Kenergy Scientific, Inc. - FORM 10-K

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EXCEL - IDEA: XBRL DOCUMENT - Kenergy Scientific, Inc.	Financial_Report.xls
EX-3.5 - EXHIBIT 3.5 - Kenergy Scientific, Inc.	exh3_5.htm
EX-31.1 - EXHIBIT 31.1 - Kenergy Scientific, Inc.	exh31_1.htm
EX-32.1 - EXHIBIT 32.1 - Kenergy Scientific, Inc.	exh32_1.htm
EX-10.25 - EXHIBIT 10.25 - Kenergy Scientific, Inc.	exh10_25.htm
EX-10.26 - EXHIBIT 10.26 - Kenergy Scientific, Inc.	exh10_26.htm
EX-10.28 - EXHIBIT 10.28 - Kenergy Scientific, Inc.	exh10_28.htm
EX-10.24 - EXHIBIT 10.24 - Kenergy Scientific, Inc.	exh10_24.htm
EX-10.27 - EXHIBIT 10.27 - Kenergy Scientific, Inc.	exh10_27.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 333-120507

KENERGY SCIENTIFIC, INC. (formerly SpeechSwitch, Inc) (Exact name of registrant)

New Jersey (State or other jurisdiction of incorporation or organization)	20-1862816 (I.R.S. Employer Identification No.)

6 Minneakoning Road, Flemington, New Jersey (Address of principal executive offices)	08822 (Zip Code)

Issuer's telephone number 908-788-0077

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

Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act). Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [ ] No [X]

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 [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K 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-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer,""accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated filer o Accelerated filer o Non-accelerated filer  Smaller reporting Company [X]

(Do not check if a smaller reporting company)

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, 2011, based upon the average bid and ask prices on that date was $184,571.

As of April 9, 2012, the Registrant had 13,020,798 outstanding shares of Class A Common Stock, no par value per share and 10,000 outstanding shares of Class B Common Stock, par value $.01 per share.

EXPLANATORY NOTE

This Annual Report on Form 10-K for the fiscal year ended December 31, 2011 contains financial statements that have not been audited by an independent registered public accounting firm for the fiscal years ended December 31, 2011 and 2010.

Table of Contents

PART I
Item 1. Business	4
Item 2. Properties	15
Item 3. Legal Proceedings	16

PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	16
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.	24
Item 8. Financial Statements and Supplementary Data	26
Item 9A. Controls & Procedures	26
Item 9B. Other Information	28

PART III
Item 10. Directors, Executive Officers and Corporate Governance	29
Item 11. Executive Compensation.	30
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13. Certain Relationships and Related Transactions and Director Independence	33
Item 14. Principal Accountant Fees and Services	34

PART IV
Item 15. Exhibits and Financial Statement Schedules	35

PART I

ITEM 1. BUSINESS

BACKGROUND

In September 2004, the Board of Directors of iVoice, Inc., the former parent of SpeechSwitch, Inc. (“SpeechSwitch”), resolved to pursue the separation of iVoice software business into three publicly owned companies. SpeechSwitch was incorporated under the laws of New Jersey on November 10, 2004 as a wholly owned subsidiary of iVoice, Inc. ("iVoice"). SpeechSwitch received by assignment all of the interests in and rights and title to, and assumed all of the obligations of, all of the agreements, contracts, understandings and other instruments of iVoice Technology 3, Inc., a Nevada corporation, a former wholly owned subsidiary of iVoice.. SpeechSwitch continued to develop, market and license the automated speech attendant software, which runs on industry-standard hardware and performs speech recognition.

On August 4, 2005, the registration statement to effectuate the spin-off of the SpeechSwitch from iVoice was declared effective and SpeechSwitch immediately embarked on the process to spin off the SpeechSwitch from iVoice.

On August 5, 2005, the spin-off transaction was accomplished, by the assignment, contribution and conveyance of certain intellectual property, representing the software codes of speech recognition, and certain accrued liabilities and related party debt into SpeechSwitch (the "Spin-off"). The Class A Common Stock shares of SpeechSwitch were distributed to iVoice shareholders in the form of a taxable special dividend distribution.

In June 2009 Kenneth P. Glynn acquired debt owed by the Company to third party creditors.

In September 2009, Kenneth P. Glynn established the Kenergy Scientific Group (the “Group”) to seek new products to be sold under the Kenergy Scientific brand. The Group acquired a small inventory of solar rechargeable lanterns for testing and eventual sales.

In June 2009, the Company moved its headquarters from Matawan, NJ to Flemington, NJ. Our principal offices and facilities are now located at 6 Minneakoning Road, Flemington, New Jersey, 08822 and our new telephone number is (908) 788-0077.

On January 19, 2011, the Board of Directors and shareholders, through written consent representing a majority of the total voting Class A and Class B common stock, voted to change the name of SpeechSwitch to Kenergy Scientific, Inc. (the “Company”) and to increase the number of authorized Class A common stock from 10 billion shares to 20 billion shares. On February 3, 2011, the Company filed an Amendment to the Certificate of Incorporation with the State of New Jersey to officially change the name of SpeechSwitch and to increase the authorized Class A common stock to 20 billion shares from 10 billion shares. On February 25, 2011, the Company’s new trading symbol was changed from SSWC to KNSC on the OTCQB of the OTC Marketplace.

In November 2011, the Company opened its first company-ownded GreenSmart Store at the Flemington Marketplace in Flemington, NJ.

OUR BUSINESS

In June 2009, we entered into fields of development of various products relating to solar power generating systems; portable solar powered products, such as cell phone and PDA rechargers that are solar rechargeable; solar rechargeable lantern/flashlight devices; solar backpack rechargers; solar power audio devices, such as radios; wind power generating systems; and, creative products based on proprietary positions, especially in the area of healthcare. We may seek to expand our operations through additional sales and marketing activity and the acquisition of additional businesses. Any potential acquired additional businesses may be outside the current field of our operations. We may not be able to identify, successfully integrate or profitably manage any such business or operations. Currently, we have no plans, proposal or arrangements, either orally or in writing, regarding any proposed acquisitions and is not considering any potential acquisitions.

PRODUCTS AND SERVICES

The following description of our business is intended to provide an understanding of our product and the direction of our initial marketing strategy. As the new product development is in its early development stages, any focus described in the following pages may change and different initiatives may be pursued, at the discretion of Management. Our areas of development and recent activities include:

(a)

On June 18, 2009, the Company acquired rights and ownership from GlynnTech, Inc. of technology and pending patent applications relating to cancer treatment drug delivery systems, and the technology transfer into the Company included a prototype, numerous variations on designs, CAD drawings, pending patent applications, risk analysis studies, development history and presentation documents. The sale was “at cost” of GlynnTech, Inc. in the amount of $425,000.00. The Agreement called for the aggregate purchase price to be in various denominations of one-year notes. The business objective was to transfer a potentially significant profit opportunity from GlynnTech, Inc. to Kenergy Scientific, Inc. Three presentations had previously been made to pharmaceutical industry candidates and feedback indicated a high level of interest in potential purchase of this technology following FDA approval of this product.

(b)

In the solar rechargeable products sector, candidates for future sales currently include an iPhone/iPod recharger; a solar powered recharger for the cell phones and PDA’s; a backpack solar recharger with chips for attachment to a backpack, a tent, an outdoor line, etc. with a storage pocket and an array of interchangeable connectors for diverse electronic devices; a solar powered lantern/flashlight; a solar powered radio/flashlight; a solar powered laptop recharger, and other devices. Product launches on a majority of these items were in the third quarter of 2010. Initial product launches involved Internet sales, with a roll-out to our retail outlet in November 2011.

(c)	In solar power energy production systems, the Company is reviewing numerous models of solar photovoltaic panels and converters, as well as unique aftermarket opportunities. The Company intends to partner with installers and market home, office and commercial solar panels through various media.

(d)	In the wind power energy production systems, third party companies will review various microturbine products to license and sell.

SALES AND MARKETING

The Company had nominal sales during the years 2011 and 2010. Sales have been slow due to research and development, product selections, product testing and other launch preparation. Sales through the third quarters of 2011 were through our website and additional opportunities are being developed, through third party retail and internet sites and through third party distributors. In November 2011, the Company opened its first company-owned GreenSmart retail store and we expect to expand our store plans to include other franchised stores.

DISTRIBUTION

Within the first two years under new management, the Company created a viable website and contracted with major retailers and multimedia advertising for the solar powered rechargers and other products. In addition, the Company opened one retail store, as well as offering additional products made from recycled materials and/or biodegradable materials in the marketplace.

BUSINESS DEVELOPMENT

Business development objectives at the Company will be to focus on the primary functions as listed below:

1.	Continuously develop product ideas, manufacturing and supply alliances;

2.	Expand sales opportunities through diverse resources;

3.	Develop retail outlets;

4.	Evolve franchising opportunities using company retail outlets as a base;

5.	Create a continuous flow of ideas and inventions to develop patent and/or new product opportunity

STRATEGIC ALLIANCES

Kenergy Scientific’s business development efforts will seek to engage and secure strategic alliances with alternative energy related businesses and professional organizations in order to develop marketing programs that will expand market share for our products and develop brand recognition by entering into strategic alliances with companies that offer these products and/or services, the Company will accelerate its entry into various markets, while eliminating or reducing various training, learning curve, employee and overhead costs.

COMPETITION

The primary areas of business of the Company are research and development in technologies of interest- alternative energy systems, alternative energy products, green products and healthcare. There is significant competitive research in the alternative energy and healthcare sectors, and no one company can emerge to eliminate all competition. This is due to the segmentation of these industries as well as the mere vastness of different opportunities. With respect to the Company, we have developed niche areas where we seem to have an edge on the basis of issued patents versus our own filings. There niches include solar alternatives to conventional photovoltaic systems, wind power and hybrid wind/solar systems. However, because research and development is typically a secretive process and it is embryonic product development, the effects of competitive efforts on the Company in the long run is indeterminate.

The other primary areas of business into the future involve retail sales in the form of internet, mall kiosk and one-stop mini-department stores selling only green products. Competition is segmented, as many small companies market individual green products or small groups of green products. No one company appears to offer all green broad product-based green stores at this time. It is reasonable, however to expect competition in the areas of both dedicated green stores and existing major outlets to offer large green sections. The long term effects of these forms of competition will eventually drive prices and profit margins into line with non-green retail sales as currently exist. On the other hand, more competition will reflect increased demand and this will reduce inventory costs as more green products move toward larger economies of scale.

INTELLECTUAL PROPERTY RIGHTS

The Company has completed the acquisition of the patented rights for the cancer treatment patent awarded by the United States Patent and Trademark Office. No foreign counterparts have been filed at this time.

Also, the company now has numerous patent applications and some issued patents in the fields of microturbine wind power generators, third generation solar power generators, solar desealination, solar-wind hybrid power generators, biodegradeable bandages and other energy and healthcare related inventions.

PRODUCT DEVELOPMENT

We currently have significant long term plans to engage in future research and development, to create valuable intellectual property rights and/or to launch new products. The Company will acquire third party patent rights, develop its own patent rights and evolve both new product and intellectual property transfer (sale or license) opportunities.

LICENSING

The Company has minimal licensing requirements at this time and is believed to be in full compliance. No special licenses are needed for research and development efforts as they involve drawing board design and mechanical prototyping. The Company is not engaged in any research efforts involving chemicals, hazardous materials or medical products requiring special licensing. In the future, as retail efforts ramp up, licensing and certificate requirements for retail sales will be required

and satisfied.

EMPLOYEES

Kenneth P. Glynn was elected to the positions of President, Secretary and Chairman of the Board on June 16, 2009. On July 1, 2009, the Company entered into a one (1) year employment agreement with Mr. Glynn to serve as President and Chief Executive of the Company at an annual base salary of $96,000 for the first year. On July 1, 2010 and 2011, the Company renewed Mr. Glynn’s employment agreement for an additional one (1) year at an annual base salary of $96,000 for the year. It is the present intention of Mr. Glynn to defer a portion of his salary payment for at least the next 6 months.

As of December 31, 2011, we had one employee, Kenneth P. Glynn. All other participants in Company activities are through purchased support services and independent contractors.

RISK FACTORS

In addition to other information in this Annual Report on Form 10-K, the following important factors should be carefully considered in evaluating the Company and our business because such factors currently have a significant impact on our business, prospects, financial condition and results of operations.

FORWARD LOOKING STATEMENTS - CAUTIONARY FACTORS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and in Section 21F of the Securities Exchange Act of 1934 as amended. The statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of these terms or other similar terminology. These forward-looking statements involve risks and uncertainties and other factors that may cause the actual results, performance or achievements to differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Except for the historical information and statements contained in this Report, the matters and items set forth in this Report are forward looking statements that involve uncertainties and risks some of which are discussed at appropriate points in the Report and are also summarized as follows:

Additional risks and uncertainties not currently known or deemed to be immaterial also may materially adversely affect the business, financial condition and/or operating results.

The Company will face many of the difficulties that companies with limited operating history face.

As a result of the Company’s limited operating history and the currently difficult economic conditions of the marketplace, it may be difficult for you to assess our growth and earnings potential. The Company believes that the emerging green products marketplace is poised to grow, there has not yet been developed, implemented and demonstrated a commercially viable business model from which to successfully operate any form of business that relies on the products and services that we intend to market, sell, and distribute. Therefore, we have faced many of the difficulties that companies in the early stages of their development in new and evolving markets often face, as they are described herein. We may continue to face these and other difficulties in the future, some of which may be beyond our control. If we are unable to successfully address these problems, our future growth and earnings will be negatively affected.

The Company has acknowledged the uncertainty regarding its ability to continue as a going concern.

The Company has acknowledged the uncertainty regarding the Company’s ability to continue as a going concern due to its historical negative cash flow and because the Company does not have access to sufficient committed capital to meet its projected operating needs for the next 12 months.

Our financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have not made any adjustments to our financial statements as a result of our uncertainty regarding the Company’s ability to continue as a going concern. If we become unable to continue as a going concern, we could have to liquidate our assets, which means that we are likely to receive significantly less for those assets than the values at which such assets are carried on our consolidated financial statements. Any shortfall in the proceeds from the liquidation of our assets would directly reduce the amounts, if any, that holders of our common stock could receive in liquidation.

There can be no assurance that management’s plans will be successful, and other unforeseeable actions may become necessary. Any inability to raise capital may require us to reduce the level of our operations. Such actions would have a material adverse effect on us, our business and operations and result in charges that would be material to our business and results of operations.

The Company’s future revenue and operating results are unpredictable and may fluctuate, which could cause the Company’s stock price to decline.

Our short operating history and the rapidly changing nature of the market in which we compete make it difficult to accurately forecast our revenues and operating results. Our operating results are unpredictable and we expect them to fluctuate in the future due to a number of factors. These factors may include, among others:

●	the timing of sales of our products and services, particularly in light of our minimal sales history;

●	the introduction of competitive products by existing or new competitors;

●	reduced demand for any given product;

●	difficulty in keeping current with changing technologies;

●	unexpected delays in introducing new products, new product features and services;

●	increased or uneven expenses, whether related to sales and marketing, product development or administration;

●	deferral of recognition of our revenue in accordance with applicable accounting principles due to the time required to complete projects; and

●	costs related to possible acquisitions of technology or businesses.

Due to these factors, forecasts may not be achieved, either because expected revenues do not occur or because they occur at lower prices or on terms that are less favorable to us. In addition, these factors increase the chances that our results could diverge from the expectations of investors and analysts. If so, the market price of our stock would likely decline.

The Company has in the past and may in the future sell additional unregistered convertible securities, possibly without limitations on the number of shares of common stock the securities are convertible into, which could dilute the value of the holdings of current stockholders and have other detrimental effects on your holdings.

We have relied on the private placement of convertible debentures and promissory notes to obtain working capital and may continue to do so in the future. As of December 31, 2011, we have several convertible debentures with E-Lionheart Associates, LLC with an aggregate principal balance of $1,126,123. Some of these convertible debentures were acquired from YA Global Investments and one of the debentures was created when E-Lionheart provided new funding to the Company. In addition, the Company has a convertible promissory note of $79,936 due to a related party for administrative services and deferred compensation of $156,000 due to Mr. Kenneth Glynn and provides that, at Mr. Glynn’s option, principal and interest due on the note can be converted into shares of the Company’s Class B Common Stock which is convertible into the number of shares of Class A Common Stock determined by dividing the number of shares of Class B Common Stock being converted by a 20% discount of the lowest price at which the Company had ever issued its Class A Common Stock. There is no limit upon the number of shares that we may be required to issue upon conversion of any of these obligations. The Board of Directors maintains control over the issuance of shares and may decline the request for conversion of the repayment into shares of the Company.

In order to obtain working capital in the future, we intend to issue additional equity securities and convertible obligations.

In the event that the price of our Class A Common Stock decreases, and our convertible obligations (or any other convertible obligations we may issue) are converted into shares of our Class A Common Stock:

●	the percentage of shares outstanding that will be held by these holders upon conversion will increase accordingly,

●	increased share issuance, in addition to a stock overhang of an indeterminable amount, may depress the price of our Class A Common Stock,

●	the sale of a substantial amount of convertible debentures to relatively few holders could effectuate a possible change in control of the Company, and

●	in the event of our voluntary or involuntary liquidation while the secured convertible debentures are outstanding, the holders of those securities will be entitled to a preference in distribution of our property.

In addition, if the market price declines significantly, we could be required to issue a number of shares of Class A Common Stock sufficient to result in our current stockholders not having an effective vote in the election of directors and other corporate matters. In the event of a change in control of the Company, it is possible that the new majority stockholders may take actions that may not be consistent with the objectives or desires of our current stockholders.

We are required to convert our existing convertible obligations based upon a formula that varies with the market price of our common stock. As a result, if the market price of our Class A Common Stock increases after the issuance of our convertible obligations, it is possible, that, upon conversion of our convertible obligations, we will issue shares of Class A Common Stock at a price that is far less than the then-current market price of our Class A Common Stock.

If the market price of our Class A Common Stock decreases after our issuance of any convertible obligations, upon conversion, we will have to issue an increased number of shares to the holders of our convertible obligations. Any sale of convertible obligations may result in a very large conversion at one time. If we do not have a sufficient number of shares to cover the conversion, we may have a risk of a civil lawsuit.

If the Company loses the services of any key personnel, including our chief executive officer or our directors, our business may suffer.

We are dependent on our key officers and directors, including Kenneth P. Glynn, our President, Chief Executive Officer and Chief Financial Officer. The loss of any of our key personnel could materially harm our business because of the cost and time necessary to retain and train a replacement. Such a loss would also divert management attention away from operational issues.

Our potential future business acquisitions may be unpredictable and may cause our business to suffer.

The Company may seek to expand its operations through the acquisition of additional businesses. These potential acquired additional businesses may be outside the current field of operations of the Company. The Company may not be able to identify, successfully integrate or profitably manage any such businesses or operations. The proposed expansion may involve a number of special risks, including possible adverse effects on the Company’s operating results, diversion of management attention, inability to retain key personnel, risks associated with unanticipated events and the financial statement effect of potential impairment of acquired intangible assets, any of which could have a materially adverse effect on our business, financial condition and results of operations. In addition, if competition for acquisition candidates or assumed operations were to increase, the cost of acquiring businesses or assuming customers’ operations could increase materially. The inability of the Company to implement and manage its expansion strategy successfully may have a material adverse effect on the business and future prospects of the Company. Furthermore, through the acquisition of additional businesses, the Company may effect a business acquisition with a target business which may be financially unstable, under-managed, or in its early stages of development or growth. While the Company may, under certain circumstances, seek to effect business acquisitions with more than one target business, as a result of our limited resources, we may in all likelihood, only have the ability to effect a single business acquisition at one time. Currently, the Company has no plans, proposals or arrangements, either orally or in writing, regarding any proposed acquisitions and is not considering any potential acquisitions.

The Company’s stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire businesses.

If working capital or future acquisitions are financed through the issuance of equity securities, the Company’s stockholders would experience significant dilution. In addition, the conversion of outstanding debt obligations into equity securities would have a dilutive effect on the Company’s shareholders. Further, securities issued in connection with future financing activities or potential acquisitions may have rights and preferences senior to the rights and preferences of the Company’s Class A Common Stock.

If the Company is unable to obtain funds from equity financing, management believes that the Company can limit its operations, defer payments to management and maintain its business at nominal levels until it can identify alternative sources of capital. However, there is no assurance that management will be able to obtain additional funding.

If the Company must restructure its operations, valuable resources will be diverted from other business objectives.

We intend to continually evaluate our product and corporate strategy. We have in the past undertaken, and will in the future undertake, organizational changes and/or product and marketing strategy modifications. These organizational changes increase the risk that objectives will not be met due to the allocation of valuable limited resources to implement changes. Further, due to the uncertain nature of any of these undertakings, these efforts may not be successful and we may not realize any benefit from these efforts.

Potential product liability could result in delays in market acceptance, unexpected costs and diminished operating results.

Our products may contain defects, especially when first introduced or when new versions are released. Defects could be found in current versions of our products, future upgrades to current products or newly developed and released products. Defects could result in delays in market acceptance which could materially adversely affect our operating results. Our products have limited warrantees designed to limit our exposure to potential product liability claims. It is possible, however, that these provisions limiting our liability may not be valid as a result of federal, state, local or foreign laws or ordinances or unfavorable judicial decisions. A successful product liability claim may have a material adverse effect on our business, operating results and financial condition.

We may not be able to access sufficient funds when needed.

We are dependent on external financing to fund our operations. Our most recent financing was provided through the sale of $380,000 in convertible debentures and promissory notes. If the Company cannot find sources of additional financing to fund its working capital needs, the Company will be unable to obtain sufficient capital resources to operate our business. We cannot assure you that we will be able to access any financing in sufficient amounts or at all when needed. Our inability to obtain sufficient working capital funding will have an immediate material adverse effect upon our financial condition and our business.

Our obligations under the convertible promissory note and the secured promissory note are secured by substantially all of our assets.

Our obligations under the convertible promissory notes and the secured promissory note issued to E-Lionheart Associates, LLC are secured by substantially all of our assets. As a result, if we default under the terms of these promissory notes, E-Lionheart Associates could foreclose its security interest and liquidate all of our assets. This would cause operations to cease.

Kenneth Glynn, the Chairman of the Board and President of the Company, currently has voting control over the management and direction of the Company.

As President and sole director, Mr. Glynn has control over the management and direction of the Company. As of December 31, 2011, Mr. Glynn owns 7,057,329 shares of Class A Common Stock, 10,000 shares of Class B Common Stock and has the right to convert $235,936 of indebtedness and deferred compensation, together with accrued but unpaid interest of $12,973, into 248,909 shares of Class B Common Stock. The Class B Common Stock is convertible into the number of shares of Class A Common Stock determined by dividing the number of shares of Class B Common Stock being converted by a 20% discount of the lowest price at which the Company had ever issued its Class A Common Stock. Interest accrues on the outstanding principal balance of the note at the prime rate plus 1% per annum. There is no limitation on the number of shares of Class A Common Stock we may be required to issue to Mr. Glynn upon the conversion of this indebtedness. Each share of Class B Common Stock has voting rights equal to 100 shares of Class A Common Stock. If Mr. Glynn converts his indebtedness into 248,909 shares of Class B Common Stock, he will have the aggregate voting rights equal to an additional 25,890,900 shares of Class A Common Stock and when added to his holdings of Class A Common Stock of 7,057,329 shares, Mr. Glynn will have voting control over the management and direction of the Company, including the election of directors, appointment of management and approval of actions requiring the approval of stockholders. The Board has the option to pay Mr. Glynn in Class B Common Stock. The Board of Directors maintains control over the issuance of shares and may decline the request for conversion of the repayment into shares of the Company.

The Company may rely on intellectual property and proprietary rights which may not remain unique to the Company.

We regard our software and its underlying technology, and some of our products as proprietary. We seek to protect our proprietary rights through a combination of confidentiality agreements and copyright, patent, trademark and trade secret laws.

We have acquired pending patent rights for the cancer treatment patent applications and have several pending patent application on our proprietary technology that we believe to be material to our future success and may obtain additional patents in the future. Our existing and future patents, if any, may be successfully challenged and may not provide us with any competitive advantages. Although we have obtained patents and have pending patent applications, we may not be able to continue to develop proprietary products or technologies that are patentable and other parties may have prior claims.

Patent, trademark and trade secret protection is important to us because developing and marketing new technologies and products is time-consuming and expensive. Although we have acquired pending patent rights for the cancer treatment patent applications, we do not own any foreign patents or registered intellectual property. We may not be able to obtain additional issued patents or other protection from any future patent applications owned by or licensed to us.

There can be no assurance that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar technology substantially equivalent or superseding proprietary technology. Furthermore, there can be no assurance that any confidentiality agreements between us and our employees will provide meaningful protection of our proprietary information, in the event of any unauthorized use or disclosure thereof. As a consequence, any legal action that we may bring to protect proprietary information could be expensive and may distract management from day-to-day operations.

The Company may become involved in future litigation, which may result in substantial expense and may divert our attention from the implementation of our business strategy.

We believe that the success of our business depends, in part, on obtaining intellectual property protection for our products, defending our intellectual property once obtained and preserving our trade secrets. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets and to determine the validity and scope of our proprietary rights. Any litigation could result in substantial expense and diversion of our attention from our business, and may not adequately protect our intellectual property rights.

In addition, we may be sued by third parties who claim that our products infringe the intellectual property rights of others. This risk is exacerbated by the fact that the validity and breadth of claims covered in technology patents involve complex legal and factual questions for which important legal principles are unresolved. Any litigation or claims against us, whether valid or not, could result in substantial costs, place a significant strain on our financial resources, divert management resources and harm our reputation. Such claims could result in awards of substantial damages, which could have a material adverse impact on our results of operations. In addition, intellectual property litigation or claims could force us to:

●	cease licensing, incorporating or using any of our products that incorporate the challenged intellectual property, which would adversely effect our revenue;

●	obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms, if at all; and

●	redesign our products, which would be costly and time-consuming.

The Company may incur increased expenses after the administrative services agreement with GlynnTech, Inc. is terminated.

The Company entered into an Administrative Services Agreement with GlynnTech, Inc. Under this agreement, GlynnTech, Inc. is providing the Company with services in such areas as inventory purchasing, material and inventory control, employee benefits administration, payroll, financial accounting and reporting, and other areas where the Company needs assistance and support. The agreement will continue for a term of one year and is renewable annually. Upon termination of the agreement, the Company will be required to obtain such services from a third party or increase its headcount to provide such services. This could be more expensive than the fees, which the Company has been required to pay under the administrative services agreement.

The Company has a material weakness in internal controls due to a limited segregation of duties, and if we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting which could harm the trading price of the Company’s stock.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. Inferior internal controls could cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of the stock. Management has found it necessary to limit our administrative staffing in order to conserve cash, until our level of business activity increases. As a result, there is very limited segregation of duties amongst the administrative employees, and we and our independent public accounting firm have identified this as a material weakness in the our internal controls. Despite the limited number of administrative employees and limited segregation of duties, management believes that our administrative employees are capable of following our disclosure controls and procedures effectively.

OUR SECURITIES

We do not expect to pay dividends in the foreseeable future.

We intend to retain any future earnings to finance the growth and development of our business. Therefore, we do not expect to pay any cash dividends in the foreseeable future. Any future dividends will depend on our earnings, if any, and our financial requirements.

The price of our stock may be affected by a limited trading volume and may fluctuate significantly.

There has been a limited public market for our Class A common stock and there can be no assurance that an active trading market for our stock will continue. An absence of an active trading market could adversely affect our stockholders' ability to sell our Class A common stock in short time periods, or possibly at all. Our Class A common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations which could adversely affect the market price of our stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our Class A common stock to fluctuate substantially.

Our Class A Common Stock is deemed to be “Penny Stock,” which may make it more difficult for investors to sell their shares due to suitability requirements.

Our Class A common stock is deemed to be "penny stock" as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934, as amended. These requirements may reduce the potential market for our Class A common stock by reducing the number of potential investors. This may make it more difficult for investors in our Class A common stock to sell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline. Penny stocks are stock:

·	With a price of less than $5.00 per share

·	That are not traded on a "recognized" national exchange;

·	Whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ listed stock must still have a price of not less than $5.00 per share); or

·	Issuers with net tangible assets less than $2.0 million (if the issuer has been in continuous operation for at least three years) or $5.0 million (if in continuous operation for less than three years), or with average revenues of less than $6.0 million for the last three years.

Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor.

Future sales of our Class A Common Stock could cause our stock price to decline.

The sale of a large number of our shares, or the perception that such a sale may occur, could lower our stock price. Such sales could make it more difficult for us to sell equity securities in the future at a time and price that we consider appropriate.

Issuance of our reserved shares of Class A Common Stock may significantly dilute the equity interest of existing stockholders.

We have reserved for issuance, shares of our Class A common stock upon exercise or conversion of stock options, warrants, or other convertible securities that are presently outstanding. Issuance of these shares will have the effect of diluting the equity interest of our existing stockholders and could have an adverse effect on the market price for our Class A common stock.

Reports to Security Hold

Pursuant to the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), the Company files reports with the Securities and Exchange Commission. In this regard, the Company files quarterly reports on Form 10-Q, annual reports on Form 10-K and as required, files reports on Form 8-K. However, the Company’s Annual Report on Form 10-K does not contain audited financial statements as required under the Exchange Act.

The public may read and copy any materials the Company files with the Securities and Exchange Commission at the Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The Internet address of the Commission's site is (http://www.sec.gov).

ITEM 2. PROPERTIES.

We do not own any real property. We rent office space from GlynnTech, Inc. located at 6 Minneakoning Road, Flemington, New Jersey. We also rent 2,375 square feet of retail sales space from Flemington Mall, LLC for our GreenSmart retail store. We intend to continue renting such spaces and anticipate no relocation of our offices or store front in the foreseeable future. We are unaware of any environmental problems in connection with these locations, and, because of the nature of our activities, do not anticipate such problems.

ITEM 3. LEGAL PROCEEDINGS.

We are subject to litigation from time to time arising from our normal course of operations. Currently, there are no open litigation matters.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

MARKET INFORMATION

Prior to February 24, 2011, our common stock was quoted on the OTCQB of the OTC Marketplace under the symbol “SSWC”. After February 25, 2011, our trading symbol is “KNSC”. On May 5, 2011, the Company amended its Certificate of Incorporation to reflect the reverse stock split authorized by the Board of Directors and adopted by the shareholders on January 19, 2011.

The following table shows the high and low closing prices for the period indicated, and reflects the effect of the reverse stock split on May 5, 2011:

2010	High	Low
First quarter	$0.152	$0.104
Second Quarter	$2.904	$0.104
Third Quarter	$1.448	$0.400
Fourth quarter	$0.504	$0.152
2011	High	Low
First Quarter	$0.248	$0.104
Second Quarter	$0.152	$0.035
Third Quarter	$0.060	$0.030
Fourth quarter	$0.050	$0.010

The quotations listed above reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions

HOLDERS OF COMMON EQUITY.

As of December 31, 2011, the number of record holders of our common shares was approximately 771.

DIVIDEND INFORMATION.

To date, the Company has never paid a dividend. We have no plans to pay any dividends in the near future. We intend to retain all earnings, if any, for the foreseeable future, for use in our business operations.

SALES OF UNREGISTERED EQUITY SECURITIES.

In the year ending December 31, 2011, the Company issued the following unregistered securities pursuant to various exemptions from registration under the Securities Act of 1933, as amended:

·	The Company issued 577,597 (462,077,400 pre-reverse split) shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $143,244.

In the year ending December 31, 2010, the Company issued the following unregistered securities pursuant to various exemptions from registration under the Securities Act of 1933, as amended:

The Company issued an aggregate of 7,057,328 (5,645,862,500 pre-reverse split) shares of Class A common stock and 10,000 shares of Class B common stock to Mr. Glynn in settlement of $509,425 of promissory notes and accrued interest that Mr. Glynn acquired in June 2009. These shares contain a restrictive legend which will limit Mr. Glynn from liquidating these into the open market.

·	The Company issued an aggregate of 696,031 (556,825,000 pre-reverse split) shares of Class A common stock for repayment of convertible debt in lieu of cash, valued at $752,226.

·	The Company issued 2,239,712 (1,791,769,350 pre-reverse split) shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $1,025,558.

·	The Company issued 85,000 (68,000,000 pre-reverse split) shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $157,080.

DESCRIPTION OF SECURITIES

Pursuant to our certificate of incorporation, we are authorized to issue up to: 1,000,000 shares of preferred stock, par value of $1.00 per share, 125,000,000 shares of Class A common stock, no par value per share, 50,000,000 shares of Class B common stock, par value $.01 per share, and 20,000,000 shares of Class C common stock, par value $.01 per share. Below is a description of the Company’s outstanding securities, including Class A common stock, Class B common stock, Class C common stock, options, warrants and debt.

On May 5, 2011, the Company amended its Certificate of Incorporation to reflect the reverse stock split authorized by the Board of Directors and adopted by the shareholders on January 19, 2011. The effect of this amendment was: a) to reduce the authorized shares from 20,000,000,000 to 25,000,000; b) to reduce the outstanding shares from 9,924,630,443 to 12,405,788; and c) to reduce the unissued shares from 10,075,369,557 to 12,594,212.

On November 29, 2011, the Company amended its Certificate of Incorporation to increase the number of authorized Class A Common Stock Shares to 125,000,000, as authorized by the Board of Directors and adopted by the shareholders on November 17, 2011. The effect of this amendment was to increase the authorized shares from 25,000,000 to 125,000,000.

PREFERRED STOCK

The Board of Directors expressly is authorized, subject to limitations prescribed by the New Jersey Business Corporations Act and the provisions of this Certificate of Incorporation, to provide, by resolution and by filing an amendment to the Certificate of Incorporation pursuant to the New Jersey Business Corporations Act, for the issuance from time to time of the shares of Preferred Stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and other rights of the shares of each such series and to fix the qualifications, limitations and restrictions thereon, including, but without limiting the generality of the foregoing, the following:

a) the number of shares constituting that series and the distinctive designation of that series;

b) the dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

c) whether that series shall have voting rights, in addition to voting rights provided by law, and, if so, the terms of such voting rights;

d) whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provisions for adjustment of the conversion rate in such events as the Board of Directors shall determine;

e) whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

f) whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;

g) the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and

h) any other relative powers, preferences and rights of that series, and qualifications, limitations or restrictions on that series.

In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of Preferred Stock of each series shall be entitled to receive only such amount or amounts as shall have been fixed by the certificate of designations or by the resolution or resolutions of the Board of Directors providing for the issuance of such series.

The Company is authorized to issue 1,000,000 shares of Preferred Stock, par value $1.00 per share. As of December 31, 2010, the Company has not issued any shares of Preferred Stock. The Company has no current plans to issue any shares of preferred stock.

CLASS A COMMON STOCK

Each holder of our Class A common stock is entitled to one vote for each share held of record. Holders of our Class A common stock have no preemptive, subscription, conversion, or redemption rights. Upon liquidation, dissolution or winding-up, the holders of Class A common stock are entitled to receive our net assets pro rata. Each holder of Class A common stock is entitled to receive ratably any dividends declared by our board of directors out of funds legally available for the payment of dividends. We have not paid any dividends on our common stock and do not contemplate doing so in the foreseeable future. We anticipate that any earnings generated from operations will be used to finance our growth.

As of December 31, 2011, we had 12,418,388 shares of Class A common stock issued and outstanding.

CLASS B COMMON STOCK

Each holder of Class B Common Stock has voting rights equal to 100 shares of Class A Common Stock. Holders of Class B Common Stock are entitled to receive dividends in the same proportion as the Class B Common Stock conversion rights have to Class A Common Stock. There are 50,000,000 shares of our Class B Common Stock authorized and no shares issued and outstanding. A holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of shares of Class B Common Stock being converted by a 20% discount of the lowest price that the Company had ever issued its Class A Common Stock. Upon our liquidation, dissolution, or winding-up, holders of Class B Common Stock will be entitled to receive distributions.

As of December 31, 2011, there were 10,000 shares of Class B Common Stock issued and outstanding.

CLASS C COMMON STOCK

Each holder of our Class C Common Stock is entitled to 1 vote for each 1,000 shares held of record. Holders of our Class C Common Stock have no preemptive, subscription, conversion, or redemption rights. Shares of Class C Common Stock are not convertible into Class A Common Stock. Upon liquidation, dissolution or winding-up, the holders of Class C Common Stock are not entitled to receive our net assets pro rata.

As of December 31, 2011, there were 20,000,000 shares of our Class C Common Stock authorized and no shares were issued or outstanding.

OPTIONS AND WARRANTS

On December 12, 2005, the Company adopted the 2005 Stock Incentive Plan and the 2005 Directors’ and Officers’ Stock Incentive Plan (the “Plan”) in order to attract and retain qualified personnel. Under the Plan, the Board of Directors (the "Board"), in its discretion may grant stock options (either incentive or non-qualified stock options) to officers and employees to purchase the Company's common stock.

The Company did not issue any stock options for the years ended December 31, 2011 and 2010.

EQUITY COMPENSATION PLAN INFORMATION

Plan Category	Shares to be issued upon exercise of outstanding options, warrants or stock rights (#)	Weighted average exercise price ($)	Number of Securities Available for Future Issuance (#)
Approved by Shareholders:
Stock Incentive Plan	0	n/a	0

Not approved by Shareholders:
Stock Incentive Plan	0	n/a	2,500 * *2,000,000 pre-reverse split

The Company’s 2005 Stock Incentive Plan (the “Plan”) was approved by the Board of Directors, and became effective, on December 12, 2005. The shares that may be delivered or purchased or used for reference purposes under the Plan shall not exceed an aggregate of twenty percent (20%) of the issued and outstanding shares of the Company’s Class A Common Stock, no par value per share, as determined by the Board from time to time. The purpose of the Plan is to (i) provide long-term incentives and rewards to employees, directors, independent contractors or agents of the Company and its subsidiaries; (ii) assist the Company in attracting and retaining employees, directors, independent contractors or agents with experience and/or ability on a basis competitive with industry practices; and (iii) associate the interests of such employees, directors, independent contractors or agents with those of the Company’s stockholders. Awards under the Plan may include, but need not be limited to, stock options (including non-statutory stock options and incentive stock options, stock appreciation rights, warrants, dividend equivalents, stock awards, restricted stock, phantom stock, performance shares or other securities or rights that the Board of Directors determines to be consistent with the objectives and limitations of the Plan. Under the Plan, the Board may provide for the issuance of shares of the Company’s Class A Common Stock as a stock award for no consideration other than services rendered or, to the extent permitted by applicable state law, to be rendered.

The Company’s 2005 Directors’ and Officers’ Stock Incentive Plan (the “D&O Plan”) was approved by the Board of Directors, and became effective, on December 12, 2005. The shares that may be delivered or purchased or used for reference purposes under the D&O Plan shall not exceed an aggregate of twenty percent (20%) of the issued and outstanding shares of the Company’s Class A Common Stock, no par value per share, as determined by the Board from time to time. The purpose of the D&O Plan is to (i) provide long-term incentives and rewards to officers and directors of the Company and its subsidiaries; (ii) assist the Company in attracting and retaining officers and directors, with experience and/or ability on a basis competitive with industry practices; and (iii) associate the interests of such officers and directors with those of the Company’s stockholders.. Awards under the D&O Plan may include, but need not be limited to, stock options (including non-statutory stock options and incentive stock options), stock appreciation rights, warrants, dividend equivalents, stock awards, restricted stock, phantom stock, performance shares or other securities or rights that the Board of Directors determines to be consistent with the objectives and limitations of the D&O Plan. Under the D&O Plan, the Board may provide for the issuance of shares of the Company’s Class A Common Stock as a stock award for no consideration other than services rendered or, to the extent permitted by applicable state law, to be rendered.

The Company did not issue any stock options or shares under either stock incentive plans listed above for the years ended December 31, 2011 and 2010.

The Company had no outstanding equity awards for its executive officers at the end of the most recent completed fiscal year.

DEBT

On March 30, 2007, the Company issued a Secured Convertible Debenture (the "Debenture") to YA Global Investments (f/k/a/ Cornell Capital Partners) (“YA Global”) for the sum of $1,000,000 in exchange for a previously issued notes payable for the same amount. The Debenture has an initial term of three years, and pays interest at the rate of 5% per annum. YA Global has the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price equal to eighty percent (80%) of the lowest closing Bid Price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date. YA Global may not convert the Debenture into shares of Class A Common Stock if such conversion would result in YA Global beneficially owning in excess of 4.99% of the then issued and outstanding shares of Class A Common Stock. The Conversion Price and number of shares of Class A Common Stock issuable upon conversion of the Debenture are subject to certain exceptions and adjustment for stock splits and combinations and other dilutive events. Subject to the terms and conditions of the Debenture, the Company has the right to redeem ("Optional Redemption") a portion or all amounts outstanding under this Debenture prior to the Maturity Date at any time provided that as of the date of the Holder's receipt of a Redemption Notice (i) the Closing Bid Price of the of the Common Stock, as reported by Bloomberg, LP, is less than the Conversion Price and (ii) no Event of Default has occurred. The Company shall pay an amount equal to the principal amount being redeemed plus a redemption premium ("Redemption Premium") equal to twenty percent (20%) of the principal amount being redeemed, and accrued interest, (collectively referred to as the "Redemption Amount"). During the time that any portion of this Debenture is outstanding, if any Event of Default has occurred, the full principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration shall become at the Holder's election, immediately due and payable in cash, provided however, the Holder may request (but shall have no obligation to request) payment of such amounts in Common stock of the Company. Furthermore, on addition to any other remedies, the Holder shall have the right (but not the obligation) to convert this Debenture at any time after (x) an Event of Default or (y) the Maturity Date at the Conversion Price then in-effect. The debenture is secured by substantially all of the assets of the Company.

On June 17, 2009, Kenneth P. Glynn, President and CEO of the Company, acquired debt owed by the Company to third party creditors as follows:

(1)	Promissory Note due to Jerome Mahoney dated August 5, 2005 having a balance on June 17, 2009 of $71,756 and accrued interest of $98,379;

(2)	Deferred Compensation due to Jerome Mahoney as of June 17, 2009 equal to $319,910;

(3)	Convertible promissory note to iVoice, Inc. dated March 5, 2008 having a balance on June 17, 2009, $79,936 and accrued interest of $4,344; and

(4)	Loan from iVoice Technology, Inc. to the Company in the amount of $3,600.

The outstanding promissory note, referred to above, will bear interest at the rate of Prime plus 1.0% per annum (4.25% at December 31, 2010) on the unpaid balance until paid. Under the terms of the Promissory Note, at the option of the Promissory Note holder, principal and interest can be converted into either (i) one share of Class B Common Stock, par value $.01 per share, for each dollar owed, (ii) the number of shares of Class A Common Stock calculated by dividing (x) the sum of the principal and interest that the Note holder has requested to have prepaid by (y) eighty percent (80%) of the lowest issue price of Class A Common Stock since the first advance of funds under this Note, or (iii) payment of the principal of this Promissory Note, before any repayment of interest. The Board of Directors of the Company maintains control over the issuance of shares and may decline the request for conversion of the repayment into shares of the Company.

On March 5, 2008, the Company converted its outstanding accounts payable to iVoice, Inc. for unpaid administrative services in the amount of $50,652 into a convertible promissory note at the rate of prime plus 1 percent per annum. Additional amounts of $42,209 were added to this note based on any unpaid administrative services, and will accrue interest at the above specified rate from date of advance until paid. On June 17, 2009, Kenneth P. Glynn (a related party) acquired this debt from iVoice, Inc. The Note holder may elect payment of the principal and/or interest, at the its sole discretion, owed pursuant to this Note by requiring the Company to issue either: (i) one Class B common stock share of the Company par value $.01 per share, for each dollar owed, (ii) the number of Class A common stock shares of the Company calculated by dividing (x) the sum of the principal and interest that the Note holder has decided to have paid by (y) eighty percent (80%) of the lowest issue price of Class A common stock since the first advance of funds under this Note, or (iii), payment of the principal of this Note, before any repayment of interest.

On June 1, 2009 and June 2, 2009, the Company issued two (2) one-year promissory notes in the aggregate of $37,000 to GlynnTech, Inc, for GlynnTech to assume a like amount of current obligations that the Company was unable to pay from current operations. The debt is due on or before the 1st anniversary and is interest free. On June 22, 2011, the Company had defaulted on the terms of the 2nd wrap-around agreement and as such, the default interest rate was increased retroactively to 24.99% on the remaining balance of the debt.

On June 18, 2009, the Company acquired the patent rights and technology relating to cancer drug delivery systems developed by GlynnTech, Inc. by the issuance of three (3) $100,000 one-year promissory notes. The promissory notes are due on or before the 1st anniversary of the notes and are interest free.

On June 8, 2010 and June 22, 2010, the Company executed two wrap-around agreements, in an aggregate of $337,000, to assign amounts due under various Promissory Notes due to GlynnTech, Inc to EPIC Worldwide, Inc. (the “Investor”). The wrap-around agreements also modified the original terms to extend the due dates by one year, to include provisions to allow the Investor to convert the amounts due into common stock at a 50% discount of the average three deep bid on the day of conversion and to increase the interest rate to 15% after a 60 day interest free period.

On July 26, 2010, the convertible debenture with YA Global Investments, LP was amended and restated in order to replace the existing debenture with five (5) debentures of $208,707.74 each. The term of the debentures were amended to extend the due date until July 29, 2011. The amendments had the effect of reclassing $156,199 of non-interest bearing accrued interest into the secured convertible debentures.

On July 26, 2010, YA Global Investments, LP assigned the debentures that it held to E-Lionheart Associates, LLC (“E-Lionheart”) with an aggregate value of $1,043,539. This was done in conjunction with the execution of a Securities Purchase Agreement dated August 9, 2010 with E-Lionheart whereby E-Lionheart will purchase from the Company up to $500,000 of convertible debentures which will provide new financing for the Company. Amounts due under this debenture are due on or before August 9, 2011 and pays interest at the rate of 5% per annum. E-Lionheart has the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price equal to eighty percent (90%) of the lowest closing Bid Price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date. E-Lionheart may not convert the Debenture into shares of Class A Common Stock if such conversion would result in YA Global beneficially owning in excess of 4.99% of the then issued and outstanding shares of Class A Common Stock. During the year ended December 31, 2010, the Company received $450,000 of new funding under this agreement. During the year ended December 31, 2011, the Company received the remaining $50,000 of new funding under this agreement. On August 9, 2011, the Company had defaulted on the terms of this Debenture and as such, the full principal amount of this Debentures, together with interest and other amounts owing in respect thereof, shall become at the Holder's election, immediately due and payable in cash, provided however, the Holder may request (but shall have no obligation to request) payment of such amounts in Common stock of the Company. During the calendar year 2011, the Company notified E-Lionheart that the Company was disputing the balances due upon this debenture due to miscalculations of the effective conversion rates used by E-Lionheart and as of the date of this filing, the dispute has not been settled. The Company expects a favorable outcome to this dispute.

In 2011, the Company completed the transfer of the patent rights and technology relating to cancer drug delivery systems developed by GlynnTech, Inc. by the issuance of three (3) one-year promissory notes for the aggregate amount of $125,000. The promissory notes are due on or before the 1st anniversary of the notes and are interest free.

On August 26, 2011 and November 22, 2011, the Company issued two convertible promissory notes, in an aggregate of $65,000, to Asher Enterprises, Inc. (“Asher”). Amounts due under this notes are due on or before May 30, 2012 and August 28, 2012, respectively, and pays interest at the rate of 8% per annum. Asher has the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price equal to fifty five percent (55%) of the Average of the lowest three (3) Trading Prices of the Common Stock during the ten (10) Trading Day period immediately preceding the Conversion Date. Asher may not convert the note into shares of Class A Common Stock if such conversion would result in Asher beneficially owning in excess of 4.99% of the then issued and outstanding shares of Class A Common Stock.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis of financial condition and results of operations should be read in conjunction with our Financial Statements included in this filing.

Overview

In June 2009, the Company entered into fields of development of various products relating to solar power generating systems; portable solar powered products, such as cell phone and PDA rechargers that are solar rechargeable; solar rechargeable lantern/flashlight devices; solar backpack rechargers; solar power audio devices, such as radios; wind power generating systems; and, creative products based on proprietary positions, especially in the area of healthcare. Kenergy Scientific may seek to expand its operations through additional sales and marketing activity and the acquisition of additional businesses. Any potential acquired additional businesses may be outside the current field of operations of Kenergy Scientific. Kenergy Scientific may not be able to identify, successfully integrate or profitably manage any such business or operations. Currently, Kenergy Scientific has no plans, proposal or arrangements, either orally or in writing, regarding any proposed acquisitions and is not considering any potential acquisitions.

The Company has only one employee, that is Kenneth P. Glynn, President. At present, Mr. Glynn is not drawing his entire cash salary and portions of his salary are being deferred. It is the present intention of Mr. Glynn to continue to defer a portion of his salary for the near future, and possibly until the end of 2012. All other participants in Company activities are through purchased support services and independent contractors.

Year Ended December 31, 2011 as Compared with the Year Ended December 31, 2010

Total revenues for the years ended December 31, 2011 was $27,014, an increase of $26,198 from $816 for the year ended December 31, 2010. The increase corresponds with the opening of our first GreenSmart retail store in Flemington, NJ. The Company continues to evaluate adding additional franchise locations for its GreenSmart stores and to add more green products to our product offerings.

Gross margin increased $11,129 to $11,768 for the year ended December 31, 2011 as compared to $639 for the year ended December 31, 2010. Gross margin increased primarily as a result of the higher sales.

Total operating expenses increased $122,070 (42%) to $412,955 for the year ended December 31, 2011 as compared to $290,885 for the year ended December 31, 2010. The increases were the result of the Company investing resources in building out the GreenSmart store, increased depreciation and amortization expenses, and general increases in the back office expenses and professional fees.

Total other income (expense) for the year ended December 31, 2011 was total expense of $155,499 as compared to total expense of $4,083,232 for the year ended December 31, 2010, for a decrease of $3,927,733. These decreases are primarily attributed to the non-recurrence of the write off of $2.4 million of beneficial interest on debt conversions into stock during the prior period, the change from a loss on revaluation of derivatives in the prior year to a gain on revaluation of derivatives in the current period and the reduction in amortization of debt discount expense when compare to the prior period.

Net loss for the year ended December 31, 2011 and 2010 was $556,686 and $4,373,478, respectively. The decrease in net loss of $3,816,792 was the result of the factors discussed above.

Liquidity and Capital Resources

To date, the Company has incurred substantial cash losses, and will require financing for working capital to meet its operating obligations. We anticipate that we will require financing on an ongoing basis for the foreseeable future.

On March 30, 2007, the Company issued a Secured Convertible Debenture (the "Debenture") to YA Global Investments (f/k/a/ Cornell Capital Partners, LP) for the sum of $1,000,000 in exchange for a previously issued promissory note for the same amount (see Note 9 to the Financial Statements).

In June 2009, the Company issued an aggregate of $337,000 of one-year Promissory notes to GlynnTech, Inc. in exchange for GlynnTech to assume some of the Company’s debt and to acquire the rights to a cancer delivery system developed by GlynnTech for future development and/or licensing.

On July 26, 2010, the Company consented to the assignment of the above debentures from YA Global Investments, LP to E-Lionheart Associates, LLC (“E-Lionheart”) for an aggregate total of $1,043,539. This was done in conjunction with the execution of a Securities Purchase Agreement dated August 9, 2010 with E-Lionheart whereby E-Lionheart will purchase from the Company up to $500,000 of convertible debentures which will provide new financing for the Company. Amounts due under this debenture are due on or before August 9, 2011 and pays interest at the rate of 5% per annum. E-Lionheart has the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price equal to eighty percent (90%) of the lowest closing Bid Price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date. E-Lionheart may not convert the Debenture into shares of Class A Common Stock if such conversion would result in YA Global beneficially owning in excess of 4.99% of the then issued and outstanding shares of Class A Common Stock.

During the year ended December 31, 2011, the Company was able to raise an additional $205,000 in cash through the issuance of various convertible debts and promissory note (see Notes 9 and 10 to the financial statements).

During the year ended December 31, 2011, the Company had a net decrease in cash of $183,362. The Company’s principal sources and uses of funds were as follows:

Cash used by operating activities. The Company used $396,629 in cash for operating activities in the year ended December 31, 2011 as compared to using $197,750 for the year ended December 31, 2010. A portion of this increase was to purchase inventories for the GreenSmart retail store.

Cash used by investing activities. The Company used $166,733 and $62,045 in cash for investing activities for the years ended December 31, 2011 and 2010, respectively. These amounts were for the acquisition of the rights and technology for a cancer treatment drug delivery system developed by GlynnTech, Inc., providing for the security deposit for the GreenSmart store, the acquistion of office equipment and the filing of applications for name protection for some of the “Green” products.

Cash provided by financing activities. For the year ended December 31, 2011, the Company provided $380,000 in financing activities by the issuance of related party promissory notes, convertible debt to E-Lionheart and trade promissory notes. For the year ended December 31, 2010, the Company provided $450,000 in financing activities by the issuance of convertible debentures to E-Lionhart.

There was no significant impact on the Company’s operations as a result of inflation for the year ended December 31, 2011.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these 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 these estimates, including those related to bad debts, inventory obsolescence, intangible assets, payroll tax obligations, and litigation. We base our estimates 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 certain assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

OFF BALANCE SHEET ARRANGEMENTS

During fiscal year 2011 we did not engage in any material off-balance sheet activities nor have any relationships or arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitment or intent to provide additional funding to any such entities.

SUBSEQUENT EVENTS

On March 5, 2012, the Company amended its Certificate of Incorporation to increase the number of authorized Class A Common Stock Shares to 625,000,000, as authorized by the Board of Directors and adopted by the shareholders on February 15, 2012. The effect of this amendment was to increase the authorized shares from 125,000,000 to 625,000,000.

On March 7, 2012, the Company issued 602,410 shares of Class A common stock for repayment of $5,000 of convertible debt due to Asher Enterprises.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements and notes of this Form 10-K appear after the signature page to this Form 10-K.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures.

An evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of December 31, 2011. Based on that evaluation, management, including the Chief Executive Officer and Chief Financial Officer had concluded that the Company's disclosure controls and procedures were not effective.

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the securities Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2011 based on the criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the criteria set forth in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was not effective for the following reasons:

The deficiency was identified as the Company's limited segregation of duties amongst the Company's employees with respect to the Company's control activities. This deficiency is the result of the Company's limited number of employees. This deficiency may affect management's ability to determine if errors or inappropriate actions have taken place. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible changes in our disclosure controls and procedures.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we engaged an independent registered public accounting firm to perform, an audit on our internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

Changes in internal controls.

Management of the Company has also evaluated, with the participation of the Chief Executive Officer of the Company, any change in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal year covered by this Annual Report on Form 10-K. There was no change in the Company's internal control over financial reporting identified in that evaluation that occurred during the fiscal year covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Risk factors related to controls and procedures

The Company has limited segregation of duties amongst its employees with respect to the Company's preparation and review of the Company's financial statements due to the limited number of employees, which is a deficiency in internal controls, and if the Company fails to maintain an effective system of internal controls, it may not be able to accurately report its financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in the Company's financial reporting which could harm the trading price of the Company's stock.

Management has found it necessary to limit the Company's administrative staffing in order to conserve cash, until the Company's level of business activity increases. As a result, there is very limited segregation of duties amongst the administrative employees, and the Company and its independent public accounting firm have identified this as a deficiency in the Company's internal controls. The Company intends to remedy this deficiency by hiring additional employees and reallocating duties, including responsibilities for financial reporting, among the employees as soon as there are sufficient resources available. However, until such time, this deficiency will continue to exist. Despite the limited number of administrative employees and limited segregation of duties, management believes that the Company's administrative employees are capable of following its disclosure controls and procedures effectively.

Item 9B. Other Information.

Section 1 – Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement

On November 22, 2011, the Company issued a convertible promissory notes, in an amount of $27,500, to Asher Enterprises, Inc. (“Asher”). Amounts due under this note are due on or before August 28, 2012 and pays interest at the rate of 8% per annum. Asher has the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price equal to fifty five percent (55%) of the Average of the lowest three (3) Trading Prices of the Common Stock during the ten (10) Trading Day period immediately preceding the Conversion Date. Asher may not convert the note into shares of Class A Common Stock if such conversion would result in Asher beneficially owning in excess of 4.99% of the then issued and outstanding shares of Class A Common Stock.

In 2011, the Company completed the transfer of the patent rights and technology relating to cancer drug delivery systems developed by GlynnTech, Inc. by the issuance of three (3) one-year promissory notes for the aggregate amount of $125,000. The promissory notes are due on or before the first anniversary of the notes and are interest free.

On July 1, 2011, the Company extended the employment agreement with Mr. Glynn for an additional one (1) year period for Mr. Glynn to serve as President and Chief Executive Officer of the Company at an annual base salary of $96,000.

Section 2 - Financial Information

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On November 22, 2011, the Company issued a convertible promissory notes, in an amount of $27,500, to Asher Enterprises, Inc. (“Asher”). (See Item 1.01).

In 2011, the Company completed the transfer of the patent rights and technology relating to cancer drug delivery systems developed by GlynnTech, Inc. by the issuance of three (3) one-year promissory notes for the aggregate amount of $125,000. The promissory notes are due on or before the first anniversary of the notes and are interest free. (See Item 1.01).

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

On July 29, 2011 and August 9, 2011, the Company had defaulted on the terms of the E-Lionheart Debentures and as such, the full principal amount of this debentures, together with interest and other amounts owing in respect thereof, shall become at the Holder's election, immediately due and payable in cash, provided however, the Holder may request (but shall have no obligation to request) payment of such amounts in Common stock of the Company. During the calendar year 2011, the Company notified E-Lionheart that the Company was disputing the balances due upon this debenture due to miscalculations of the effective conversion rates used by E-Lionheart and as of the date of this filing, the dispute has not been settled.

Section 5 Corporate Governance and Management

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Item 5.07 Submission of Matters to a Vote of Security Holders.

On November 17, 2011, a majority of voting shares, through written consent in lieu of a meeting, passed a resolution approving the amendment to the Certificate of Incorporation to increase the number of authorized Class A Common Stock from 25 million to 125 million shares.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

As of the date of this filing, the Company's board of directors consists of one director. Listed below is certain information concerning individuals who currently serve as directors and executive officers of the Company.

Name	Age at December 31, 2011	Position with the Company.	Term

Kenneth P. Glynn	64	Director, President, Chief Executive Officer and Chief Financial Officer	6/09 - present

Kenneth P. Glynn. Mr. Glynn has served as the Company’s President and Chief Executive Officer and a director since June 2009. Mr. Glynn has served as President and founder of Kenergy Development Corp. since January 2009. Mr. Glynn has served as President of GlynnTech, Inc. for over twelve years.

The members of the Board of Directors do not receive additional remuneration for serving on the Board of Directors.

AUDIT COMMITTEE

At December 31, 2011, the Audit Committee consisted solely of Mr. Glynn. The Audit Committee has no independent members and no member that may deemed a financial expert as defined in §228.401(e) of the regulations promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended. The Company at present due to its size, cannot attract a financial expert to sit on its Board of Directors. Management is responsible for the Company’s internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s financial statements in accordance with generally accepted accounting principles and to issue a report thereon and as to management’s assessment of the effectiveness of internal controls over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes, although the members of the Audit Committee are not engaged in the practice of auditing or accounting. The Audit Committee did not meet in 2011. The Board of Directors approved an Audit Committee Charter on March 23, 2006. As of this date, the Audit Committee operates pursuant to this Audit Committee Charter.

CORPORATE GOVERNANCE

Director Independence

Audit Committee

As of the date of this filing, the Company’s audit committee currently consists of Mr. Glynn. Mr. Glynn is not considered an “independent member” of the audit committee under the independence standards set forth in Section 4350(d)(2) of the NASDAQ Marketplace Rules.

Nominating Committee

The Company does not have a standing nominating committee or a committee performing similar functions, as the Board of Directors consists of only one member. Due to the Company’s size, it finds it difficult to attract individuals who would be willing to accept membership on the Company’s Board of Directors. Therefore, with only one member of the Board of Directors, the full Board of Directors would participate in nominating candidates to the Board of Directors. The Company did not have an annual meeting of shareholders in the past fiscal year.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

As the Company has no class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) there was no required to file Forms 3,4 or 5, as required by Section 16(a) of the Exchange Act.

Code of Ethics

The Board of Directors adopted a Code of Ethics for its chief executive officer and chief financial. The Code of Ethics will be provided to any person without charge, upon request. Requests should be directed to the Investor Relations Department at the Company's corporate headquarters. The Code of Ethics was adopted by the Board of Directors on March 23, 2006.

ITEM 11. EXECUTIVE COMPENSATION.

The following table sets forth compensation information for services rendered by certain of our executive officers in all capacities during the last two completed fiscal years. The following information includes the dollar value of base salaries and certain other compensation, if any, whether paid or deferred.

Summary Compensation Table

Name and Position(s)	Year	Salary ($)	All Other Compensation ($)	Total Compensation ($)

Kenneth P. Glynn(1)	2011	$96,000	$0	$96,000
President and Chief	2010	$96,000	$0	$96,000
Executive Officer
(1)	Mr. Glynn has been President and Chief Executive Office since June 16, 2009. Mr. Glynn has deferred all cash compensation in 2010 and a portion of 2011 and is currently not drawing a salary until such time as the Company receives additional funding.

Compensation of Directors

The Company does not have any outside directors and has not paid any employee director fees.

Aggregate Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
Name	Shares Acquired on Exercise (#)	Value Realized ($)	Number of Securities Underlying Unexercised Options/SARs at FY- End (#) Exercisable/Unexercisable	Value of Unexercised In-the- Money Options/SARs at FY-End ($) Exercisable/Unexercisable

None	0	0	0	0 / 0

EMPLOYMENT CONTRACTS

Kenneth P. Glynn

The Company entered into an employment agreement with Mr. Glynn as of July 1, 2009 and it was extended on July 1, 2010 and July 1, 2011. Pursuant to the terms of the employment agreement and extension, Mr. Glynn will serve as the Company’s President and Chief Executive Officer until June 30, 2012. As consideration, the Company agreed to pay Mr. Glynn a base salary of $96,000 during the term. In addition, the Company agreed to pay Mr. Glynn incentive compensation based on the amount of total revenues collected by the Company. If the Company records and collects total revenues in an amount greater than $300,000 but less than $2,000,000, Mr. Glynn will receive a bonus equal to 7.5% of the total revenues of the Company. If the Company records and collects total revenues in an amount greater than $2,000,000, in addition to the 7.5% bonus, Mr. Glynn will also receive a bonus equal to 3.5% of the total revenues of the Company in excess of $2,000,000. However, if the Company’s pre-tax profit margin for the year is less than 35%, Mr. Glynn’s aggregate bonus will be reduced by 35%.

In the event Mr. Glynn’s employment agreement is terminated due to his death or disability or by the Company with or without cause, Mr. Glynn will receive the portion of his salary earned up until the date of his termination. Under his agreement, “cause” means (1) any material breach of the agreement by Mr. Glynn, (2) Mr. Glynn’s failure to perform his duties under the employment agreement to the reasonable satisfaction of the board of directors, (3) any material act, or material failure to act, by Mr. Glynn in bad faith and to the material detriment of the Company, (4) commission of a material act involving moral turpitude, dishonesty, unethical business conduct, or any other conduct which significantly impairs the reputation of the Company, its subsidiaries or affiliates or (5) the conviction of Mr. Glynn of a felony. The employment agreement restricts Mr. Glynn from competing with the Company during the term of the agreement and for eighteen months after he is no longer employed by the Company.

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

The following table sets forth, as of April 9, 2012, information with respect to the beneficial ownership of our voting securities by (i) each person known by us to beneficially own more than five percent of the voting securities, (ii) each director, (iii) each executive officer and (iv) all directors and executive officers as a group.

As of April 9, 2012, a total of 13,020,798 shares of Class A Common Stock outstanding and 10,000 shares of our Class B Common Stock were outstanding. Each share of Class A common stock is entitled to one vote on matters on which holders of common stock are eligible to vote. Every holder of the outstanding shares of the Class B Common Stock Shares has voting rights equal to 100 shares of Class A Common Stock.

The number of shares beneficially owned is determined under rules promulgated by the Securities and Exchange Commission, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under those rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days of April 9, 2012, through the exercise or conversion of any stock option, convertible security, warrant or other right. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of capital stock listed as owned by that person or entity.

Name	Title of Class	Common Stock Beneficially Owned	Percentage Ownership
Kenneth P. Glynn,	Class A Common Stock	46,124,650(1)	89%
Director, President and Chief	Class B Common Stock	258,909(2)	100%
Executive Officer	Class C Common Stock	0	0%

E-Lionheart Associates, LLC	Class A Common Stock	70,983,285(3)	85%
245 Main Street, Suite 390	Class B Common Stock	0	0%
White Plains, NY 10601	Class C Common Stock	0	0%

Asher Enterprises, Inc.	Class A Common Stock	8,962,364(4)	41%
1 Linden Place, Suite 207	Class B Common Stock	0	0%
Great Neck, NY 11021	Class C Common Stock	0	0%

All directors and executive	Class A Common Stock	46,124,650	89%
officers as a group	Class B Common Stock	258,909	100%
	Class C Common Stock	0	0%

(1) Gives the effect to: a) 7,132,329 shares of our Class A common stock held by Mr. Glynn, (b) 1,506,024 shares of our Class A common stock issuable upon conversion of 10,000 shares of our Class B common stock held by Mr. Glynn, and c) the right of Mr. Glynn, pursuant to a promissory notes and loans executed by the Company in favor of Mr. Glynn in the amount of $248,909 ($79,936 of indebtedness, $156,000 of deferred compensation plus accrued and unpaid interest of $12,973) to convert amounts owing under such promissory note, into 248,909 shares of Class B Common Stock which are convertible into approximately 37,486,295 shares of our Class A Common Stock, which is at a rate equal to 80% of the lowest price that the Company issued shares of Class A Common Stock subsequent to the date of the note.

(2) Gives the effect to: a) 10,000 shares of our Class B common stock held by Mr. Glynn and (b) Mr. Glynn may at his option convert the $235,936 of promissory note and deferred compensation plus accrued interest of $12,973 held by him into 248,909 shares of Class B Common Stock at a rate of one dollar per share.

(3) Gives the effect to the right of E-Lionheart, LLC, pursuant to the convertible debentures in the amount of $1,194,508 ($1,126,123 of indebtedness plus accrued and unpaid interest of $68,385) to convert amounts owing under such convertible debenture, into 70,983,285 shares of our Class A Common Stock, which is at a rate between 80% and 90% of the lowest closing Bid Price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date.

(4) Gives the effect to the right of Asher Enterprises, Inc. pursuant to the convertible debentures in the amount of $98,586 ($97,500 of indebtedness plus accrued and unpaid interest of $1,086) to convert amounts owing under such convertible debenture, into 8,962,364 shares of our Class A Common Stock, which is at a rate of 55% of the average of the lowest three Trading Prices of the Common Stock during the ten Trading Day period immediately preceding the Conversion Date.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

Pursuant to two Assignment and Assumption Agreements dated each June 1, 2009 and June 2, 2009, the Company issued two (2) one-year promissory notes in the aggregate of $37,000 to GlynnTech, Inc, for GlynnTech to assume a like amount of current obligations that the Company was unable to pay from current operations. The debt is due on or before the 1st anniversary and is interest free. GlynnTech is a private company 100% owned by Kenneth Glynn.

Pursuant to an Intellectual Property Transfer Purchase Agreement dated June 18, 2009, the Company acquired the patent rights and technology relating to cancer drug delivery systems developed by GlynnTech, Inc. by the issuance of an aggregate of $425,000 in one-year promissory notes. The promissory notes are due on or before the 1st anniversary of the notes and are interest free.

On June 17, 2009, Kenneth P. Glynn, President and Chief Executive Officer of the Company, acquired debt owed by the Company to third party creditors as follows:

(1)	Promissory Note due to Jerome Mahoney dated August 5, 2005 (the “Promissory Note”) having a balance on June 17, 2009 of $71,756 and accrued interest of $98,379;

(2)	Deferred Compensation due to Jerome Mahoney as of June 17, 2009 equal to $319,910;

(3)	Convertible Promissory Note to iVoice, Inc. dated March 5, 2008 the (“Convertible Note”) having a balance on June 17, 2009, $79,936 and accrued interest of $4,344; and

(4)	Loan from iVoice Technology, Inc. to the Company in the amount of $3,600.

The Promissory Note and the Convertible Note referred to above, will bear interest at the rate of Prime plus 1.0% per annum (4.25% at December 31, 2010) on the unpaid balance until paid. Under the terms of each the Promissory Note and the Convertible Note , at the option of the holder, principal and interest can be converted into either (i) one share of Class B Common Stock, par value $.01 per share, for each dollar owed, (ii) the number of shares of Class A Common Stock calculated by dividing (x) the sum of the principal and interest that the Note holder has requested to have prepaid by (y) eighty percent (80%) of the lowest issue price of Class A Common Stock since the first advance of funds under each the Promissory Note and the Convertible Note, or (iii) payment of the principal of each the Promissory Note and the Convertible Note before any repayment of interest. The Board of Directors of the Company maintains control over the issuance of shares and may decline the request for conversion of the repayment into shares of the Company.

The amount of deferred compensation, referred to above, is added to the outstanding promissory note for calculations of accrued interest and is payable in the form of cash, debt, or shares of our Class B Common Stock.

On May 27, 2010, the Company issued an aggregate of 7,057,328 (5,645,862,500 pre-reverse split) shares of Class A common stock and 10,000 shares of Class B common stock to Mr. Glynn in settlement of $509,425 (items #1 and #2 above) of promissory notes and accrued interest due to Mr. Glynn. These shares contain a restrictive legend which will limit Mr. Glynn from liquidating these into the open market.

On July 1, 2011, the Company extended the employment agreement with Mr. Glynn for an additional one (1) year period for Mr. Glynn to serve as President and CEO of the Company at an annual base salary of $96,000. In 2011, Mr. Glynn did not draw his entire cash salary and a portion of his earned salary is being deferred. As of December 31, 2011, the total amount due to Mr. Glynn for unpaid compensation is $156,000. In addition, the Company agreed to pay Mr. Glynn incentive compensation based on the amount of total revenues collected by the Company. If the Company records and collects total revenues in an amount greater than $300,000 but less than $2,000,000, Mr. Glynn will receive a bonus equal to 7.5% of the total revenues of the Company. If the Company records and collects total revenues in an amount greater than $2,000,000, in addition to the 7.5% bonus, Mr. Glynn will also receive a bonus equal to 3.5% of the total revenues of the Company in excess of $2,000,000. However, if the Company’s pre-tax profit margin for the year is less than 35%, Mr. Glynn’s aggregate bonus will be reduced by 35%.

On July 1, 2011, the Company extended the Administrative Services Agreement with GlynnTech, Inc to provide back office administrative support to the Company. The administrative services agreement was for an initial term of one year and was extended for an additional one-year periods at the Company’s request. The amended fees are $7,500 per month but may be reduced in scope or eliminated at any time upon 90 days’ prior written notice by the Company to GlynnTech.

Director Independence

As of the date of this filing, the Company’s board of directors currently consists of Kenneth P. Glynn. Mr. Glynn is not considered an “independent director” as such term is defined in Section 4200(a)(15) of the NASDAQ Marketplace Rules. Due to the Company’s size, stage of development and ability to compensate qualified candidates, the Company is unable to attract independent members of the Board of Directors.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

As no independent registered public accounting firm was engaged by the Company for the fiscal years ended December 31, 2010 and 2011, no fees are listed.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	List the following documents filed as part of the report

1.	The following financial statements of the Company are included in Part II, Item 8, "Financial Statements and Supplementary Data" of this report: · Balance Sheets · Statement of Operations · Statement of Changes in Stockholders’ Deficit · Statement of Cash Flows · Notes to Financial Statements

All schedules are omitted because the required information is inapplicable or the information is presented in the financial statements or related notes.

(b) Exhibits:

The following exhibits are incorporated herein by reference or are filed or furnished with this report as indicated below:

No. Description

3.1	Amended and Restated Certificate of Incorporation of SpeechSwitch, Inc. (filed as Exhibit 3.1 to SpeechSwitch, Inc.'s Amendment No. 1 to Form SB-2 Registration Statement, File No. 333-120507, filed on January 14, 2005, and incorporated herein by reference)

3.2	By-laws of SpeechSwitch, Inc. (filed as Exhibit 3.2 to SpeechSwitch, Inc.'s Amendment No. 1 to Form SB-2 Registration Statement, File No. 333-120507, filed on January 14, 2005, and incorporated herein by reference)

3.3	Amended to the Certificate of Incorporation of SpeechSwitch, Inc. (filed as Exhibit 3.1 to Kenergy Scientific, Inc.'s form 8-K, filed on February 3, 2011, File No. 333-120507, and incorporated herein by reference)

3.4	Amended to the Certificate of Incorporation of Kenergy Scientific, Inc. (filed as Exhibit 3.1 to Kenergy Scientific, Inc.'s form 8-K, filed on May 5, 2011, File No. 333-120507, and incorporated herein by reference)

3.5	Amended to the Certificate of Incorporation of Kenergy Scientific, Inc., dated November 29, 2011 and filed herein.

4.1	SpeechSwitch, Inc. 2005 Stock Incentive Plan (filed on Form S-8 as Exhibit 4.1 filed with the Commission on June 22, 2007 and incorporated herein by reference.)

4.2	SpeechSwitch, Inc. 2005 Directors' and Officers' Stock Incentive Plan, (filed on Form S-8 as Exhibit 4.2 filed with the Commission on June 22, 2007 and incorporated herein by reference.)

10.1	Promissory Note dated June 1, 2009 payable to GlynnTech, Inc. for the sum of $25,000 (filed as Exhibit 10.11 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.2	Assignment and Assumption Agreement by and between SpeechSwitch, Inc. and GlynnTech, Inc. dated June 1, 2009. (filed as Exhibit 10.12 to SpeechSwitch, Inc’s Form 10- for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.3	Promissory Note dated June 2, 2009 payable to GlynnTech, Inc. for the sum of $12,000. (filed as Exhibit 10.13 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.4	Assignment and Assumption Agreement by and between SpeechSwitch, Inc. and GlynnTech, Inc. dated June 2, 2009. (filed as Exhibit 10.14 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.5	Promissory Note dated June 18, 2009 payable to GlynnTech, Inc. for the sum of $100,000. (filed as Exhibit 10.15 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.6	Promissory Note dated June 18, 2009 payable to GlynnTech, Inc. for the sum of $100,000. (filed as Exhibit 10.16 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.7	Promissory Note dated June 18, 2009 payable to GlynnTech, Inc. for the sum of $100,000. (filed as Exhibit 10.17 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.8	Intellectual Property Transfer Purchase Agreement by and between SpeechSwitch, Inc. and GlynnTech, Inc. dated June 18, 2009. (filed as Exhibit 10.18 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.9	Wrap-around Agreement, dated June 8, 2010, between SpeechSwitch, Inc., GlynnTech, Inc. and Epic Worldwide, Inc. (filed as Exhibit 10.1 to SpeechSwitch, Inc’s Form 10-Q for the period ended June 30, 2010 and incorporated herein by reference.)

10.10

Wrap-around Agreement, dated June 22, 2010, between SpeechSwitch, Inc., GlynnTech, Inc. and Epic Worldwide, Inc. (filed as Exhibit 10.2 to SpeechSwitch, Inc’s Form 10-Q for the period ended June 30, 2010 and incorporated herein by reference.)

10.11

Amended and Restated Secured Convertible Debenture (SSWC-2-1) between SpeechSwitch, Inc and YA Global Investments, LP dated July 26, 2010. (filed as Exhibit 10.1 to SpeechSwitch, Inc’s Form 10-Q for the period ended September 30, 2010 and incorporated herein by reference.)

10.12

Security Agreement between SpeechSwitch, Inc and YA Global Investments, dated July 26, 2010. (filed as Exhibit 10.2 to SpeechSwitch, Inc’s Form 10-Q for the period ended September 30, 2010 and incorporated herein by reference.)

10.13

Intellectual Property Security Agreement between SpeechSwitch, Inc and YA Global Investments, LP dated July 26, 2010. (filed as Exhibit 10.3 to SpeechSwitch, Inc’s Form 10-Q for the period ended September 30, 2010 and incorporated herein by reference.)

10.14

Purchase Agreement between E-Lionheart Associates, LLC, YA Global Investments, LP, and SpeechSwitch, Inc dated July 26, 2010. (filed as Exhibit 10.4 to SpeechSwitch, Inc’s Form 10-Q for the period ended September 30, 2010 and incorporated herein by reference.)

10.15

Assumption and Assignment Agreement (SSWC-2-1) between E-Lionheart Associates, LLC and YA Global Investments, LP dated July 26, 2010. (filed as Exhibit 10.5 to SpeechSwitch, Inc’s Form 10-Q for the period ended September 30, 2010 and incorporated herein by reference.)

10.16

Securities Purchase Agreement between E-Lionheart Associates, LLC and SpeechSwitch, Inc dated August 9, 2010. (filed as Exhibit 10.6 to SpeechSwitch, Inc’s Form 10-Q for the period ended September 30, 2010 and incorporated herein by reference.)

10.17

Convertible Debenture between E-Lionheart Associates, LLC and SpeechSwitch, Inc dated July 23, 2010. (filed as Exhibit 10.7 to SpeechSwitch, Inc’s Form 10-Q for the period ended September 30, 2010 and incorporated herein by reference.)

10.18

Administrative Services Agreement, dated July 1, 2011, between GlynnTech, Inc. and Kenergy Scientific, Inc. (filed as Exhibit 10.1 to Kenergy Scientific, Inc’s Form 10-Q for the period ended September 30, 2011 and incorporated herein by reference.)

10.19

Promissory Note, dated June 15, 2011, between Stuart W. DeJonge and Kenergy Scientific, Inc. (filed as Exhibit 10.2 to Kenergy Scientific, Inc’s Form 10-Q for the period ended September 30, 2011 and incorporated herein by reference.)

10.20

Promissory Note, dated July 12, 2011, between Opal Marketing Corp and Kenergy Scientific, Inc. (filed as Exhibit 10.3 to Kenergy Scientific, Inc’s Form 10-Q for the period ended September 30, 2011 and incorporated herein by reference.)

10.21

Promissory Note, dated July 22, 2011, between Charles M. Basner and Kenergy Scientific, Inc. (filed as Exhibit 10.4 to Kenergy Scientific, Inc’s Form 10-Q for the period ended September 30, 2011 and incorporated herein by reference.)

10.22

Convertible Promissory Note, dated August 26, 2011, between Asher Enterprises, Inc. and Kenergy Scientific, Inc., for the sum of $37,500 (filed as Exhibit 10.5 to Kenergy Scientific, Inc’s Form 10-Q for the period ended September 30, 2011 and incorporated herein by reference.)

10.23

Lease Agreement, dated January 15, 2011, between Flemington Mall, LLC and Kenergy Scientific, Inc. (filed as Exhibit 10.6 to Kenergy Scientific, Inc’s Form 10-Q for the period ended September 30, 2011 and incorporated herein by reference.)

10.24

Convertible Promissory Note, dated November 22, 2011, between Asher Enterprises, Inc. and Kenergy Scientific, Inc., for the sum of $27,500, filed herein.

10.25

Employment Agreement, dated July 1, 2011, between Kenergy Scientific, Inc. and Kenneth P. Glynn, filed herein.

10.26

Promissory Note dated December 29, 2009 payable to GlynnTech, Inc. for the sum of $50,000 filed herein.

10.27

Promissory Note dated December 29, 2009 payable to GlynnTech, Inc. for the sum of $50,000 filed herein.

10.28

Promissory Note dated December 29, 2009 payable to GlynnTech, Inc. for the sum of $25,000 filed herein.

14	Code of Ethics (filed as Exhibit 14 to Form 10-KSB for the fiscal year ended December 31, 2005 and incorporated herein by reference.)

31.1	Rule 13a-14(a)/15d-14(a) Certifications.

32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

Kenergy Scientific, Inc. April 12, 2012

By: /s/ Kenneth P. Glynn

Kenneth P. Glynn

President, Chief Executive Officer and Chief Financial Officer

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

By: /s/ Kenneth P. Glynn April 12, 2012

Kenneth P. Glynn

President, Chief Executive Officer, Chief Financial Officer

and Director

Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act

No annual report or proxy material has been sent to security holders.

EXHIBIT INDEX

The following exhibits are filed as part of this annual report or, where indicated, were heretofore filed and are hereby incorporated by reference.

No. Description

3.1	Amended and Restated Certificate of Incorporation of SpeechSwitch, Inc. (filed as Exhibit 3.1 to SpeechSwitch, Inc.'s Amendment No. 1 to Form SB-2 Registration Statement, File No. 333-120507, filed on January 14, 2005, and incorporated herein by reference)

3.2	By-laws of SpeechSwitch, Inc. (filed as Exhibit 3.2 to SpeechSwitch, Inc.'s Amendment No. 1 to Form SB-2 Registration Statement, File No. 333-120507, filed on January 14, 2005, and incorporated herein by reference)

3.3	Amended to the Certificate of Incorporation of SpeechSwitch, Inc. (filed as Exhibit 3.1 to Kenergy Scientific, Inc.'s form 8-K, filed on February 3, 2011, File No. 333-120507, and incorporated herein by reference)

3.4	Amended to the Certificate of Incorporation of Kenergy Scientific, Inc. (filed as Exhibit 3.1 to Kenergy Scientific, Inc.'s form 8-K, filed on May 5, 2011, File No. 333-120507, and incorporated herein by reference)

3.5	Amended to the Certificate of Incorporation of Kenergy Scientific, Inc., dated November 29, 2011 and filed herein.

4.1	SpeechSwitch, Inc. 2005 Stock Incentive Plan (filed on Form S-8 as Exhibit 4.1 filed with the Commission on June 22, 2007 and incorporated herein by reference.)

4.2	SpeechSwitch, Inc. 2005 Directors' and Officers' Stock Incentive Plan (filed on Form S-8 as Exhibit 4.2 filed with the Commission on June 22, 2007 and incorporated herein by reference.)

10.1	Promissory Note dated June 1, 2009 payable to GlynnTech, Inc. for the sum of $25,000 (filed as Exhibit 10.11 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.2	Assignment and Assumption Agreement by and between SpeechSwitch, Inc. and GlynnTech, Inc. dated June 1, 2009. (filed as Exhibit 10.12 to SpeechSwitch, Inc’s Form 10- for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.3	Promissory Note dated June 2, 2009 payable to GlynnTech, Inc. for the sum of $12,000. (filed as Exhibit 10.13 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.4	Assignment and Assumption Agreement by and between SpeechSwitch, Inc. and GlynnTech, Inc. dated June 2, 2009. (filed as Exhibit 10.14 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.5	Promissory Note dated June 18, 2009 payable to GlynnTech, Inc. for the sum of $100,000. (filed as Exhibit 10.15 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.6	Promissory Note dated June 18, 2009 payable to GlynnTech, Inc. for the sum of $100,000. (filed as Exhibit 10.16 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.7	Promissory Note dated June 18, 2009 payable to GlynnTech, Inc. for the sum of $100,000. (filed as Exhibit 10.17 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.8	Intellectual Property Transfer Purchase Agreement by and between SpeechSwitch, Inc. and GlynnTech, Inc. dated June 18, 2009. (filed as Exhibit 10.18 to SpeechSwitch, Inc’s Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference.)

10.9	Wrap-around Agreement, dated June 8, 2010, between SpeechSwitch, Inc., GlynnTech, Inc. and Epic Worldwide, Inc. (filed as Exhibit 10.1 to SpeechSwitch, Inc’s Form 10-Q for the period ended June 30, 2010 and incorporated herein by reference.)

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

10.24

Convertible Promissory Note, dated November 22, 2011, between Asher Enterprises, Inc. and Kenergy Scientific, Inc., for the sum of $27,500, filed herein.

10.25

Employment Agreement, dated July 1, 2011, between Kenergy Scientific, Inc. and Kenneth P. Glynn, filed herein.

10.26

Promissory Note dated December 29, 2009 payable to GlynnTech, Inc. for the sum of $50,000 filed herein.

10.27

Promissory Note dated December 29, 2009 payable to GlynnTech, Inc. for the sum of $50,000 filed herein.

10.28

Promissory Note dated December 29, 2009 payable to GlynnTech, Inc. for the sum of $25,000 filed herein.

14	Code of Ethics (filed as Exhibit 14 to Form 10-KSB for the fiscal year ended December 31, 2005 and incorporated herein by reference.)

31.1	Rule 13a-14(a)/15d-14(a) Certifications.

32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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KENERGY SCIENTIFIC, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2011 and 2010

KENERGY SCIENTIFIC, INC.

FINANCIAL STATEMENTS

CONTENTS

	Page

FINANCIAL STATEMENTS

Balance Sheets	F-1

Statements of Operations	F-2

Statements of Changes in Stockholders' Deficit	F-3

Statements of Cash Flows	F-4 to F-5

Notes to Financial Statements	F-6 to F-24

EXPLANATORY NOTE

These Financial Statements are part of the Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and do not contain audited financial statements audited by an independent registered public accounting firm for the fiscal years ended December 31, 2011 and 2010.

KENERGY SCIENTIFIC, INC.

Balance Sheets as of December 31

ASSETS	2011 Unaudited			2010 Unaudited
Current assets:
Cash and cash equivalents	$	6,960		$	190,322
Accounts receivable, net of allowance for doubtful
accounts of $2,862		477			-
Inventory and other assets		100,768			34,455
Total current assets		108,205			224,777
Property and equipment, net		11,614			-
Intangible assets, net		472,191			362,045

Total assets	$	592,010		$	586,822
LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued expenses	$	275,480		$	541,763
Due to related parties		174,307			162,307
Notes payable		140,000			-
Promissory notes payable to related parties		125,000			-
Convertible promissory note, net of unamortized debt discount of $18,824 and $34,803, respectively		61,112			45,133
Convertible debenture, net of unamortized debt discount of $45,098 and $306,250, respectively		1,196,025			866,081
Derivative liability		2,270,858			2,208,868
Total current liabilities		4,242,782			3,824,152
Commitments Stockholders’ Deficit:
Preferred stock, $1.00 par value; authorized 1,000,000 shares; no shares issued and outstanding		-			-
Common stock:
Class A – no par value; authorized 125,000,000 and 25,000,000 shares; 12,418,388 and 11,828,191 shares issued and outstanding, respectively (Note 11)		4,635,140			4,491,896
Class B - $.01 par value; authorized 50,000,000 Shares; 10,000 shares issued and outstanding, respectively		100			100
Class C - $.01 par value; authorized 20,000,000 Shares; no shares issued and outstanding		-			-
Additional paid-in capital		2,128,985			2,128,985
Accumulated deficit		(10,414,997	)		(9,858,311	)
Total stockholders’ deficit		(3,650,772	)		(3,237,330	)

Total liabilities and stockholders’ deficit	$	592,010		$	586,822

The accompanying notes are an integral part of the financial statements

F-1

KENERGY SCIENTIFIC, INC.

Statements of Operations

For the Years Ended December 31

	2011 Unaudited			2010 Unaudited

Net sales	$	27,014		$	816

Cost of sales		15,246			177

Gross profit		11,768			639

Operating expenses:
General and administrative expenses		367,982			290,855
Depreciation and amortization		44,973			30

Total operating expenses		412,955			290,885

Loss from operations		(401,187	)		(290,246	)

Other income/(expense):
Interest expense		(179,309	)		(2,545,636	)
Other income		362,931			5,250
Amortization of debt discount		(342,131	)		(571,545	)
Gain (loss) on valuation of derivative		3,010			(971,301	)

Total other income (expense)		(155,499	)		(4,083,232	)

Loss before provision for income taxes		(556,686	)		(4,373,478	)

Provision for income taxes		-			-
Net loss attributable to common shares	$	(556,686	)	$	(4,373,478	)

Basic and diluted loss per common share	$	(0.04	)	$	(0.64	)

Weighted average number of shares outstanding:
Basic and diluted		12,407,311			6,881,072

The accompanying notes are an integral part of the financial statements.

F-2

KENERGY SCIENTIFIC, INC.

Statements of Changes in Stockholders’ Deficit (Unaudited)

	Preferred Stock				Common Stock A					Common Stock B				Common Stock C
	Shares		Amount		Shares			Amount		Shares		Amount		Shares		Amount		Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Deficit
Balance at January 1, 2010		-	$	-		1,400,096,193		$	806,814		-	$	-		-	$	-	$	2,119,085	$	(5,484,833	)	$	(2,558,934	)

Common stock issued for conversion of debt and deferred compensation		-		-		5,645,862,500			1,750,217		10,000		100		-		-		9,900		-			1,760,217
Common stock issued for repayment of convertible debenture		-		-		68,000,000			157,080		-		-		-		-		-		-			157,080
Common stock issued for repayment of convertible debt		-		-		556,825,000			752,227		-		-		-		-		-		-			752,227
Common stock issued for repayment of convertible debenture		-		-		1,791,769,350			1,025,558		-		-		-		-		-		-			1,025,558
Net (loss) for the year ended December, 31, 2010		-		-		-			-		-		-		-		-		-		(4,373,478	)		(4,373,478	)
Balance at December 31, 2010		-	$	-		9,462,553,043		$	4,491,896		10,000	$	100		-	$	-	$	2,128,985	$	(9,858,311	)	$	(3,237,330	)

Common stock issued for repayment of convertible debt		-		-		462,077,400			143,244		-		-		-		-		-		-			143,244
Effect of 1:800 reverse stock split		-		-		(9,912,212,055	)		-		-		-		-		-		-		-			-
Net (loss) for the year ended December, 31, 2011		-		-		-			-		-		-		-		-		-		(556,686	)		(556,686	)
Balance at December 31, 2011		-	$	-		12,418,388		$	4,635,140		10,000	$	100		-	$	-	$	2,128,985	$	(10,414,997	)	$	(3,650,772	)

The accompanying notes are an integral part of the financial statements.

F-3

KENERGY SCIENTIFIC, INC.

Statements of Cash Flows

For the Years Ended December 31,


	2011 Unaudited			2010 Unaudited
Cash flows from operating activities:
Net (loss)	$	(556,686	)	$	(4,373,478	)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Depreciation and amortization of intangibles		44,973			30
(Gain) loss on valuation of derivative		(3,010	)		971,301
Amortization of discount on debt		342,131			571,545
Beneficial interest on conversion of debt		97,036			2,493,449
(Gain) on extinguishment of debt		(362,931	)		-

Changes in certain assets and liabilities:
Increase in accounts receivable		(477	)		-
Increase in inventory and other assets		(66,313	)		(34,455	)
Increase in accounts payable and
accrued expenses		96,648			59,988
Increase in due to related parties		12,000			114,307
(Decrease) in deferred maintenance contracts		-			(437	)

Net cash (used in) operating activities		(396,629	)		(197,750	)

Cash flows from investing activities:
Acquisition of office equipment		(12,858	)		-
Security deposit on GreenSmart retail store		(21,375	)		-
Acquisition of intangible assets		(132,500	)		(62,045	)

Net cash (used in) investing activities		(166,733	)		(62,045	)

Cash flows from financing activities:
Issuance of related party debt		125,000			-
Issuance of trade debt		255,000			450,000

Net cash provided by financing activities		380,000			450,000

Net increase (decrease) in cash and cash equivalents		(183,362	)		190,205

Cash and cash equivalents, beginning of year		190,322			117

Cash and cash equivalents, end of year	$	6,960		$	190,322

Supplemental Schedule of Cash Flow Information:
Cash Paid During the Year:
Taxes Paid	$	-		$	-
Interest Paid	$	-		$	-

Non cash transactions:
Related party notes converted to convertible debentures	$	-		$	337,000
Issuance of promissory note for purchase of intangible assets	$	125,000		$	-

The accompanying notes are an integral part of the financial statements.

F-4

KENERGY SCIENTIFIC, INC.

Statements of Cash Flows (Unaudited)

Supplemental Schedule of Non-Cash Financing Activities:

For the year ended December 31, 2011:

a)	The Company issued 577,597 (462,077,400 pre-reverse split) shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $143,244. The difference in the market value and the reduction in debt of $46,208 was charged to beneficial interest in the amount of $97,036.

b)	The Company issued an aggregate of $125,000 of Promissory Notes to GlynnTech, Inc. to make the remaining payment on the acquisition of the cancer treatment drug delivery system developed and patented by GlynnTech, Inc.

For the year ended December 31, 2010:

The Company executed two wrap-around agreements, in an aggregate of $337,000, to assign amounts due under various Promissory Notes from GlynnTech, Inc to EPIC Worldwide, Inc. The Company was in default on the original notes and this allowed the Company to extend the payment terms for an additional year while the Company attains alternate financing. (See note 9 for terms of these agreements.)

On July 26, 2010, the convertible debenture with YA Global Investments, LP was amended and restated in order to replace the existing debenture with five (5) debentures of $208,707.74 each. The amendments had the effect of reclassifying $156,199 of non-interest bearing accrued interest into the secured convertible debenture. (See note 9 for terms of these agreements.)

The Company issued an aggregate of 696,031 (556,825,000 pre-reverse split) shares of Class A common stock for repayment of convertible debt in lieu of cash, valued at $752,226. The difference in the market value and the reduction in debt of $287,000 was charged to beneficial interest in the amount of $465,226.

The Company issued 2,239,712 (1,791,769,350 pre-reverse split) shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $1,025,558. The difference in the market value and the reduction in debt of $371,208 was charged to beneficial interest in the amount of $654,350.

h)	The Company issued 85,000 (68,000,000 pre-reverse split) shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $157,080. The difference in the market value and the reduction in debt of $34,000 was charged to beneficial interest in the amount of $123,080.

The accompanying notes are an integral part of the financial statements.

F-5

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

NOTE 1 - BACKGROUND

In September 2004, the Board of Directors of iVoice, Inc., the former parent of the Company, resolved to pursue the separation of iVoice software business into three publicly owned companies. SpeechSwitch, Inc. (“SpeechSwitch” or “Company”) was incorporated under the laws of New Jersey on November 10, 2004 as a wholly owned subsidiary of iVoice, Inc. ("iVoice"). The Company received by assignment all of the interests in and rights and title to, and assumed all of the obligations of, all of the agreements, contracts, understandings and other instruments of iVoice Technology 3, Inc., a Nevada corporation and affiliate of the Company.

On August 4, 2005, the Company received notice from the SEC that the registration statement to effectuate the spin-off of the SpeechSwitch from iVoice was declared effective and the Company immediately embarked on the process to spin off the SpeechSwitch from iVoice.

On August 5, 2005, the spin-off transaction was accomplished, by the assignment, contribution and conveyance of certain intellectual property, representing the software codes of speech recognition, and certain accrued liabilities and related party debt into SpeechSwitch (the "Spin-off"). The Class A Common Stock shares of the Company were distributed to iVoice shareholders in the form of a taxable special dividend distribution.

In June 2009 Kenneth P. Glynn acquired debt owed by SpeechSwitch, Inc. to third party creditors and the company moved its headquarters from Matawan, NJ to Flemington, NJ.

In September 2009, Kenneth P. Glynn established the Kenergy Scientific Group to seek new products to be sold under the Kenergy Scientific brand. The Group acquired a small inventory of solar rechargeable lanterns for testing and eventual sales.

In 2010, the Company launched several products on its website www.greensmartstore.com and is pursuing the opening of its first company–owned GreenSmart Store. The Company may seek to expand its operations through additional sales and marketing activity and the acquisition of additional businesses.

On February 3, 2011, the Company changed its name to Kenergy Scientific, Inc.

In November 2011, the Company opened its first company-owned GreenSmart Store at the Flemington Marketplace in Flemington, NJ.

NOTE 2 - BUSINESS OPERATIONS

F-6

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.

As of December 31, 2011, the Company had a negative cash flow from operating activities, negative working capital and limited availability to raise new capital. These matters raise substantial doubt about the Company's ability to continue as a going concern. Therefore, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn, is dependent upon the Company's ability to raise capital and/or generate positive cash flow from operations.

Management plans on developing new products and increasing their sales to existing customers, to achieve profitability and to generate a positive cash flow. However, these plans are dependent upon obtaining additional capital.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Presentation

The accompanying unaudited financial statements included herein have been prepared in conformity with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC").

b) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

F-7

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

c) Revenue Recognition

The Company currently derives its revenues from the sales of portable solar powered products, solar rechargeable lantern/flashlight devices, solar backpack rechargers and clothing made from recycled products. Our products are sold directly to consumers through our own website or by direct sales. Payment is made for the products prior to delivery.

d) Product Warranties

The Company warrants the product from defects for 30 days from delivery to the customer. The Company estimates its warranty costs based on historical warranty claims experience in estimating potential warranty claims. Due to the limited sales of the Company's products, management has determined that warranty costs are immaterial and has not included an accrual for potential warranty claims. Presently, costs related to warranty coverage are expensed as incurred. Warranty claims are reviewed quarterly to verify that warranty liabilities properly reflect any remaining obligation based on the anticipated expenditures over the balance of the obligation period.

e) Research and development costs

Research and development costs are charged to operations as incurred.

f) Advertising Costs

Advertising costs are expensed as incurred and included in selling expenses. For the years ended December 31, 2011 and 2010, advertising expense amounted to $1,927 and $0, respectively.

g) Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2011 and 2010.

h) Income Taxes

The Company accounts for income taxes in accordance with ASC 740-10, “Income Taxes”, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income taxes and liabilities are computed annually for differences between the financial statement and the tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

F-8

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

i) Organization Costs

Organization costs consist primarily of professional and filing fees relating to the formation of the Company. These costs have been expensed.

j) Intangible Assets

Development, registration and maintenance costs associated with the filing and registration of patents are prepaid and amortized over the remaining life of the patent, not to exceed 20 years.

As defined in ASC 360-10-35, “Impairment or Disposal of Long-Lived Assets”, long-lived assets and certain identifiable intangibles to be held and used or disposed of by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has adopted this statement and determined that no additional impairment loss should be recognized for applicable assets at this time.

k) Income (loss) per Share

ASC 260, “Earnings Per Share” requires presentation of basic earnings per share (“basic EPS”) and diluted earnings per share (“diluted EPS”). The Company’s basic income (loss) per common share is based on net income or loss for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted income or loss per common share is based on net income or loss, divided by the weighted average number of common shares outstanding during the year, including common share equivalents, such as outstanding stock options. The computation of diluted loss per share also does not assume conversion, exercise or contingent exercise of securities due to the beneficial conversion of related party accounts as these shares that would have an anti-dilutive effect.

The computation of income (loss) per share is as follows:

	December 31, 2011			December 31, 2010
Basic net (loss) per share computation:
Net (loss) attributable to common stockholders	$	(556,686	)	$	(4,373,478	)
Weighted-average common shares outstanding		12,407,311			6,881,072
Basic net (loss) per share attributable to common stockholders	$	(0.04	)	$	(0.64	)

Diluted net (loss) per share computation:
Net (loss) attributable to common stockholders	$	(556,686	)	$	(4,373,478	)
Weighted-average common shares outstanding		12,407,311			6,881,072
Incremental shares attributable to the assumed conversion of convertible debenture and convertible promissory note		-			-
Weighted-average common shares outstanding		12,407,311			6,881,072
Basic net (loss) per share attributable to common stockholders	$	(0.04	)	$	(0.64	)

F-9

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

As of December 31, 2011, the Company had common stock equivalents of 10,053,271 due on undisputed amounts due on convertible debentures. The Company has an additional undeterminable number of common stock equivalents due on convertible debt balances that have disputed calculated values between the parties. The Company had common stock equivalents of 15,230,812 (74,872,488 pre-reverse split) at December 31, 2010.

l) Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash. As of December 31, 2011 and 2010, the Company believes it has no significant risk related to its concentration within its accounts receivable.

The Company maintains cash and cash equivalent balances at a financial institution that is insured by the Federal Deposit Insurance Corporation up to $250,000. There were no uninsured cash balances at December 31, 2011 and 2010.

m) Derivative Liabilities

The Company accounts for its embedded conversion features in its convertible debentures in accordance ASC 815-10, "Derivatives and Hedging", which requires a periodic valuation of their fair value and a corresponding recognition of liabilities associated with such derivatives, and ASC 815-40, “Contracts in Entity’s Own Equity”. The recognition of derivative liabilities related to the issuance of convertible debt is applied first to the proceeds of such issuance as a debt discount, at the date of issuance, and the excess of derivative liabilities over the proceeds is recognized as “Loss on Valuation of Derivative” in other expense in the accompanying financial statements. Any subsequent increase or decrease in the fair value of the derivative liabilities is recognized as “Other expense” or “Other income”, respectively.

n) Fair Value of Instruments

The carrying amount reported in the balance sheet for cash and cash equivalents, deposits, prepaid expenses, accounts payable, and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amount reported for notes payable approximates fair value because, in general, the interest on the underlying instruments fluctuates with market rates.

o) Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued ASU 2011-04, guidance to improve consistency in application of existing fair value measurement and disclosure requirements. The standard is intended to clarify the application of the requirements, not to establish valuation standards or affect valuation practices outside of financial reporting. The guidance was effective for interim and annual periods beginning on or after December 15, 2011, with early adoption prohibited. The adoption of this guidance did not have a material impact on the Company’s results of operations or financial condition.

F-10

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

In September 2011, the FASB issued ASU 2011-08, “Intangibles — Goodwill and Other (Topic 350).” The objective of this Update is to simplify how entities test goodwill for impairment. This Update permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The Update was effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011. The adoption of this guidance did not have a material impact on the Company’s results of operations or financial condition.

In December 2011, the FASB issued ASU 2011-11, “Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11 amends the disclosure requirements on offsetting in Section 210-20-50 which requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The amended guidance is effective for interim and annual financial periods beginning on or after January 1, 2013. We do not expect adoption of this guidance to have an impact on our financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

NOTE 5 - FAIR VALUE MEASUREMENTS

In September 2006, the FASB issued ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC 820 were effective January 1, 2008. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

ASC 820 classifies these inputs into the following hierarchy:

F-11

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

Lev Level 1 Inputs– Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Lev Level 2 Inputs– Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Lev Level 3 Inputs– Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of December 31, 2011 and 2010. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

December 31, 2011

	Level I		Level II		Level III		Total
Total Assets	$	-	$	-	$	-	$	-

Convertible promissory notes	$	-	$	61,112	$	-	$	61,112
Notes payable - related parties		-		125,000		-		125,000
Notes payable - trade		-		140,000		-		140,000
Convertible debentures		-		1,196,025		-		1,196,025
Derivative liabilities		-		2,270,858		-		2,270,858
Total Liabilities	$	-	$	3,792,995	$	-	$	3,792,995

F-12

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

December 31, 2010

	Level I		Level II		Level III		Total
Total Assets	$	-	$	-	$	-	$	-

Convertible promissory notes	$	-	$	45,133	$	-	$	45,133
Convertible debentures		-		866,081		-		866,081
Derivative liabilities		-		2,208,868		-		2,208,868
Total Liabilities	$	-	$	3,120,082	$	-	$	3,120,082

The Company’s derivatives are classified within Level 2 of the valuation hierarchy. The Company’s derivatives are valued using internal models that use as their basis readily observable market inputs, such as time value, forward interest rates, and volatility factors. Refer to Notes 8 & 9 for more discussion on derivatives.

NOTE 6 - INTANGIBLE ASSETS

Intangible assets consist of accumulated costs incurred with respect to the Company’s patent filings originally paid for by iVoice for $24,000 in May and December 2003. These assets were valued at $16,800 at the date of the spin-off from iVoice, Inc. Additional filing costs of $225 were capitalized on August 26, 2005. The Company also acquired some patent rights for $425,000. In calendar year 2010, the Company paid an additional $67,045 for fees related to work on the cancer drug delivery system, to register several “Green” trademark applications and to acquire additional patent applications in the Kenergy Development portfolio. In the calendar year 2011, the Company acquired rights to the Smart Bell patent from the inventors and paid a security deposit of $21,375 on the new GreenSmart retail store.

At December 31, 2011 and 2010, intangible assets consist of the following:

	2011			2010

Speech-enabled auto dialer	$	17,025		$	17,025
Cancer drug delivery system		435,000			310,000
“Green” trademark applications		2,045			2,045
Kenergy patent portfolio		52,500			50,000
Smart Bell		5,000			--
Less: accumulated amortization		(60,754	)		(17,025	)


Sub-total		450,816			362,045

Security deposit		21,375			--

Intangible assets, net	$	472,191		$	362,045

F-13

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

NOTE 7 - RELATED PARTY TRANSACTIONS

On June 18, 2009, the Company acquired the patent rights and technology relating to cancer drug delivery systems developed by GlynnTech, Inc. by the issuance of three (3) $100,000 one-year promissory notes. The promissory notes were due on or before the 1st anniversary of the notes and were interest free.

On June 8, 2010 and June 22, 2010, the Company executed two wrap-around agreements, in an aggregate of $337,000, to assign amounts due under these one-year promissory notes to EPIC Worldwide, Inc. The Company was in default on the original notes and this allowed the Company to extend the payment terms for an additional year while the Company attains alternate financing.

On June 17, 2009, Kenneth P. Glynn, President and CEO of the Company, acquired debt owed by the Company to third party creditors as follows:

(1)	Promissory Note due to Jerome Mahoney dated August 5, 2005 having a balance on June 17, 2009 of $71,756 and accrued interest of $98,379;

(2)	Deferred Compensation due to Jerome Mahoney as of June 17, 2009 equal to $319,910;

(3)	Convertible promissory note to iVoice, Inc. dated March 5, 2008 having a balance on June 17, 2009, $79,936 and accrued interest of $4,344; and

(4)	Loan from iVoice Technology, Inc. to SpeechSwitch, Inc. in the amount of $3,600.

The outstanding promissory note, referred to above, will bear interest at the rate of Prime plus 1.0% per annum on the unpaid balance until paid. Under the terms of the Promissory Note, at the option of the Promissory Note holder, principal and interest can be converted into either (i) one share of SpeechSwitch Class B Common Stock, par value $.01 per share, for each dollar owed, (ii) the number of shares of SpeechSwitch Class A Common Stock calculated by dividing (x) the sum of the principal and interest that the Note holder has requested to have prepaid by (y) eighty percent (80%) of the lowest issue price of Class A Common Stock since the first advance of funds under this Note, or (iii) payment of the principal of this Promissory Note, before any repayment of interest. The Board of Directors of the Company maintains control over the issuance of shares and may decline the request for conversion of the repayment into shares of the Company.

The amount of deferred compensation, referred to above, was added to the outstanding promissory note for calculations of accrued interest and is payable in the form of cash, debt, or shares of our Class B Common Stock.

F-14

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

During the year ended December 31, 2010, GlynnTech, Inc and Mr. Glynn have paid some bills on behalf of the Company. As of December 31, 2011, the aggregate amounts due for these payments is $18,307.

NOTE 8 – CONVERTIBLE PROMISSORY NOTE AND DERIVATIVE LIABILITY (RELATED PARTIES)

The Company had entered into a temporary administrative services agreement with iVoice in 2004. The administrative services agreement continued on a month-to-month basis until December 31, 2008 at which point the agreements were suspended by mutual consent of the parties.

In March 2008, the administrative services agreement was amended to provide that accrued and unpaid administrative services shall be segregated and converted into a Convertible Promissory Note. The principal and interest shall be due and payable as follows: (a) interest shall accrue monthly on the unpaid balance and shall be paid annually, and (b) principal shall be payable on demand.

F-15

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

On June 17, 2009, Kenneth P. Glynn (a related party) acquired this debt from iVoice, Inc. The Note holder may elect payment of the principal and/or interest, at the its sole discretion, owed pursuant to this Note by requiring the Company to issue either: (i) one Class B common stock share of the Company par value $.01 per share, for each dollar owed, (ii) the number of Class A common stock shares of the Company calculated by dividing (x) the sum of the principal and interest that the Note holder has decided to have paid by (y) eighty percent (80%) of the lowest issue price of Class A common stock since the first advance of funds under this Note, or (iii), payment of the principal of this Note, before any repayment of interest.

As of December 31, 2011, the outstanding balance on the Convertible Promissory Note was $79,936 plus accrued interest of $12,973.

Unless otherwise provided, this Convertible Promissory Note may be prepaid in full or in part at any time without penalty or premium. Partial prepayments shall be applied to installments due in reverse order of their maturity.

In the event of (a) default in payment of any installment of principal or interest hereof as the same becomes due and such default is not cured within ten (10) days from the due date, or (b) default under the terms of any instrument securing this Note, and such default is not cured within fifteen (15) days after written notice to maker, then in either such event the holder may, without further notice, declare the remainder of the principal sum, together with all interest accrued thereon, and the prepayment premium, if any, at once due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time. The unpaid principal of this Note and any part thereof, accrued interest and all other sums due under this Note shall bear interest at the rate of prime plus 1 percent per annum after default until paid.

The Convertible Promissory Note has a security interest in substantially all of the assets of the Company.

In accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Promissory Note met the criteria of an embedded derivative, and therefore the conversion feature of this Promissory Note needed to be bifurcated and accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes model with the following assumptions: risk free interest rate: 5.6%; expected dividend yield: 0%: expected life: 5 years; and volatility: 263.04%. The accounting guidance instructs that the conversion options are a derivative liability. As such, at March 5, 2008 the Company recorded the conversion options as a liability, recorded a debt discount of $50,652, and charged Other Expense - Loss on Valuation of Derivative for $67,530, resulting primarily from calculation of the conversion price. For the year ended December 31, 2011, the Company recorded a Gain on Valuation of Derivative in the amount of $265,822. For the year ended December 31, 2010, the Company recorded a Loss on Valuation of Derivative in the amount of $213,101.

F-16

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

NOTE 9 – CONVERTIBLE DEBENTURE AND DERIVATIVE LIABILITY

On March 30, 2007, the Company issued a Secured Convertible Debenture (the "Debenture") to YA Global Investments (f/k/a/ Cornell Capital Partners) (“YA Global”) for the sum of $1,000,000 in exchange for a previously issued notes payable for the same amount. The Debenture has a term of three years, and pays interest at the rate of 5% per annum. YA Global has the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price equal to eighty percent (80%) of the lowest closing Bid Price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date. YA Global may not convert the Debenture into shares of Class A Common Stock if such conversion would result in YA Global beneficially owning in excess of 4.99% of the then issued and outstanding shares of Class A Common Stock. The Conversion Price and number of shares of Class A Common Stock issuable upon conversion of the Debenture are subject to certain exceptions and adjustment for stock splits and combinations and other dilutive events. Subject to the terms and conditions of the Debenture, the Company has the right to redeem ("Optional Redemption") a portion or all amounts outstanding under this Debenture prior to the Maturity Date at any time provided that as of the date of the Holder's receipt of a Redemption Notice (i) the Closing Bid Price of the of the Common Stock, as reported by Bloomberg, LP, is less than the Conversion Price and (ii) no Event of Default has occurred. The Company shall pay an amount equal to the principal amount being redeemed plus a redemption premium ("Redemption Premium") equal to twenty percent (20%) of the principal amount being redeemed, and accrued interest, (collectively referred to as the "Redemption Amount"). During the time that any portion of this Debenture is outstanding, if any Event of Default has occurred, the full principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration shall become at the Holder's election, immediately due and payable in cash, provided however, the Holder may request (but shall have no obligation to request) payment of such amounts in Common stock of the Company. Furthermore, on addition to any other remedies, the Holder shall have the right (but not the obligation) to convert this Debenture at any time after (x) an Event of Default or (y) the Maturity Date at the Conversion Price then in-effect. The debenture is secured by substantially all of the assets of the Company.

On July 26, 2010, the convertible debenture with YA Global Investments, LP was amended and restated in order to replace the existing debenture with five (5) debentures of $208,707.74 each. The term of the debentures were amended to extend the due date until July 29, 2011. The amendments had the effect of reclassifying $156,199 of non-interest bearing accrued interest into the secured convertible debentures.

During the year ended December 31, 2010, the Company issued 85,000 (68,000,000 pre-reverse split) shares of Class A common stock to YA Global for repayment valued at $157,080. The difference in the market value and the reduction in debt of $34,000 was charged to beneficial interest in the amount of $123,080.

F-17

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

During the year ended December 31, 2010, YA Global Investments, LP assigned the debentures that it held to E-Lionheart Associates, LLC (“E-Lionheart”) with an aggregate value of $1,043,539. This was done in conjunction with the execution of a Securities Purchase Agreement with E-Lionheart whereby E-Lionheart will purchase from the Company up to $500,000 of convertible debentures which will provide new financing for the Company. The new convertible debentures are due on August 9, 2011 and have conversion rights essentially the same as YA Global.

During the year ended December 31, 2010, the Company issued 2,239,712 (1,791,769,350 pre-reverse split) shares of Class A common stock to E-Lionheart for repayment valued at $1,025,558. The difference in the market value and the reduction in debt of $371,208 was charged to beneficial interest in the amount of $654,350. During the year ended December 31, 2011, the Company issued an additional 577,597 (462,077,400 pre-reverse split) shares of Class A common stock to E-Lionheart for repayment valued at $143,244. The difference in the market value and the reduction in debt of $46,208 was charged to beneficial interest in the amount of $97,036.

On July 29, 2011 and August 9, 2011, the Company had defaulted on the terms of the E-Lionheart Convertible Debentures and as such, the full principal amount of these Debentures, together with interest and other amounts owing in respect thereof, shall become at the Holder's election, immediately due and payable in cash, provided however, the Holder may request (but shall have no obligation to request) payment of such amounts in Common stock of the Company.

As of December 31, 2011, the outstanding balance on the YA Global Convertible Debenture was $0 and the outstanding balance on the E-Lionheart Convertible Debentures were $626,123. During the calendar year 2011, the Company notified E-Lionheart that the Company was disputing the balances due upon this debenture due to miscalculations of the effective conversion rates used by E-Lionheart and as of the date of this filing, the dispute has not been settled. The Company expects a favorable outcome to this dispute.

In accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes model with the following assumptions: risk free interest rate: 5.6%; expected dividend yield: 0%: expected life: 3 years; and volatility: 165.62%. The accounting guidance instructs that the conversion options are a derivative liability. As such, in March 2007 the Company recorded the conversion options as a liability, recorded a debt discount of $1,000,000, and charged Other Expense - Loss on Valuation of Derivative for $124,479, resulting primarily from calculation of the conversion price. For the year ended December 31, 2011, the Company recorded a Gain on Valuation of Derivative in the amount of $51,693. For the year ended December 31, 2010, the Company recorded a Loss on Valuation of Derivative in the amount of $791,626.

F-18

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

During the year ended December 31, 2010, the Company issued an aggregate of 696,031 (556,825,000 pre-reverse split) shares of Class A common stock for repayment valued at $752,226. The difference in the market value and the reduction in debt of $287,000 was charged to beneficial interest in the amount of $465,226.

On June 22, 2011, the Company had defaulted on the terms of the 2nd wrap-around agreements and as such, the default interest rate was increased retroactively to 24.99% on the remaining balance of the debt.

As of December 31, 2011, the outstanding balance on the EPIC Convertible Notes were $50,000.

In accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes model with the following assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%: expected life: 1 years; and volatility: 227.62%. The accounting guidance instructs that the conversion options are a derivative liability. As such, on the issue dates, the Company recorded the conversion options as a liability, recorded a debt discount of $337,000, and charged Other Expense - Loss on Valuation of Derivative for $264,858. During the year ended December 31, 2010, the Company had paid down $287,000 of these notes. For the year ended December 31, 2010, the Company recorded a Gain on Valuation of Derivative in the amount of $532,153 on the pay down of the debt and the fluctuation in the current market prices. For the year ended December 31, 2011, the Company recorded a Loss on Valuation of Derivative in the amount of $84,496.

On August 9, 2010, the Company entered into a securities purchase agreement with E-Lionheart to purchase up to $500,000 of convertible debentures from the Company. Amounts due under this debenture are due on or before August 9, 2011 and pays interest at the rate of 5% per annum. E-Lionheart has the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price equal to eighty percent (90%) of the lowest closing Bid Price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date. E-Lionheart may not convert the Debenture into shares of Class A Common Stock if such conversion would result in YA Global beneficially owning in excess of 4.99% of the then issued and outstanding shares of Class A Common Stock.

During the year ended December 31, 2010, the Company received $450,000 of new funding under this agreement. During the year ended December 31, 2011, the Company received the remaining $50,000 of new funding under this agreement.

F-19

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

On August 9, 2011, the Company had defaulted on the terms of this Debenture and as such, the full principal amount of this Debentures, together with interest and other amounts owing in respect thereof, shall become at the Holder's election, immediately due and payable in cash, provided however, the Holder may request (but shall have no obligation to request) payment of such amounts in Common stock of the Company.

In accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes model with the following assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%: expected life: 1 years; and volatility: 301.66% to 308.06%. The accounting guidance instructs that the conversion options are a derivative liability. As such, on the issue dates, the Company recorded the conversion options as a liability and recorded a debt discount of $143,408. For the year ended December 31, 2011, the Company recorded a Loss on Valuation of Derivative in the amount of $66,609 on the fluctuation in the current market prices.

As of December 31, 2011, the outstanding balance on the Asher Convertible Promissory Notes were $65,000.

In accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes model with the following assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%: expected life: .75 years; and volatility: 212.29%. The accounting guidance instructs that the conversion options are a derivative liability. As such, on the issue dates, the Company recorded the conversion options as a liability, recorded a debt discount of $65,000, and charged Other Expense - Loss on Valuation of Derivative for $24,294. For the year ended December 31, 2011, the Company recorded a Loss on Valuation of Derivative in the amount of $139,106 on the fluctuation in the current market prices.

F-20

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

NOTE 10 – PROMISSORY NOTES

On June 15, 2011, the Company issued a promissory note, in an aggregate of $25,000, to Stuart W. DeJonge (“DeJonge”). Amounts due under this note are due on or before January 15, 2012 and pays interest at the rate of 9% per annum. As of December 31, 2011, the outstanding balance on the DeJonge note was $25,000 and accrued interest of $1,227.

On July12, 2011, the Company issued a promissory note, in an aggregate of $15,000, to Opal Marketing Corp. Amounts due under this note are due on or before March 15, 2012 and pays interest at the rate of 7% per annum. As of December 31, 2011, the outstanding balance on the Opal Marketing Corp. note was $15,000 and accrued interest of $475.

On July 22, 2011, the Company issued a promissory note, in an aggregate of $100,000, to Charles M. Basner (“Basner”). Amounts due under this note are due on or before March 22, 2012 and pays interest at the rate of 7% per annum. As of December 31, 2011, the outstanding balance on the Basner note was $100,000 and accrued interest of $2,574.

NOTE 11 - CAPITAL STOCK

Pursuant to Kenergy Scientific's certificate of incorporation, as amended, as of December 31, 2011, the Company is authorized to issue 1,000,000 shares of Preferred Stock, par value of $1.00 per share, 125,000,000 shares of Class A Common Stock, no par value per share, 50,000,000 shares of Class B Common Stock, par value $0.01 per share, and 20,000,000 shares of Class C Common Stock, par value $0.01 per share. Below is a description of Kenergy Scientific's outstanding securities, including Preferred Stock, Class A Common Stock, Class B Common Stock, and Class C Common Stock.

a) Preferred Stock

Kenergy Scientific is authorized to issue 1,000,000 shares of Preferred Stock, par value $1.00 per share. As of December 31, 2011, Kenergy Scientific has not issued any shares of Preferred Stock.

b) Class A Common Stock

F-21

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

As of December 31, 2011 and 2010, there are 125,000,000 and 25,000,000 (10,000,000,000 pre-reverse split) shares of Class A Common Stock authorized, respectively, no par value, and 12,418,388 and 11,828,191 (9,462,553,043 pre-reverse split) shares were issued and outstanding, respectively.

Each holder of Class A Common Stock is entitled to receive ratably dividends, if any, as may be declared by the Board of Directors out of funds legally available for payment of dividends. The Company has never paid any dividends on its common stock and does not contemplate doing so in the foreseeable future. The Company anticipates that any earnings generated from operations will be used to finance its growth objectives.

For the year ended December 31, 2011, the Company had the following transactions in its Class A common stock:

·	The Company issued 577,597 (462,077,400 pre-reverse split) shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $143,244. The difference in the market value and the reduction in debt of $46,208 was charged to beneficial interest in the amount of $97,036.

For the year ended December 31, 2010, the Company had the following transactions in its Class A common stock:

The Company issued an aggregate of 7,057,328 (5,645,862,500 pre-reverse split) shares of Class A common stock to Mr. Glynn in partial settlement of $509,425 of promissory notes and accrued interest that Mr. Glynn acquired in June 2009. These shares contain a restrictive legend which will limit Mr. Glynn from liquidating these into the open market.

·	The Company issued 85,000 (68,000,000 pre-reverse split) shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $157,080. The difference in the market value and the reduction in debt of $34,000 was charged to beneficial interest in the amount of $123,080.

c) Class B Common Stock

As of December 31, 2011, there are 50,000,000 shares of Class B Common Stock authorized, par value $.01 per share and 10,000 shares were issued and outstanding. Each holder of Class B Common Stock has voting rights equal to 100 shares of Class A Common Stock. A holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount of the lowest price that Kenergy Scientific, Inc. had ever issued its Class A Common Stock. Upon liquidation, dissolution, or winding-up, holders of Class B Common Stock will be entitled to receive distributions.

F-22

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

For the year ended December 31, 2010, the Company had the following transactions in its Class B common stock:

·	The Company issued 10,000 shares of Class B common stock to Mr. Glynn in partial settlement of $509,425 of promissory notes and accrued interest that Mr. Glynn acquired in June 2009.

d) Class C Common Stock

As of December 31, 2011, there are 20,000,000 shares of Class C Common Stock authorized, par value $.01 per share. Each holder of Class C Common Stock is entitled to 1,000 votes for each share held of record. Shares of Class C Common Stock are not convertible into Class A Common Stock. Upon liquidation, dissolution or wind-up, the holders of Class C Common Stock are not entitled to receive the Company’s net assets pro rata. As of December 31, 2011, no shares were issued or outstanding.

NOTE 12 - STOCK OPTIONS

Stock Option Plans

During 2005, the Company adopted the 2005 Stock Incentive Plan and the 2005 Directors’ and Officers’ Stock Incentive Plan (“Plan”) in order to attract and retain qualified personnel. Under the Plan, the Board of Directors, in its discretion may grant stock options (either incentive or non-qualified stock options) to officers, directors and employees.

The Company did not issue any stock options for the years ended December 31, 2011 and 2010.

NOTE 13 - INCOME TAXES

The reconciliation of the effective income tax rate to the Federal statutory rate is as follows:

	December 31,
	2011			2010
Federal income tax rate		(34.0	)%		(34.0	)%
State income tax, net of federal benefit		( 4.1	)%		( 4.1	)%
Effect of valuation allowance		38.1	%		38.1	%
Effect income tax rate		0.0	%		0.0	%

Deferred income taxes will be determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes will be measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

F-23

KENERGY SCIENTIFIC, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2011 and 2010

At December 31, 2011 and 2010 deferred tax assets consist of the following:

	2011			2010

Deferred tax assets	$	881,000		$	721,000
Less: Valuation allowance		(881,000	)		(721,000	)

Net deferred tax assets	$	-0-		$	-0-

At December 31, 2011 and 2010, the Company had federal net operating loss carryforwards in the approximate amounts of $2,590,000 and $2,120,000, respectively, available to offset future taxable income. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

NOTE 14 - SUBSEQUENT EVENTS

On March 7, 2012, the Company issued 602,410 shares of Class A common stock for repayment of $5,000 of convertible debt due to Asher Enterprises.

F-24

Kenergy Scientific, Inc. - FORM 10-K - April 13, 2012

Attached files

Kenergy Scientific, Inc. Reports