ITEM 2: MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") together with our financial statements and notes thereto as of and for the year ended December 31, 2007, filed with our Registration Statement on Form S-1 on May 29, 2008, and our financial statements and notes thereto as of and for the three months and six months ended June 30, 2008, which appear elsewhere in this Quarterly Report on Form 10-Q.

On April 25, 2008, Kayenta Kreations, Inc. ("Kayenta") acquired all the outstanding Common Stock of Geospatial Mapping Systems, Inc. ("GMSI") pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated March 25, 2008. Upon consummation of the Merger Agreement, GMSI became a fully-owned subsidiary of Kayenta, which was subsequently renamed "Geospatial Holdings, Inc." (the "Company"). Because GMSI's stockholders owned the majority of the Company upon consummation of the Merger Agreement, GMSI was deemed to be the acquiring entity. Accordingly, all historical financial information prior to the consummation of the Merger Agreement contained in this MD&A, and in our financial statements and notes thereto, is that of GMSI.

Prior to the Merger, Kayenta was a shell company as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Upon consummation of the Merger Agreement, the Company adopted GMSI's business, and ceased to be a shell company as defined in the Exchange Act. The Company's services include pipeline data acquisition, professional data management, and pipeline field services.

Results of Operations

From GMSI's inception on May 26, 2006, through December 31, 2007, we were considered a development stage company as defined by Statement of Accounting Standards No. 7, Accounting and Reporting by Development Stage Enterprises. As such, we devoted substantially all of our efforts to establishing a new business. During 2008, we began to generate revenues from our planned operations, and ceased to be a development stage company.

Sales were $366,888 and $1,314,428 for the three and six month periods ended June 30, 2008, respectively, compared to $28,664 for each of the three and six month periods ended June 30, 2007. Cost of sales was $132,648 and $427,085 for the three and six months ended June 30, 2008, respectively, compared to $4,482 for each of the three and six month periods ended June 30, 2007. Our sales and cost of sales increased in 2008 as we began to generate revenues from our planned operations and ceased to be a development stage company. We expect sales and cost of sales to fluctuate as our business reaches maturity.

Selling, general and administrative ("SG&A") expenses include all costs that are not directly associated with our revenue-generating activities. SG&A expenses include payroll costs for sales, administrative, and technical personnel, sales and marketing costs, corporate costs, and facilities costs. SG&A expenses were $1,676,167 and $2,225,636 for the three and six months ended June 30, 2008, respectively, compared to $495,332 and $898,913 for the three and six months ended June 30, 2007, respectively. The increase was primarily due to legal, accounting, and other expenses incurred in 2008 related to the acquisition of Kayenta, and the subsequent filing of a Registration Statement under the Securities Act of 1933, as amended for a portion of our shares. Also contributing to the increase in SG&A expenses was the expansion of our sales and administrative staff in 2008.

Other income and expenses include interest income, interest expense, non-business income and expenses, and gains or losses on foreign currency exchange. Other income and expense was net income of $12,813 for the three months ended June 30, 2008, and net expense of $161,661 for the six months ended June 30, 2008. Other income and expense was net expense of $4,508 and $4,006 for the three and six months ended June 30, 2007, respectively. Included in net income and expense was a gain on foreign currency exchange of $10,762 for the three months ended June 30, 2008, and a loss on foreign currency exchange of $163,449 for the six months ended June 30, 2008. There were no gains or losses on foreign currency exchange for the three or six months ended June 30, 2007. We do not hedge our exposure to foreign currency. Gains or losses on foreign currency may fluctuate in future periods.

We had no net benefit from income taxes, as our deferred tax benefit was completely offset by a valuation allowance due to the uncertainty of realization of the benefit.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements as of June 30, 2008.

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