UNITED STATES




SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549







FORM 10-Q





X
QUARTERLY REPORT PURSUANT TO SECTION 13 OR


___
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2010



TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Commission File No. 333-120507





SPEECHSWITCH, INC.


(Exact name of the Registrant)






New Jersey
20-1862816(State of Incorporation)
(I.R.S. Employer ID Number)6 Minneakoning Road, Flemington, New Jersey
08822(Address of Principal Executive Offices)
(Zip Code)





908-788-0077


(Registrant’s Telephone No. including Area Code)





Indicateby checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes __No _X_





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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes __No_X_





Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Act).  Yes__  No _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 o    Smaller reporting company [x]


(Do not check if a smaller reporting company)





Indicate the number of shares outstanding of the issuer's common stock, as of the latest practical date:


8,150,053,043 shares outstanding of Class A Common stock, no par value as of September 30, 2010.


9,462,553,043 shares outstanding of Class A Common stock, no par value as of December 31, 2010.









SPEECHSWITCH, INC.
 TABLE OF CONTENTS
  PAGEPart I – Financial InformationItem 1.
Condensed Financial Statements:Condensed Balance Sheets – September 30, 2010 (Unaudited)and December 31, 2009 (Unaudited)
1Condensed Statements of Operations - Nine months and three months endedSeptember 30, 2010 and 2009 (Unaudited)
2Condensed Statements of Cash Flows - Nine months endedSeptember 30, 2010 and 2009 (Unaudited)
3-4Notes to Condensed Financial Statements (Unaudited)
5-21Item 2.
Management’s Discussion and Analysis of Financial Positionand Results of Operations
22-25Item 4T.
Controls and Procedures
26Part II – Other InformationItem 1.
Legal Proceedings
27Item 1a.
Risk Factors
27Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
27Item 5.
Other Information
28Item 6.
Exhibits
29





Part 1.  Financial Statements


Item 1 - Financial Statements
 SPEECHSWITCH, INC.CONDENSED BALANCE SHEETSSeptember 30,


December 31,ASSETS

2010


2009(Unaudited)


(Unaudited)Current assets:Cash and cash equivalents

$
85,738


$
117Inventories


10,654



-Total current assets


96,392



117Intangible assets, net


312,045



300,030Total assets

$
408,437


$
300,147LIABILITIES & STOCKHOLDERS’ DEFICITCurrent liabilities:Accounts payable and accrued expenses

$
599,037


$
755,733Due to related parties


128,442



367,910Deferred maintenance contracts


-



437Note payable to related parties


-



71,756Promissory note due to related parties


-



337,000Convertible promissory note, net of unamortized debt discount of $38,830

and $50,781, respectively


41,106



29,155Convertible debentures, net of unamortized debt discount of $175,482

and $74,817, respectively


859,349



846,523Derivative liabilities


1,702,771



450,567Total current liabilities


3,330,705



2,859,081Stockholders' 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 10,000,000,000 shares;

8,150,053,043 and 1,400,096,193 shares issued and outstanding,

respectively


3,930,646



806,814Class B - $.01 par value; authorized 50,000,000

Shares; 10,000 and 0 shares issued and outstanding,

respectively


100



-Class C - $.01 par value; authorized 20,000,000

Shares; no shares issued and outstanding


-



-Additional paid-in capital


2,128,985



2,119,085Accumulated deficit


(8,981,999
)


(5,484,833
)Total stockholders' deficit


(2,922,268
)


(2,558,934
)Total liabilities and stockholders' deficit

$
408,437


$
300,147
 
 See accompanying notes to condensed financial statements




SPEECHSWITCH, INC.CONDENSED STATEMENTS OF OPERATIONS(Unaudited)Nine months ended


Three months endedSeptember 30, 2010


September 30, 2009


September 30, 2010


September 30, 2009Net sales

$
816


$
18,998


$
379


$
1,707Cost of sales


177



4,631



177



--Gross margin


639



14,367



202



1,707Operating expenses:General and administrative expenses


186,921



52,555



105,973



39,689Depreciation and amortization


30



2,274



8



572Engineering, research, & development


--



6,775



--



--Total operating expenses


186,951



61,604



105,981



40,261Loss from operations


(186,312
)


(47,237
)


(105,779
)


(38,554
)Other income (expense):Interest expense


(2,152,614
)


(58,484
)


(482,958
)


(22,960
)Other income


5,250



--



5,250



--Amortization of debt discount


(391,694
)


(241,445
)


(171,953
)


(81,366
)Gain (loss) on valuation of derivative


(771,796
)


562,418



459,192



(26,755
)Total other income (expense)


(3,310,854
)


262,489



(190,469
)


(131,081
)Income (loss) from operations before

Income taxes


(3,497,166
)


215,252



(296,248
)


(169,635
)
 
 Provision for income taxes


-



-



-



-Net income (loss) attributable to common

Shares

$
(3,497,166
)

$
215,252


$
(296,248
)

$
(169,635
)Basic income (loss) per common share

$
( 0.00
)

$
0.00


$
( 0.00
)

$
0.00Diluted income (loss) per common share

$
( 0.00
)

$
0.00


$
( 0.00
)

$
0.00Weighted average shares outstanding -Basic


4,299,765,457



1,400,096,193



7,813,869,526



1,400,096,193Diluted


4,299,765,457



10,000,000,000



7,813,869,526



1,400,096,193
  
 See accompanying notes to condensed financial statements




SPEECHSWITCH, INC.CONDENSED STATEMENTS OF CASH FLOWS(Unaudited)
 
 Nine months EndedSeptember 30,

2010


September 30,

2009Cash flows from operating activities:Net income (loss)

$
(3,497,166
)

$
215,252Adjustments to reconcile net income (loss) to net

cash used in operating activities:Amortization of intangibles


30



2,274(Gain) loss on valuation of derivative


771,796



(562,418
)Amortization of debt discount


391,694



241,445Beneficial interest on conversion of debt


2,094,699



-Changes in assets and liabilities:Decrease in accounts receivable


-



617Increase in inventories


(10,654
)


-Decrease in prepaid expenses


-



904Increase in accounts payable and accrued

Liabilities


117,262



34,807Increase in amounts due to related parties


80,442



24,000Decrease in deferred maintenance contracts


(437
)


(2,010
)Net cash provided by (used in) operating activities


(52,334
)


(45,129
)Cash flows from investing activities:Purchase of intangible assets from related parties


(12,045
)


(300,000
)Net cash (used in) investing activities


(12,045
)


(300,000
)Cash flows from financing activities:Issuance of convertible debt – trade


150,000



-Issuance of promissory notes - related party


-



337,000Net cash provided by financing activities


150,000



337,000Net increase (decrease) in cash and cash equivalents


85,621



(8,129
)Cash and cash equivalents at beginning of period


117



8,371Cash and cash equivalents at end of period

$
85,738


$
242SUPPLEMENTAL CASH FLOW INFORMATION:Taxes paid

$
-


$
-Interest paid

$
-


$
-Non-Cash TransactionsRelated Part Notes converted to Convertible Debt

$
337,000


$
-Accounts Payable converted to Convertible Debt

$
156,199


$
37,000Issuance of promissory note for purchase of intangible assets

$
-


$
300,000




See accompanying notes to condensed financial statements




SPEECHSWITCH, INC.CONDENSED STATEMENTS OF CASH FLOWS (Continued)(Unaudited)
 
 Supplemental Schedule of Non-Cash Financing Activities:
 
 For the nine months ended September 30, 2010:
 
 a)
The Company issued an aggregate of 5,645,862,500 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.
 
 b)
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 10 for terms of these agreements.)
 
 c)
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 reclassing $156,199 of non-interest bearing accrued interest into the secured convertible debenture.  (See note 10 for terms of these agreements.)
 
 d)
The Company issued an aggregate of 556,825,000 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.
 
 e)
The Company issued 479,269,350 shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $464,308. The difference in the market value and the reduction in debt of $208,708 was charged to beneficial interest in the amount of $255,600.
 
 f)
The Company issued 68,000,000 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.
 
 For the nine months ended September 30, 2009:
 
 g)
The Company issued an aggregate of $37,000 of Promissory Notes to GlynnTech, Inc. to replace a like amount of current debt assumed by GlynnTech, Inc.
 
 h)
The Company issued an aggregate of $300,000 of Promissory Notes to GlynnTech, Inc. to acquire a cancer treatment drug delivery system being developed and patented by GlynnTech, Inc.
   See accompanying notes to condensed financial statements





SPEECHSWITCH, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


September 30, 2010 and 2009


Note 1                      Background
 
 SpeechSwitch, Inc. (the “Company”) was incorporated in New Jersey on November 10, 2004 as a wholly-owned subsidiary of iVoice, Inc.  It was engaged in the design, manufacture, and marketing of specialized telecommunication equipment until mid-2009.  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.  The Company plan was for a one-year developmental stage, followed by product launches in 2010.  SpeechSwitch 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 SpeechSwitch.  SpeechSwitch may not be able to identify, successfully integrate or profitably manage any such business or operations.  Currently, SpeechSwitch has no plans, proposal or arrangements, either orally or in writing, regarding any proposed acquisitions and is not considering any potential acquisitions.
 
 Note 2                      Business Operations
 
 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 $300,000.00 in one-year notes, and a balance of $125,000.00 only upon issuance of one or more patents (also to be paid with a one-year note upon issuance of a patent).  The business objective was to transfer a potentially significant profit opportunity from GlynnTech, Inc. to SpeechSwitch, 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.  It is anticipated that FDA filings will be made prior to December 31, 2010.
 
 (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 launch on a majority of these items is set for July 1, 2010.  Product launch is expected to initially involve internet sales, with a roll-out to retail outlets.














SPEECHSWITCH, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


September 30, 2010 and 2009


(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, ten companies will review various microturbine products to represent and resell.
 
 Distribution
 
 Within the first year the Company created a viable website and over the next couple of months expects to have representatives contracting major retailers and multimedia advertising for the solar powered rechargers and other products.  In addition, the Company expects to have at least one retail store opening soon, as well as offering additinal products made from recycled materials and/or biodegradable materials in the marketplace.
 
 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.
 
 Business Development
 
 Business development objectives at SpeechSwitch are focused 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
 
 SpeechSwitch’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.





SPEECHSWITCH, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


September 30, 2010 and 2009




Manage OEM and Reseller Accounts
 
 While we have traditionally sold our product primarily on a direct basis with our existing officers and employees fulfilling orders received by telephone and over the internet, we will seek to obtain new OEM and reseller relationships that will serve as an extension of our sales team which has yet to be hired.  We currently have no material strategic alliances with any OEMs or resellers, but will vigorously attempt to establish significant long-term relationships of this type over the next 18 months.
 
 Sales and Marketing
 
 The Company had nominal sales during the third quarter of 2010. Sales have been slow due to research and development, product selections, product testing and other launch preparation.  Sales in the third quarter were through the internet website and additional opportunities are being developed, through third party retail and internet sites and through third party distributors.  In 2011, the Company is expected to expand its store plans to include franchised stores.
 
 Intellectual Property Rights
 
 The Company has acquired pending patent rights for the cancer treatment patent applications, two applications have a status of pending in the United Stares Patent and Trademark Office.  No foreign counterparts have been filed at this time.
 
 Employees
 
 The Company has only one employee, that is Kenneth P. Glynn, President.  It is the present intention of Mr. Glynn to defer salary payment for at least the next 6 months.  All other participants in Company activities are through purchased support services and independent contractors.
 
 Properties
 
 We do not own any real property.  We co-occupy the same rental space as GlynnTech, Inc. and are subleasing from GlynnTech, Inc. located at 6 Minneakoning Road, Flemington, New Jersey. We intend to continue subleasing such space and anticipate no relocation of our offices in the foreseeable future.
 
 SpeechSwitch’s Management
 
 Kenneth P. Glynn was elected to the positions of President, Secretary and Chairman of the board on June 16, 2009.
    SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
  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 September 30, 2010, the Company had a negative cash flow from operations, negative working capital and a net loss for the nine months ending September 30, 2010. 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 new 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 condensed unaudited interim financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The condensed financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company's annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the December 31, 2009 unaudited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. These results are not necessarily indicative of the results to be expected for the full year.
 
 These condensed unaudited financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.
 
 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.





SPEECHSWITCH, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


September 30, 2010 and 2009




c)    Revenue Recognition
 
 The Company currently derives its revenues from the licensing of its software product and optional customer support (maintenance) service. The Company's standard license agreement provides for a one-time fee for use of the Company's product in perpetuity for each computer or CPU in which the software will reside. The Company's software application is fully functional upon delivery and implementation and does not require any significant modification or alteration. The Company also offers customers an optional annual software maintenance and support agreement for the subsequent one-year periods. Such maintenance and support services are free for the first year the product is licensed and is considered the warranty period. The software maintenance and support agreement provides free software updates, if any, and technical support the customer may need in deploying or changing the configuration of the software. Generally, the Company does not license its software in multiple element arrangements whereby the customer purchases a combination of software and maintenance. In a typical arrangement, software maintenance services are sold separately from the software product; are not considered essential to the functionality of the software and are purchased at the customer's option upon the completion of the first year licensed.
 
 The Company does not offer any special payment terms or significant discount pricing.  Normal and customary payment terms require payment for the software license fees when the product is shipped.  Payment for software maintenance is due prior to the commencement of the maintenance period.  It is also the Company's policy to not provide customers the right to refund any portion of its license fees.  With respect to the sale of software license fees, the Company recognizes revenue in accordance with ASC 985-605, “Software Revenue Recognition”, as amended, and generally recognizes revenue when all of the following criteria are met: (1) persuasive evidence of an arrangement exists generally evidenced by a signed, written purchase order from the customer, (2) delivery of the software product on Compact Disk (CD) or other means to the customer has occurred, (3) the perpetual license fee is fixed or determinable and (4) collectability, which is assessed on a customer-by-customer basis, is probable.
  With respect to customer support services, upon the completion of one year from the date of sale, considered to be the warranty period, the Company offers customers an optional annual software maintenance and support agreement for subsequent one-year periods.  Sales of purchased maintenance and support agreements are recorded as deferred revenue and recognized over the respective terms of the agreements.
  Due to the nature of the business and one-time contracts, it is unlikely that any one customer will impact revenues in future periods.
  d)    Product Warranties
  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.





SPEECHSWITCH, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


September 30, 2010 and 2009




e)    Research and Development Costs
 
 Research and development costs are charged to expense as incurred.
 
 f)    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 September 30, 2010 and December 31, 2009.
 
 g)    Intangible Assets
  In May and December 2003, the Company was issued two patents by the U.S. Patent and Trademark Office for its Speech-Enabled Automatic Telephone Dialer.  The patents expire 20 years from the date of the original patent filings.  All accumulated costs incurred with respect to the Company's patent filings have been capitalized.  Costs related specifically to the awarded patents are now being amortized on a straight basis over the life of the patents.
 
 In June 2009, the Company acquired the patent rights and technology relating to cancer drug delivery systems developed by GlynnTech, Inc. (a related party) by the issuance of three (3) $100,000 one-year promissory notes. The Company has also agreed to issue an additional one-year promissory note for $125,000 upon the issuance of a patent by the United States Patent and Trademark Office.
 
 In the third quarter of 2010, the Company paid an additional $12,045 for fees related to work on the cancer drug delivery system and to register several “Green” trademark applications.
 
 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.
 
 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.





SPEECHSWITCH, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


September 30, 2010 and 2009




i)    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.
  j)    Fair Value of Instruments
  The carrying amount reported in the condensed 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.
 
 k)     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 September 30, 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. The uninsured cash balances at September 30, 2010 and December 31, 2009 were $0.
  Note 5                      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 and diluted income (loss) per common share is based on net income (loss) for the relevant period, divided by the weighted average number of common shares outstanding during the period.  Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding stock options. A computation of diluted loss per share would not assume conversion, exercise or contingent exercise of securities due to the beneficial conversion of related party accounts as this would be anti-dilutive.





SPEECHSWITCH, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


September 30, 2010 and 2009




Nine monthsEnded


Nine monthsEndedSeptember 30, 2010


September 30, 2009Basic net income (loss) per share computation:Net income (loss) attributable to common stockholders

$
(3,497,166
)

$
215,252Weighted-average common shares outstanding


4,299,765,457



1,400,096,193Basic net income (loss) per share attributable to

common stockholders

$
(0.00
)

$
0.00Diluted net income (loss) per share computationNet income (loss) attributable to common stockholders

$
(3,497,166
)

$
215,252Weighted-average common shares outstanding


4,299,765,457



1,400,096,193Incremental shares attributable to the assumed conversion of

Convertible debenture and convertible promissory note


-



8,599,903,807Total adjusted weighted-average shares


4,299,765,457



10,000,000,000Diluted net income (loss) per share attributable to

common stockholders

$
(0.00
)

$
0.00
 
 The Company had common stock equivalents in excess of its authorized capital at September 30, 2009, so the maximum authorized shares of 10,000,000,000 are shown for diluted earnings per common share calculations. The Company had common stock equivalents of 5,242,075,993 at September 30, 2010.
 
 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. In June 2009, the Company also acquired some patent rights for $300,000. In the thrid quarter of 2010, the Company paid an additional $12,045 for fees related to work on the cancer drug delivery system and to register several “Green” trademark applications.
 
 These assets are reflected at cost, net of accumulated amortization of $17,025, at September 30, 2010.
 
 Note 7                      Income Taxes
 
 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.
 
 At September 30, 2010 and December 31, 2009 deferred tax assets consist of the following:
   September 30, 2010


December31, 2009Deferred tax assets

$
695,000


$
639,000Less: Valuation Allowance


(695,000
)


(639,000
)Net deferred tax assets

$
-0-


$
-0-





SPEECHSWITCH, INC.


NOTES TO CONDENSED FINANCIAL STATEMENTS


September 30, 2010 and 2009




At September 30, 2010 and December 31, 2009, the Company had federal net operating loss carry forwards in the approximate amounts of $2,045,000 and $1,880,000, 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 8                      Related Party Transactions
 
 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 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 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 SpeechSwitch, Inc. 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 2.0% per annum (5.25% at September 30, 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 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, 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.
    
  SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
  On May 27, 2010, the Company issued an aggregate of 5,645,862,500 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, 2010, 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.  At present, Mr. Glynn is not drawing any cash salary and his entire earned salary is being deferred. As of September 30, 2010, the total amount due to Mr. Glynn for unpaid compensation is $120,000.
 
 During the nine months ended September 30, 2010, GlynnTech, Inc and Mr. Glynn have paid some bills on behalf of the Company. As of September 30, 2010, the aggregate amounts due for these payments is $8,442.
 
 On July 1, 2010, 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 $4,500 per month but may be reduced in scope or eliminated at any time upon 90 days’ prior written notice by the Company to GlynnTech.
 
 Note 9                    Convertible Promissory Note and Derivative Liability (Related Party)
 
 SpeechSwitch 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.
 
 OnMarch 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.
 
 As of September 30, 2010, the outstanding balance on the Convertible Promissory Note was $79,936 plus accrued interest of $8,719.




SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
  Unless otherwise provided, this 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 promissory note has a security interest in substantially all of the assets of the Company. However, the promissory note's interests are second to that of YA Global Investments (see Note 10).
 
 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 nine months ended September 30, 2010, the Company recorded a Loss on Valuation of Derivative in the amount of $532,606. For the nine months ended September 30, 2009, the Company recorded a Gain on Valuation of Derivative in the amount of $49,648.
 
 Note 10      Convertible Debenture and Derivative Liability
 
 On March 30, 2007, SpeechSwitch, Inc. issued a Secured Convertible Debenture (the "Debenture") to YA Global Investments for the sum of $1,000,000 in exchange for 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.




SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
  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.
 
 During the nine months ended September 30, 2010, the Company issued 68,000,000 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.
 
 During the nine months ended September 30, 2010, the Company consented to the assignment of three (3) of the above debentures from YA Global Investments, LP to E-Lionheart Associates, LLC (“E-Lionheart”) for an aggregate total of $626,123. This was done in conjunction with the execution of a Securities Purchase Agreement with E-Lionheart whereby E-Lionheart will purchase from the Company upto $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 nine months ended September 30, 2010, the Company issued 479,269,350 shares of Class A common stock to E-Lionheart for repayment valued at $464,308. The difference in the market value and the reduction in debt of $208,708 was charged to beneficial interest in the amount of $255,600.
 
 As of September 30, 2010, the outstanding balance on the YA Global Convertible Debenture was $417,415 and the outstanding balance on the E-Lionheart Convertible Debentures were $417,416 for an aggregate total of $834,831.
 
 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 nine months ended September 30, 2010, the Company recorded a Loss on Valuation of Derivative in the amount of $533,015. For the nine months ended September 30, 2009, the Company recorded a Gain on Valuation of Derivative in the amount of $512,770.




SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
  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.
 
 During the nine months ended September 30, 2010, the Company issued an aggregate of 556,825,000 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.
 
 As of September 30, 2010, 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 nine months ended September 30, 2010, the Company had paid down $287,000 of these notes. For the nine months ended September 30, 2010, the Company recorded a Gain on Valuation of Derivative in the amount of $520,562 on the pay down of the debt and the fluctuation in the current market prices.
 
 On August 9, 2010, the Company entered into a securities purchase agreement with E-Lionheart to purchase upto $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 nine months ended September 30, 2010, the Company received $150,000 of new funding under this agreement.
 
 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%. 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 nine months ended September 30, 2010, the Company recorded a Gain on Valuation of Derivative in the amount of $1,121 on the fluctuation in the current market prices.




SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
  Note 11       Capital Stock
 
 Pursuant to SpeechSwitch's certificate of incorporation, as amended, the Company is authorized to issue 1,000,000 shares of Preferred Stock, par value of $1.00 per share, 10,000,000,000 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 SpeechSwitch's outstanding securities, including Preferred Stock, Class A Common Stock, Class B Common Stock, and Class C Common Stock.
 
 a) Preferred Stock
 
 SpeechSwitch is authorized to issue 1,000,000 shares of Preferred Stock, par value $1.00 per share.  As of September 30, 2009, SpeechSwitch has not issued any shares of Preferred Stock.
 
 b) Class A Common Stock
 
 As of September 30, 2010, there are 10,000,000,000 shares of Class A Common Stock authorized, no par value, and 8,150,053,043 shares were issued and outstanding.
  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.
 
 c) Class B Common Stock
 
 As of September 30, 2010, there are 50,000,000 shares of Class B Common Stock authorized, par value $.01 per share, 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 SpeechSwitch, 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.
 
 d) Class C Common Stock
 
 As of September 30, 2010 here are 20,000,000 shares of Class C Common Stock authorized, par value $.01 per share, no shares were issued or outstanding.  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.




SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
  Note 12      Stock Options
 
 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 has not issued any stock options as of September 30, 2010.
  Note 13      New Accounting Pronouncements
 
 In July, 2010, the FASB issued ASU 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (Topic 310)”. The intent is to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. This Update is effective for interim and annual reporting periods beginning on or after December 15, 2010.  The Company does expect that the adoption of this amendment to have a material effect of the financial position of the Company.
 
 Note 14      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:
 
 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.




SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
  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.
 
 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 September 30, 2010 and December 31, 2009. 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.
 
 September 30, 2010
 
 Assets

Level I


Level II


Level III


TotalTotal Assets

$
-


$
-


$
-


$
-Convertible promissory notes

$
-


$
41,106


$
-


$
41,106Convertible debentures


-



859,349



-



859,349Derivative liabilities


-



1,702,771



-



1,702,771Total Liabilities

$
-


$
2,603,226


$
-


$
2,603,226
 December 31, 2009
 
 Assets

Level I


Level II


Level III


TotalTotal Assets

$
-


$
-


$
-


$
-Convertible promissory notes

$
-


$
29,155


$
-


$
29,155Note payable - other


-



71,756



-



71,756Notes payable - related parties


-



337,000



-



337,000Convertible debentures


-



846,523



-



846,523Derivative liabilities


-



450,567



-



450,567Total Liabilities

$
-


$
1,735,001


$
-


$
1,735,001













SPEECHSWITCH, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 September 30, 2010 and 2009
 
 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 9 & 10 for more discussion on derivatives.
 
 Note 15         Subsequent Events
  On November 3, 2010 and November 30, 2010, the Company consented to the assignment of remaining two (2) of the convertible debentures from YA Global Investments, LP to E-Lionheart Associates, LLC for an aggregate total of $417,415. The new convertible debentures are due on July 29, 2011 and have conversion rights essentially the same as YA Global.




Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 Forward Looking Statements
 
 A number of the statements made by the Company in this report may be regarded as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
 
 Forward-looking statements include, among others, statements concerning the Company’s outlook, pricing trends and forces within the industry, the completion dates of capital projects, expected sales growth, cost reduction strategies and their results, long-term goals of the Company and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.
 
 All predictions as to future results contain a measure of uncertainty and accordingly, actual results could differ materially.  Among the factors that could cause a difference are:  changes in the general economy; changes in demand for the Company’s products or in the cost and availability of its raw materials; the actions of its competitors; the success of our customers; technological change; changes in employee relations; government regulations; litigation, including its inherent uncertainty; difficulties in plant operations and materials; transportation, environmental matters; and other unforeseen circumstances.  For a discussion of material risks and uncertainties that the Company faces, see the discussion in the Form 10−K for the fiscal year ended December 31, 2009 entitled “Risk Factors”.
 
 Overview and Plan of Operation
  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.  The Company plan was for a one-year developmental stage, followed by product launches in 2010.  SpeechSwitch 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 SpeechSwitch.  SpeechSwitch may not be able to identify, successfully integrate or profitably manage any such business or operations.  Currently, SpeechSwitch has no plans, proposal or arrangements, either orally or in writing, regarding any proposed acquisitions and is not considering any potential acquisitions.
 
 Results of Operations
 
 Virtually all of the revenues reported by SpeechSwitch through September 30, 2010, were derived from our speech recognition software products installations and maintenance. During the three months ended September 30, 2010, the Company sold a small amount of solar powered products through their website. For the nine months ended September 30, 2010, total revenues decreased $18,182 (96%) to $637 as compared to the same period in the prior year of $18,998. For the three months ended September 30, 2010, total revenues decreased from $1,328 to $379 as compared to the same period in the prior year. The low overall sales volume of the speech recognition software business is attributable to the minimal resources made available for the sales and marketing of the speech recognition software products. Concurrent with the recent change in management, the new management has decided to move away from the speech recognition business and is pursuing developing the solar power generating marketplace.




Gross margin for the nine months ended September 30, 2010 decreased $13,728 (96%) as compared to the same periods in the prior year. For the three months ended September 30, 2010 decreased from $1,505 to $202 as compared to the same period in the prior year. Cost of sales in the prior year represent hardware costs for product installations. Cost of sales in the current year represent product cost of the solar powered products sold during the period.
 
 Total operating expenses increased $125,347 (204%) to $186,951 for the nine months September 30, 2010, as compared to the same periods in the prior year. For the three months ended September 30, 2010, operating expenses increased $65,720 (163%) to $105,981, as compared to the same period in the prior year. The increases were the result of the Company investing resources in reestablishing the operations. Incremental expenses will be paid in the future when funding becomes available.
  Total other income (expense) for the nine months ended September 30, 2010 was total expense of $3,310,854 as compared to total income of $262,489 for the nine months ended September 30, 2009, for a change of $3,573,343. These changes are primarily attributed to the reversal of a gain on revaluation of derivatives to a loss on revaluation of derivatives in the current period and the write off of $2.1 million of beneficial interest on debt conversions into stock during the period. Total other income (expense) for the three months ended September 30, 2010 was total expense of $190,469 as compared to total expense of $131,081 for the three months ended September 30, 2009, for a change of $59,388. These changes are primarily attributed to the  gain on revaluation of derivatives in the current period offset by the write off of $468 thousand of beneficial interest on debt conversions into stock during the period.
  Net loss for the nine months ended September 30, 2010 was $3,497,166 as compared to a net income of $215,252 for the nine months September 30, 2009. Net loss for the three months ended September 30, 2010 was $296,248 as compared to a net loss of $169,635 for the three months September 30, 2009. The unfavorable changes for the nine months and three months ending September 30, 2010, were primarily from the unfavorable changes in revaluation of derivatives (in the nine months), the write off of beneficial interest and the increased investment in operating expenses.
  Liquidity and Capital Resources
  To date, SpeechSwitch 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, SpeechSwitch, Inc. 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 10 to the Condensed 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.
 
 For the nine months ended September 30, 2010, the Company received $150,000 of new financing pursuant to the terms of the securities purchase agreement with E-Lionheart (see Note 10 to the Condensed Financial Statements).
 
 The Company currently has no other significant sources of working capital or cash commitments. However, no assurance can be given that SpeechSwitch will raise sufficient funds from such financing arrangements, or that SpeechSwitch will ever produce sufficient revenues to sustain its operations, or that a market will develop for its common stock for which a significant amount of SpeechSwitch’s financing is dependent upon.




For the nine months ended months September 30, 2010, the Company had a net increase in cash of $85,621.  The Company’s principal sources and uses of funds were as follows:
 
 Cash used by operating activities.The Company used $52,334 in cash for operating activities for the nine months ended September 30, 2010 and used $45,129 in cash for operating activities for the nine months ended 2009. The current cash operating losses are being funded by deferred payments to vendors and related parties.
 
 Cash used by investing activities.The Company used $12,045 and $300,000 in cash for investing activities for the nine months ended September 30, 2010 and 2009, respectively. These amounts were for the acquisition of the rights and technology for a cancer treatment drug delivery system developed by GlynnTech, Inc. and the filing of applications for name protection for some of the “Green” products.
  Cash provided by financing activities.  For the nine months ended September 30, 2010, the Company provided $150,000 in financing activities by the issuance of convertible debentures to E-Lionhart. For the nine months ended September 30, 2009, the Company provided $337,000 in financing activities by the issuance of related party promissory notes.
 
 There was no significant impact on the Company’s operations as a result of inflation for the nine months ended September 30, 2010.
  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.
  We have identified below the accounting policies, revenue recognition and software costs, related to what we believe are most critical to our business operations and are discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policies affect our reported and expected financial results.
  Revenue Recognition
  With respect to the sale of software license fees, the Company recognizes revenue in accordance with ASC 985-605, “Software Revenue Recognition”, as amended, and generally recognizes revenue when all of the following criteria are met: (1) persuasive evidence of an arrangement exists generally evidenced by a signed, written purchase order from the customer, (2) delivery of the software product on Compact Disc (CD) or other means to the customer has occurred, (3) the perpetual license fee is fixed or determinable and (4) collectability, which is assessed on a customer-by-customer basis, is probable.
    
  With respect to customer support services, upon the completion of one year from the date of sale, the Company offers customers an optional annual software maintenance and support agreement for subsequent one-year periods. Sales of purchased maintenance and support agreements are recorded as deferred revenues and recognized over the respective terms of the agreements.
  The Company derives its revenues from the licensing of its software product and optional customer support (maintenance) services. Presently, 100% of the revenues reported by the Company are derived from the licensing of the Company’s IVR software. No revenues have been derived from the sale of optional customer support services. The Company’s standard license agreement provides for a one-time fee for use of the Company’s product in perpetuity for each computer or CPU in which the software will reside. The Company’s software application is fully functional upon delivery and implementation and does not require any significant modification or alteration. The Company also offers customers an optional annual software maintenance and support agreement for the subsequent one-year periods. Such maintenance and support services are free for the first year the product is licensed. The software maintenance and support agreement provides free software updates, if any, and technical support the customer may need in deploying or changing the configuration of the software. Generally, the Company does not license its software in multiple element arrangements whereby the customer purchases a combination of software and maintenance. In a typical arrangement, software maintenance services are sold separately from the software product; are not considered essential to the functionality of the software and are purchased at the customer’s option upon the completion of the first year licensed.
  The Company does not offer any special payment terms or significant discount pricing. Normal and customary payment terms require payment for the software license fees when the product is shipped. Payment for software maintenance is due prior to the commencement of the maintenance period. It is also the Company’s policy not to provide direct customers (as opposed to resellers and dealers) the right to refund any portion of its license fees. The Company accepts Visa and MasterCard as well as company checks.
  Customers may license the Company’s products through our telesales organization and through promotions or reseller agreements with independent third parties.  SpeechSwitch only permits returns from authorized dealers and resellers of unused inventory, subject to the consent of the Company and a twenty-five percent restocking fee. End users who purchaser products directly from SpeechSwitch may not return such products to SpeechSwitch under any circumstances.  Accordingly, the Company records a provision for product returns and allowances against product revenue in the same period the revenue is recorded. The estimates are based on historical sales returns and other known data as well as market and economic conditions.
  Our current products are not sold through retail distribution channels. Current reseller agreements provide for a limited contractual right of return and do not provide for future price concessions, minimum inventory commitments nor is payment contingent upon the reseller’s future sales or our products. Revenues generated from products licensed through marketing channels where the right of return exists, explicitly or implicitly, is reduced by reserves for estimated product returns. Such reserves are estimates based on returns history and current economic and market trends.
  OFF BALANCE SHEET ARRANGEMENTS
 
 During the nine months ended September 30, 2010, 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.




Item4T.                      Controls and Procedures.
 
 Evaluation of Disclosure Controls and Procedures
 
 Management of the Company has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the quarter covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of the Company have concluded, as of the end of the quarter covered by this Quarterly Report on Form 10-Q, that our disclosure controls and procedures have not been effective for the following reason:
 
 A 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.
 
 Changes in internal control over financial reporting.
 
 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 that occurred during the period covered by this Quarterly Report on Form 10-Q and determined that there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.




Part II.  Other Information
 
 Item 1.               Legal Proceedings.
 
 SpeechSwitch is not party to any material legal proceeding, nor to the knowledge of SpeechSwitch, is any such proceeding threatened against it.
 
 Item 1a.              Risk Factors.
 
 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.
 
 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.
 
 Item 2.                Unregistered Salesof Equity Securities and Use of Proceeds.
 
 The Company issued an aggregate of 354,200,000 shares of Class A common stock to EPIC Worldwide, Inc. for repayment of convertible debt in lieu of cash, valued at $362,384.
  The Company issued an aggregate of 479,269,350 shares of Class A common stock to E-Lionheart Associates, LLC for repayment of convertible debenture in lieu of cash, valued at $464,308.




Item 5.                    Other Information.
 
 (a)
Section 1 - Registrant's Business and Operations
 
 Item 1.01 Entry into Material Definitive 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 term of the debentures were amended to extend the due date until July 29, 2011. The first debenture (SSWC-2-1) is filed as Exhibit 10.1 herein.
 
 In conjunction with the issuance of the amended and restated agreements with YA Global, the Company also amended and executed the security agreement and intellectual property security agreement.  These agreements are filed as Exhibit 10.2 and 10.3 herein.
 
 On July 26, 2010, the Company entered into a purchase agreement by and among E-Lionheart Associates, LLC, YA Global Investments, LP and the Company, whereby E-Lionheart would purchase from YA Global the convertible debenture held by YA Global. The five (5) debentures would be transferred to E-Lionheart upon the delivery of a fixed sum of money over a period of time pursuant to the agreement. This agreement is filed as Exhibit 10.4 herein.
 
 On July 26, 2010, August 13, 2010 and September 30, 2010, the Company consented to the assignment of three (3) of the secured debentures from YA Global Investments, LP to E-Lionheart Associates, LLC (“E-Lionheart”) for an aggregate total of $626,123. The consent for the first debenture (SSWC-2-1) is filed as Exhibit 10.5 herein.
 
 On August 9, 2010 the Company entered into a securities purchase agreement and convertible debenture with E-Lionheart Associates LLC whereby E-Lionheart will purchase from the Company upto $500,000 of convertible debentures. The convertible debenture is due on August 9, 2011 and have conversion rights essentially the same as YA Global. These agreements are filed as Exhibit 10.6 and 10.7 herein.
   (b)
The Company does not have a standing nominating committee or a committee performing similar functions as the Company’s Board of Directors consists of only two members and therefore there would be no benefit in having a separate nominating committee that would consist of the same number of members as the full board of directors.  Both members of the Board of Directors participate in the consideration of director nominees.




Item 6.                    Exhibits
 
 10.1
Amended and Restated Secured Convertible Debenture (SSWC-2-1) between SpeechSwitch, Inc and YA Global Investments, LP dated July 26, 2010.
 10.2
Security Agreement between SpeechSwitch, Inc and YA Global Investments, dated July 26, 2010.
 10.3
Intellectual Property Security Agreement between SpeechSwitch, Inc and YA Global Investments, LP dated July 26, 2010.
 10.4
Purchase Agreement between E-Lionheart Associates, LLC, YA Global Investments, LP, and SpeechSwitch, Inc dated July 26, 2010.
 10.5
Assumption and Assignment Agreement (SSWC-2-1) between E-Lionheart Associates, LLC and YA Global Investments, LP dated July 26, 2010.
 10.6
Securities Purchase Agreement between E-Lionheart Associates, LLC and SpeechSwitch, Inc dated August 9, 2010.
 10.7
Convertible Debenture between E-Lionheart Associates, LLC and SpeechSwitch, Inc dated July 23, 2010.
 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.













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






SPEECHSWITCH, INCDate:    January 10, 2011
By:/s/ Kenneth GlynnKenneth GlynnPresidentChief Executive Officer andChief Financial Officer














INDEX OF EXHIBITS


10.1
Amended and Restated Secured Convertible Debenture (SSWC-2-1) between SpeechSwitch, Inc and YA Global Investments, LP dated July 26, 2010.
 
 10.2
Security Agreement between SpeechSwitch, Inc and YA Global Investments, dated July 26, 2010.
 
 10.3
Intellectual Property Security Agreement between SpeechSwitch, Inc and YA Global Investments, LP dated July 26, 2010.
 
 10.4
Purchase Agreement between E-Lionheart Associates, LLC, YA Global Investments, LP, and SpeechSwitch, Inc dated July 26, 2010.
 
 10.5
Assumption and Assignment Agreement (SSWC-2-1) between E-Lionheart Associates, LLC and YA Global Investments, LP dated July 26, 2010.
 
 10.6
Securities Purchase Agreement between E-Lionheart Associates, LLC and SpeechSwitch, Inc dated August 9, 2010.
 
 10.7
Convertible Debenture between E-Lionheart Associates, LLC and SpeechSwitch, Inc dated July 23, 2010.
 
 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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