth Clinton,        2006(6)    $167,750  $     -    $815,408     $      -    5,653,125           -
Director and            2005(7)    $131,660  $     -    $ 50,781     $359,375    1,953,125    $ 77,826
President               2004(8)    $104,822  $60,060    $109,375     $      -    1,562,500           -

Dr. Shaohua Tan         2006(9)    $ 75,000  $     -    $232,499     $      -    1,500,000           -
Director                2005(10)          -  $     -    $ 15,625     $      -    1,562,500           -

Li Shaoqing             2005(11)   $ 44,000  $     -    $205,000     $      -            -           -
Former Director
</TABLE>

(1) Mr. Wolfson's compensation for fiscal 2006 included:

    o   $167,750 salary payable under the terms of his employment agreement, of
        which $80,078 was paid through the issuance of 1,953,125 shares of our
        common stock upon the exercise of stock options and 1,697,916 shares of
        our common stock valued at $84,896 issued to him in September 2005.

    o   options to purchase 3,700,000 shares of our common stock at an exercise
        price of $0.145 per share representing other annual compensation which
        were valued at $512,675 pursuant to the terms of his employment
        agreement,

    o   options to purchase 1,953,125 shares of our common stock at an exercise
        price of $0.093 per share representing other annual compensation which
        were valued at $302,733 pursuant to the terms of his employment
        agreement,

(2) Mr. Wolfson's compensation for fiscal 2005 included:

    o   $152,500 salary payable under the terms of his employment agreement, of
        which $50,000 was paid through the issuance of 773,810 shares of our
        common stock,

    o   options to purchase 1,953,125 shares of our common stock at an exercise
        price of $0.041 per share representing other annual compensation which
        were valued at $50,781 pursuant to the terms of his employment
        agreement,

    o   3,125,000 shares of our common stock valued at $359,375 which represent
        pursuant to the terms of his employment agreement, and

    o   1,140,319 shares of our common stock valued at $77,646 issued as other
        compensation.

    Mr. Wolfson's fiscal 2005 compensation reported above excludes 1,697,916
    shares of our common stock valued at $84,896 issued to him in September 2005
    for services to be rendered to us during fiscal 2006.

                                       35
<PAGE>

(3) Mr. Wolfson's compensation for fiscal 2004 included:

    o   $130,000 salary payable under the terms of his employment agreement, of
        which $72,000 was paid through the issuance and exercise of options to
        purchase 653,838 shares of our common stock at an exercise price of $.12
        to $.13 per share (Mr. Wolfson's fiscal 2004 compensation reported above
        excludes 486,111 shares of our common stock valued at $58,333 issued to
        him in July 2004 for services to rendered to us during fiscal 2005),

    o   bonuses totaling $60,060, which includes 146,000 shares of our common
        stock valued at $40,060, and

    o   options to purchase 1,562,500 shares of our common stock at an exercise
        price of $0.06 per share which were valued at $109,375 pursuant to the
        terms of his employment agreement.

(4) Dr. Wang served as our Chairman of the Board and President until December
13, 2004. Dr. Wang's compensation for fiscal 2005 included:

    o   $29,165 of salary; and

    o   severance payments equal to cash of $100,000, $95,000 worth of
        marketable securities held by the Company and 562,500 shares of our
        common stock valued at $61,875. See "Separation and Severance Agreement"
        below.

(5) Dr. Wang's fiscal 2004 compensation included:

    o   $117,833 salary payable under his employment agreement, of which $81,425
        was paid through the issuance and exercise of options to purchase
        626,348 shares of our common stock at an average exercise price of $.13
        per share,

    o   bonuses totaling $60,060, which includes 146,000 shares of our common
        stock valued at $40,060, and

    o   options to purchase 1,562,500 shares of our common stock at an exercise
        price of $0.06 per share which were valued at $109,375 pursuant to the
        terms of his employment agreement. These options expired on December 31,
        2005.

(6) Mr. Clinton's compensation for fiscal 2006 included:

    o   $167,750 salary payable under the terms of his employment agreement, of
        which $80,078 was paid through the issuance of 1,953,125 shares of our
        common stock upon the exercise of stock options and 1,697,916 shares of
        our common stock valued at $84,896 issued to him in September 2005.

    o   options to purchase 3,700,000 shares of our common stock at an exercise
        price of $0.145 per share representing other annual compensation which
        were valued at $512,675 pursuant to the terms of his employment
        agreement,

    o   options to purchase 1,953,125 shares of our common stock at an exercise
        price of $0.093 per share representing other annual compensation which
        were valued at $302,733 pursuant to the terms of his employment
        agreement,

(7) Mr. Clinton's fiscal 2005 compensation included:

    o   $131,660 salary payable under the terms of his employment agreement, of
        which $41,664 was paid through the issuance of 664,800 shares of our
        common stock,

    o   options to purchase 1,953,125 shares of our common stock at an exercise
        price of $0.041 per share representing other annual compensation which
        were valued at $50,781 pursuant to the terms of his employment
        agreement,

    o   3,125,000 shares of our common stock valued at $359,375 which represent
        pursuant to the terms of his employment agreement, and

                                       36
<PAGE>

    o   1,161,675 shares of our common stock valued at $77,826 issued as other
        compensation.

    Mr. Clinton's fiscal 2005 compensation reported above excludes 1,697,916
    shares of our common stock valued at $84,896 issued to him in September 2005
    for services to be rendered to us during fiscal 2006.

(8) Mr. Clinton's fiscal 2004 compensation included:

    o   $104,822 salary payable under the terms of his employment agreement, of
        which $110,117 was paid through the issuance and exercise of options to
        purchase 882,960 shares of our common stock at an average exercise price
        of $.12 per share ($31,755 of share value issued in fiscal 2004 was for
        services performed in fiscal 2005),

    o   bonuses totaling $60,060, which includes 146,000 shares of our common
        stock valued at $40,060, and

    o   options to purchase 1,562,500 shares of our common stock at an exercise
        price of $0.06 per share which were valued at $109,375 pursuant to the
        terms of his employment agreement.

(9) Dr. Tan's fiscal 2006 compensation included:

    o   $75,000 consulting fee paid for services rendered for GEP.

    o   options to purchase 1,500,000 shares of our common stock at an exercise
        price of $0.093 per share which were valued at $232,499.

(10) Dr. Tan's fiscal 2005 compensation included:

    o   options to purchase 1,562,500 shares of our common stock at an exercise
        price of $0.03 per share which were valued at $15,625.

(11) Dr. Li Shaoqing served as the director/chief executive officer of our China
operations from October 1, 2004 until September 30, 2005. Under the terms of our
one year agreement with Dr. Li, we agreed to pay him a base salary of $4,000 per
month and issue him an aggregate of 1,500,000 shares of our common stock which
was valued at $205,000. Additionally, Dr. Li was entitled to an annual bonus of
5% of the net profits generated by our China operations to be paid in common
stock or cash as determined by us. There were no net profits during the period.

OPTION GRANTS IN LAST FISCAL YEAR

         The following table sets forth information concerning individual grants
of options made during Fiscal 2006 to the Named Executive Officers.
<TABLE>
<CAPTION>
                                            % of Total
                   Number of Shares     Options Granted    Exercise or      FMV of
                  Underlying Options    to Employees in     Base Price    Shares on        Expiration
                    Granted (#)           Fiscal Year         ($/Sh)      Grant Date          Date
                  ------------------    ---------------    -----------    ----------    -----------------
<S>               <C>                   <C>                <C>            <C>           <C>
Gary Wolfson           1,953,125             13.4%           $ 0.093       $ 0.155      August 1, 2011
Ken Clinton            1,953,125             13.4%           $ 0.093       $ 0.155      August 1, 2011
Gary Wolfson           3,700,000             25.4%           $ 0.145       $ 0.145      July 31, 2007
Ken Clinton            3,700,000             25.4%           $ 0.145       $ 0.145      July 31, 2007
Adam Wasserman           250,000              1.7%           $ 0.310       $ 0.070      February 14, 2011
</TABLE>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES

         The following table indicates each exercise of stock options (or tandem
SARS) and freestanding SARS during the last fiscal year by each of the names
executive officers and the total number and value of exercisable and
unexercisable stock options held by Named Executive Officers as of September 30,
2006.

                                       37
<PAGE>
<TABLE>
<CAPTION>
                                                        Number of Securities            Value of Unexercised
                                                       Underlying Unexercised              In-the-Money
                                                    Options at Fiscal Year-End(#)    Options at Fiscal Year-end
                  Shares acquired       Value       -----------------------------    ---------------------------
Name              on Exercise(#)     Realized($)    Exercisable     Unexercisable    Exercisable   Unexercisable
--------------    ---------------    -----------    -----------     -------------    -----------   -------------
<S>               <C>                <C>            <C>             <C>              <C>           <C>
Gary Wolfson         1,953,125         $ 80,078      8,565,625            -           $ 160,987       $    -
Ken Clinton          1,953,125         $ 80,078      8,565,625            -           $ 160,987       $    -
Shaohua Tan          1,562,500         $ 46,875              -            -           $       -       $    -
Adam Wasserman       1,006,869         $ 50,343        250,000            -           $       -       $    -
</TABLE>

STOCK OPTION PLANS

         On October 31, 2001, our board of directors authorized, and holders of
a majority of our outstanding common stock adopted our 2002 Stock Option Plan
(the "2002 Plan"). Subsequent to October 2001, the 2002 Plan was amended to
increase to reserve 6,055,000 of our authorized but unissued shares of common
stock for issuance under the Plan. On May 30, 2003, our board of directors and
holders of a majority of our outstanding common stock approved and adopted our
2003 Stock Option Plan (the "2003 Plan") covering 7,000,000 shares of common
stock. On April 21, 2004, our board of directors and holders of a majority of
our outstanding common stock approved and adopted our 2004 Stock Option Plan
(the 2004 Plan") covering 10,000,000 shares of common stock. On August 13, 2005
our Board of Directors increased the number of shares available for issuance
under our 2004 Plan to 22,000,000 shares. As of September 30, 2006, options for
an aggregate of 31,052 shares at exercise prices of $.10 remain outstanding
under the 2002, 2003 Plan and 2004 Plan and none remain available for issuance
under our 2004 Plan.

INFORMATION APPLICABLE TO THE 2002 PLAN, THE 2003 PLAN AND THE 2004 PLAN

         The purpose of the 2002 Plan, the 2003 Plan, and the 2004 Plan is to
encourage stock ownership by our officers, directors, key employees and
consultants, and to give such persons a greater personal interest in the success
of our business and an added incentive to continue to advance and contribute to
us. Our officers, directors, key employees and consultants are eligible to
receive stock grants and non-qualified options under each of the plans. Only our
employees are eligible to receive incentive options.

         Each plan is administered by our board of directors or an underlying
committee. The board of directors or the committee determines from time to time
those of our officers, directors, key employees and consultants to whom plan
options are to be granted, the terms and provisions of the respective option
agreements, the time or times at which such options shall be granted, the type
of options to be granted, the dates such plan options become exercisable, the
number of shares subject to each option, the purchase price of such shares and
the form of payment of such purchase price. All other questions relating to the
administration of the plan, and the interpretation of the provisions thereof and
of the related option agreements are resolved by the board or committee.

         Subject to the limitation on the aggregate number of shares issuable
under the plan, there is no maximum or minimum number of shares as to which a
stock grant or plan option may be granted to any person. Shares used for stock
grants and plan options may be authorized and unissued shares or shares
reacquired by us, including shares purchased in the open market. Shares covered
by plan options which terminate unexercised will again become available for
grant as additional options, without decreasing the maximum number of shares
issuable under the plan, although such shares may also be used by us for other
purposes.

         Plan options may either be options qualifying as incentive stock
options under Section 422 of the Internal Revenue Code of 1986, as amended or
non-qualified options. In addition, each of the plans allow for the inclusion of
a reload option provision, which permits an eligible person to pay the exercise
price of the option with shares of common stock owned by the eligible person and
receive a new option to purchase shares of common stock equal in number to the
tendered shares. Any incentive option granted under the plan must provide for an
exercise price of not less than 100% of the fair market value of the underlying

                                       38
<PAGE>

shares on the date of grant, but the exercise price of any incentive option
granted to an eligible employee owning more than 10% of our outstanding common
stock must not be less than 110% of fair market value on the date of the grant.
Each plan provides that, with respect to incentive stock options, the aggregate
fair market value (determined as of the time the option is granted) of the
shares of common stock, with respect to which incentive stock options are first
exercisable by any option holder during any calendar year cannot exceed
$100,000. The exercise price of non-qualified options cannot be less than the
par value of our common stock on the date the option is granted. The term of
each plan option and the manner in which it may be exercised is determined by
the board of directors or the committee, provided that no option may be
exercisable more than 10 years after the date of its grant and, in the case of
an incentive option granted to an eligible employee owning more than 10% of the
common stock, no more than five years after the date of the grant.

         The board of directors or the committee may grant stock appreciation
rights to persons who have been, or are being granted, plan options as a means
of allowing such participants to exercise their plan options without the need to
pay the exercise price in cash. In the case of a non-qualified option, a stock
appreciation right may be granted either at or after the time of the grant of
the non-qualified option. In the case of an incentive option, a stock
appreciation right may be granted only at the time of the grant of the incentive
option. Shares of restricted stock may also be awarded either alone or in
addition to other awards granted under the plan. The board of directors or the
committee determines the eligible persons to whom, and the time or times at
which, grants of restricted stock will be awarded, the number of shares to be
awarded, the price (if any) to be paid by the holder, the time or times within
which such awards may be subject to forfeiture, the vesting schedule and rights
to acceleration thereof, and all other terms and conditions of the awards.
Shares of deferred stock may be awarded either alone or in addition to other
awards granted under the plan. The board of directors or committee determines
the eligible persons to whom and the time or times at which grants of deferred
stock will be awarded, the number of shares of deferred stock to be awarded to
any person, the duration of the period during which, and the conditions under
which, receipt of the shares will be deferred, and all the other terms and
conditions of the awards.

         Each plan provides that, if our outstanding shares are increased,
decreased, exchanged or otherwise adjusted due to a share dividend, forward or
reverse share split, recapitalization, reorganization, merger, consolidation,
combination or exchange of shares, an appropriate and proportionate adjustment
shall be made in the number or kind of shares subject to the plan or subject to
unexercised options and in the purchase price per share under such options. Any
adjustment, however, does not change the total purchase price payable for the
shares subject to outstanding options. In the event of our proposed dissolution
or liquidation, a proposed sale of all or substantially all of our assets, a
merger or tender offer for our shares of common stock, the board of directors
may declare that each option granted under a plan shall terminate as of a date
to be fixed by the board of directors; provided that not less than 30 days
written notice of the date so fixed shall be given to each participant holding
an option, and each such participant shall have the right, during the period of
30 days preceding such termination, to exercise the participant's option, in
whole or in part, including as to options not otherwise exercisable.

         All plan options are non-assignable and non-transferable, except by
will or by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. The board of directors may
amend, suspend or terminate either plan at any time, except that no amendment
shall be made which:

         * increases the total number of shares subject to the plan or changes
The minimum purchase price thereof (except in either case in the event of
adjustments due to changes in our capitalization),

         * affects outstanding plan options or any exercise right thereunder,

         * extends the term of any plan option beyond 10 years, or

         * extends the termination date of the plan.

                                       39
<PAGE>

         Unless the plan has been suspended or terminated by the board of
directors, each plan will terminate on 10 years from the date of the respective
plan's adoption. Any such termination of the plan will not affect the validity
of any plan options previously granted thereunder.

EMPLOYMENT AGREEMENTS

         Gary Wolfson. Effective August 1, 2004, we entered into an employment
agreement with our chief executive officer, Gary Wolfson. The agreement is for a
term of three years unless either the Company or the employee terminates the
agreement, and contains confidentiality clauses. As consideration for the
employee's services, the Company has agreed to a base salary of $150,000 per
annum plus benefits, for time actually devoted to duties on behalf of the
Company. On each successive anniversary date of this agreement, the Board shall
review the base compensation and at its sole discretion may elect to increase
the base salary at any time, but not decrease it. If the Board takes no action,
the base salary shall increase a minimum of 10% annually. The executive is
entitled to a discretionary bonus of 25% of base salary determined by the CEO or
Board of Directors. In addition, the employee shall be granted stock options
equal in number to the previous employment year (1,250,000 for the employment
year ended July 31, 2005) plus an additional 25% to purchase shares of the
Company's common stock at a price equal to 60% of the average closing price for
the month of July, the final month of the employment year. The stock options
have an expiration date five years from the grant date. These options contain
anti-dilutive provisions. In fiscal 2004, in connection with this agreement, the
executive was granted stock options to purchase 1,562,500 common shares at $.06
per share and in fiscal 2006 and 2005, in connection with this agreement, the
executive was granted stock options to purchase 1,953,125 common shares at $.093
and $.041 per share, respectively. On November 1, 2004, the executive was
granted restricted shares of common stock equal to two times the number of
options granted under this employment agreement. In connection with this
employment agreement, in November 2004, the Company issued 3,125,000 common
shares. In July 2006, in exchange for the issuance of common shares under this
employment agreement, the Company granted this executive 3,700,000 stock option
to purchase 3,700,000 shares of the Company's common stock at an exercise price
of $.145 per share for a period of five years. In the event the Company's common
stock is approved for listing on the American Stock Exchange or the Nasdaq
SmallCap Market, the Executive will be granted 2.5% of the Company's outstanding
shares on the first day of trading on the new exchange.

         Kenneth Clinton. Effective August 1, 2004, the Company entered into an
employment agreement with its chief operating officer and subsequently elevated
to president, Kenneth Clinton. The agreement is for a term of three years unless
either the Company or the employee terminates the agreement, and contains
confidentiality clauses. As consideration for the employees' services, the
Company has agreed to a base salary of $125,000 per annum plus benefits, for
time actually devoted to duties on behalf of the Company. On each successive
anniversary date of this agreement, the Board shall review the base compensation
and at its sole discretion may elect to increase the base salary at any time,
but not decrease it. If the Board takes no action, the base salary shall
increase a minimum of 10% annually. The executive is entitled to a discretionary
bonus of 25% of base salary determined by the CEO or Board of Directors. In
addition, the employee shall be granted stock options equal in number to the
previous employment year (1,250,000 for the employment year ended July 31, 2005)
plus an additional 25% to purchase shares of the Company's common stock at a
price equal to 60% of the average closing price for the month of July, the final
month of the employment year. The stock options have an expiration date five
years from the grant date. These options contain anti-dilutive provisions. In
fiscal 2004, in connection with this agreement, the executive was granted stock
options to purchase 1,562,500 common shares at $.06 per share. In fiscal 2006
and 2005, in connection with this agreement, the executive was granted stock
options to purchase 1,953,125 common shares at $.093 and $.041 per share,
respectively. On November 1, 2004, the executive was granted restricted shares
of common stock equal to two times the number of options granted under this
employment agreement. In connection with this employment agreement, in November
2004, the Company issued 3,125,000 common shares. In July 2006, in exchange for
the issuance of common shares under this employment agreement, the Company
granted this executive 3,700,000 stock option to purchase 3,700,000 shares of
the Company's common stock at an exercise price of $.145 per share for a period
of five years. In the event the Company's common stock is approved for listing
on the American Stock Exchange or the Nasdaq SmallCap Market, he Executive will
be granted 2.5% of the Company's outstanding shares on the first day of trading
on the new exchange.

                                       40
<PAGE>

SEPARATION AND SEVERANCE AGREEMENT

         In August 2004, we entered into an employment agreement with Dr. James
Wang, then our Chairman and President. The agreement was for a term of three
years unless either party terminated the agreement, and contained
confidentiality clauses. As consideration for his services, we agreed to pay Dr.
Wang a base salary of $140,000 per annum plus benefits, for time actually
devoted to duties on our behalf. In addition, Dr. Wang was to be granted stock
options equal in number to the previous employment year (1,250,000 for the
employment year ending July 31, 2004) plus an additional 25% to purchase shares
of our common stock at a price equal to 60% of the average closing price for the
month of July, the final month of the employment year. The stock options had an
expiration date five years from the grant date. In connection with this
agreement, Dr. Wang was granted options to purchase 1,562,500 shares of our
common stock at $.06 per share. On December 13, 2004, the employment agreement
with Dr. Wang was cancelled. In connection with this employment agreement, in
November 2004, the Company was to issue 3,125,000 common shares to Dr. Wang.
These shares were not delivered to Dr. Wang and in management's opinion are not
issuable due to the Separation and Severance Agreement. Currently, Dr. Wang is
disputing this position. During negotiations, Dr. Wang stated on advice of
counsel that he could not maintain his employment agreement or any of its
benefits if he did not continue as an employee of GTEC. The Company plans to
vigorously defend its position and believes that any settlement, if any, will
not have a material adverse effect on its financial condition.

         On December 13, 2004, we entered into a Separation and Severance
Agreement with Dr. Wang. Under the terms of this agreement, to which Yastock and
Shanghai Yastand Information Technology Company, Limited ("Yastand"), were also
parties, effective December 13, 2004, Dr. Wang resigned as President, Chairman
of the Board and as a member of our Board of Directors, and the foregoing
employment agreement dated August 1, 2004, including all rights, benefits and
obligations pursuant thereto was terminated.

         The Separation and Severance Agreement provided for the following
severance provisions:

         * We transferred our ownership interest in and to Yastock and Yastand,
free and clear of all liens, pledges, hypothecation, option, contract and other
encumbrance, to Messrs. Robert Zhuang and Lawrence Wang, the previous owners.

         * Yastock and Yastand agreed to transfer all rights and privileges to
certain agreement to us.

         * We transferred to Yastock two-thirds of our ownership interest in the
joint venture with CIIC Investment Banking Services Company, Limited, free and
clear of all liens, pledges, hypothecation, option, contract and other
encumbrance.

         * We issued Dr. Wang 562,500 shares of our common stock pursuant to our
2004 Stock Option Plan, which shares were registered under an effective
registration statement on Form S-8.

         * We paid Dr. Wang $100,000 on the day after we file this annual report
on Form 10-KSB for the year ended September 30, 2004 with the SEC and the annual
report is accepted by the SEC Edgar filing system.

         * Dr. Wang agreed to provide substantial assistance to us in the
preparation of this annual report and organization of all audits of
subsidiaries.

         * Dr. Wang also agreed to assist us in maintaining a positive
relationship between the Company and our subsidiary, Chorry.

         * Dr. Wang's options to purchase 1,500,000 shares of our common stock
which are exercisable at an exercise price of $0.06 cents per share received
pursuant to the above-described employment agreement terminated on December 13,
2005, unless exercised prior thereto. As of September 30, 2005, 437,500 options
were exercised and the remaining options expired without exercise.

                                       41
<PAGE>

         * For a period of three years, Dr. Wang, Yastock and Yastand shall not
(i) without first obtaining our written consent, directly or indirectly, do
business with any of our past or current customers, or (ii) directly or
indirectly, solicit or proposition, or otherwise attempt to induce any of our
customers to terminate their relationships with our company.

         * We transferred to Yastock 95,000 shares of Dragon International Group
Corp. common stock owned by us which were valued at December 13, 2004, the date
of the Separation Agreement at approximately $51,000.

         * We agreed that if Dr. Wang is made a party, is threatened to be made
a party, to any action, suit or proceeding, whether civil, criminal,
administrative, or investigative, by reason of the fact that Dr. Wang was a
director, officer, or employee of our company, or was serving at the request of
our company as a director, officer, member, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
proceeding is Dr. Wang's alleged action in an official capacity while serving as
a director, officer, member, employee, or agent, to indemnify and hold Dr. Wang
harmless to the fullest extent legally permitted or authorized by our Articles
of Incorporation, Bylaws, or resolutions of our Board of Directors, or, if
greater, by the laws of the State of Florida.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

         The following table sets forth, as of December 1, 2006, information
known to us relating to the beneficial ownership of shares of common stock by:

         -  each person who is the beneficial owner of more than five percent of
            the outstanding shares of common stock;
         -  each director;
         -  each executive officer; and
         -  all executive officers and directors as a group.

         Unless otherwise indicated, the address of each beneficial owner in the
table set forth below is care of Genesis Technology Group, Inc., 7900 Glades
Road, Suite 420, Boca Raton FL 33434. We believe that all persons named in the
table have sole voting and investment power with respect to all shares of common
stock beneficially owned by them. Under the securities laws, a person is
considered to be the beneficial owner of securities that can be acquired by him
within 60 days from the date of this filing upon the exercise of options,
warrants or convertible securities. We determine beneficial owner's percentage
ownership by assuming that options, warrants or convertible securities that are
held by him, but not those held by any other person and which are exercisable
within 60 days of the date of this filing, have been exercised or converted. As
of December 31, 2006, there were 84,532,112 shares of our common stock issued
and outstanding. The issued and outstanding shares do not include 22,911,611
shares of our common stock issuable upon the exercise of warrants and options.

Names and Address of              Number of shares          Percentage of shares
Beneficial Owner                  Beneficially Owned         Beneficially Owned
-------------------------         ------------------        --------------------
Gary Wolfson ............            13,299,100(1)                  14.3%
Kenneth Clinton .........            12,586,325(2)                  13.5%
Adam Wasserman ..........             1,243,738(3)                   1.47%
Dr. Shaohua Tan .........             2,800,000(4)                   3.3%
Rodrigo Arboleda ........               500,000                  less than 1%

All executive officers
 and directors as a group
 (five persons) .........            32,063,163                     31.0%

(1) Mr. Wolfson's holdings include options to purchase 8,565,625 shares of
    common stock.
(2) Mr. Clinton's holdings include options to purchase 8,565,625 shares of
    common stock. Mr. Clinton disclaims ownership in 1,634,000 shares of common
    stock held in the name of Kenneth Clinton Jr., Mr. Clinton's father.
(3) Mr. Wasserman's holdings include options to purchase 250,000 shares of
    common stock.
(4) Includes options to purchase 1,500,000 shares of common stock.

                                       42
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Our director, Shaohua Tan, is the owner of Shaohua Tan, Inc., a 24%
owner of our partially-owned subsidiary Genesis Equity Partners LLC. Upon
receipt by GEP of 13,209,600 restricted common shares of SEAA, we distributed
3,170,304 shares of SEAA (24%) to Shaohua Tan, Inc.. Additionally, at September
30, 2006, we owed $75,000 to Dr. Tan for services rendered during the year ended
September 30, 2006.

         During the year ended September 30, 2006, the Company paid $19,912 to a
company owned by Adam Wasserman , our chief financial officer for accounting
services rendered related to Lotus which has been included in cost of services
performed on the accompanying statement of operations.

         On May 5, 2006, in connection with a 24-month consulting agreement, we
issued 1,000,000 shares of common stock for investor relations services rendered
and to be rendered in the future to a company related through common ownership
with a China West, LLC a 25% member of the Company's partially-owned subsidiary,
GEP. We valued these common shares at the fair market value on the date of grant
at per share price of $.23 or $230,000. In connection with issuance of these
shares, for the year ended September 30, 2006, we recorded stock-based
consulting expense of $47,917 and deferred compensation of $182,083 which will
amortized over the remaining service period.

ITEM 13. EXHIBITS

2.1      Agreement and Plan of Reorganization between Virginia City Gold Mines,
         Inc. and Psychicnet.com, Inc. dated March 8, 1999 (1)
2.2      Agreement and Plan of Merger between Newagecities.com, Inc., New Leaf
         Distributing Company and Al-Wali Corporation, dated April 6, 2001. (4)
2.3      Agreement and Plan of Reorganization and Stock Purchase Agreement
         between Newagecities.com, Inc. and Genesis Systems, Inc. (5)
2.4      Stock Purchase Agreement by and Among Newagecities.com and PropaMedia
         (6)
2.5      Stock Purchase Agreement by and Among Newagecities.com and G-Choice (6)
2.6      Stock Purchase Agreement dated November 15, 2001 by and between Genesis
         Technology Group, Inc., Zhaoli Science and Technology Development
         Company, Limited and the Majority Shareholder of Zhaoli Science and
         Technology Development Company, Limited. (7)
2.7      Stock Purchase Agreement dated December 1, 2001 by and between Genesis
         Technology Group, Inc, Yastock Investment Consulting Company, Limited
         and the majority shareholders of Yastock Investment Consulting Company,
         Limited. (7)
2.8      Agreement and Plan of Merger And Reorganization by and among
         theNETdigest.Com, Inc. as Acquiror, Shanghai G-Choice Science &
         Technology Company Ltd as Acquiree and the Shareholders of Shanghai
         G-Choice Science & Technology Company Ltd. (9)
2.9      Agreement for purchase of LLC Membership Interests in Extrema LLC dated
         August 12, 2004(2)
2.10     Merger Agreement and Plan of Reorganization (1)
3.1      Articles of Incorporation (1)
3.2      Articles of Amendment to the Articles of Incorporation (1)
3.3      Articles of Amendment to the Articles of Incorporation (1)
3.4      Bylaws (1)
4.1      Subscription Agreement (13)
4.2      Articles of Amendment Designating Rights of Series A 6% Cumulative
         Convertible Preferred Stock (13)
4.3      Form of Warrant (13)
10.1     Genesis Technology Group, Inc. 2002 Stock Option Plan. (8)
10.2     Genesis Technology Group Amendment No.1 to 2002 Stock Option Plan. (11)
10.3     Genesis Technology Group 2003 Stock Option Plan. (12)
10.4     Employment Agreement with Gary Wolfson dated August 1, 2004(2)
10.5     Employment Agreement with Kenneth Clinton dated August 1, 2004(2)
10.6     Separation and severance agreement with James Wang dated December 10,
         2004 (2)
10.7     Joint Venture Agreement with Global Boardroom Solutions, Inc., a
         division of Custage International, Inc. dated June 1, 2004 (2)
10.8     Real Estate Contract for Extrema including Guarantee Signed by Genesis
         (2)

                                       43
<PAGE>

10.9     Employment Agreement with Dr. Li Shaoqing (2)
10.10    Stock Purchase Agreement dated November 2, 2005 with Dragon Venture (3)
10.11    Amendment number 1 to the 2004 Stock Option Plan (10)
10.12    General Partnership Agreement dated December 30, 2005 between Genesis
         Equity Partners, LLC and Jin Ma Group, Ltd. (14)
14.1     Code of Business Conduct and Ethics (14) 21.1 Subsidiaries of the small
         business issuer (14)
31.1     Section 302 Certificate of Chief Executive Officer *
31.2     Section 302 Certificate of Chief Financial Officer *
32.1     Section 906 Certificate of Chief Executive Officer *
32.2     Section 906 Certificate of Chief Financial Officer *

(1)      Incorporated by reference to exhibits filed with the registration
         statement on Form SB-2 as filed on September 1, 1999
(2)      Incorporated by reference to exhibits filed with our annual report on
         Form 10-KSB for the fiscal year ended September 30, 2004.
(3)      Incorporated by reference to exhibit filed with the Current Report on
         Form 8-K as filed on November 15, 2005.
(4)      Incorporated by reference to exhibits filed with the Current Report on
         Form 8-K as filed on April 23, 2001.
(5)      Incorporated by reference to exhibits filed with the Current Report on
         Form 8-K as filed on August 16, 2001.
(6)      Incorporated by reference to exhibits filed with the Current Report on
         Form 8-K as filed on September 12, 2001.
(7)      Incorporated by reference to exhibits filed with the Current Report on
         Form 8-K as filed on January 14, 2002.
(8)      Incorporated by reference to exhibits filed with the registration
         statement on Form S-8 filed on March 26, 2002.
(9)      Incorporated by reference to exhibits filed with the Current Report on
         Form 8-K as filed on July 15, 2002.
(10)     Incorporated by reference to exhibit filed with the registration
         statement on Form S-8 as filed on September 30, 2005.
(11)     Incorporated by reference to exhibits filed with the registration
         statement on Form S-8 as filed on December 17, 2002.
(12)     Incorporated by reference to exhibits filed with the registration
         statement on Form S-8 as filed on June 5, 2003. (13) Incorporated by
         reference to exhibits with the Current Report on Form 8-K as filed on
         January 22, 2004. (14) Incorporated by reference to exhibits with our
         annual report on Form 10-KSB for the fiscal year ended September 30,
         2005.

*        Filed herewith

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Sherb & Co., LLP served as our independent registered public accounting
firm for fiscal 2006 and 2005. The following table shows the fees that were
billed for the audit and other services provided by each of this firm for the
2006 and 2005 fiscal years.

                         Fiscal 2006      Fiscal 2005
                         -----------      -----------

Audit Fees                $ 66,000         $ 65,500
Audit-Related Fees        $      0         $      0
Tax Fees                  $      0         $  5,000
All Other Fees            $      0         $      0
                          --------         --------
         Total            $ 66,000         $ 70,500
                          ========         ========

         Audit Fees -- This category includes the audit of our annual financial
statements, review of financial statements included in our Form 10-QSB Quarterly
Reports and services that are normally provided by the independent auditors in
connection with engagements for those fiscal years. This category also includes
advice on audit and accounting matters that arose during, or as a result of, the
audit or the review of interim financial statements.

                                       44
<PAGE>

         Audit-Related Fees -- This category consists of assurance and related
services by the independent auditors that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported above under "Audit Fees." The services for the fees disclosed under
this category include consultation regarding our correspondence with the SEC and
other accounting consulting.

         Tax Fees -- This category consists of professional services rendered by
our independent auditors for tax compliance and tax advice. The services for the
fees disclosed under this category include tax return preparation and technical
tax advice.

         All Other Fees -- This category consists of fees for other
miscellaneous items.

         Our Board of Directors has adopted a procedure for pre-approval of all
fees charged by our independent auditors. Under the procedure, the Board
approves the engagement letter with respect to audit, tax and review services.
Other fees are subject to pre-approval by the Board, or, in the period between
meetings, by a designated member of Board. Any such approval by the designated
member is disclosed to the entire Board at the next meeting. The audit and tax
fees paid to the auditors with respect to fiscal year 2006 were pre-approved by
the entire Board of Directors.

                                       45
<PAGE>


                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



                                    CONTENTS



Report of Independent Registered Public Accounting Firm......................F-2

Consolidated Financial Statements:

  Consolidated Balance Sheet.................................................F-3

  Consolidated Statements of Operations......................................F-4

  Consolidated Statement of Shareholders' Equity.............................F-5

  Consolidated Statements of Cash Flows......................................F-6

Notes to Consolidated Financial Statements...........................F-7 to F-32


                                       F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Genesis Technology Group, Inc
Boca Raton, Florida


         We have audited the accompanying consolidated balance sheet of Genesis
Technology Group, Inc. and Subsidiaries as of September 30, 2006, and the
related consolidated statements of operations, shareholders' equity and cash
flows for the years ended September 30, 2006 and 2005. These consolidated
financial statements are 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 statements referred to above
present fairly, in all material respects, the financial position of Genesis
Technology Group, Inc. and Subsidiaries as of September 30, 2006, and the
results of their operations and their cash flows for the years ended September
30, 2006 and 2005, in conformity with accounting principles generally accepted
in the United States of America.

         The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 9 to the
consolidated financial statements, the Company has an accumulated deficit of
$16,568,619 and has cash used in operations of $914,353 for the year ended
September 30, 2006. 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 9. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                        /s/ Sherb & Co., LLP
                                        Certified Public Accountants

Boca Raton, Florida
December 11, 2006

                                       F-2
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               September 30, 2006

                                     ASSETS

CURRENT ASSETS:
  Cash and cash equivalents .....................................  $    592,610
  Marketable equity securities, at market .......................       601,565
  Prepaid expenses ..............................................         6,730
  Deferred contract costs .......................................       100,503
                                                                   ------------

    Total Current Assets ........................................     1,301,408

PROPERTY AND EQUIPMENT - Net ....................................        15,641

OTHER ASSETS:
  Restricted marketable equity securities,
   at market ....................................................     4,184,917
  Restricted marketable equity securities,
   at market - related party ....................................     1,684,224
  Other assets ..................................................        45,583
                                                                   ------------

    Total Assets ................................................  $  7,231,773
                                                                   ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses .........................  $    207,504
  Due to related party ..........................................        75,000
  Liabilities of discontinued operations ........................       150,709
                                                                   ------------

    Total Current Liabilities ...................................       433,213
                                                                   ------------

MINORITY INTEREST ...............................................     1,577,395
                                                                   ------------

SHAREHOLDERS' EQUITY:
  Preferred stock ($.001 Par Value; 20,000,000
   Shares Authorized) ...........................................             -
  Convertible preferred stock  Series A ($.001
   Par Value; 218,000 Shares Authorized; 15,400
   shares issued and outstanding) ...............................            15
  Common stock ($.001 Par Value; 200,000,000
   Shares Authorized; 84,032,112 shares issued
   and outstanding) .............................................        84,033
  Additional paid-in capital ....................................    21,838,795
  Accumulated deficit ...........................................   (16,568,619)
  Less: treasury stock, at cost (10,000 shares) .................        (2,805)
  Less: deferred compensation ...................................      (235,032)
  Less: subscription receivable .................................      (182,340)
  Accumulated other comprehensive income ........................       287,118
                                                                   ------------

    Total Shareholders' Equity ..................................     5,221,165
                                                                   ------------

    Total Liabilities and Shareholders' Equity ..................  $  7,231,773
                                                                   ============

                 See notes to consolidated financial statements

                                       F-3
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                        For the Year Ended
                                                           September 30,
                                                    ---------------------------
                                                        2006           2005
                                                    ------------   ------------

NET REVENUES .....................................  $  6,750,229   $    154,580
                                                    ------------   ------------

OPERATING EXPENSES:
  Cost of services performed .....................       318,916              -
  Consulting .....................................       137,506        211,510
  Salaries and non-cash compensation .............       965,803      1,921,101
  Severance expense ..............................             -        329,343
  Selling, general and administrative ............       652,219        679,305
                                                    ------------   ------------

    Total Operating Expenses .....................     2,074,444      3,141,259
                                                    ------------   ------------

INCOME (LOSS) FROM OPERATIONS ....................     4,675,785     (2,986,679)
                                                    ------------   ------------

OTHER INCOME (EXPENSE):
  Gain from sale of marketable securities ........     1,046,916              -
  Loss on impairment of marketable securities ....       (20,300)             -
  Loss on abandonment of property and equipment ..             -         (2,444)
  Interest income ................................        17,351          2,911
                                                    ------------   ------------

    Total Other Income (Expense) .................     1,043,967            467
                                                    ------------   ------------

INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS,
 INCOME TAXES AND MINORITY INTEREST ..............     5,719,752     (2,986,212)
                                                    ------------   ------------

DISCONTINUED OPERATIONS:
  Gain (loss) from disposal of discontinued
   operations ....................................       237,377       (377,346)
  Gain (loss) from discontinued operations .......         9,124       (365,568)
                                                    ------------   ------------

    Total gain (loss) from Discontinued Operations       246,501       (742,914)
                                                    ------------   ------------

INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY
 INTEREST ........................................     5,966,253     (3,729,126)

PROVISION FOR INCOME TAXES .......................             -              -
                                                    ------------   ------------

INCOME (LOSS) BEFORE MINORITY INTEREST ...........     5,966,253     (3,729,126)

MINORITY INTEREST IN INCOME (LOSS) OF SUBSIDIARY .    (3,056,647)         2,197
                                                    ------------   ------------

NET INCOME (LOSS) ................................  $  2,909,606   $ (3,726,929)
                                                    ============   ============

INCOME (LOSS) PER COMMON SHARE - BASIC:
  Income (loss) from continuing operations .......  $       0.03   $      (0.05)
  Income (loss) from discontinued operations .....             -          (0.01)
                                                    ------------   ------------

    Net income (loss) per common share ...........  $       0.03   $      (0.06)
                                                    ============   ============

INCOME (LOSS) PER COMMON SHARE - DILUTED:
  Income (loss) from continuing operations .......  $       0.03   $      (0.05)
  Income (loss) from discontinued operations .....             -          (0.01)
                                                    ------------   ------------

    Net income (loss) per common share ...........  $       0.03   $      (0.06)
                                                    ============   ============

  Weighted common shares outstanding - basic .....    77,523,502     61,248,209
                                                    ============   ============
  Weighted common shares outstanding - diluted ...    81,381,921     61,248,209
                                                    ============   ============

              See notes to consolidated financial statements

                                   F-4
<PAGE>
<TABLE>
                                          GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                          For the Years Ended September 30, 2006 and 2005

<CAPTION>
                                            Preferred Stock Series A            Common Stock,
                                                $.001 Par Value                $.001 Par Value
                                           ---------------------------   ---------------------------    Additional
                                                   Number of              Number of                      Paid-in      Accumulated
                                              Shares         Amount        Shares           Amount       Capital        Deficit
                                           ------------   ------------   ------------   ------------   -------------  ------------
<S>                                        <C>            <C>            <C>            <C>            <C>            <C>
Balance, September 30, 2004 ..............       97,500   $         97     51,099,693   $     51,100   $ 18,403,301   $(15,662,992)
Stock options granted to director and
 employees ...............................            -              -              -              -        149,639              -
Common stock issued for services .........            -              -     17,336,015         17,336      1,476,489              -
Shares issued  from exercise of stock
 options for cash and accrued salaries ...            -              -        463,889            464         26,369              -
Shares issued in connection with
 severance agreement .....................            -              -        562,500            562         61,313              -
Amortization of deferred compensation ....            -              -              -              -              -              -
Other comprehensive income:
  Net loss ...............................            -              -              -              -              -     (3,726,929)
  Comprehensive loss - change in
   unrealized loss on marketable equity
   securities and foreign currency
   exchange -net of taxes of $0 ..........            -              -              -              -              -              -

  Total comprehensive loss ...............            -              -              -              -              -              -
                                           ------------   ------------   ------------   ------------   ------------   ------------
Balance, September 30, 2005 ..............       97,500             97     69,462,097         69,462     20,117,111    (19,389,921)
Stock options granted to director and
 employees ...............................            -              -              -              -        351,929              -
Stock options granted to consultants
 for services ............................            -              -              -              -        124,718              -
Common stock issued for services and
 accounts payable ........................            -              -      2,006,869          2,007        278,338              -
Conversion of preferred stock to common
 stock ...................................      (82,100)           (82)     3,538,792          3,540         (3,458)             -
Shares issued from exercise of stock
 options .................................            -              -      6,996,750          6,997        382,374              -
Purchase of treasury stock ...............            -              -              -              -              -              -
Shares issued from exercise of stock
 warrants ................................            -              -      1,646,983          1,647        499,859              -
Preferred stock dividend .................            -              -        380,621            380         87,924        (88,304)
Amortization of deferred compensation ....            -              -              -              -              -              -
Other comprehensive income:
  Net income .............................            -              -              -              -              -      2,909,606
  Comprehensive income - change in
   unrealized gain on marketable equity
   securities and foreign currency
   exchange -net of taxes of $0 ..........            -              -              -              -              -              -

  Total comprehensive income .............            -              -              -              -              -              -
                                           ------------   ------------   ------------   ------------   ------------   ------------
Balance, September 30, 2006 ..............       15,400   $         15     84,032,112   $     84,033   $ 21,838,795   $(16,568,619)
                                           ============   ============   ============   ============   ============   ============
                                                                                                                       (continued)
                                          See notes to consolidated financial statements

                                                               F-5A
</TABLE>
<PAGE>
<TABLE>
                                          GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                          For the Years Ended September 30, 2006 and 2005
                                                            (continued)
<CAPTION>


                                                                                                                  Total
                                            Treasury          Deferred       Subscriptions    Comprehensive    Shareholders'
                                              Stock         Compensation      Receivable      Income (Loss)       Equity
                                           ------------     ------------     ------------     ------------     ------------
<S>                                        <C>              <C>              <C>              <C>              <C>
Balance, September 30, 2004 .............. $          -     $   (273,438)    $    (25,400)    $    148,572     $  2,641,240
Stock options granted to director and
 employees ...............................            -         (101,562)               -                -           48,077
Common stock issued for services .........            -       (1,149,176)               -                -          344,649
Shares issued  from exercise of stock
 options for cash and accrued salaries ...            -                -             (850)               -           25,983
Shares issued in connection with
 severance agreement .....................            -                -           26,250                -           88,125
Amortization of deferred compensation ....            -        1,210,719                -                -        1,210,719
Other comprehensive income:
  Net loss ...............................            -                -                -                -       (3,726,929)
  Comprehensive loss - change in
   unrealized loss on marketable equity
   securities and foreign currency
   exchange -net of taxes of $0 ..........            -                -                -         (257,640)        (257,640)
                                                                                                               ------------
  Total comprehensive loss ...............            -                -                -                -       (3,984,569)
                                           ------------     ------------     ------------     ------------     ------------
Balance, September 30, 2005 ..............            -         (313,457)               -         (109,068)         374,224
Stock options granted to director and
 employees ...............................            -                -                -                -          351,929
Stock options granted to consultants
 for services ............................            -          (78,599)               -                -           46,119
Common stock issued for services and
 accounts payable ........................            -         (230,000)               -                -           50,345
Conversion of preferred stock to common
 stock ...................................            -                -                -                -                -
Shares issued from exercise of stock
 options .................................            -                -         (182,340)               -          207,031
Purchase of treasury stock ...............       (2,805)               -                -                -           (2,805)
Shares issued from exercise of stock
 warrants ................................            -                -                -                -          501,506
Preferred stock dividend .................            -                -                -                -                -
Amortization of deferred compensation ....            -          387,024                -                -          387,024
Other comprehensive income:
  Net income .............................            -                -                -                -        2,909,606
  Comprehensive income - change in
   unrealized gain on marketable equity
   securities and foreign currency
   exchange -net of taxes of $0 ..........            -                -                -          396,186          396,186
                                                                                                               ------------
  Total comprehensive income .............            -                -                -                -        3,305,792
                                           ------------     ------------     ------------     ------------     ------------
Balance, September 30, 2006 .............. $     (2,805)    $   (235,032)    $   (182,340)    $    287,118     $  5,221,165
                                           ============     ============     ============     ============     ============

                                          See notes to consolidated financial statements

                                                               F-5B
</TABLE>
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         For the Year Ended
                                                            September 30,
                                                    ----------------------------
                                                        2006           2005
                                                    ------------   -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss) ..............................  $  2,909,606   $ (3,726,929)
  Income (loss) from discontinued operations .....       246,501       (742,914)
                                                    ------------   ------------
  Income (loss) from continuing operations .......     2,663,105     (2,984,015)
  Adjustments to reconcile net income (loss) to
   net cash used in operating activities:
    Depreciation and amortization ................         7,915         10,435
    Gain on sale of marketable securities ........    (1,046,916)             -
    Loss on impairment of marketable securities ..        20,300              -
    Common stock issued and forgiveness of
     subscription for severance ..................             -         88,125
    Severance expense ............................             -        121,608
    Stock-based compensation and consulting ......       981,672      1,603,445
    Loss on abandonment of leasehold improvements              -          2,444
    Minority interest ............................     3,056,647         (2,197)
    Loss on impairment of cost-method investment .        34,000              -
    Marketable securities received for services ..    (6,736,896)      (114,000)
    Marketable securities distributed for
     settlement ..................................             -         22,800
  Changes in assets and liabilities:
    Prepaid and other current assets .............        (6,730)       100,644
    Deferred contract costs ......................      (100,503)             -
    Other assets .................................        (8,173)        28,927
    Accounts payable and accrued expenses ........       167,227        (63,753)
    Due to related party .........................        75,000              -
    Deferred revenue .............................       (13,333)       (37,500)
                                                    ------------   ------------

  Net cash used in continuing operations
   activities ....................................      (906,685)    (1,223,037)
                                                    ------------   ------------

  Net cash used in discontinued operations .......        (7,668)      (220,044)
                                                    ------------   ------------

NET CASH USED IN OPERATING ACTIVITIES ............      (914,353)    (1,443,081)
                                                    ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of marketable securities ....     1,413,307              -
  Purchase of marketable securities ..............      (600,331)             -
  Capital expenditures ...........................             -         (6,682)
                                                    ------------   ------------

NET CASH FLOWS PROVIDED BY (USED IN)
 INVESTING ACTIVITIES ............................       812,976         (6,682)
                                                    ------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Contributions from LLC members .................       127,550              -
  Proceeds from exercise of stock options ........       548,380         25,983
                                                    ------------   ------------

NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES ..       675,930         25,983
                                                    ------------   ------------

EFFECT OF EXCHANGE RATE CHANGES IN CASH ..........           170          5,479
                                                    ------------   ------------

NET INCREASE (DECREASE) IN CASH AND CASH
 EQUIVALENTS .....................................       574,723     (1,418,301)

CASH AND CASH EQUIVALENTS - beginning of year ....        17,887      1,436,188
                                                    ------------   ------------

CASH AND CASH EQUIVALENTS - end of year ..........  $    592,610   $     17,887
                                                    ============   ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW  INFORMATION:
  Cash paid for:
    Interest .....................................  $          -   $          -
                                                    ============   ============
    Income taxes .................................  $          -   $          -
                                                    ============   ============

  Non-cash investing and financing activities:
    Preferred stock dividend paid with
     common stock ................................  $     88,304   $          -
                                                    ============   ============
    Common stock issued for debt .................  $     13,902   $          -
                                                    ============   ============
    Common stock issued for subscription
     receivable ..................................  $    182,340   $          -
                                                    ============   ============

                     See notes to consolidated financial statements.

                                           F-6
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

Genesis Technology Group, Inc. (the "Company" or "Genesis") is a business
development and marketing firm that specializes in advising and providing a turn
key solution for Chinese small and mid-sized companies entering Western markets.
The Company dedicates its expertise and capital resources to expand the
potential of Chinese partner companies. The Company provides the marketing
strategy, counsel, and plans to support its clients' business, financial, or
marketing goals. The Company works closely with top management to define its
strategy and business model to develop effective tactics to support business
development. The Company's business mission is to create substantial,
incremental stockholder value for emerging growth companies by executing
strategy-driven programs that professionally incubate and mature Chinese
companies and prepare them for Western markets.

Genesis provides strategy and execution services to Chinese clients who believe
that penetrating US markets is critical to achieving their core operating and
financial objectives. The Company fosters development projects that require
marketing, manufacturing, finance, and product deployment expertise for
companies in the United States and China. The Company's core competency is
sourcing merger and acquisitions opportunities for both its contract clients and
the Company.

Effective June 20, 2005, the Company formally established Genesis Equity
Partners LLC ("GEP") in which it owns 51% and strategic partners own the
remaining 49%.

On March 15, 2006, GEP signed a General Partnership Agreement with Liang Fang
Pharmaceutical, Ltd. ("Liang"), a company registered in the People's Republic of
China. Liang is based in Beijing and is a drug development, medical device, and
retail drug store enterprise with 10 retail outlets. Among Liang's best selling
products is Valsartan Capsules a medication for primary hypertension or high
blood pressure. Valsartan first came to market in America in 1996, known as
Diovan. On August 28, 2006, GEP and the members of Liang established Lotus
Pharmaceutical International, Inc., a Nevada company ("Lotus"). On September 6,
2006, Lotus and the stockholders of 100% of Lotus' common stock (the "Lotus
Stockholders") executed a Share Exchange Agreement ("Exchange Agreement") by and
among Lotus Pharmaceutical International, Inc., a Nevada corporation ("Lotus")
with S.E. Asia Trading Company, Inc., a publicly-trading company ("SEAA"). The
Exchange Agreement closed on September 28, 2006 and GEP received 13,209,600
restricted common shares of SEAA for services performed in helping Lotus
facilitate the merger with SEAA and for other business development services.
Separately, Lotus has entered into consulting service agreements and
equity-related agreements with Liang and Beijing En Zhe Jia Shi Pharmaceutical
Co., Ltd. ("En Zhe Jia"), both of which are limited liability companies
headquartered in the People's Republic of China ("PRC") and organized under the
laws of the PRC. GEP may receive ongoing consulting fees for coordination and
oversight of its U.S. business activities if it attains certain capital raising
goals (see note 5).

                                       F-7
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company (continued)

In the fall of 2005, GEP signed a contract with The Jin Ma Group Company, Ltd.
("Jin Ma"), a real estate development company in Western China, to globalize its
operations in the areas of real estate, construction, and hospitality. Jin Ma
has been active in its industry since its founding in 1980. To be known as Gold
Horse International, Inc., a Nevada corporation, GEP will receive a significant
equity position in Gold Horse and ongoing consulting fees for coordination and
oversight of its U.S. business activities. Currently, Jin Ma is finalizing an
audit of its financial statements by an independent accounting firm. GEP has
incurred approximately $100,500 of legal, audit and other related fees and
expenses in connection with the signing of this agreement which have been
recorded as deferred contract costs in the accompanying balance sheet.

Discontinued operations

On November 15, 2001, the Company entered into a Stock Purchase Agreement with
Shanghai Chorry Technology Development Co., Limited ("Chorry") and Chorry's
shareholder and acquired an 80% interest in Chorry. Chorry was formerly known as
Shanghai Zhaoli Technology Development Company Ltd. Chorry is a Chinese company
with principal offices in Shanghai, China. On November 2, 2005, the Company
entered into a stock purchase agreement with Dragon Ventures (OTC: DRGV), a
Nevada public corporation, for the sale of Chorry. The Company closed on this
transaction on February 14, 2006 (See Note 3 - Discontinued Operations).
Accordingly, Chorry is reported as a discontinued operation, and prior periods
have been restated in the Company's financial statements and related footnotes
to conform to this presentation.

On December 1, 2001, the Company entered into a Stock Purchase Agreement with
Yastock Investment Consulting Company, Limited ("Yastock") and the shareholders
of Yastock. Yastock is an investment consulting firm located in Shanghai, China
that specializes in raising capital and consulting in a number of areas,
including trading information, public relations, corporate management, corporate
strategic evaluations and human resources. On December 13, 2004, in connection
with a Separation and Severance Agreement with the Company's former President
and Chairman, Dr. James Wang, the Company transferred its ownership interest in
Yastock, free and clear of all liens, pledges, hypothecation, option, contract
and other encumbrance, to the previous owners.

On June 1, 2004, the Company entered into a joint venture agreement with Global
Boardroom Solutions, Inc. ("GBS"), a division of Custage International, Inc, a
Florida corporation. In connection with this partnership, the Company
incorporated Genesis Latin America, Inc. ("GLA"), which it owns 51% and 49% is
owned by GBS. GLA was formed to bridge Chinese business interests to qualified
counterparts in the Southern Hemisphere. Currently, the Company is no longer
pursuing this joint venture.

                                       F-8
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Discontinued operations (continued)

Effective September 8, 2004, the Company acquired 60% of the common stock of
Extrema LLC ("Extrema"), a Miami-based computer hardware wholesaler. On May 1,
2005, the shareholders of Extrema unanimously agreed to discontinue the
operations of Extrema because of (a) the disappointing performance of Extrema
including continuing operating losses; and (b) the Company's lack of ability to
obtain working capital loans to finance the purchase of inventory and to finance
accounts receivable (See Note 3).

In April 2005, the Company incorporated a new subsidiary, Genesis (Hong Kong)
OEM Direct, Ltd. (`GHK'). GHK's purpose was to consolidate certain sales
channels and related trading activities of the Company. Management of the
Company believed that GHK would be able to leverage its position as first-tier
distributor and its access to superior technology to develop and market LCD's
and LCD products. As of September 30, 2006, GHK had no revenues, had minimal
expenses and is inactive.

Basis of presentation

The consolidated financial statements include the accounts of Genesis Technology
Group, Inc. and its wholly and partially-owned subsidiaries. All significant
inter-company balances and transactions have been eliminated.

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 2006 and
2005 include the valuation of stock-based compensation, the useful life of
property and equipment, and the valuation of its restricted marketable equity
securities.

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
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 and
accounts payable and accrued expenses 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. In accordance with Statement of Financial Accounting Standards (SFAS)
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", the
Company examines the possibility of decreases in the value of property and
equipment when events or changes in circumstances reflect the fact that their
recorded value may not be recoverable.

Marketable equity securities

Marketable equity securities consist of investments in equity of publicly traded
and non-public domestic and foreign companies and are stated at market value
based on the most recently traded price of these securities at September 30,
2006. The Company has marketable securities classified as trading and available
for sale securities at September 30, 2006. Realized and unrealized gains and
losses on trading securities are included in earnings. Unrealized gains and
losses on available for sale securities, determined by the difference between
historical purchase price and the market value at each balance sheet date, are
recorded as a component of Accumulated Other Comprehensive Income in
Stockholders' Equity. Realized gains and losses are determined by the difference
between historical purchase price and gross proceeds received when the
marketable securities are sold. Restricted marketable equity securities are
shown as long-term assets. For the purpose of computing realized gains and
losses, cost is identified on a specific identification basis. For marketable
equity securities for which there is an other-than-temporary impairment, an
impairment loss is recognized as a realized loss. For the year ended September
30, 2006, the Company recognized a gain of $1,046,916 from the sale of
marketable equity securities. Additionally, the Company recorded an impairment
loss of $20,300 related to the reduction in the fair market value of certain
marketable equity securities that management deemed to be other than temporary.

                                      F-10
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Investment in non-marketable equity securities

Certain securities that the Company may invest in can be determined to be
non-marketable. Non-marketable securities where the Company owns less than 20%
of the investee are accounted for at cost pursuant to APB No. 18, "The Equity
Method of Accounting for Investments in Common Stock" ("APB 18")

The Company periodically reviews its investments in non-marketable securities
and impairs any securities whose value is considered non-recoverable. For the
year ended September 30, 2006, the Company recorded an impairment loss of
$34,000 related to its investment in a Chinese limited liability company which
has been included in other selling, general and administrative expenses on the
accompanying consolidated statement of operations. At September 30, 2006, the
Company valued its investment in non-marketable equity securities at $26,000
which is included in other assets on the accompanying consolidated balance
sheet.

Income taxes

The Company files federal and state income tax returns in the United States for
its domestic operations, and files separate foreign tax returns for the
Company's Chinese subsidiaries. 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.

Comprehensive income (loss)

The Company uses Statement of Financial Accounting Standards No. 130 (SFAS 130)
"Reporting Comprehensive Income". Comprehensive income is comprised of net
income (loss) and all changes to the statements of stockholders' equity, except
those due to investments by stockholders', changes in paid-in capital and
distributions to stockholders. Comprehensive income (loss) for the years ended
September 30, 2006 and 2005 amounted to $3,305,792 and $(3,984,569),
respectively.

                                      F-11
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Net income (loss) per common share

Basic income (loss) per share is computed by dividing net income (loss) by
weighted average number of shares of common stock outstanding during each
period. Diluted income per share is computed by dividing net income by the
weighted average number of shares of common stock, common stock equivalents and
potentially dilutive securities outstanding during each period. Diluted loss per
common share is not presented because it is anti-dilutive. The following table
presents a reconciliation of basic and diluted earnings per share:

                                                           For the Year
                                                        Ended September 30,
                                                        2006           2005
                                                    ------------   ------------
Net income (loss) ...............................   $  2,909,606   $ (3,726,929)
                                                    ------------   ------------
Weighted average shares outstanding - basic .....     77,523,502     61,248,209
                                                    ------------   ------------
Net income (loss) per common shares - basic .....   $       0.03   $      (0.06)
                                                    ============   ============

Net income (loss) ...............................   $  2,909,606   $ (3,726,929)
                                                    ============   ============
Weighted average shares outstanding - basic .....     77,523,502     61,248,209
Effect of dilutive securities
   Unexercised warrants and options .............      3,858,419              -
                                                    ------------   ------------
Weighted average shares outstanding- diluted ....     81,381,921     61,248,209
                                                    ============   ============
Net income (loss) per common shares - diluted ...   $       0.03   $      (0.06)
                                                    ============   ============

Stock-based compensation

Effective October 1, 2005, 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 October 1, 2005, 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").

                                      F-12
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-based compensation (continued)

The following table sets forth the computation of basic and diluted income per
share for the year ended September 30, 2005 and illustrates the effect on net
loss and loss per share as if the Company had applied the fair value recognition
provisions of SFAS No. 123 to stock-based employee compensation:

                                                                       2005
                                                                    -----------
Net loss as reported .............................................  $(3,726,929)

Add: Stock-based compensation expense included in reported net
loss, net of related tax effects .................................      161,581

Less: total stock-based employee compensation expense determined
under fair value based method, net of related tax effect .........     (379,802)

                                                                    -----------

Pro forma net loss ...............................................   (3,945,150)
                                                                    ===========

Basic and diluted loss per common share:
     As reported .................................................  $      (.06)
                                                                    ===========
     Pro forma ...................................................  $      (.06)
                                                                    ===========

Concentration of credit risk

Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of cash and marketable equity securities. The
Company places its cash and marketable securities with high credit quality
financial institutions. Almost all of the Company's sales are credit sales which
are primarily to customers whose ability to pay is dependent upon the industry
economics prevailing in these areas. The Company also performs ongoing credit
evaluations of its customers to help further reduce credit risk.

The Company's investments in restricted marketable equity securities are held in
two publicly-traded companies with substantially of their assets located in
China. These investments in marketable equity securities (excluding marketable
securities - related party) accounted for 47% and 10%, respectively, of the
Company's total assets at September 30, 2006.

For the year ended September 30. 2006, one customer accounted for 99.9% of the
Company's net revenues.

                                      F-13
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Research and development

Research and development costs, if any, are expensed as incurred. For the year
ended September 30, 2006 and 2005, research and development costs were $0 and
$0, respectively.

Advertising

Advertising is expensed as incurred. Advertising expenses for the years ended
September 30, 2006 and 2005 was not material.

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 collectability is reasonably assured. The
following policies reflect specific criteria for the various revenues streams of
the Company:

Consulting income is recognized on a straight-line basis over the period of the
service agreement. Deferred revenues relates to consulting revenues that is
being recognized over the period of the service agreement.

Substantially all of the services the Company provides are paid in common shares
issued by its clients. These instruments are classified as marketable equity
securities on the consolidated balance sheet, if still held at the financial
reporting date. These instruments are stated at fair value in accordance with
the provision of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" (SFAS No.
115) and EITF 00-8 "Accounting by a grantee for an equity instrument to be
received in conjunction with providing goods or services." Primarily all of the
equity instruments are received from small public companies.

Recent accounting pronouncements

In February 2006, the FASB issued SFAS 155, which applies to certain "hybrid
financial instruments," which are instruments that contain embedded derivatives.
The new standard establishes a requirement to evaluate beneficial interests in
securitized financial assets to determine if the interests represent
freestanding derivatives or are hybrid financial instruments containing embedded
derivatives requiring bifurcation. This new standard also permits an election
for fair value re-measurement of any hybrid financial instrument containing an
embedded derivative that otherwise would require bifurcation under SFAS 133. The
fair value election can be applied on an instrument-by-instrument basis to
existing instruments at the date of adoption and can be applied to new
instruments on a prospective basis. The adoption of SFAS No.155 did not have a
material impact on the Company's financial position and results of operations.

                                      F-14
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent accounting pronouncements (continued)

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets, an amendment of FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
This statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization and impairment requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and servicing liabilities at fair value eliminates the necessity for
entities that manage the risks inherent in servicing assets and servicing
liabilities with derivatives to qualify for hedge accounting treatment and
eliminates the characterization of declines in fair value as impairments or
direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year
beginning after September 15, 2006. The adoption of this statement is not
expected to have a significant effect on the Company's future reported financial
position or results of operations.

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation (FIN) No. 48, "Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109." This interpretation provides guidance
for recognizing and measuring uncertain tax positions, as defined in SFAS No.
109, "Accounting for Income Taxes." FIN No. 48 prescribes a threshold condition
that a tax position must meet for any of the benefit of an uncertain tax
position to be recognized in the financial statements. Guidance is also provided
regarding de-recognition, classification, and disclosure of uncertain tax
positions. FIN No. 48 is effective for fiscal years beginning after December 15,
2006. The Company does not expect that this interpretation will have a material
impact on its financial position, results of operations, or cash flows.

In September 2006, the FASB issued Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" ("FAS 157"). This Statement defines fair
value as used in numerous accounting pronouncements, establishes a framework for
measuring fair value in generally accepted accounting principles and expands
disclosure related to the use of fair value measures in financial statements.
The Statement is to be effective for the Company's financial statements issued
in 2008; however, earlier application is encouraged. The Company is currently
evaluating the timing of adoption and the impact that adoption might have on its
financial position or results of operations

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.

                                      F-15
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 2 - PROPERTY AND EQUIPMENT

At September 30, 2006, property and equipment consisted of the following:

                                                      Estimated
                                                        Life
                                                      ---------
Office Furniture .............................        7 Years          $ 15,432
Computer Equipment and software ..............        3-5 Years          28,938
Office Equipment .............................        5 Years             9,990
                                                                       --------
                                                                         54,360
Less: Accumulated Depreciation ...............                          (38,719)
                                                                       --------
                                                                       $ 15,641
                                                                       ========

For the year ended September 30, 2006 and 2005, depreciation expense amounted to
$7,915 and $10,435, respectively.

NOTE 3 - DISCONTINUED OPERATIONS

As described in Note 1, on May 1, 2005, the shareholders of Extrema unanimously
agreed to discontinue the operations of Extrema. Extrema is reported as a
discontinued operation and prior periods have been restated in the Company's
financial statements and related footnotes to conform to this presentation.

Additionally, on November 2, 2005, the Company entered into a stock purchase
agreement with Dragon Ventures (Pink sheets symbol: DRGV), a Nevada public
corporation, for the sale of its majority-owned subsidiary Chorry. The Company
closed on this transaction on February 14, 2006.
The agreement includes the following provisions:

    (1) The Company delivered 100% of its shares in Chorry, representing its 80%
        ownership of that subsidiary, to DRGV.

    (2) DRGV paid to the Company 17,159,965 shares of DRGV's common stock at a
        price calculated at the average closing price at the initial closing
        date on December 15, 2005 of $.027 per share or $463,319. Accordingly,
        in connection with the sale of Chorry, for the year ended September 30,
        2006, the Company recorded a gain from sale of discontinued operations
        of $237,377.

Accordingly, Chorry is reported as a discontinued operation, and prior periods
have been restated in the Company's financial statements and related footnotes
to conform to this presentation.

                                      F-16
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 3 - DISCONTINUED OPERATIONS (CONTINUED)

The remaining liabilities of discontinued operations are presented in the
balance sheet under the caption "Liabilities of discontinued operation". The
approximate carrying amounts of the major classes of these liabilities as of
September 30, 2006 are summarized as follows:

         Liabilities:
         Accounts payable and accrued expenses ...........     $150,709
                                                               --------

         Liabilities of discontinued operation ...........     $150,709
                                                               ========

The following table sets forth for the fiscal years indicated selected financial
data of the Company's discontinued operations.

                                                         2006          2005
                                                      -----------  ------------
Revenues ...........................................  $ 7,398,358  $ 27,293,816
Cost of sales ......................................    7,259,500    26,747,801
                                                      -----------  ------------
Gross profit .......................................      138,858       546,015
Operating and other non-operating expenses .........      129,734       911,583
                                                      -----------  ------------
Gain (loss) from discontinued operations ...........        9,124      (365,568)

Gain (loss) from disposal of discontinued operations      237,377      (377,346)
                                                      -----------  ------------

Total gain (loss) from discontinued operations .....  $   246,501  $   (742,914)
                                                      ===========  ============

NOTE 4 - 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 $1,100,000 at September 30, 2006 expiring through the year 2026.
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% change in ownership).

                                      F-17
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 4 - INCOME TAXES (CONTINUED)

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

                                                       2006             2005
                                                   -----------      -----------
Deferred tax benefits - noncurrent
  Net operating loss carryforward ............     $ 1,671,000      $ 2,598,000
  Capital loss carryforward ..................               -          380,000
                                                   -----------      -----------
    Total deferred tax assets ................       1,671,000        2,978,000

Less:  Valuation allowance ...................      (1,671,000)      (2,978,000)
                                                   -----------      -----------
                                                   $         -      $         -
                                                   ===========      ===========

The table below summarizes the differences between the Company's effective tax
rate and the statutory federal rate as follows for fiscal 2006 and 2005:

                                                                2006       2005
                                                              -------    -------

Computed "expected" tax expense (benefit) ..............        34.0%    (34.0)%
State income taxes .....................................         4.0%     (4.0)%
Net operating and capital losses used ..................      (34.0)%       0.0%
Other permanent differences ............................         0.0%      10.0%
Change in valuation allowance ..........................         0.0%      28.0%
                                                              -------    -------

Effective tax rate .....................................         0.0%       0.0%
                                                              =======    =======

The valuation allowance at September 30, 2006 was $1,671,000. The decrease
during fiscal 2006 was $1,307,000.

NOTE 5 - MARKETABLE SECURITIES RECEIVED FOR SERVICES RENDERED

As discussed in Note 1, on March 15, 2006, the Company's 51%-owned subsidiary,
GEP, signed a General Partnership Agreement with Liang Fang Pharmaceutical, Ltd.
("Liang"), a company registered in the People's Republic of China. On August 28,
2006, GEP and the members of Liang established Lotus Pharmaceutical
International, Inc., a Nevada company ("Lotus"). On September 6, 2006, Lotus and
the stockholders of 100% of Lotus' common stock (the "Lotus Stockholders")
executed a Share Exchange Agreement ("Exchange Agreement") by and among Lotus
Pharmaceutical International, Inc., a Nevada corporation ("Lotus") with S.E.
Asia Trading Company, Inc., a publicly-trading company ("SEAA"). The Exchange
Agreement closed on September 28, 2006 and GEP received 13,209,600 restricted
common shares of SEAA for services performed in helping Lotus facilitate the
merger with SEAA and for other business development services. The Company valued
these shares at $.51 per share based on an accredited business valuation
performed by an independent party. Accordingly, the Company recorded revenue of
$6,736,896 related to the receipt of these restricted marketable equity
securities.

                                      F-18
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY

Preferred stock

The Company is authorized to issue 20,000,000 shares of Preferred Stock, par
value $.001, with such designations, rights and preferences as may be determined
from time to time by the Board of Directors.

In January 2004, the Board of Directors established a Series A 6% Cumulative
Convertible Preferred Stock (the "Series A Preferred Stock") authorized to be
issued by the Company, with the designations and amounts thereof, together with
the voting powers, preferences and relative, participating, optional and other
special rights of the shares of each such series, and the qualifications,
limitations or restrictions as follows:

The authorized number of shares of Series A Preferred Stock shall be 218,000.
Each share of Series A Preferred Stock shall have a stated value equal to $10
(as adjusted for any stock dividends, combinations or splits with respect to
such shares) (the "Stated Value"), and $.001 par value.

The Holders of outstanding shares of Series A Preferred Stock are entitled to
receive preferential dividends in cash out of any funds of the Company legally
available at the time for declaration of dividends before any dividend or other
distribution will be paid or declared and set apart for payment on any shares of
any Common Stock, or other class of stock presently authorized or to be
authorized (the Common Stock, and such other stock being hereinafter
collectively the "Junior Stock") at the rate of 6% simple interest per annum on
the Stated Value per share payable quarterly commencing with the period ending
March 31, 2004 when as and if declared. At the Holder's option, however, the
dividend payments may be made in additional fully paid and non-assessable shares
of Series A Preferred Stock at a rate of one share of Series A Preferred Stock
for each $10 of such dividend not paid in cash.

Shares of Series A Preferred Stock shall have the following conversion rights
and obligations:

         (a) Subject to the further provisions in the agreement, each Holder of
shares of Series A Preferred Stock shall have the right at any time commencing
after the issuance to the Holder of Series A Preferred Stock, to convert such
shares into fully paid and non-assessable shares of Common Stock of the Company
determined in accordance with the Conversion Price as defined below (the
"Conversion Price"). All issued or accrued but unpaid dividends may be converted
at the election of the Holder simultaneously with the conversion of principal
amount of Stated Value of Series A Preferred Stock being converted.

          (b) The number of shares of Common Stock issuable upon conversion of
each share of Series A Preferred Stock shall equal (i) the sum of (A) the Stated
Value per share and (B) at the Holder's election accrued and unpaid dividends on
such share, divided by (ii) the Conversion Price. The Conversion Price shall be,
at the election of the Holder, the lesser of: (x) $.36, or (y) 80% of the
Closing Bid Price for the trading day immediately preceding the initial purchase
of Series A Preferred Stock by the first Holder thereof which was $.232.

                                      F-19
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)

Common Stock

On October 1, 2004, in connection with an employment agreement, the Company
issued 1,000,000 shares of restricted common stock to an executive. The Company
valued these common shares at the fair market value on the dates of grant of
$.175 per share or $170,000 based on the trading price of common shares.
Accordingly, in fiscal 2005, the Company recorded stock based compensation of
$170,000.

During the three months ended December 31, 2004, in connection with the exercise
of stock options, the Company issued 463,889 shares of common stock to employees
for net proceeds of $25,983 and the reduction of a subscription payable of $850.

On November 1, 2004, in connection with two employment agreements with officers
of the Company, the Company issued 6,250,000 shares of restricted common stock
to executives. The Company valued these common shares at the fair market value
on the dates of grant of $.115 per share or $718,750 based on the trading price
of common shares which was amortized over the service period of one year.
Accordingly, for the years ended September 30, 2006 and 2005, the Company
recorded stock-based compensation expense of $59,896 and $658,854, respectively.

On December 13, 2004, in connection with a severance and separation agreement
(see note 7), the Company issued 562,500 shares of the Company's common stock
pursuant to the Company's 2004 Stock Option Plan. The Company valued these
common shares at the fair market value on the dates of grant of $.11 per share
or $61,875 based on the trading price of common shares and recorded settlement
expense of $61,875. Additionally, the Company forgave a subscription receivable
due amounting to $26,250 and recorded settlement expense of $26,250.

On February 3, 2005, the Company issued 343,706 shares of common stock to two
executives for services rendered. The Company valued these common shares at the
fair market value on the dates of grant of $.085 per share or $29,215 based on
the trading price of common shares. Accordingly, for the year ended September
30, 2005, the Company recorded stock-based compensation expense of $29,215.

On March 2, 2005, the Company issued 312,866 shares of common stock to two
executives for services rendered. The Company valued these common shares at the
fair market value on the dates of grant of $.09 per share or $28,157 based on
the trading price of common shares. Accordingly, for the year ended September
30, 2005, the Company recorded stock-based compensation expense of $28,157.

On April 1, 2005, the Company issued 1,626,977 shares of common stock to two
executives for services rendered. The Company valued these common shares at the
fair market value on the dates of grant of $.07 per share or $113,888 based on
the trading price of common shares. Accordingly, for the year ended September
30, 2005, the Company recorded stock-based compensation expense of $113,888.

                                      F-20
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)

Common Stock (continued)

On April 1, 2005, in connection with an employment agreement, the Company issued
500,000 restricted shares of common stock to a director. The Company valued
these common shares at the fair market value on the dates of grant of $.07 per
share or $35,000 based on the trading price of common shares. Accordingly, for
the year ended September 30, 2005, the Company recorded stock-based compensation
expense of $35,000.

On April 25, 2005, in connection with a consulting agreement, the Company issued
1,500,000 shares of restricted common stock to a consultant for investor
relations services. The Company valued these common shares at the fair market
value on the dates of grant of $.061 per share or $91,500 based on the trading
price of common shares. Accordingly, for the year ended September 30, 2005, the
Company recorded stock-based consulting expense of $91,500.

On May 31, 2005, the Company issued 763,867 shares of common stock to two
executives for services rendered. The Company valued these common shares at the
fair market value on the dates of grant of $.06 per share or $45,832 based on
the trading price of common shares. Accordingly, for the year ended September
30, 2005, the Company recorded stock-based compensation expense of $45,832.

In May and June 2005, the Company issued 14,973 shares of common stock to two
employees for services rendered. The Company valued these common shares at the
fair market value on the dates of grant of $.07 per share or $1,049 based on the
trading price of common shares. Accordingly, for the year ended September 30,
2005, the Company recorded stock-based compensation expense of $1,049.

On July 19, 2005, the Company issued 840,254 shares of common stock to two
executives for services rendered. The Company valued these common shares at the
fair market value on the dates of grant of $.06 per share or $50,415 based on
the trading price of common shares. Accordingly, for the year ended September
30, 2005, the Company recorded stock-based compensation expense of $50,415.

On July 19, 2005, the Company issued 85,000 shares of common stock to an
employee for website services rendered. The Company valued these common shares
at the fair market value on the dates of grant of $.06 per share or $5,100 based
on the trading price of common shares. Accordingly, for the year ended September
30, 2005, the Company recorded stock-based compensation expense of $5,100.

On September 26, 2005, the Company issued 525,700 shares of common stock to two
former employees for services rendered and for severance pay. The Company valued
these common shares at the fair market value on the dates of grant of $.05 per
share or $26,285 based on the trading price of common shares. Accordingly, for
the year ended September 30, 2005, the Company recorded stock-based compensation
expense of $26,285.

                                      F-21
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)

Common Stock (continued)

On September 26, 2005, the Company issued 3,572,672 shares of common stock to
two executives for services rendered and to be rendered in the future. The
Company valued these common shares at the fair market value on the dates of
grant of $.05 per share or $178,634 based on the trading price of common shares.
Accordingly, for the year ended September 30, 2006 and 2005, the Company
recorded stock-based compensation expense of $169,792 and $8,842 respectively.

On November 30, 2005, in connection with the exercise of stock options, the
Company issued 528,000 shares of common stock to an employee for a subscription
receivable of $15,840 due in March 2006. In April 2006, this employee filed a
lawsuit against the Company (see note 8).

On December 9, 2005, Series A preferred stockholders' converted 11,600 share of
Series A Preferred Stock into 500,000 shares of common stock.

In January 2006, the Company issued 1,006,869 shares of common stock to its
chief financial officer for services rendered. The Company valued these common
shares at the fair market value on the dates of grant of $.05 per share or
$50,345 based on the trading price of common shares. Accordingly, the Company
recorded stock-based compensation expense of $36,443 and reduced accounts
payable by $13,900.

In March 2006, Series A preferred stockholders' converted 70,000 share of Series
A Preferred Stock into 3,017,241 shares of common stock. Additionally, in
connection with the conversion, the Company issued 380,621 shares of common
stock for preferred stock dividends of $88,304.

In March 2006, in connection with the exercise of stock options, the Company
issued 1,562,500 shares of common stock to a director for cash proceeds of
$46,875.

In March 2006, in connection with the exercise of 3,906,250 stock options with
an exercise price of $.041 per share, the Company issued 3,906,250 shares of
common stock to two executives. In lieu of the collection of cash for these
stock options, the amount due of $160,156 was offset against future compensation
due to these executives under employment agreements. Accordingly, for the year
ended September 30, 2006, the Company recorded stock-based compensation expense
of $160,156.

In March 2006, in connection with the exercise of warrants, the Company issued
1,646,983 shares of common stock for proceeds of $501,506.

                                      F-22
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)

Common Stock (continued)

On May 5, 2006, in connection with a 24-month consulting agreement, the Company
issued 1,000,000 shares of common stock for investor relations services rendered
and to be rendered in the future to a company related through common ownership
with a China West, LLC a 25% member of the Company's partially-owned subsidiary,
GEP. The Company valued these common shares at the fair market value on the date
of grant at per share price of $.23 or $230,000. In connection with issuance of
these shares, for the year ended September 30, 2006, the Company recorded
stock-based consulting expense of $47,917 and deferred compensation of $182,083
which will amortized over the remaining service period.

On May 18, 2006, in connection with the exercise of options granted to a
consultant for services, the Company issued 500,000 shares of common stock for a
subscription receivable of $90,000 originally due in October 31, 2006. In
October 2006, the due date was extended to January 31, 2007.

On July 11, 2006, Series A preferred stockholders' converted 500 shares of
Series A Preferred Stock into 21,551 shares of common stock.

On July 13, 2006, in connection with the exercise of options granted to a
consultant for services, the Company issued 500,000 shares of common stock for a
subscription receivable of $76,500 originally due in October 31, 2006. In
October 2006, the due date was extended to January 31, 2007.

For the year ended September 30, 2006, the Company recorded stock-based
compensation of approximately $387,000 from the amortization of deferred
compensation.

Stock Options and Warrants

On April 6, 2004, the Company's Board of Directors authorized, approved and
adopted the 2004 Stock Option Plan (the "Plan") covering 10,000,000 shares of
common stock. On August 13, 2005, the Company amended the Plan to increase the
reservation of shares of common stock by an additional 12,000,000 shares, or a
total of 22,000,000 shares. As of September 30, 2006, substantially all of the
underlying shares and options had been granted under the Plan. The purpose of
the Plan is to encourage stock ownership by the Company's officers, directors,
key employees and consultants, and to give such persons a greater personal
interest in the success of the business and an added incentive to continue to
advance and contribute to the Company.

During the three months ended December 31, 2004, 604,319 options were granted to
an employee of the Company with an exercise price of $.06 per share. The Company
accounts for stock options issued to employees in accordance with the provisions
of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations. As such, compensation cost is
measured on the date of grant as the excess of the current market price of the
underlying stock over the exercise price. In connection with these options, the
Company recorded stock-based compensation of $32,452 during the year ended
September 30, 2005 under the intrinsic value method of APB 25.

                                      F-23

<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)

Stock Options and Warrants (continued)

On August 1, 2005, in connection with employment agreements, 3,906,250 stock
options were granted to officers of the Company with an exercise price of $.041
and a current market price of $.067 per common share. The Company accounts for
stock options issued to employees in accordance with the provisions of
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees," and related interpretations. As such, compensation cost is
measured on the date of grant as the excess of the current market price of the
underlying stock over the exercise price. In connection with these options, the
Company valued these options at $101,562. Accordingly, under the intrinsic value
method of APB 25, the Company recorded stock-based compensation of $84,635 and
$16,927 for the year ended September 30, 2006 and 2005, respectively.

On September 26, 2005, 1,562,500 options were granted to a director of the
Company with an exercise price of $.03 and a current market price of $.04 per
common share. The Company accounts for stock options issued to employees and
directors in accordance with the provisions of Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. As such, compensation cost is measured on the date of grant as
the excess of the current market price of the underlying stock over the exercise
price. In connection with these options, the Company valued these options at
$15,625. Accordingly, under the intrinsic value method of APB 25, the Company
recorded stock-based compensation of $15,625 for the year ended September 30,
2005.

On November 30, 2005, the Company granted 528,000 stock options to an employee
at an exercise price of $.03 per share. These options were immediately exercised
for a subscription receivable of $15,840, although the employee failed to
deliver this required payment (See note 8). The Company accounts for stock
options issued to employees in accordance with the provisions of SFAS 123R and
related interpretations. The fair value of this option grant was estimated on
the date of grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions dividend yield of -0- percent; expected
volatility of 373 percent; risk-free interest rate of 3.75 percent and an
expected holding periods of 3.00 years. In connection with these options, the
Company recorded stock-based compensation expense of $26,376.

On February 14, 2006, the Company granted 250,000 stock options to an executive
at an exercise price of $.31 per share. The Company accounts for stock options
issued to employees in accordance with the provisions of SFAS 123R and related
interpretations. The fair value of this option grant was estimated on the date
of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions dividend yield of -0- percent; expected volatility
of 379 percent; risk-free interest rate of 3.75 percent and an expected holding
periods of 5.00 years. In connection with these options, the Company recorded
stock-based compensation expense of $15,000.

                                      F-24
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)

Stock Options and Warrants (continued)

On May 18, 2006, the Company granted 500,000 stock options to a consultant at an
exercise price of $.18 per share. The options were immediately exercised for a
subscription receivable of $90,000. The Company valued these warrants utilizing
the Black-Scholes options pricing model at approximately $0.12 or $61,000 and
recorded a stock-based consulting expense of approximately $61,000 for the year
ended September 30, 2006.

On July 13, 2006, the Company granted 500,000 stock options to a consultant at
an exercise price of $.153 per share. The options were immediately exercised for
a subscription receivable of $76,500. The Company valued these warrants
utilizing the Black-Scholes options pricing model at approximately $0.13 or
$63,000.

On July 31, 2006, the Company granted an aggregate of 7,400,000 stock options
(3,700,000 stock options each) to purchase 7,400,000 shares of the Company's
common stock to two officers of the Company at an exercise price of $.145 per
share. These options expire on July 31, 2007. These stock options were granted
to these executives in lieu of common share due to these executives under their
respective employment agreements. The Company accounts for stock options issued
to employees in accordance with the provisions of SFAS 123R and related
interpretations. The fair value of this option grant was estimated on the date
of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions dividend yield of -0- percent; expected volatility
of 400 percent; risk-free interest rate of 4.91 percent and an expected holding
periods of one year. In connection with these options, the Company recorded
stock-based compensation expense of $170,892.

On August 1, 2006, in connection with employment agreements, 3,906,250 five-year
stock options were granted to officers of the Company with an exercise price of
$.093 per share. The Company accounts for stock options issued to employees in
accordance with the provisions of SFAS 123R and related interpretations. The
fair value of this option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions dividend yield of -0- percent; expected volatility of 401 percent;
risk-free interest rate of 4.90 percent and an expected holding periods of 5.00
years. In connection with these options, the Company recorded stock-based
compensation expense of $100,911.

                                      F-25
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)

Stock Options and Warrants (continued)

On August 1, 2006, the Company granted 1,500,000 five-year stock options to a
director of the Company at an exercise price of $.093 per share. The Company
accounts for stock options issued to employees in accordance with the provisions
of SFAS 123R and related interpretations. The fair value of this option grant
was estimated on the date of grant using the Black-Scholes option-pricing model
with the following weighted-average assumptions dividend yield of -0- percent;
expected volatility of 401 percent; risk-free interest rate of 4.91 percent and
an expected holding periods of 5.00 years. In connection with these options, the
Company recorded stock-based compensation expense of approximately $38,750.

As of September 30, 2006, the total future compensation expense related to stock
options not yet recognized in the consolidated statement of operations is
$1,552,770.

A summary of the stock options and warrants as of September 30, 2006 and 2005
and changes during the periods is presented below:

                                          Year Ended             Year Ended
                                      September 30, 2006     September 30, 2005
                                     --------------------   --------------------
                                     Number of   Weighted   Number of   Weighted
                                     Options      Average   Options      Average
                                       and       Exercise     and       Exercise
                                     Warrants      Price    Warrants     Price
                                    ----------   --------  ----------   --------
Stock options and warrants
Balance at beginning of year ....   19,188,526   $    0.1  14,579,286   $  0.187
Granted .........................   14,584,250        0.1   6,073,069      0.040
Exercised .......................   (8,643,733)       0.1    (463,889)     0.058
Forfeited .......................   (2,217,432)       0.2    (999,940)     0.287
                                   -----------   --------  -----------   -------
Balance at end of year ..........   22,911,611   $    0.1  19,188,526   $  0.137
                                   ===========   ========  ===========  ========

Options exercisable at end
 of year ........................   22,911,611   $    0.1  19,188,526   $  0.137
                                   ===========   ========  ===========  ========

Weighted average fair value
 of options granted during
 the year .......................                $  0.126               $   0.04

                                      F-26
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 6 - STOCKHOLDERS' EQUITY (CONTINUED)

Stock Options and Warrants (continued)

The following table summarizes information about employee stock options and
consultant warrants outstanding at September 30, 2006:

                                                          Options and Warrants
           Options and Warrants Outstanding                    Exercisable
-----------------------------------------------------   ------------------------
                               Weighted
                 Number         Average     Weighted        Number      Weighted
Range of     Outstanding at    Remaining     Average    Exercisable at   Average
Exercise      September 30,   Contractual   Exercise     September 30,  Exercise
  Price          2006            Life        Price          2006          Price
-----------  --------------   -----------  ----------   --------------  --------
$ 0.30-0.31   3,213,361       2.60 Years   $   0.305       3,213,361    $  0.305
      0.145   7,400,000       0.83 Years       0.145       7,400,000       0.145
 0.085-0.10   7,923,250       3.81 Years       0.086       7,923,250       0.086
 0.056-0.06   4,375,000       1.12 Years       0.059       4,375,000       0.059
             --------------                ----------   -------------   --------
             22,911,611                    $   0.133      22,911,611    $  0.133
             ==============                ==========   =============

NOTE 7 - SEPARATION AND SEVERANCE AGREEMENT

On December 13, 2004, the Company entered into a Separation and Severance
Agreement with its former Chairman/President, Dr. James Wang, Yastock Investment
Consulting Company, Limited ("Yastock"), and Shanghai Yastand Information
Technology Company, Limited ("Yastand"). The Separation and Severance Agreement
provides, effective December 13, 2004, the resignation of Dr. Wang as President,
Chairman of the Board and as a director of the Company, and the termination of
his Employment Agreement dated August 1, 2004, including all rights, benefits
and obligations pursuant thereto. The agreement provided for the following
severance provisions:

    (a) The Company transferred its ownership interest in Yastock and Yastand,
        free and clear of all liens, pledges, hypothecation, option, contract
        and other encumbrance, to the previous owners. In connection with this
        transfer, the Company incurred severance expense of $121,608.

    (b) Yastock/Yastand transferred all rights and privileges of certain
        agreements to the Company.

    (c) During the year ended September 30, 2005, the Company issued Dr. Wang
        562,500 shares of the Company's common stock pursuant to the Company's
        2004 Stock Option Plan, which such shares were registered under an
        effective registration statement on Form S-8. In connection with
        issuance of these shares, the Company recorded severance expense of
        $61,875.

                                      F-27
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 7 - SEPARATION AND SEVERANCE AGREEMENT (CONTINUED)

    (d) In December 2004, the Company paid Dr. Wang cash of $100,000 which was
        released from escrow after the Company filed its annual report on Form
        10-KSB for the year ended September 30, 2004 with the SEC. In connection
        with this cash payment, for the year ended September 30, 2005, the
        Company recorded severance expense of $100,000.

    (e) Dr. Wang's options to purchase 1,500,000 shares of the Company's common
        stock at an exercise price of .06 cents per share received pursuant to
        the Employment Agreement and the Company's Non-Qualified Stock Option
        Plan shall terminate on December 31, 2005, unless exercised prior
        thereto.

    (f) For a period of three years, Dr. Wang, Yastock and Yastand agreed not to
        (i) without first obtaining the written consent of the Company, directly
        or indirectly, do business with any of the past or current customers of
        the Company, or (ii) directly or indirectly, solicit or proposition, or
        otherwise attempt to induce any of the customers of the Company to
        terminate their relationships with the Company.

    (g) The Company transferred to Yastock 95,000 shares of Dragon International
        Group Corp. restricted common stock. In connection with the transfer of
        these shares, the Company recorded severance expense of $22,800.

NOTE 8 - COMMITMENTS

Operating Leases

The Company leases office space under an operating lease that expires on June 1,
2008. The office lease agreement has certain escalation clauses and renewal
options. Future minimum rental payments required under the operating lease are
as follows:

         Period Ended September 30, 2007 ...............       $28,071
         Period Ended September 30, 2008 ...............       $19,411
                                                               -------

                  Total ................................       $47,482
                                                               =======

Rent expense for the years ended September 30, 2006 and 2005 was $50,536 and
$63,804, respectively.

                                      F-28
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 8 - COMMITMENTS (CONTINUED)

Employment agreements

Effective August 1, 2004, the Company entered into a three-year employment
agreement with its chief executive officer unless either the Company or the
employee terminates the agreement, and contains confidentiality clauses. As
consideration for the employee's services, the Company has agreed to a base
salary of $150,000 per annum plus benefits, for time actually devoted to duties
on behalf of the Company. On each successive anniversary date of this agreement,
the Board shall review the base compensation and at its sole discretion may
elect to increase the base salary at any time, but not decrease it. If the Board
takes no action, the base salary shall increase a minimum of 10% annually. The
executive is entitled to a discretionary bonus of 25% of base salary determined
by the CEO or Board of Directors. In addition, the employee shall be granted
stock options equal in number to the previous employment year (1,250,000 for the
employment year ending July 31, 2003) plus an additional 25% to purchase shares
of the Company's common stock at a price equal to 60% of the average closing
price for the month of July, the final month of the employment year. The stock
options have an expiration date five years from the grant date. In connection
with this agreement, on August 1, 2006 and 2005, the executive was granted
1,953,125 stock options to purchase 1,953,125 common shares at $.093 and $.041
per share, respectively. In addition, based on certain achievements, the
executive shall be granted restricted common stock equal to two times the number
of options granted in the employment year. In connection with this employment
agreement, in November 2004, the Company issued 3,125,000 common shares to this
executive. In July 2006, in exchange for the issuance of common shares under
this employment agreement, the Company granted this executive 3,700,000 stock
option to purchase 3,700,000 shares of the Company's common stock at an exercise
price of $.145 per share for a period of five years. In the event the Company
qualifies or joins the American Stock Exchange or NASDAQ Small Cap Market, the
Executive will be granted 2.5% of the Company's outstanding shares on the first
day of trading on the new exchange.

Effective August 1, 2004, the Company entered into a three-year employment
agreement with its chief operating officer (COO) unless either the Company or
the employee terminates the agreement, and contains confidentiality clauses. As
consideration for the employees' services, the Company has agreed to a base
salary of $125,000 per annum plus benefits, for time actually devoted to duties
on behalf of the Company. On each successive anniversary date of this agreement,
the Board shall review the base compensation and at its sole discretion may
elect to increase the base salary at any time, but not decrease it. If the Board
takes no action, the base salary shall increase a minimum of 10% annually. The
executive is entitled to a discretionary bonus of 25% of base salary determined
by the COO or Board of Directors. In August 2005, the COO was promoted to
President of the Company and his salary was changed to the salary of the
Company's Chief Executive Officer. In addition, the employee shall be granted
stock options equal in number to the previous employment year (1,250,000 for the
employment year ending July 31, 2003) plus an additional 25% to purchase shares
of the Company's common stock at a price equal to 60% of the average closing
price for the month of July, the final month of the employment year. The stock
options have an expiration date five years from the grant date. In connection
with this agreement, on August 1, 2006 and 2005, the executive was granted
1,953,125 stock options to purchase 1,953,125 common shares at $.093 and $.041
per share, respectively.

                                      F-29
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 8 - COMMITMENTS (CONTINUED)

Employment agreements (continued)

In addition, based on certain achievements, the executive shall be granted
restricted common stock equal to two times the number of options granted in the
employment year. In connection with this employment agreement, in November 2004,
the Company issued 3,125,000 common shares to this executive. In July 2006, in
exchange for the issuance of common shares under this employment agreement, the
Company granted this executive 3,700,000 stock option to purchase 3,700,000
shares of the Company's common stock at an exercise price of $.145 per share for
a period of five years. In the event the Company qualifies or joins the American
Stock Exchange or NASDAQ Small Cap Market, the Executive will be granted 2.5% of
the Company's outstanding shares on the first day of trading on the new
exchange.

Litigation

Fernando Praca vs. Extrema,  LLC and Genesis Technology Group,  Inc., a Florida
Corporation - Case No. 50 2005 CA 005317, Dade County, Florida
-------------------------------------------------------------------------------

         Fernando Praca, former Director of the Company and former President of
our discontinued subsidiary, Extrema LLC, filed an action in Dade County,
Florida against Extrema, LLC and the Company in June 2005 relating to damages
arising from the sale of Extrema LLC to the Company. Praca has filed a Motion of
Temporary Injunction but has not proceeded to move this case forward. There has
been minimal action in this case since September of 2005, and this case not
currently set for trial. If the case proceeds, the Company intends to respond
aggressively to the litigation and it is too soon to determine the likelihood or
amount of loss.

Keke Zhang a/k/a Katherine Zhang vs. Genesis Technology Group,  Inc., a Florida
Corporation and Gary L. Wolfson - Case No. 50 2006 CA 003447, Palm Beach County,
Florida
--------------------------------------------------------------------------------

         In April 2006, a former employee of the Company filed a lawsuit against
the Company and our Chief Executive Officer alleging breach of an employment
agreement, loss of compensation, and losses from the value associated with
denied stock options. The Company plans to vigorously defend its position and
believe that any settlement will not have a material adverse effect on its
financial condition.

                                      F-30
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 9 - GOING CONCERN

The accompanying consolidated financial statements are prepared assuming the
Company will continue as a going concern. While the Company reported net income
of $2,909,606 for the fiscal year ended September 30, 2006, its operating
results for future periods will include significant expenses, including
compensation expense, travel expense, professional fees, marketing costs, and
administrative and general overhead expenses, and costs related to the
fulfillment of obligations related to its client contracts, which the Company
will incur as it continues to implement its business model. As a result, the
Company is unable to predict whether it will continue to achieve profitability
in the future. There can be no assurances whatsoever that the Company will be
able to successfully implement its business model, identify and close
acquisitions of operating companies, identify and close contract clients,
penetrate its target markets or attain a wide following for its services. The
Company is attempting to increase revenues and cash flows and control costs.
While the Company believes in the viability of its strategy to improve sales
volume and in its ability to raise additional funds and/or sell its investments
in marketable equity securities, there can be no assurances to that effect. The
ability of the Company to continue as a going concern is dependent on the
Company's ability to further implement its business plan, generate increased
revenues, and obtain operating cash from the sale of marketable equity
securities received for services. The consolidated financial statements do not
include any adjustments that might be necessary if the Company is unable to
continue as a going concern. Management believes that the actions presently
being taken to further implement its business plan and generate additional
revenues provide the opportunity for the Company to continue as a going concern.

NOTE 10 - RELATED PARTY TRANSACTIONS

Investment in restricted marketable equity securities - related party

At September 30, 2006, the Company has an investment in restricted marketable
equity securities consisting of 3,302,400 shares of Common Stock of S.E. Asia
Trading Company, Inc. that is in the name of GEP, the Company's 51% owned
subsidiary. China West, LLC ("China West"), a 25% owner of GEP has full
indication of ownership of these shares, including, without limitation, the
right to vote the shares, the right to dispose or otherwise transfer the shares
and the right to control the shares. China West has an irrevocable proxy to vote
the shares and an irrevocable right to execute all documents and take such other
actions which may be necessary to cause China West to transact in the shares.

Distribution of marketable equity securities

On September 28, 2006, in connection with the receipt of 13,209,600 common
shares of SEAA for services rendered, the Company immediately distributed
3,170,304 of these shares to a company that owns 24% of GEP, the Company's
partially-owned subsidiary and is owned by Shaohua Tan, a Director of the
Company.

                                      F-31
<PAGE>

                 GENESIS TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2006

NOTE 10 - RELATED PARTY TRANSACTIONS (CONTINUED)

Due to related party

At September 30, 2006, the Company owed $75,000 to Shaohua Tan, a director, for
services rendered during the year ended September 30, 2006.

Other

During the year ended September 30, 2006, the Company paid $19,912 to a company
owned by its chief financial officer for accounting services rendered related to
Lotus which has been included in cost of services performed on the accompanying
statement of operations.

NOTE 11 - SUBSEQUENT EVENTS

On November 30, 2006, in connection with the appointment of a new board of
director, Rodrigo Arboleda, the Company issued 500,000 shares of restricted
common stock to the new board of director member for services to be rendered for
a one year period. The Company valued these common shares at the fair market
value on the dates of grant of $.135 per share or $67,500 based on the trading
price of common shares.

                                      F-32
<PAGE>

                                   SIGNATURES

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


                                      GENESIS TECHNOLOGY GROUP, INC.


                                      By: /s/ Gary Wolfson
                                          ----------------
                                      Gary Wolfson,
Dated: January 16, 2007               Chief Executive Officer
                                      principal executive officer


                                      By: /s/ Adam Wasserman
                                          ------------------
                                      Adam Wasserman,
Dated: January 16, 2007               Chief Financial Officer,
                                      principal financial and accounting officer


         In accordance with the Securities Exchange Act of 1934, this report has
been signed by the following persons on behalf of the registrant in the
capacities and on the dates indicated.


SIGNATURE                            TITLE                           DATE

/s/ Gary Wolfson             Chief Executive Officer           January 16, 2007
----------------             and Director
Gary Wolfson


/s/ Ken Clinton              President and Director            January 16, 2007
---------------
Ken Clinton


/s/ Shaohua Tan              Director                          January 16, 2007
---------------
Shaohua Tan


/s/ Rodrigo Arboleda         Director                          January 16, 2007
--------------------
Rodrigo Arboleda