UNITED
STATES

SECURITIES
ANDEXCHANGE
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
thequarterly
period
ended:
March
31,2014

or



| |  ̈ | TRANSITION
                           REPORT PURSUANT TO SECTION 13 OR
                           15(d)
                           OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For
the transition
period
from:01/01/2014 to 03/31/14





KENERGY
SCIENTIFIC,
INC.

(Exact
nameof
registrant
asspecified
in itscharter)



|New
        Jersey                       | 333-120507       | 20-1862816             
|---------------------------------------- | ---------------- | -----------------------
|(State
    or OtherJurisdiction          | (Commission      | (I.R.S.
    Employer   
|of
    Incorporation
    orOrganization) | File
    Number) | Identification
    No.)



999
Wonderland Rd, Building Tingxiang, Suite 703, Nanchang, China, JX330009

(Address
of Principal
Executive
Offices)(Zip
Code)





866-520-2370

(Registrant’s
telephone
number,
including
areacode)





N/A

(Former
nameor former
address
andformer
fiscalyear,
if changed
sincelastreport)





Indicate
by check
markwhether
the registrant
(1)has
filedallreports
required
tobe filed
by Section
13 or15(d)
of the Securities
Exchange
Actof
1934
during
the preceding
12 months
(orfor
suchshorter
period
thatthe registrant
wasrequired
tofilesuch
reports),
and(2)has
beensubject
tosuch
filingrequirements
for the past
90days.
Yes x No  ̈



Indicate
bycheck
markwhether
theregistrant
hassubmitted
electronically
andposted
onitscorporate
Website,
ifany,
every
Interactive
DataFile
required
to be submitted
andposted
pursuant
toRule405ofRegulation
S-T(§232.405
ofthis
chapter)
during
thepreceding
12months
(orfor
suchshorter
period
that the
registrant
wasrequired
tosubmit
andpostsuchfiles).YesxNo  ̈



Indicate
thenumber
ofshares
outstanding
ofthe
issuer's
commonstock,
asof
thelatest
practicaldate:
62,270
sharesoutstanding
ofPreferred
Stock,par
value$1.00
pershare;
5,432,475,719 sharesoutstanding
ofClass
ACommon
Stock,nopar
value
and10,000
shares
outstanding
of Class
BCommon
Stock,par
value
$.01
pershare,as ofJune 11, 2014.









KENERGY
SCIENTIFIC,
INC.

TABLE
OFCONTENTS





|            | Part
    I – Financial Information                                                       | Page  
|----------- | ---------------------------------------------------------------------------------------- | ------
|            |                                                                                          |       
|Item
    1. | Condensed Financial
    Statements                                                       |       
|            |                                                                                          |       
|            | Condensed Balance
    Sheets – March 31, 2014 and December 31, 2013                      | 1     
|            |                                                                                          |       
|            |                                                                                          |       
|            | Condensed Statements
    of Operations – Three months Ended march 31, 2014 and 2013      |       
|            |                                                                                          | 2     
|            |                                                                                          |       
|            | Condensed Statements
    of Operations – Three months Ended March 31, 2014 and 2013      |       
|            |                                                                                          | 3 - 4 
|            |                                                                                          |       
|            | Notes to Condensed
    Financial Statements                                              | 5 - 21
|            |                                                                                          |       
|Item 2.     | Management’s Discussion and Analysis
    of Financial Position And Results of Operations | 21    
|            |                                                                                          |       
|            |                                                                                          |       
|Item 4.     | Controls and Procedures                                                                  | 24    
|            |                                                                                          |       
|            | Part
    II – Other Information                                                          |       
|            |                                                                                          |       
|Item 2.     | Unregistered Sales of Equity Securities
    and Use of Proceeds                          | 25    
|            |                                                                                          |       
|Item
    6. | Exhibits                                                                                 | 25    











EXPLANATORY
NOTE



These
FinancialStatementsarepart
ofthe
Quarterly
Reporton
Form10-Q
forthe
threemonths
ended
March31,
2014anddo
notcontain
financial
statements
audited
orreviewed
byan
independent
registered
public accounting
firm for
the three
months
ended
March 31, 2014
and 2013orthe
yearended
December
31,2013.





























Part
1. Financial
Statements



Item
1-Financial
Statements



KENERGY
SCIENTIFIC, INC.

CONDENSED
BALANCE SHEETS



|                                                                                              |  |   | March
                                                                                                                                 31, |  |  |   | December
                                                                                                                                 31, | 
|--------------------------------------------------------------------------------------------- |  | - | ------------------------------------------------------------------------------------------------------------------------------------------ |  |  | - | --------------------------------------------------------------------------------------------------------------------------------------------- | 
|                                                                                              |  |   | 2014                                                                                                                                       |  |  |   | 2013                                                                                                                                          | 
|ASSETS                                                                                        |  |   | (Unaudited)                                                                                                                                |  |  |   | (Unaudited)                                                                                                                                   | 
|Current assets:                                                                               |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Cash and
    cash equivalents                                                                 |  | $ | 2,024                                                                                                                                      |  |  | $ | 3,039                                                                                                                                         | 
|Accounts receivable,
    net of allowance for doubtful accounts of $3,479                     |  |   | 72,493                                                                                                                                     |  |  |   | 74,903                                                                                                                                        | 
|Inventory                                                                                     |  |   | —                                                                                                                                          |  |  |   | —                                                                                                                                             | 
|Prepaid
    and other current assets                                                          |  |   | —                                                                                                                                          |  |  |   | —                                                                                                                                             | 
|Total current assets                                                                          |  |   | 74,517                                                                                                                                     |  |  |   | 77,942                                                                                                                                        | 
|Property and equipment,
    net                                                               |  |   | 4,437                                                                                                                                      |  |  |   | 4,625                                                                                                                                         | 
|Intangible
    assets, net and security deposits                                              |  |   | —                                                                                                                                          |  |  |   | —                                                                                                                                             | 
|Total
    assets                                                                              |  | $ | 78,954                                                                                                                                     |  |  | $ | 82,567                                                                                                                                        | 
|                                                                                              |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|LIABILITIES & STOCKHOLDERS’
    DEFICIT                                                       |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Current liabilities:                                                                          |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Accounts payable and
    accrued expenses                                                     |  |   | 1,283,414                                                                                                                                  |  |  | $ | 1,327,105                                                                                                                                     | 
|Due to related parties                                                                        |  |   | 120,719                                                                                                                                    |  |  |   | 107,731                                                                                                                                       | 
|Revolving Line of
    Credit from Mina Mar Group @5%                                          |  |   | 290,030                                                                                                                                    |  |  |   | 290,030                                                                                                                                       | 
|Notes Payable                                                                                 |  |   | 186,600                                                                                                                                    |  |  |   | 186,600                                                                                                                                       | 
|Promissory note due
    to related parties                                                    |  |   | 75,000                                                                                                                                     |  |  |   | 75,000                                                                                                                                        | 
|Convertible promissory
    note, net of unamortized debt discount                             |  |   | 180,000                                                                                                                                    |  |  |   | 180,000                                                                                                                                       | 
|Convertible debentures,
    net of unamortized debt discount                                  |  |   | 1,279,598                                                                                                                                  |  |  |   | 1,279,598                                                                                                                                     | 
|Derivative
    liabilities                                                                    |  |   | 810,771                                                                                                                                    |  |  |   | 810,771                                                                                                                                       | 
|Total
    current liabilities                                                                 |  |   | 4,226,132                                                                                                                                  |  |  |   | 4,265,835                                                                                                                                     | 
|                                                                                              |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Stockholders' deficit:                                                                        |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Preferred stock, $1.00
    par value; authorized 1,000,000 shares; 62,270                     |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|issued and outstanding, respectively                                                          |  |   | 62,270                                                                                                                                     |  |  |   | 62,270                                                                                                                                        | 
|Common stock:                                                                                 |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Class A – no
    par value; authorized 10,000,000,000 shares;                                 |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|5,432,475,719 and
    1,480,028,558 shares issued and outstanding, respectively (see note 11) |  |   | 11,938,355                                                                                                                                 |  |  |   | 11,938,355                                                                                                                                    | 
|Class B - $.01 par
    value; authorized 50,000,000                                           |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Shares; 20,000 shares
    issued and outstanding                                              |  |   | 100                                                                                                                                        |  |  |   | 100                                                                                                                                           | 
|Class C - $.01 par
    value; authorized 20,000,000                                           |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Shares; no shares
    issued and outstanding                                                  |  |   | —                                                                                                                                          |  |  |   |                                                                                                                                               | 
|Additional paid-in
    capital                                                                |  |   | 1,936,969                                                                                                                                  |  |  |   | 1,936,969                                                                                                                                     | 
|Accumulated
    deficit                                                                       |  |   | -18,084,872                                                                                                                                |  |  |   | -18,111,962                                                                                                                                   | 
|Total
    stockholders' deficit                                                               |  |   | -4,147,178                                                                                                                                 |  |  |   | -4,174,268                                                                                                                                    | 
|                                                                                              |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|Total
    liabilities and stockholders' deficit                                               |  | $ | 78,954                                                                                                                                     |  |  | $ | 82,567                                                                                                                                        | 
|                                                                                              |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|                                                                                              |  |   |                                                                                                                                            |  |  |   |                                                                                                                                               | 
|See accompanying notes to
    condensed financial statements                                 





- 1 -





KENERGY
SCIENTIFIC, INC.

CONDENSED
STATEMENTS OF OPERATIONS

(Unaudited)



|                                                             |  | Three
    months ended
|------------------------------------------------------------ |  | ----------------------
|                                                             |  | March
    31, 2014    
|Net sales                                                    |  |                       
|Cost of sales                                                |  |                       
|Gross margin (loss)                                          |  |                       
|                                                             |  |                       
|Operating expenses:                                          |  |                       
|General and administrative
    expenses                      |  |                       
|Depreciation and amortization                                |  |                       
|                                                             |  |                       
|Total operating expenses                                     |  |                       
|                                                             |  |                       
|Profit / (Loss) from
    operations                          |  |                       
|                                                             |  |                       
|Other income (expense):                                      |  |                       
|Interest expense                                             |  |                       
|Amortization of debt
    discount                            |  |                       
|Gain (loss) on valuation
    of derivative                   |  |                       
|Total other income (expense)                                 |  |                       
|Income (loss) from operations before Income
    taxes        |  |                       
|                                                             |  |                       
|                                                             |  |                       
|                                                             |  |                       
|Provision for income
    taxes                               |  |                       
|                                                             |  |                       
|Net income (loss) attributable to common
    shares          |  |                       
|                                                             |  |                       
|Basic income (loss) per common share                         |  |                       
|Diluted income (loss) per common share                       |  |                       
|                                                             |  |                       
|Weighted average shares outstanding -                        |  |                       
|Basic (see note 5)                                           |  |                       
|Diluted (see note 5)                                         |  |                       
|                                                             |  |                       
|                                                             |  |                       
|                                                             |  |                       
|                                                             |  |                       
|See accompanying notes to
    condensed financial statements





- 2 -





KENERGY
SCIENTIFIC, INC.

CONDENSED
STATEMENTS
OFCASHFLOWS

(Unaudited)





|                                                             |  | Three
    months Ended
|------------------------------------------------------------ |  | ----------------------
|                                                             |  | March
    31, 2014    
|                                                             |  |                       
|                                                             |  |                       
|Net income (loss)                                            |  | $                     
|Adjustments to reconcile net income
    (loss) to net        |  |                       
|cash provided by
    (used in) operating activities:         |  |                       
|Amortization
    of intangibles and depreciation expense     |  |                       
|(Gain)
    loss on valuation of derivative                   |  |                       
|Amortization
    of debt discount                            |  |                       
|Beneficial
    interest on conversion of debt                |  |                       
|Imputed
    interest on related party debt                   |  |                       
|Changes in assets and liabilities:                           |  |                       
|Decrease
    in accounts receivable                          |  |                       
|Decrease
    (increase) in inventories                       |  |                       
|Decrease
    (increase) in prepaid expenses                  |  |                       
|Increase in accounts
    payable and accrued Liabilities     |  |                       
|Increase
    in amounts due to related parties               |  |                       
|Net cash (used
    in) operating activities                  |  |                       
|                                                             |  |                       
|Cash flows from investing activities:                        |  |                       
|Purchase
    of intangible assets                            |  |                       
|Net cash (used in) investing activities                      |  |                       
|                                                             |  |                       
|Cash flows from financing activities:                        |  |                       
|Issuance
    of promissory notes                             |  |                       
|Net cash provided by financing activities                    |  |                       
|                                                             |  |                       
|Net (decrease) in cash and cash equivalents                  |  |                       
|                                                             |  |                       
|Cash and cash equivalents at beginning
    of period         |  |                       
|                                                             |  |                       
|Cash and cash equivalents at end of period                   |  | $                     
|                                                             |  |                       
|SUPPLEMENTAL CASH FLOW INFORMATION:                          |  |                       
|                                                             |  |                       
|Taxes paid                                                   |  | $                     
|Interest paid                                                |  | $                     
|                                                             |  |                       
|                                                             |  |                       
|                                                             |  |                       
|                                                             |  |                       
|                                                             |  |                       
|See accompanying
    notes to condensed financial statements





- 3 -





KENERGY
SCIENTIFIC, INC.

CONDENSED
STATEMENTS
OFCASH
FLOWS
(Continued)

(Unaudited)



Supplemental
Schedule
ofNon-Cash
Financing
Activities:



For
thethree
months
ended
March31,2014:

No
material non-cash financing activities happened during the three months ended March 31, 2014.



Forensic
accounting and records keeping indicates that all the above arrangements were primarily with friends and relatives of previous
management. The debts were substantially paid off. When the new management took over and these “creditors” came forward
none of them were able to substantiate or prove their claims either through cancelled cheques or wires. Moreover, most had conversion
rights at 0000.1 below the Company par value of 0.0001 thus making the transaction void.



For
thethree
months
ended
March31,2013:

|a) |  | The
                                                                                                                                                                                                                                      Company
                                                                                                                                                                                                                                      issued
                                                                                                                                                                                                                                      an
                                                                                                                                                                                                                                      aggregate
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      383,852,814
                                                                                                                                                                                                                                      shares
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      Class
                                                                                                                                                                                                                                      A
                                                                                                                                                                                                                                      common
                                                                                                                                                                                                                                      stock
                                                                                                                                                                                                                                      for
                                                                                                                                                                                                                                      repayment
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      convertible
                                                                                                                                                                                                                                      debenture
                                                                                                                                                                                                                                      and
                                                                                                                                                                                                                                      accrued
                                                                                                                                                                                                                                      interest
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      lieu
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      cash,
                                                                                                                                                                                                                                      valued
                                                                                                                                                                                                                                      at
                                                                                                                                                                                                                                      $113,498.
                                                                                                                                                                                                                                      The
                                                                                                                                                                                                                                      difference
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      market
                                                                                                                                                                                                                                      value
                                                                                                                                                                                                                                      and
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      reduction
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      debt
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      $30,200
                                                                                                                                                                                                                                      was
                                                                                                                                                                                                                                      charged
                                                                                                                                                                                                                                      to
                                                                                                                                                                                                                                      beneficial
                                                                                                                                                                                                                                      interest
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      amount
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      $83,298.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | The
                                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                                   issued
                                                                                                                                                                                                                                   an
                                                                                                                                                                                                                                   aggregate
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   536,528,400
                                                                                                                                                                                                                                   shares
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   Class
                                                                                                                                                                                                                                   A
                                                                                                                                                                                                                                   common
                                                                                                                                                                                                                                   stock
                                                                                                                                                                                                                                   for
                                                                                                                                                                                                                                   repayment
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   convertible
                                                                                                                                                                                                                                   debenture
                                                                                                                                                                                                                                   and
                                                                                                                                                                                                                                   accrued
                                                                                                                                                                                                                                   interest
                                                                                                                                                                                                                                   in
                                                                                                                                                                                                                                   lieu
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   cash,
                                                                                                                                                                                                                                   valued
                                                                                                                                                                                                                                   at
                                                                                                                                                                                                                                   $135,041.
                                                                                                                                                                                                                                   The
                                                                                                                                                                                                                                   difference
                                                                                                                                                                                                                                   in
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   market
                                                                                                                                                                                                                                   value
                                                                                                                                                                                                                                   and
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   reduction
                                                                                                                                                                                                                                   in
                                                                                                                                                                                                                                   debt
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   $29,474
                                                                                                                                                                                                                                   was
                                                                                                                                                                                                                                   charged
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   beneficial
                                                                                                                                                                                                                                   interest
                                                                                                                                                                                                                                   in
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   amount
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   $105,567.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c) |  | The
                                                                                                                                                                                                                                      Company
                                                                                                                                                                                                                                      issued
                                                                                                                                                                                                                                      an
                                                                                                                                                                                                                                      aggregate
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      68,156,800
                                                                                                                                                                                                                                      shares
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      Class
                                                                                                                                                                                                                                      A
                                                                                                                                                                                                                                      common
                                                                                                                                                                                                                                      stock
                                                                                                                                                                                                                                      for
                                                                                                                                                                                                                                      repayment
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      convertible
                                                                                                                                                                                                                                      debenture
                                                                                                                                                                                                                                      and
                                                                                                                                                                                                                                      accrued
                                                                                                                                                                                                                                      interest
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      lieu
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      cash,
                                                                                                                                                                                                                                      valued
                                                                                                                                                                                                                                      at
                                                                                                                                                                                                                                      $13,631.
                                                                                                                                                                                                                                      The
                                                                                                                                                                                                                                      difference
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      market
                                                                                                                                                                                                                                      value
                                                                                                                                                                                                                                      and
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      reduction
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      debt
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      $3,408
                                                                                                                                                                                                                                      was
                                                                                                                                                                                                                                      charged
                                                                                                                                                                                                                                      to
                                                                                                                                                                                                                                      beneficial
                                                                                                                                                                                                                                      interest
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      amount
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      $10,223.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|d) |  | The
                                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                                   has
                                                                                                                                                                                                                                   issued
                                                                                                                                                                                                                                   an
                                                                                                                                                                                                                                   aggregate
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   43,142,857
                                                                                                                                                                                                                                   shares
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   Class
                                                                                                                                                                                                                                   A
                                                                                                                                                                                                                                   common
                                                                                                                                                                                                                                   stock
                                                                                                                                                                                                                                   upon
                                                                                                                                                                                                                                   conversion
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   6,040
                                                                                                                                                                                                                                   shares
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   Convertible
                                                                                                                                                                                                                                   Preferred
                                                                                                                                                                                                                                   Shares
                                                                                                                                                                                                                                   with
                                                                                                                                                                                                                                   Southridge
                                                                                                                                                                                                                                   Partners
                                                                                                                                                                                                                                   pursuant
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   terms
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   Equity
                                                                                                                                                                                                                                   Purchase
                                                                                                                                                                                                                                   Agreement
                                                                                                                                                                                                                                   finalized
                                                                                                                                                                                                                                   on
                                                                                                                                                                                                                                   July
                                                                                                                                                                                                                                   16,
                                                                                                                                                                                                                                   2012.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|e) |  | The
                                                                                                                                                                                                                                      Company
                                                                                                                                                                                                                                      consented
                                                                                                                                                                                                                                      to
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      assignment
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      $23,400
                                                                                                                                                                                                                                      due
                                                                                                                                                                                                                                      to
                                                                                                                                                                                                                                      Charles
                                                                                                                                                                                                                                      Basner
                                                                                                                                                                                                                                      to
                                                                                                                                                                                                                                      Star
                                                                                                                                                                                                                                      City
                                                                                                                                                                                                                                      Capital,
                                                                                                                                                                                                                                      LLC
                                                                                                                                                                                                                                      and
                                                                                                                                                                                                                                      their
                                                                                                                                                                                                                                      affiliates.
                                                                                                                                                                                                                                      Some
                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      amounts
                                                                                                                                                                                                                                      paid
                                                                                                                                                                                                                                      to
                                                                                                                                                                                                                                      Charles
                                                                                                                                                                                                                                      Basner
                                                                                                                                                                                                                                      for
                                                                                                                                                                                                                                      these
                                                                                                                                                                                                                                      assignments
                                                                                                                                                                                                                                      were
                                                                                                                                                                                                                                      reinvested
                                                                                                                                                                                                                                      in
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      Company
                                                                                                                                                                                                                                      and
                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                      Company
                                                                                                                                                                                                                                      issued
                                                                                                                                                                                                                                      replacement
                                                                                                                                                                                                                                      notes
                                                                                                                                                                                                                                      for
                                                                                                                                                                                                                                      these
                                                                                                                                                                                                                                      amounts.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|f) |  | The
                                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                                   consented
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   assignment
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   $25,000
                                                                                                                                                                                                                                   due
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   Stuart
                                                                                                                                                                                                                                   W.
                                                                                                                                                                                                                                   DeJonge
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   Star
                                                                                                                                                                                                                                   City
                                                                                                                                                                                                                                   Capital,
                                                                                                                                                                                                                                   LLC
                                                                                                                                                                                                                                   and
                                                                                                                                                                                                                                   their
                                                                                                                                                                                                                                   affiliates.
                                                                                                                                                                                                                                   Some
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   amounts
                                                                                                                                                                                                                                   paid
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   Stuart
                                                                                                                                                                                                                                   W.
                                                                                                                                                                                                                                   DeJonge
                                                                                                                                                                                                                                   for
                                                                                                                                                                                                                                   these
                                                                                                                                                                                                                                   assignments
                                                                                                                                                                                                                                   were
                                                                                                                                                                                                                                   reinvested
                                                                                                                                                                                                                                   in
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                                   and
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                                   issued
                                                                                                                                                                                                                                   replacement
                                                                                                                                                                                                                                   notes
                                                                                                                                                                                                                                   for
                                                                                                                                                                                                                                   these
                                                                                                                                                                                                                                   amounts.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|g) |  | The
                                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                                   consented
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   the
                                                                                                                                                                                                                                   assignment
                                                                                                                                                                                                                                   of
                                                                                                                                                                                                                                   $25,000
                                                                                                                                                                                                                                   due
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   Opal
                                                                                                                                                                                                                                   Marketing
                                                                                                                                                                                                                                   Corp.
                                                                                                                                                                                                                                   to
                                                                                                                                                                                                                                   Star
                                                                                                                                                                                                                                   City
                                                                                                                                                                                                                                   Capital,
                                                                                                                                                                                                                                   LLC
                                                                                                                                                                                                                                   and
                                                                                                                                                                                                                                   their
                                                                                                                                                                                                                                   affiliates.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|h) |  | The
                                                                                                                                              Company
                                                                                                                                              issued
                                                                                                                                              10,000
                                                                                                                                              shares
                                                                                                                                              of
                                                                                                                                              Preferred
                                                                                                                                              Class
                                                                                                                                              B
                                                                                                                                              stock
                                                                                                                                              to
                                                                                                                                              Zoran
                                                                                                                                              Cvetojevic
                                                                                                                                              for
                                                                                                                                              his
                                                                                                                                              service
                                                                                                                                              at
                                                                                                                                              CEO.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





















See
accompanying
notesto condensed
financial
statements



- 4 -





KENERGY
SCIENTIFIC, INC.

NOTES
TO CONDENSED FINANCIAL STATEMENTS

MARCH
31, 2014 and 2013



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
June2009
Kenneth
P.Glynnacquired
debtowed
bySpeechSwitch,
Inc.tothird
partycreditors
andthe
company
moved
itsheadquarters
fromMatawan,
NJto Flemington,
NJ.



On
February
3, 2011,
theCompany
changed
its nameto Kenergy
Scientific,
Inc.



In
November
2011,
theCompany
openeditsfirst
company-owned
GreenSmartStoreatthe
Flemington
Marketplace
in Flemington,
NJ.



On
February
4,2013,
theCompany
announced
thatthey
wouldbeclosing
theirGreenSmart
storeand“would
seekanew
business
entity acquisition
to change
its direction
and its financial
status”.
On March 1, 2013,
the Company
announced
that they had
closed
the GreenSmart
store
andthe
goods
andcontents
were sold
out at
a 60% discount
to loyal
customers
anddebtors
fora
reduction
ofsome
debts.



On
July 2 2013, the Company announced that it secured certain complex financing via the sale of preferred shares. The new majority
preferred shareholder, and stakeholder Mina Mar Group Inc, a Canadian based M&A and IR firm has provided significant support
in terms of both personnel and resources.



On
July 26, 2013, the Company terminated merger discussions with PanTuffa Group and accepted the resignation of Charles Zein as President-Elect
of Kenergy.



On
August 8, 2013, the Company secured a $1 million dollar revolving line of credit at 5% per annual interest rate with its preferred
shareholder Mina Mar Group. The funds are used to fund daily operations, develop the Sparx Media business and settle creditor
debts. The balance of the amount drawn as on 30 September 2013 was $229,727 and the interest accrued is $3,750.



On
August 14, 2013, the Company closed the merger with Sparx Business Media Inc through issuance of 3,387,500 shares of Kenergy.



- 5 -







On
September 13, 2013, the Company terminated the employment contract with Manuel Canales and accepted the resignation of Andrea
Zecevic and Hugo Rubio as Board Members. In addition Zoran Cvetojevic was appointed Interim CEO.



On
March 31, 2014, the Company appointed Rajesh Babaria and Rajesh Dholakiya as co-chairs in the position of CTO.





NOTE
2BUSINESS
OPERATIONS



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.



From
August 14, 2013, the Company commenced operations of a wholly owned media company under the brand name Sparx Business Media Inc.
and earned licensing revenue from Sparx.



OUR
STRATEGY FOR GROWTH MAY INCLUDE JOINT VENTURES, STRATEGIC ALLIANCES AND MERGERS AND ACQUISITIONS, WHICH COULD BE DIFFICULT TO
MANAGE.



The
successful execution of the growth strategy may depend on many factors, including identifying suitable companies, negotiating
acceptable terms, successfully consummating the corporate relationships and obtaining the required financing on acceptable terms.
The Company may be exposed to risks relating to incorrect assessment of new businesses and technologies. The Company could face
difficulties and unexpected costs during and after the establishment of corporate relationships. Acquisitions may be foreign acquisitions
which would add additional risks including political, regulatory and economic risks related to specific countries as well as currency
risks.

The
documented difficulties with the transfer agent coupled with the hostile creditors are making daily on- going operations next
to impossible for the new management. The Company was in talks with bankruptcy trustees and was considering seeking relief under
Chapter 11. Subsequently, as of December 01, 2013, the Company has resolved its differences with the transfer agent and is back
to normal functionality.



Products
and Services

The
following description of the Company’s business is intended to provide an understanding of the Company product and the direction
of the Company’s 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. The Company
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 market value” of GlynnTech, Inc. in the amount of $425,000.00. 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 interest in potential purchase
of this technology following FDA approval of this product.



(b)
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.

(c)
In the wind power energy production systems, ten companies will review various micro-turbine products to license and resell.



- 6 -







On
purchase of controlling shares by Mina Mar Group, the Company changed its business focus as a marketing media company through
its subsidiary Sparx Business Media Inc. The company manages social media networks and offers various customer service solutions
for their corporate clients through a company owned call centre. The media group also acts as a sales agent for a Delaware USA
real estate timeshare and fractional ownership company.



Product
Development

The
Company 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 their own patent rights
and evolve both new product and intellectual property transfer (sale or license) opportunities.



Sales
and Marketing

In
November 2011, the Company opened its first company-owned GreenSmart retail store. On March 1, 2013, the Company announced that
they had closed the GreenSmart store and the goods and contents were sold out at a 60% discount to loyal customers and debtors
for a reduction of some debts. There are currently no plans to develop new retail stores in the future. The Company closed the
store in June 2013 and disposed of the small inventory items.



Kenergy
Scientific’s Management

On
June 30, 2013, Kenneth Glynn resigned from his positions at Kenergy Scientific, Inc., including President and Chairman of the
Board, Ken Moser has simultaneously resigned from the Board of Directors.



The
following individuals were elected to the Board of Directors effective June 30, 2013

·
Zoran Cvetojevic Chairman of the Board and CEO

·
Jelena Cvetojevic

·
Andrea Zecevic

·
Hugo Rubio



Resignations:

Charles
Zein President (Subsequently resigned on July 26, 2013)

Manuel
Canales CEO / COO (Subsequently terminated on September 13, 2013)

| | - | Teresa
                                                                                                                            Rubio
                                                                                                                            Secretary
                                                                                                                            and
                                                                                                                            Treasurer
                                                                                                                            (Subsequently
                                                                                                                            resigned
                                                                                                                            on
                                                                                                                            July
                                                                                                                            4,
                                                                                                                            2013)
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Andrea
                                                                                                                            Zecevic,
                                                                                                                            Director
                                                                                                                            (Subsequently
                                                                                                                            resigned
                                                                                                                            on
                                                                                                                            July,
                                                                                                                            4
                                                                                                                            2013)
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Hugo
                                                                                                                            Rubio,
                                                                                                                            Director
                                                                                                                            (Subsequently
                                                                                                                            resigned
                                                                                                                            on
                                                                                                                            July
                                                                                                                            4,
                                                                                                                            2013)
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





NOTE
3GOING
CONCERN



The
accompanying
financial
statements
havebeen
prepared
inconformity
withaccounting
principles
generally
acceptedin theUnited
States of
America, which contemplates continuation of the Company as a going concern.



For
thethree
months
ended
March31,
2014,
theCompany
hadanegative
cashflowfrom
operations,
negativeworking
capital and
aloss
from operations.
These
mattersraisesubstantial
doubtabouttheCompany's
abilitytocontinue
asagoingconcern.
Therefore,
recoverability
ofa major
portion
ofthe
recorded
asset
amounts
shownin theaccompanying
balancesheets
isdependent
uponcontinued
operations
ofthe
Company,
which in turn,
isdependent
upon the
Company's
abilitytoraisecapital
and/or generate
positive
cashflowfrom operations.



The
new management that acquired controlling shares of the Company recently, has provided financing to the Company through revolving
line of credit from one of its group company and has also recorded sales showing some positive signs of generating cash flow from
operations.



- 7 -







NOTE
4SUMMARY
OFSIGNIFICANT
ACCOUNTING
POLICIES





|a) |  | Basis
                                                                                                                                                                                                                                                    of
                                                                                                                                                                                                                                                    Presentation
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
accompanying
condensed
unaudited
interim
financial
statements
includedherein
havebeen
prepared,
withoutaudit,pursuant
totherules
andregulations
ofthe
Securities
andExchange
Commission
("SEC").
Thecondensed
financial
statements
andnotes
arepresented
aspermitted
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
withaccounting
principles
generally
accepted in the
UnitedStates
ofAmerica
havebeencondensed
oromitted
pursuant
tosuch
rulesandregulations,
although
theCompany
believesthatthe
disclosures
are adequate
tomaketheinformation
presented
notmisleading.
Itissuggested
that
thesecondensed
financial
statements
beread
inconjunction
withtheDecember31,
2013unaudited
financial
statements
andthe
accompanying
notesthereto.
The financial
statements
thatwere
reported
in theCompany’s
Form10-Kfor
thefiscal
yearended
December
31,2013 donotcontain
auditedfinancial
statements
audited
byan
independent
registered
publicaccounting
firm.Whilemanagement
believes
theprocedures
followed
inpreparing
these
condensed
financial
statements
are reasonable,
theaccuracy
ofthe
amounts
areinsomerespects
dependent
upon the
factsthat will exist,
andprocedures
that will beaccomplished
bythe
Company
laterintheyear.Theseresults
arenot
necessarily
indicative
ofthe
results
tobeexpected
forthe
fullyear.



These
condensed
unaudited
financial
statements
reflectalladjustments,
including
normal
recurring
adjustments,
which,
intheopinion
of management,
arenecessary
topresent
fairly
theoperations
andcash
flows for
theperiods
presented.



|b) |  | Use
                                                                                                                                                                                                                                                    of
                                                                                                                                                                                                                                                    Estimates
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
preparation
offinancial
statements
inconformity
withaccounting
principles
generally
acceptedintheUnited
States
ofAmerica
requires
management
to makeestimates
andassumptions
thataffect
the reported
amountsofassets
andliabilities
anddisclosure
ofcontingent
assets
and liabilities
atthe
dateof
thefinancial
statements
andthe
reported
amounts
ofrevenue
and expenses
during
thereporting
period.
Actualresults
could differ
from
those
estimates.



|c) |  | Revenue
                                                                                                                                                                                                                                                    Recognition
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company used to derive its revenues from the sales of portable solar powered products, solar rechargeable lantern/flashlight devices,
solar backpack rechargers and clothing made from recycled products.These products were sold directly
to consumers through website or by direct sales. Payment was made for the products prior to delivery.

The
Company has changed its business activity afterpurchase of controlling
shares by Mina Mar Group. The Company changed its business focus as a marketing media company through its subsidiary Sparx Business
Media Inc. The company manages social media networks and offers various customer service solutions for their corporate clients
through a company owned call centre. The media group also acts as a sales agent for a Delaware USA real estate timeshare and fractional
ownership company.



|d) |  | Product
                                                                                                                                                                                                                                                    Warranties
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company warranted its solar powered products from defects for 30 days from delivery to the customer.The
Company estimated its warranty costs based on historical warranty claims experience in estimating potential warranty claims. Due
to no sales during the quarter, management has not included an accrual for potential warranty claims and do not expect to incur
any warranty costs in future. The Company is no longer in the business of power energy production systems or related products
and therefore now has no product warranty and does not need to accrue for any warranty claim.





- 8 -







|e) |  | Research
                                                                                                                                                                                                                                                    and
                                                                                                                                                                                                                                                    Development
                                                                                                                                                                                                                                                    Costs
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Research
anddevelopment
costs
arecharged
to expense
asincurred.



|f) |  | Cash
                                                                                                                                                                                                                                                    and
                                                                                                                                                                                                                                                    Cash
                                                                                                                                                                                                                                                    Equivalents
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company
considers
allhighly
liquid
investments
purchased
withoriginal
maturities
ofthree
months
orless
tobecashequivalents.
There
wereno
cashequivalents
atMarch
31,2014
andDecember31,2013.



|g) |  | Intangible
                                                                                                                                                                                                                                                    Assets
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Development,
registration
andmaintenance
costsassociated
withthefiling
andregistration
ofpatents
areprepaid
andamortized
overthe
remaining
life ofthe patent,
not to exceed
20 years.



As
defined
in ASC360-10-35,
“Impairment
orDisposal
ofLong-Lived
Assets”,
long-lived
assets
andcertain
identifiable
intangibles
tobeheld and
used
ordisposed
ofby
anentity
bereviewed
forimpairment
whenever
eventsorchanges
incircumstances
indicate
thatthe
carrying amount
ofan
asset
maynot
berecoverable.
TheCompany
hasadopted
thisstatement
anddetermined
that no
additional
impairment
lossshould
berecognized
forapplicable
assets
atthis
time.



|h) |  | Income
                                                                                                                                                                                                                                                    Taxes
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company
accounts
forincome
taxesin
accordance
withASC740-10,
“Income
Taxes”,
whichrequires
anasset
andliability
approach
to financial
accounting
andreporting
forincome
taxes. Deferred
income
taxes
andliabilities
arecomputed
annually
fordifferences
betweenthe financial
statement
andthe
taxbasis
ofassets
andliabilities
that
willresult
intaxable or
deductible
amounts
inthefuture
based
onenacted
tax lawsandrates
applicable
totheperiods
inwhich
thedifferences
areexpected
toaffect
taxableincome.
Valuation
allowances
areestablished
whennecessary
to reducedeferredtax assets
to theamount
expected
to berealized.



|i) |  | Derivative
                                                                                                                                                     Liabilities
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company
accounts
forits
embedded
conversion
features
initsconvertible
debentures
inaccordance
ASC815-10,
"Derivatives
and Hedging",
whichrequires
aperiodic
valuation
oftheir
fairvalue
andacorresponding
recognition
ofliabilities
associated
with such derivatives,
andASC815-40,
“Contracts
in Entity’s
OwnEquity”.
Therecognition
ofderivative
liabilities
related
tothe
issuance
of convertible
debtis
applied
first
to theproceeds
ofsuch
issuance
as a debt
discount,
atthe
dateof
issuance,
andthe
excessofderivative
liabilities
overtheproceeds
is recognized
as “Loss
on Valuation
of Derivative”
in other
expense
in theaccompanying
financial
statements.
Any subsequent
increase
or decrease
inthefairvalue
ofthe
derivative
liabilities isrecognized
as “Other
expense”
or“Other
income”,
respectively.



|j) |  | Fair
                                                                                                                                                     Value
                                                                                                                                                     of
                                                                                                                                                     Instruments
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
carryingamount
reported
inthebalancesheet
forcash
andcash
equivalents,
deposits,
prepaidexpenses,
accounts
payable,
andaccrued
expenses
approximate
fair
valuebecause
ofthe
immediateorshort-term
maturityofthese
financial
instruments.
Thecarrying
amount
reported
fornotes
payableapproximates
fairvaluebecause,
ingeneral,
theinterest
onthe
underlying
instruments
fluctuates
withmarket
rates.



|k) |  | Concentrations
                                                                                                                                                                                                                                                    of
                                                                                                                                                                                                                                                    Credit
                                                                                                                                                                                                                                                    Risk
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Financial
instruments
thatpotentially
subject
theCompany
toconcentrations
ofcredit
riskconsist
primarily
oftrade
accountsreceivable
and cash.
AsofMarch
31,2014
andDecember
31,2013,
theCompany
believesithasnosignificant
riskrelated
toitsconcentration
withinits accounts
receivable.



- 9 -







The
Company
maintains
cashandcash
equivalent
balancesata financial
institution
thatis insured
bythe
Federal
Deposit
Insurance

Corporation
up to$250,000.
There
wereno
uninsured
cashbalancesatMarch
31,2014
andDecember
31,2013.





NOTE
5INCOME
(LOSS)
PERSHARE



ASC
260,“Earnings
PerShare”requires
presentation
ofbasic
earnings
pershare(“basic EPS”)
anddiluted
earnings
pershare
(“diluted
EPS”). The
Company’s
basic
income
(loss)
per common
share
isbased
onnet
incomeorloss
forthe
relevant
period,
divided
bythe
weighted
average
number
ofcommon
shares outstanding
during
theperiod.
Dilutedincomeorloss
per common
share
isbased
onnet
incomeorloss,
divided
by theweighted
averagenumber
ofcommon
sharesoutstanding
during
theyear,
including
commonshare
equivalents,
such
asoutstanding
stock
options.
Thecomputation
ofdiluted
losspershare
alsodoesnot
assume
conversion,
exercise
orcontingent
exerciseofsecurities
dueto
the beneficial
conversion
ofrelated
partyaccounts
asthese
shares
that
would haveananti-dilutive
effect.



|                                                                                        |  | Three
    months Ended |               | Three
    months Ended
|--------------------------------------------------------------------------------------- |  | ---------------------- | ------------- | ----------------------
|                                                                                        |  | March
    31, 2014     |               | March
    31, 2013    
|                                                                                        |  |                        |               |                       
|Basic net income (loss)
    per share computation:                                      |  |                        |               |                       
|Net income
    (loss) attributable to common stockholders                               |  | $                      | 27,090        |                       
|Weighted-average common
    shares outstanding (see below)                              |  |                        | 1,566,332,705 |                       
|Basic net income (loss)
    per share attributable to common stockholders (see below)   |  | $                      | 0.00          |                       
|                                                                                        |  |                        |               |                       
|                                                                                        |  |                        |               |                       
|Diluted net income
    (loss) per share computation                                     |  |                        |               |                       
|Net income (loss) attributable
    to common stockholders                               |  | $                      | 27,090        |                       
|Weighted-average common
    shares outstanding (see below)                              |  |                        | 1,566,332,705 |                       
|Incremental shares
    attributable to the assumed conversion of                        |  |                        |               |                       
|Convertible debenture
    and convertible promissory note                               |  |                        | —             |                       
|Total adjusted weighted-average
    shares                                              |  |                        | 1,566,332,705 |                       
|Diluted net income
    (loss) per share attributable to common stockholders (see below) |  | $                      | 0.00          |                       





At
March31,
2014,theCompany
hadcommon
stockequivalents
of 1,566,332,705, and atMarch
31,2013theCompany
hadcommon
stockequivalents
of 2,491,709,429.





NOTE
6INCOME
TAXES



Deferred
income
taxeswillbedetermined
using
theliability
method
forthe
temporary
differences
betweenthefinancial
reporting
basis
and income
tax basis
ofthe
Company's
assets
andliabilities.
Deferred
income
taxeswill be
measured
based
onthe
tax rates
expected
tobein effect whenthetemporary
differences
areincluded
in theCompany's
tax return.
Deferred
tax assets
andliabilities
arerecognized
based
on anticipated
future
tax consequences
attributable
to differences
between financial
statement
carrying
amounts
of assets
and liabilities
and their
respective
tax bases.





|At March 31, 2013 and December 31, 2012 deferred tax
    assets consist of the following:
|-----------------------------------------------------------------------------------------
|                                                                                         
|Deferred
    tax assets                                                                  
|Less:
    valuation allowance                                                            
|Net
    deferred
    taxasset                                                            



- 10 -





At
March31,
2014
andDecember31,2013,
theCompany
hadfederal
netoperating
losscarryforwards
intheapproximate
amounts
of $2,897,000and$2,925,000,
respectively,
available
tooffset
future
taxable
income.
The Company
established
valuation
allowances
equal
to the full
amount
ofthe
deferred
tax assets
dueto theuncertainty
ofthe
utilization
ofthe
operating
losses
in future
periods.





NOTE
7RELATED
PARTY
TRANSACTIONS



On
June1,2009
andJune
2,2009,
theCompany
issued
two(2)
one-year
promissory
notesinthe
aggregate
of$37,000
toGlynnTech,
Inc,for
GlynnTech
toassume
alikeamountof current
obligations
thatthe
Company
wasunable
topayfromcurrent
operations.
Thedebt
wasdueon orbefore
the1st anniversary
andwas
interest
free.



On
June
18,2009,
theCompany
acquiredthepatent
rights
andtechnology
relating
tocancerdrug
deliverysystems
developed
byGlynnTech,
Inc.
bythe
issuance
ofthree
(3)$100,000
one-year promissory
notes.
Thepromissory
notesweredue
onor
before
the1stanniversary
ofthe
notes
andwere
interest
free.



On
December
28,2009,
theCompany
completed
thetransfer
ofthe
patent
rights
andtechnology
relating
tocancerdrug
deliverysystems
developed
byGlynnTech,
Inc.
bythe
issuance
ofthree
(3) one-year
promissory
notes
for the aggregate
amount
of$125,000.
Thepromissory
notes
aredue
on orbefore
the1st
anniversary
of thenotes
andare
interest
free.



On
June8,2010
andJune
22,2010,
theCompany
executed
twowrap-around
agreements,
inanaggregate
of$337,000,
toassign
amounts
due under
theseone-yearpromissory
notes to
EPICWorldwide,
Inc.
TheCompany
was indefault
onthe
original
notesand this
allowed
the Company
to extend
thepayment
terms for
an additional
year while
the Company
attains
alternate
financing.



On
July1,2012,
theCompany
consented
totheassignment
ofone
ofthe
GlynnTech,
Incpromissory
notesfromGlynnTech
toCharles
Basner
in theamount
of$50,000.
Allterms of
theoriginal
noteare
unchanged.



The
aggregate
valueofthe
GlynnTech
promissory
notes
are$75,000
atMarch
31,2013
andDecember
31,2012.
Forthe
three
months
ended
March31,
2013,
theCompany
calculated
$1,156
asimputed
interest
atarateof
6.25%whichwascharged
tointerest
expenses
andcredited
to Additional
paid-incapital.



On
June17,2009,
Kenneth
P.Glynn,
President
andCEO
ofthe
Company,
acquired
debtowed
bythe
Company
tothird
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
toabove,
willbear
interest
atthe
rateof
Primeplus1.0%perannumon
theunpaid
balanceuntil paid.
Underthe
terms ofthePromissory
Note,atthe
option
ofthe
Promissory
Noteholder,
principal
and interest
can beconverted
intoeither
(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
ofshares
andmay
decline the
request
forconversion
ofthe
repayment
intoshares
ofthe
Company.

- 11 -







The
amount
ofdeferred
compensation,
referredtoabove,
wasadded
totheoutstanding
promissory
note forcalculations
ofaccrued
interest
and ispayable
inthe
formofcash,
debt,orshares
ofour
Class
BCommon
Stock.



On
May27,
2010,
theCompany
issued
anaggregate
of7,057,328
(5,645,862,500
pre-reverse
split)
shares
ofClass
Acommon
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
dueto Mr. Glynn.
These shares
contain a restrictive
legend which
will limit Mr.Glynn from
liquidating
these into
theopen
market.



During
theyear
ended
December
31,2012,
theCompany
issuedanaggregate
of1,202,057,500
sharesofClass
Acommon
stocktoMr.
Glynn as
repayment
of$120,823
ofdeferred
compensation
andaccrued
interest
thatMr.
Glynnearned
in2009
and2010.
These
shares
contain
a restrictive
legendwhich will
limitMr.
Glynn’s
abilitytoliquidate
theseintothe
open
market.



On
July1,2012,
theCompany
extended
theemployment
agreement
withMr.
Glynnfor
anadditional
one(1)yearperiod
forMr.Glynn
to serveasPresident
andCEO
ofthe
Company
atan
annual
basesalary
of$144,000.
During
2012and the
threemonth
ended
March
31,2013,
Mr.Glynn
drewonly
a portion
ofhis
annual
salary
andthe
balance
isbeingdeferred.
As ofMarch
31, 2013,
thetotal
amount
due to Mr.
Glynn for
unpaid
compensation
is$207,677.



During
thethree
yearsended
December31, 2012,
GlynnTech,
Inc and
Mr.Glynn
havepaid
some
billson
behalfofthe
Company.
As ofMarch
31, 2013,
theaggregate
amounts
dueforthese
payments
is$26,658.



On
July
1,2012,
theCompany
extended
theAdministrative
Services
AgreementwithGlynnTech,
Inctoprovide
backoffice
administrative
support
to theCompany.
The administrative
services
agreement
wasfor
aninitial
term ofone year
andwas
extendedforan 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’
priorwritten
notice
by theCompany
to GlynnTech.



On
June 26, 2013, the Company issued a Promissory Note to Mr. Glynn for $180,000 representing earned and unpaid deferred compensation.



On
June 30, 2013, Mr. Glynn assigned the remaining balance of his notes and deferred compensation to Mina Mar Group pursuant to the
terms of the LOI between himself and Mina Mar Group executed on May 31, 2013. The outstanding balance at December 31, 2013 was
$0.





NOTE
8CONVERTIBLE
PROMISSORY
NOTEAND
DERIVATIVE
LIABILITY
(RELATED
PARTY)



The
Company
hadenteredintoatemporary
administrative
services
agreement
withiVoice
in2004.
Theadministrative
services
agreement
continued
on amonth-to-month
basis
until
December
31,2008
atwhich
point
theagreements
were suspended
by mutual
consent
ofthe
parties.



In
March
2008,
theadministrative
services
agreement
wasamended
toprovide
that
accrued
andunpaid
administrative
services
shallbe segregated
andconverted
intoaConvertible
Promissory
Note.Theprincipal
andinterest
shallbedue
andpayable
asfollows:
(a)interest
shall accrue
monthly
on theunpaid balance
andshall
bepaid
annually,
and(b)
principal
shall be
payable
on demand.



On
March5,
2008,
theCompany
converted
itsoutstanding
accounts
payabletoiVoice,
Inc. for
unpaid
administrative
services
intheamountof

$50,652
intoaconvertible
promissory
noteatthe
rateof
prime
plus1percent
perannum.
Additional
amounts
of$42,209
wereadded
tothis

note
based
onany
unpaid
administrative
services,
andwillaccrueinterest
atthe
above
specified
ratefrom
dateof
advance
untilpaid.



- 12 -







On
June
17,2009,
Kenneth P.Glynn
(arelated
party)
acquired this
debtfromiVoice, Inc.
TheNoteholder
mayelectpaymentofthe
principal
and/or
interest,
atthe
itssole
discretion,
owedpursuant
tothis
Notebyrequiring
theCompany
toissue
either:
(i)one
Class
Bcommon
stock
shareofthe
Company
par value
$.01 per
share, for
each dollar
owed, (ii)
thenumber
ofClass
Acommon
stock
shares
ofthe
Company
calculated
bydividing
(x)the
sumof
theprincipal
andinterest
that theNoteholder
hasdecided
tohave
paidby (y)
eighty
percent (80%)
ofthe
lowest
issue
priceofClass
Acommon
stock
since
thefirst
advance
offunds
under
thisNote,
or(iii),
payment
ofthe
principal
ofthis
Note, before
anyrepayment
ofinterest.

On
June 19, 2013, the Company issued an aggregate of 2,200,000,000 shares of Class A common stock to Mr. Glynn as repayment of $88,000
of convertible debt and accrued interest. These shares contain a restrictive legend which will limit Mr. Glynn’s ability
to liquidate these into the open market.

On June 26, 2013, the Company issued a Promissory Note to Mr. Glynn for $180,000
representing earned and unpaid deferred compensation. This note matures on July 1, 2013 and upon default becomes convertible into
Class A common stock at a conversion price of 50% of the lowest closing price of the last ten trading days prior to notice of
conversion. As of September 30, 2013, the outstanding balance on the Promissory Note was $180,000 plus accrued interest of $0.

Forensic
accounting and records keeping indicates that these were primarily friends and relatives of previous management. The debts were
substantially paid off. When the new management took over and these “creditors” came forward none of them were able
to substantiate or prove their claims either through cancelled cheques or wires. Moreover most had conversion rights at 0000.1
below the Company par value of 0.0001 thus making the transaction void.



NOTE
9 CONVERTIBLE
DEBENTURE
ANDDERIVATIVE
LIABILITY



On
March30,
2007,
theCompany
issued
aSecured
Convertible
Debenture
(the"Debenture")
toYA Global
Investments
(f/k/a/
CornellCapital
Partners)
(“YA
Global”)
forthe
sumof$1,000,000
inexchange
fora
previously
issued
notes
payable for
thesame
amount.
TheDebenture
has aterm
ofthree
years,
andpays
interest
atthe
rateof
5%per
annum.
YAGlobal
hasthe
right
toconvert
aportion
orthe
entire
outstanding
principal
intothe
Company's
Class
A Common
Stockata Conversion
Price
equal
to eightypercent(80%)
ofthe
lowest
closing
BidPrice
ofthe
Common
Stockduring
thefive
(5)tradingdaysimmediately
preceding
the Conversion
Date.
YA Global
maynot
convert
the Debenture
into shares
ofClass
ACommon
Stockifsuchconversion
wouldresult
inYAGlobal
beneficially
owning
inexcess
of4.99%
ofthe
thenissued
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
hasthe
rightto redeem("Optional
Redemption")
a portion
orall
amounts
outstanding
under
thisDebenture
prior
to theMaturity
Dateat anytime provided
thatas
of thedateof
theHolder's
receiptof a Redemption
Notice(i)the
Closing
BidPrice
ofthe
ofthe
Common
Stock,
as reported
by Bloomberg,
LP,isless
thanthe
Conversion
Price
and(ii)
no Event
ofDefault
hasoccurred.
TheCompany
shallpay anamount
equalto the
principal
amount
beingredeemed
plus a redemption
premium
("Redemption
Premium")
equal
totwentypercent
(20%)
ofthe
principal
amount
beingredeemed,andaccrued
interest,
(collectively
referred
to asthe
"Redemption
Amount").
Duringthetime
thatany
portion
ofthis
Debenture
isoutstanding,
ifanyEvent
ofDefault
hasoccurred,
thefull
principal
amount
ofthis
Debenture,
together
withinterest
andother
amounts
owinginrespect
thereof,
tothedateof
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)
paymentof such
amounts
in Common
stock of
the Company.
Furthermore,
on addition
to any other
remedies,
the Holder
shall have
theright
(butnottheobligation)
toconvert
thisDebenture
atany
timeafter
(x)anEvent
ofDefault
or(y)
theMaturity
Dateatthe
Conversion
Pricethenin-effect.
Thedebenture
issecured
by substantially
allof
theassets
ofthe
Company.



On
July
26,2010,
theconvertible
debenture
withYAGlobalInvestments,
LPwas
amended
andrestated
inorder
toreplace
theexisting
debenture
withfive
(5) debentures
of $208,707.74
each. The
termof
the debentures
were
amended
to extend
the duedate until
July 29,
2011.
The amendments
hadthe
effect ofreclassifying
$156,199
of non-interest
bearing accrued
interest
into thesecured convertible
debentures.



- 13 -







During
theyear
ended
December
31,2010,
YAGlobal
Investments,
LPassigned
thedebentures
thatitheldto
E-Lionheart
Associates,
LLC (“E-Lionheart”)
withan
aggregate
value
of$1,043,539.
Thiswasdone
inconjunction
withthe
executionofaSecurities
Purchase
Agreement
withE-Lionheart
wherebyE-Lionheart
willpurchase
fromtheCompany
upto$500,000
ofconvertible
debentures
whichwillprovide
new financing
forthe
Company.
Thenew
convertible
debentures
aredue
onAugust
9,2011
andhaveconversion
rights
essentially
the same
asYA Global.



During
theyear
ended
December31,
2011,
theCompany
issued
anadditional
577,597
(462,077,400
pre-reverse
split)shares
ofClass
A common
stock
toE-Lionheart
forrepayment
valued at
$143,244.
The difference
inthe market
value and
the reduction
indebt
of$46,208
was charged
to beneficial
interest
in theamount
of$97,036.



On
July29,
2011 and
August
9,2011,
theCompany
haddefaulted
onthe
terms
ofthe
E-Lionheart
Convertible
Debentures
andas
such,
thefull
principal
amountofthese
Debentures,
together
withinterest
andother
amounts
owinginrespect
thereof,
shallbecome at
theHolder's
election,
immediately
dueandpayableincash,
provided
however,
theHolder
mayrequest (but
shallhavenoobligation
torequest)
payment
ofsuch
amounts
in Common
stockofthe
Company.



As
ofMarch
31,2013,
theoutstanding
balance on
theE-Lionheart
Convertible
Debentures
were$626,123.
During
thecalendar
year2011,
the Company
notified
E-Lionheart
that theCompany
wasdisputing
thebalances
dueupon
thisdebenture
duetomiscalculations
of theeffective
conversion
ratesused
by E-Lionheart
and asofthe
dateof
this filing,
thedispute
hasnot
beensettled.



On
June8,2010
andJune
22,2010,
theCompany
executed
twowrap-around
agreements,
inanaggregate
of$337,000,
toassign
amounts
due under
various
Promissory
Notesdueto GlynnTech,
InctoEPIC
Worldwide,
Inc.(the“Investor”).
Thewrap-around
agreements
also
modified
theoriginal
termsto
extend
thedue
dates by
oneyear,toinclude
provisions
toallow
theInvestor
toconvert
theamounts
due intocommon stock
ata50%discount
ofthe
averagethree
deepbid
onthe
dayof
conversion
andto
increase
theinterest
rateto15%aftera60dayinterest
free period.



On
August
9,2010,
theCompany
enteredintoasecurities
purchase
agreement
withE-Lionheart
topurchase
upto$500,000
ofconvertible
debentures
fromtheCompany.
Amountsdueunder
this debenture
aredue
onor
before
August
9,2011
andpays
interest
atthe
rateof
5%per
annum.
E-Lionheart
hasthe
righttoconvert
a portion
or theentire outstanding
principal
intotheCompany's
Class
A Common
Stockat a Conversion
Priceequal
toeighty
percent(90%)
of thelowest
closing
BidPrice
of theCommon
Stockduring
thefive
(5)trading
days immediately
preceding
the Conversion
Date.E-Lionheart
maynot
convert
the Debenture
intoshares
ofClass
A Common
Stock
ifsuch
conversion
wouldresult
inYAGlobalbeneficially
owning
inexcess
of4.99%
of thethenissued
andoutstanding
sharesofClass
A Common
Stock.



On
June
22,2011,
theCompany
haddefaulted
onthe
termsof
the2nd
wrap-around
agreements
andassuch,
thedefault
interest
ratewas
increased
retroactively
to 24.99%
on theremaining
balance of
thedebt.



On
August
9,2011,
theCompany
haddefaulted
onthe
termsof
thisDebenture
andas
such,
thefull
principal
amount
ofthis
Debentures,
together
withinterest
and other
amounts
owingin respect
thereof,
shall become
at the Holder's
election,
immediately
dueand payable
incash,
provided
however,
the Holder
mayrequest
(but
shallhave no
obligation
to request)
payment
of such
amounts
in Common
stockof the Company.



On
August
26,2011
andNovember
22,2011,
theCompany
issued
twoconvertible
promissory
notes,
inanaggregate
of$65,000,
toAsher
Enterprises,
Inc.(“Asher”).
Amounts
dueunder
thesenotesaredue
onor
before
May30,
2012andAugust
28,2012,
respectively,
andpays
interest
atthe
rateof
8%per
annum.
Asher
hasthe
right
toconvert
aportion
orthe
entire
outstanding
principal
intothe
Company's
Class
A Common
Stock
ataConversion
Priceequal
tofifty
fivepercent(55%)
ofthe
Average
ofthe
lowest
three(3)
Trading
Prices
ofthe
Common
Stockduring
theten
(10)
Trading
Dayperiod
immediately
preceding
theConversion
Date.Ashermaynot
convert
thenote
intoshares
ofClass
ACommon
Stock
if suchconversion
would result
in Asherbeneficially
owning
in excess
of4.99%
ofthe
thenissued
andoutstanding
shares of
Class
A Common
Stock.





- 14 -







On
February
16,2012,
March14,
2012
andNovember
27,2012,
theCompany
issued
anadditional
three(3)
convertible
promissory
notes,
in anaggregate
of$60,000,
to Asher Enterprises,
Inc.
(“Asher”).
Amounts
dueunder these
notes
are due
on or before
November
21,2012,
December19,
2012
andMarch
1,2014,
respectively,
andpays
interest
atthe
rateof
8%per
annum.
Asherhastherightto convert
aportion
or theentire outstanding
principal
intothe
Company's
Class
ACommon
Stock at
aConversion
Price equal
tofifty
five percent
(55%)
ofthe
Average of
thelowest
two(2)
Trading
Prices of
theCommon
Stock
during
the twenty (20)
Trading
Dayperiod
immediately
preceding
the Conversion
Date.Asher
maynot
convert
thenote
into shares
ofClass
ACommon
Stock
ifsuch
conversion
would
result
inAsher
beneficially
owning
in excess
of4.99%
of the
then issued
andoutstanding
shares
ofClass
A Common
Stock.



On
March6,
2012,
theCompany
consented
tothecancelation
ofthe
wrap
around
agreement withEPIC
Worldwide
andthe
reassignment
ofa new
wraparound
agreement
withATG,Inc.
for$50,000
plusaccrued
interest
of$26,050.
Concurrent
withthecancelation
ofthe
wraparound
agreement,
theCompany
alsorecorded
aGain on
Valuation
of Derivative
in theamount
of $154,201
on theretirement
of thederivative
liability.



On
March13,
2012,
theCompany
amended
theterms
ofthe
August
26,2011notetochange
theVariable
Conversion
Pricetoequal
thirty five
(35%)
multiplied
bythe
average
ofthe
lowest
twoTrading
Pricesofthe
Common
Stock
during
thethirty
(30)TradingDayperiod
immediately
preceding
theConversion
Date.



In
accordance
withASC815,
"Derivatives
andHedging",
theCompany
determined
thattheconversion
feature
ofthe
Debenture
metthe
criteriaofan
embedded
derivative,
andtherefore
the conversion
feature of
thisDebenture
needed tobebifurcated
andaccounted
foras
a derivative.
The fair
value
of the embedded
conversion
was estimated
at the date
of issuance
using
the Black-Scholes
model
withthe
following
assumptions:
riskfree interest
rate:
2.25%;
expected
dividend
yield:
0%:expected
life:
.75years;
andvolatility:
212.29%.
Theaccounting
guidance
instructs
that
theconversion
options
areaderivative
liability.
Assuch,
onthe
issue
dates,
theCompany
recorded
theconversion
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 three
months
endedMarch
31, 2013,
the Company
recorded
aGain on
Valuation
ofDerivative
inthe
amount
of$110,602
onthe
fluctuation
in the current
market prices.
For the
year ended
December
31, 2012,
the Company
recorded a Gain
on Valuation
of Derivative
in the amount
of $83,610
on thefluctuation
in thecurrent
market prices.



As
ofMarch
31,2013,
theoutstanding
balance
onthese
Convertible
Promissory
Notes were
$60,000.



In
accordance
withASC815,
"Derivatives
andHedging",
theCompany
determined
thattheconversion
feature
ofthe
Debenture
metthe
criteriaofan
embedded
derivative,
andtherefore
the conversion
feature of
thisDebenture
needed tobebifurcated
andaccounted
foras
a derivative.
The fair
value
of the embedded
conversion
was estimated
at the date
of issuance
using
the Black-Scholes
model
withthe
following
assumptions:
risk free
interest
rate: 2.25%;
expected
dividend
yield:
0%: expected
life: .75 and
1.19 years;
and volatility:
278.05%,
301.94%
and473.96%,
respectively.
Theaccounting
guidance
instructs
thatthe
conversion
options
are a derivative
liability.
Assuch,
on the issue
dates,
the Company
recordedthe conversion
options
as a liability,
recorded
a debt discount
of $60,000,
and charged
Other Expense
- Loss
on Valuation
ofDerivative
for$115,115.
For thethree months
endedMarch
31, 2013,
theCompany
recorded
a Loss on
Valuation
ofDerivative
in the amount
of $2,909
on the fluctuation
in the current
market
prices.
Forthe
yearended
December 31,
2012,
the Company
recorded
a Losson Valuation
ofDerivative
in theamount
of$214,003
on thefluctuation
in thecurrent
market
prices.



On
March6,
2012,
theCompany
consented
tothereassignment
ofthe
outstanding
balance of
theEPIC
Worldwide
wrap around
agreements
to ATG,Inc.
(“ATG”).
Theoutstanding
balance
ofprincipal
andaccrued
interest
was$76,050.
ATGsubsequently
entered
intoan
Assignment
and Assumption
Agreement
withUAIM
Corporation
(“UAIM”) to assign
$10,000
of these
fundsfrom ATG
to UAIM.Amounts
dueunder
these agreements
are due
on orbefore
March6,
2013 and
paysinterest
at the rate
of 15%
perannum.
ATGand
UAIMhave
the right
to convert
a portion
or theentire outstanding
principal
intothe
Company's
Class
A Common
Stockat
a Conversion
Priceequal
to $0.0005
pershare.
ATG and UAIM
may not
convert
these agreements
into shares
of Class
A Common
Stock if such
conversion
would result
in ATG or
UAIM beneficially
owning
in excess
of4.99%
ofthe
thenissued
andoutstanding
shares
ofClass
A Common
Stock.



During
theyearended
December31,
2012,
theCompany
issued
anaggregate
of11,200,000
shares of
Class
Acommon
stock for
repayment
of $5,600
ofconvertible
debenture
inlieu
ofcash
pursuant
to theterms
ofthe
wraparound
agreement.



- 15 -





As
of March31, 2013,
theoutstanding
balance
onthese
agreements
were$70,450.



In
accordance
withASC815,
"Derivatives
andHedging",
theCompany
determined
thattheconversion
feature
ofthe
Debenture
metthe
criteriaofan
embedded
derivative,
andtherefore
the conversion
feature of
thisDebenture
needed tobebifurcated
andaccounted
foras
a derivative.
The fair
value
of the embedded
conversion
was estimated
at the date
of issuance
using
the Black-Scholes
model
withthe
following
assumptions:
risk
free interest
rate:2.25%;
expected
dividend
yield:
0%:expected
life:
1.00years; and
volatility:
295.14.
The accounting
guidance
instructs
that
theconversion
options
areaderivative
liability.
Assuch,
onthe
issue
dates,
theCompany
recorded
theconversion
options
as a liability,
recorded
a debt discount
of $76,050,
and charged Other
Expense
- Loss
on Valuation
of Derivative
for $2,925,649.
For the
threemonths
endedMarch
31,2013,
the Company
recorded
a Gainon
Valuation
ofDerivative
in the amount
of$33,430
onthe
fluctuation
in thecurrent
market
prices.
Forthe
year ended
December
31, 2012,
theCompany
recorded
aGain on
Valuation
ofDerivative
in theamount
of $2,954,881
on thefluctuation
in thecurrent
market
prices.



In
conjunction
withtheconsent
andassignment
of$45,000
ofthe
Basner
note
(see
Note11)
toSouthridge
Partners
IILP
(“Southridge
Allonges”),
theCompany
consented
toprovide
Southridge
withthe right
to convert
a portion
orthe
entireoutstanding
principal
intothe
Company's
Class
ACommon
Stock ataConversion
Priceequal
to sixty
percent(60%) of
thelowest
closing
bidprice
ofthe
Common
Stock
during
the five
(5) trading
daysimmediately
preceding
theConversion
Date. Southridge
may not
convert
thenote
into shares
of Class
A Common
Stock if such
conversion
would
result
in Southridge
beneficially
owning
in excess of
9.99%ofthe
thenissued
andoutstanding
shares of
Class
A Common
Stock.



On
January
30,3013andMarch
11,2013,
theCompany
issued
twoconvertible
promissory
notes,
inanaggregate
of$10,000,
toSouthridge
PartnersIILP
(“Southridge
Debt”).
Amounts
dueunder
thesenotes
aredue
onor
beforeJanuary31,2014andMarch31,
2014,respectively.
Southridge
hasthe
righttoconvert
aportion
orthe
entire outstanding
principal
intothe
Company's
Class
ACommon
Stockat
aConversion
Priceequal
tothelesser
of(a)
$0.01
or(b)
fiftypercent(50%)
ofthe
lowest
closing
bidprice
during
thetwenty
(20)trading
daysimmediately
preceding
theConversion
Date.



During
theyearended
December31, 2012,
theCompany
issued
anaggregate
of58,102,182
shares of
Class
Acommon
stock for
repayment
of $45,000
ofconvertible
debtto Southridge
in lieuofcashpursuant
tothetermsof
theSecurities
Transfer
Agreement.



As
ofMarch
31,2013,
theoutstanding
balance
onthe
Southridge
Debt
was$10,000.



In
accordance
withASC815,"Derivatives
andHedging",
theCompany
determined
thatthe
conversion
feature
ofthe
Southridge
Allonge
met thecriteriaofan
embedded
derivative,
andtherefore
the conversion
feature
ofthis
debenture
neededtobebifurcated
andaccounted
forasa derivative.
Thefairvalue
ofthe
embedded
conversion
wasestimated
atthe
dateof
issuance
using
theBlack-Scholes
model
withthe
following
assumptions:
riskfreeinterest
rate:
2.25%;
expected
dividend
yield:
0%: expected
life:
.25 years;
andvolatility:
368.97%.
The accounting
guidance
instructs
that
the conversion
options
are a derivative
liability.
As such,
on the
issue
dates,
the Company
recorded
the conversion
options
asaliabilityintheaggregate
of$75,519,
recorded
adebtdiscount
intheaggregate
of$45,000,
andcharged
Other
Expense
-Loss
on Valuation
ofDerivative
intheaggregate
for$30,519.
Forthe
yearended
December31,
2012,
theCompany
recorded a Gain
onValuation
of Derivative
in theamount
of$42,589
onthe
fluctuation
inthecurrentmarket
prices.
Forthe
yearended
December 31,
2012,
theCompany
recorded
a Gainon
Valuation
ofDerivative
in theamount
of$42,589
on thefluctuation
in the current
market prices.



In
conjunction
withtheconsent
andassignment
of$93,700
ofthe
Basner
notes,
DeJonge
notes
andOpal
notes
(see
Note11)
toStarCity Capital,
LLC(“Star
CityAllonges”),
theCompany
consented
toprovide
StarCity
with theright
to convert
a portion
or theentire
outstanding
principal
intothe
Company's
Class
A Common
Stock at a Conversion
Price
equal to fifty
percent
(50%)
of thelowest
closing
bidprice
ofthe
Common
Stock
during
thefive
(5)trading
days immediately
preceding
theConversion
Date. Star
City maynot convert
thenote
into shares
of Class
ACommon
Stockif such
conversion
wouldresult
inStarCitybeneficially
owning
inexcess
of9.99%
ofthe
thenissued
andoutstanding
shares of
Class
A Common
Stock.



During
theyear
ended
December
31,2012,
theCompany
issued
an aggregate
of132,365,250
sharesofClass
A common
stock
forrepayment
of $24,969
ofconvertible
debtandinterest
to StarCity
in lieuofcashpursuant
tothe
termsof
thevarious
SecuritiesTransfer
Agreements.



- 16 -







During
thethree
months
ended
March31,
2013,
theCompany
issued
anaggregate
of536,528,400
shares
ofClass
Acommon
stockfor repayment
of$29,474
ofconvertible
debt and
interest
toStar
Cityinlieuof
cashpursuant
totheterms ofthevarious
Securities Transfer
Agreements.



As
ofDecember
31,2012,
theoutstanding
balance
onthe
StarCity
Allonges
was$36,170.



In
accordance
withASC815,"Derivatives
andHedging",
theCompany
determined
thatthe
conversion
feature
ofthe
Southridge
Allonge
met thecriteriaofan
embedded
derivative,
andtherefore
the conversion
feature
ofthis
debenture
neededtobebifurcated
andaccounted
forasa derivative.
Thefairvalue
ofthe
embedded
conversion
wasestimated
atthe
dateof
issuance
using
theBlack-Scholes
model
withthe
following
assumptions:
riskfreeinterest
rate:
2.25%;
expected
dividend
yield:
0%: expected
life:
.25 years;
andvolatility:
373.96%.
The accounting
guidance
instructs
that the
conversion
options
are a derivative
liability.
As such,
on the issue
date, the
Company
recorded
the conversion
options
as a liability
of $103,496,
recorded
a debt discount
of $54,520,
andcharged
Other
Expense
- Loss
on Valuation
of Derivative
for

$48,976.
Forthe
yearended
December31,
2012,
theCompany
recorded
aLoss
onValuation
ofDerivative
inthe
amount
of$24,595
onthe
fluctuation
in thecurrent
market
prices.

During
the nine months ended September 30, 2013, the Company issued an aggregate of 918,100,200 shares of Class A common stock for repayment
of $48,553 of convertible debt and interest to Star City in lieu of cash pursuant to the terms of the various Securities Transfer
Agreements.

In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Star City
Allonge 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: .25 years; and
volatility: 373.96%. The accounting guidance instructs that the conversion options are a derivative liability. As such, on the
issue date, the Company recorded the conversion options as a liability of an aggregate of $38,090, recorded a debt discount of
an aggregate of $25,000, and charged Other Expense - Loss on Valuation of Derivative for an aggregate of $13,090. For the six
months ended June 30, 2013, the Company recorded a Gain on Valuation of Derivative in the amount of $65,513 on the fluctuation
in the current market prices. For the year ended December 31, 2012, the Company recorded a Loss on Valuation of Derivative in
the amount of $24,595 on the fluctuation in the current market prices. The Company has not done valuation of derivative during
the quarter.

Forensic
accounting and records keeping indicates that all the above liabilities were primarily to friends and relatives of previous management.
The debts were substantially paid off. When the new management took over and these “creditors” came forward none of
them were able to substantiate or prove their claims either through cancelled cheques or wires. Moreover most had conversion rights
at 0000.1 below the Company par value of 0.0001 thus making the transaction void. As these liabilities are no longer valid, the
debts have been written off in these financial statements.



NOTE
10 PROMISSORY
NOTES



On
June
15, 2011,
theCompany
issued
apromissory
note,
inanaggregate
of$25,000,
toStuart
W.DeJonge
(“DeJonge”).
Amounts
dueunder
thisnote
aredue
onor
before
January
15, 2012
andpaysinterest
atthe
rate of9%per
annum.
OnJanuary
15, 2012,
theCompany
defaulted
on thisnoteandas
such,
thelender
maytake
whateveractionhemay
elect to
recover
hisloss
whilecontinuing
toaccrue
9%interest.
InFebruary
2013,
theCompany
consented
totheassignment
anaggregate
of$28,770
ofthe
DeJonge
note and
accruedinterest
toaffiliates
ofStar
City Capital,
LLC.OnFebruary
27,2013,
theCompany
issued
replacement
promissory
notes,
intheaggregate
of$20,000.
AsofMarch31,
2013,
theoutstanding
balance on
the new DeJonge
notes
was$20,000
andaccrued
interest
of$159.





- 17 -





On
July
12,2011,
theCompany
issued
apromissory
note,inanaggregate
of$15,000,
toOpal
Marketing
Corp.
(“Opal”).
Amountsdueunder
thisnote
aredue
onor
before
March
15,2012
andpays
interest
atthe
rate
of7%
perannum.
OnMarch15,2012,
theCompany
defaulted
on thisnote and
as such,
thelender
maytake whatever
actionhemayelectto recover
his loss
whilecontinuing
to accrue7%
interest.
On February
19, 2013,
theCompany
consented
totheassignment
of$15,000
ofthe
Opalnote
toaffiliates
ofStar
CityCapital,
LLC.AsofMarch31,
2013,
the outstanding
balance on
theOpal
Marketing Corp.
notewas$0
andaccrued
interest
of$1,671.



On
July22,2011,
theCompany
issued
apromissory
note,
inanaggregate
of$100,000,
toCharles
M.Basner
(“Basner”).
Amounts
dueunder
thisnote
aredue
onor
before
March
22,2012
andpays
interest
atthe
rate
of7%
perannum.
OnMarch22,2012,
theCompany
defaulted
on thisnoteandas
such,
thelender
may take
whatever
actionhemay
electtorecover
hisloss
whilecontinuing
toaccrue
7%interest.
During
the yearended
December31,
2012
and the three
monthsended
March31,
2013,
the Company
consented
to the assignment
an aggregate
of $100,000
ofthe
Basner
notetoSouthridge
Partners
IILP
andtoStarCity
Capital,
LLC.Duringtheyear
ended
December
31,2012andthe
three months
ended March 31,
2013,
the Company
issued
replacement
promissory
notes,
in the aggregate
of $91,600.
On July
1, 2012,
the Company
consented
to the assignment
of one
of the GlynnTech,
Inc promissory
notes
from
GlynnTech
to Charles
Basner
in the
amount of
$50,000.
All terms
ofthe
original
noteareunchanged.
As ofMarch
31,2013,
theaggregate
balances balance
on theBasner
notes
was $141,600
and accrued interest
of $11,788.



On
July
22,2012,
theCompany
issued
apromissory
note,
inanaggregate
of$25,000,
toFred
Erxleben.
Amounts
dueunder
thisnote
aredue
onor
before
January
25, 2013
andpaysinterest
atthe
rate of10%perannum.OnJanuary
25, 2013,
theCompany
defaultedonthis
note and
as such,
thelender
maytake
whatever
actionhemay
electtorecover
his loss
while
continuing
toaccrue
10%interest.
Asof
March
31,2013,
the outstanding
balance
onthe
Fred Erxleben
note
was$25,000
andaccrued
interest
of$1,726.



Forensic
accounting and records keeping indicates that all the above liabilities were primarily to friends and relatives of previous management.
The debts were substantially paid off. When the new management took over and these “creditors” came forward none of
them were able to substantiate or prove their claims either through cancelled cheques or wires. Moreover most had conversion rights
at 0000.1 below the Company par value of 0.0001 thus making the transaction void. As these liabilities are no longer valid, the
debts have been written off in these financial statements.





NOTE
11 CAPITAL
STOCK



Pursuant
to Kenergy Scientific's certificate of incorporation, as amended, as of June 30, 2013, 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 Kenergy Scientific's outstanding securities, including Preferred Stock, Class A Common
Stock, Class B Common Stock, and Class C Common Stock.



On
March5,
2012,
theCompany
amendeditsCertificate
ofIncorporation
toincrease
thenumber
ofauthorized
Class
ACommon
StockShares
to625,000,000,
asauthorized
bythe
Board
ofDirectors
andadopted
bythe
shareholders
onFebruary
15,2012.
Theeffect
ofthis
amendment
wasto
increase the
authorized
sharesfrom125,000,000
to625,000,000.



On
November
28,2012,
theCompany
amended
itsCertificate
ofIncorporation
toincrease
thenumber
ofauthorized
Class
ACommon
Stock
Sharesto4,000,000,000,
asauthorized
bythe
Board of
Directorsandadopted
bythe
shareholders
onNovember
15,2012.
Theeffectof
this amendment
wasto increase
theauthorized
shares
from 625,000,000
to 4,000,000,000.



On
June 11, 2013, the Company amended its Certificate of Incorporation to increase the number of authorized Class A Common Stock
Shares to

10,000,000,000,
as authorized by the Board of Directors and adopted by the shareholders on April 1, 2013. The purpose of this amendment was to
increase the authorized shares from 4,000,000,000 to 10,000,000,000.



- 18 -







a)
Preferred
Stock



As
ofMarch
31,2013,
Kenergy
Scientific
hasissued
75,000
shares
ofPreferred
Stockto Southridge
PartnersII LP(the“Investor”),
pursuant
to theterms
ofthe
Equity
Purchase
Agreement.
Thesesharesshall be
convertible
at the
option
ofthe
Investor
into shares
of theCompany’s
common
stock
at a conversion
priceequal
to seventypercent(70%)of the average
of the
two (2) lowest
Closing
Pricesfor the
five(5) trading
daysimmediately
preceding
a conversion
notice.
The Preferred
Stock
shall have
noregistration
rights.



For
theyear
endedDecember
31,2012,
theCompany
hadthe
following
transactions
in itsPreferred
stock:



|i) |  | The
                                                                                                                                              Company
                                                                                                                                              issued
                                                                                                                                              75,000
                                                                                                                                              shares
                                                                                                                                              of
                                                                                                                                              Preferred
                                                                                                                                              Stock,
                                                                                                                                              $1.00
                                                                                                                                              par
                                                                                                                                              value,
                                                                                                                                              to
                                                                                                                                              Southridge
                                                                                                                                              Partners
                                                                                                                                              II
                                                                                                                                              LP,
                                                                                                                                              pursuant
                                                                                                                                              to
                                                                                                                                              the
                                                                                                                                              terms
                                                                                                                                              of
                                                                                                                                              the
                                                                                                                                              Equity
                                                                                                                                              Purchase
                                                                                                                                              Agreement
                                                                                                                                              finalized
                                                                                                                                              on
                                                                                                                                              July
                                                                                                                                              16,
                                                                                                                                              2012
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





For
theyear ended
December31,
2013,
theCompany
hadthe
following
transactions
inits Preferred
stock:



|i) |  | The
                                                                                                                                              Company
                                                                                                                                              issued
                                                                                                                                              an
                                                                                                                                              aggregate
                                                                                                                                              of
                                                                                                                                              86,304,147
                                                                                                                                              shares
                                                                                                                                              of
                                                                                                                                              Class
                                                                                                                                              A
                                                                                                                                              common
                                                                                                                                              stock
                                                                                                                                              in
                                                                                                                                              exchange
                                                                                                                                              for
                                                                                                                                              an
                                                                                                                                              aggregate
                                                                                                                                              of
                                                                                                                                              12,730
                                                                                                                                              shares
                                                                                                                                              of
                                                                                                                                              Preferred
                                                                                                                                              Stock,
                                                                                                                                              $1.00
                                                                                                                                              par
                                                                                                                                              value,
                                                                                                                                              to
                                                                                                                                              Southridge
                                                                                                                                              Partners
                                                                                                                                              II
                                                                                                                                              LP,
                                                                                                                                              pursuant
                                                                                                                                              to
                                                                                                                                              the
                                                                                                                                              terms
                                                                                                                                              of
                                                                                                                                              the
                                                                                                                                              Equity
                                                                                                                                              Purchase
                                                                                                                                              Agreement
                                                                                                                                              finalized
                                                                                                                                              on
                                                                                                                                              July
                                                                                                                                              16,
                                                                                                                                              2012.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Forensic
accounting and records keeping indicates that this was primarily to friends and relatives of previous management. The debts weresubstantially paid off. When the new management took over and these “creditors” came forward none of them were
able to substantiate or prove their claims either through cancelled cheques
or wires. Moreover most had conversion rights at 0000.1 below the Company par value of 0.0001 thus making the transaction void.



b)
Class
A Common
Stock



As ofMarch 31,2013 andDecember 31,2012,
thereare4,000,000,000 sharesofClass
ACommon
Stockauthorized, nopar value,and 2,491,709,429 and1,480,028,558 shares were
issued andoutstanding, respectively.



Each
holder
ofClass
ACommon
Stock
isentitled
toreceive
ratablydividends,
ifany,
asmay
bedeclared
bythe
BoardofDirectors
outof funds
legally
availableforpayment
of dividends.
The Company
has never
paidany
dividends
on itscommonstockanddoes
not contemplate
doing
soin
the foreseeable
future.
TheCompany
anticipates
thatany
earnings
generated
fromoperations
will be used
to financeits growth
objectives.



For
thethree months ended March31, 2014, theCompany hadno
transactions
inits Class
A common stock.





















- 19 -







For
the year ended December 31, 2013, the Company had the following transactions in its Class A common stock:



| | (a) | The
                                                                                                                                 Company
                                                                                                                                 issued
                                                                                                                                 an
                                                                                                                                 aggregate
                                                                                                                                 of
                                                                                                                                 363,852,814
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 Class
                                                                                                                                 A
                                                                                                                                 common
                                                                                                                                 stock
                                                                                                                                 for
                                                                                                                                 repayment
                                                                                                                                 of
                                                                                                                                 convertible
                                                                                                                                 debenture
                                                                                                                                 and
                                                                                                                                 accrued
                                                                                                                                 interest
                                                                                                                                 in
                                                                                                                                 lieu
                                                                                                                                 of
                                                                                                                                 cash,
                                                                                                                                 valued
                                                                                                                                 at
                                                                                                                                 $113,498.
                                                                                                                                 The
                                                                                                                                 difference
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 market
                                                                                                                                 value
                                                                                                                                 and
                                                                                                                                 the
                                                                                                                                 reduction
                                                                                                                                 in
                                                                                                                                 debt
                                                                                                                                 of
                                                                                                                                 $30,200was
                                                                                                                                 charged
                                                                                                                                 to
                                                                                                                                 beneficial
                                                                                                                                 interest
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 amount
                                                                                                                                 of
                                                                                                                                 $83,298.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | The
                                                                                                                                 Company
                                                                                                                                 issued
                                                                                                                                 an
                                                                                                                                 aggregate
                                                                                                                                 of
                                                                                                                                 918,100,200
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 Class
                                                                                                                                 A
                                                                                                                                 common
                                                                                                                                 stock
                                                                                                                                 for
                                                                                                                                 repayment
                                                                                                                                 of
                                                                                                                                 convertible
                                                                                                                                 debenture
                                                                                                                                 and
                                                                                                                                 accrued
                                                                                                                                 interest
                                                                                                                                 in
                                                                                                                                 lieu
                                                                                                                                 of
                                                                                                                                 cash,
                                                                                                                                 valued
                                                                                                                                 at
                                                                                                                                 $173,198.
                                                                                                                                 The
                                                                                                                                 difference
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 market
                                                                                                                                 value
                                                                                                                                 and
                                                                                                                                 the
                                                                                                                                 reduction
                                                                                                                                 in
                                                                                                                                 debt
                                                                                                                                 of
                                                                                                                                 $48,553was
                                                                                                                                 charged
                                                                                                                                 to
                                                                                                                                 beneficial
                                                                                                                                 interest
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 amount
                                                                                                                                 of
                                                                                                                                 $124,645.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | The
                                                                                                                                 Company
                                                                                                                                 issued
                                                                                                                                 an
                                                                                                                                 aggregate
                                                                                                                                 of
                                                                                                                                 169,190,000
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 Class
                                                                                                                                 A
                                                                                                                                 common
                                                                                                                                 stock
                                                                                                                                 for
                                                                                                                                 repayment
                                                                                                                                 of
                                                                                                                                 convertible
                                                                                                                                 debenture
                                                                                                                                 and
                                                                                                                                 accrued
                                                                                                                                 interest
                                                                                                                                 in
                                                                                                                                 lieu
                                                                                                                                 of
                                                                                                                                 cash,
                                                                                                                                 valued
                                                                                                                                 at
                                                                                                                                 $23,735.
                                                                                                                                 The
                                                                                                                                 difference
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 market
                                                                                                                                 value
                                                                                                                                 and
                                                                                                                                 the
                                                                                                                                 reduction
                                                                                                                                 in
                                                                                                                                 debt
                                                                                                                                 of
                                                                                                                                 $8,460was
                                                                                                                                 charged
                                                                                                                                 to
                                                                                                                                 beneficial
                                                                                                                                 interest
                                                                                                                                 in
                                                                                                                                 the
                                                                                                                                 amount
                                                                                                                                 of
                                                                                                                                 $15,275.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | The
                                                                                                                                 Company
                                                                                                                                 has
                                                                                                                                 issued
                                                                                                                                 an
                                                                                                                                 aggregate
                                                                                                                                 of
                                                                                                                                 86,304,147
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 Class
                                                                                                                                 A
                                                                                                                                 common
                                                                                                                                 stock
                                                                                                                                 upon
                                                                                                                                 conversion
                                                                                                                                 of
                                                                                                                                 an
                                                                                                                                 aggregate
                                                                                                                                 of
                                                                                                                                 12,730
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 Convertible
                                                                                                                                 Preferred
                                                                                                                                 Shares
                                                                                                                                 with
                                                                                                                                 Southridge
                                                                                                                                 Partners
                                                                                                                                 pursuant
                                                                                                                                 to
                                                                                                                                 the
                                                                                                                                 terms
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Equity
                                                                                                                                 Purchase
                                                                                                                                 Agreement
                                                                                                                                 finalized
                                                                                                                                 on
                                                                                                                                 July
                                                                                                                                 16,
                                                                                                                                 2012.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | The
                                                                                                                                 Company
                                                                                                                                 issued
                                                                                                                                 2,200,000,000
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 Class
                                                                                                                                 A
                                                                                                                                 common
                                                                                                                                 stock
                                                                                                                                 to
                                                                                                                                 Mr.
                                                                                                                                 Glynn
                                                                                                                                 as
                                                                                                                                 repayment
                                                                                                                                 of
                                                                                                                                 $88,000
                                                                                                                                 of
                                                                                                                                 deferred
                                                                                                                                 compensation
                                                                                                                                 and
                                                                                                                                 accrued
                                                                                                                                 interest
                                                                                                                                 that
                                                                                                                                 Mr.
                                                                                                                                 Glynn
                                                                                                                                 earned
                                                                                                                                 in
                                                                                                                                 2009,
                                                                                                                                 2010
                                                                                                                                 and
                                                                                                                                 2011.
                                                                                                                                 These
                                                                                                                                 shares
                                                                                                                                 contain
                                                                                                                                 a
                                                                                                                                 restrictive
                                                                                                                                 legend
                                                                                                                                 which
                                                                                                                                 will
                                                                                                                                 limit
                                                                                                                                 Mr.
                                                                                                                                 Glynn’s
                                                                                                                                 ability
                                                                                                                                 to
                                                                                                                                 liquidate
                                                                                                                                 these
                                                                                                                                 into
                                                                                                                                 the
                                                                                                                                 open
                                                                                                                                 market.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Forensic
accounting and records keeping indicates that these were primarily friends and relatives of previous management. The debts were
substantially paid off. When the new management took over and these “creditors” came forward none of them were able
to substantiate or prove their claims either through cancelled cheques or wires. Moreover most had conversion rights at 0000.1
below the Company par value of 0.0001 thus making the transaction void.



c)
Class
BCommon
Stock



As
ofMarch
31,2014,
thereare50,000,000
sharesofClass
BCommon
Stock
authorized,
parvalue
$.01
pershareand20,000
shareswere issued
andoutstanding
..Eachholder
ofClass
BCommon
Stockhas
voting
rights
equalto100shares
ofClass
ACommon
Stock.Aholder
of Class
BCommon
Stockhas
theright
toconvert
eachshare
ofClass
BCommon
Stockinto
thenumber
ofshares
ofClass
ACommon
Stock
determined
bydividing
thenumber
ofClass
BCommon
Stock
beingconverted
bya20%discount
ofthe
lowest
price
thatKenergy
Scientific,
Inc.
hadever
issued
itsClass
A Common
Stock.
Upon liquidation,
dissolution,
orwinding-up,
holders
ofClass
B Common
Stockwillbe entitled
to receive distributions.



d)
Class
CCommon
Stock



As
ofMarch
31,2014,
thereare20,000,000
sharesofClass
CCommon
Stock
authorized,
parvalue
$.01per
share.
Eachholder
ofClass
C Common
Stockis
entitled
to1,000
votesforeachshare
heldofrecord.
Shares
ofClass
CCommon
Stockare
notconvertible
intoClass
A Common
Stock.Upon
liquidation,
dissolution
orwind-up,
theholders
ofClass
CCommon
Stockarenot
entitledtoreceive
theCompany’s
net assets
pro rata.
AsofMarch31,
2013,
noshares
were
issued
oroutstanding.



NOTE
12 ADDITIONAL
PAID-IN
CAPITAL



The
loans
arenon-interest
bearing,
unsecured
anddue
atvarious
timesup
toMarch 31,2014andare
included
intheloanspayable,
related
partybalance.
However,
ASC835-30
“Imputation
ofInterest”
hasbeen
appliedtoimputetheinterest
onloan
from
June
1,2009
asthere
wasno
interest
ratestipulated
intheagreements.
Anaccumulation
of$58,608
hasbeenimputed
asinterest
overtheperiods
andas
perASC835-30,
hasbeen
credited
to Additional
paid-incapital.







- 20 -







NOTE
13 STOCK
OPTIONS



During
2005,
theCompany
adopted
the2005
StockIncentive
Planandthe
2005Directors’
andOfficers’
Stock
Incentive
Plan(“Plan”)in order to
attractandretainqualified
personnel.
Underthe
Plans,
theBoard
ofDirectors,
initsdiscretion
maygrant
stockoptions
(eitherincentive
or non-qualified
stockoptions)
toofficers,
directors
andemployees.



The
Company
hasnot
issued
anystock
options
asof
March31,
2014.



NOTE
14 NEWACCOUNTINGPRONOUNCEMENTS



There
werevarious
otherupdates
recentlyissued,
most
ofwhich
represented
technicalcorrections
totheaccounting
literature
orapplication
to specific
industries
andare
notexpected
toa havea material
impacton
theCompany's
financial
position,
results
ofoperations
orcash
flows.



NOTE
15 COMMITMENTS AND CONTINGENCIES



From
time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of
business.

However,
litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that
may harm its business. The Company is not aware of any such legal proceedings that the Company believes will have, individually
or in the aggregate, a material adverse effect on its business, financial condition or operating results.



Forensic
accounting and records keeping indicates that most of the debentures and promissiory notes were issued primarily to friends and
relatives of previous management. The debts were substantially paid off. When the new management took over and these “creditors”
came forward none of them were able to substantiate or prove their claims either through cancelled cheques or wires. Moreover
most had conversion rights at 0000.1 below the Company par value of 0.0001 thus making the transaction void. The Company is currently
showing these liabilities in the books but contesting against it.



NOTE
16 SUBSEQUENT
EVENTS



There
is no significant subsequent event that is to be recorded up to the date of filing of this report.





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.



- 21 -





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, 2013 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. On February 4, 2013, the Company announced that they would
be closing their GreenSmart store and “would seek a new business entity acquisition to change its direction and its financial
status”. Following the change of management on July 1, 2013 the Company commenced development
of a wholly owned media company under the brand name Sparx Business Media. The Company earned licensing revenue from Sparx during
the period.



Results
of Operations

The
Company changed the its business activity from selling of solar powered products to a business marketing and media Company from
July 2013. During the three months ending March 31, 2014, the Company sold $165,655 of media products and services as compared to $5,145
for the three months ending March 31, 2013



Total
operating expenses decreased to $40,077 for the three months ended March 31, 2014, as compared to 151,713 for the same period
in the prior year.

Total
income (expense) for the three months ended March 31, 2014 was $27,090 as compared to the loss of $1,835,355 for the three months
ended March 31, 2013.

Net
income for the three months ended March 31, 2014 was $27,090 as compared to a net loss of $1,835,355 for the three months ended
March 31, 2013.



Liquidity
and Capital Resources



Kenergy
Scientific has incurred substantial cash losses in previous years due to which it required financing for working capital to meet
its operating obligations.

The
Company needs working capital funds to implement business plan and continue the operating activities. Through change in business
operations from dealing in solar powered products to business dealing in Shell Sales and IR, the funding requirements have changed
significantly. For the three months ended months March 31, 2014, the Company had a net decrease in cash of $1,015 with the principal
sources / uses of funds were as follows:

Cash
used by operating activities.The Company used $1,015 in net cash for operating activities for the three months ended
March 31, 2014 and used $37,304 in net cash for operating activities for the three months ended March 31, 2014.



Cash
used by investing activities.The Company did not do any investing activity during the three months period ended 31 March
2014. The Company used $2,470 in cash for investing activities for the three months ended March 31, 2014. These amounts were for
the prosecution and filings related to the Company’s patent portfolio.



- 22 -







Cash
provided by financing activities. For the three months ended March 31, 2014, the Company provided $0 in financing
activities. For the three months ended March 31, 2013, the Company provided $37,500 in financing activities through the revolving
line of credit of $1.0 million from Mina Mar Group to meet the working capital requirements.



There
was no significant impact on the Company’s operations as a result of inflation for the three months ended March 31,2014.



Financing
Commitments

On
August 8, 2013 the Company secured a $1 million dollar revolving line of credit at 5% annual interest rate with its preferred
shareholder Mina Mar Group. The funds are used to fund daily operations, develop the Sparx Media business and settle creditor
debts.



On
July 16, 2012, the Company finalized an equity facility with Southridge Partners II, LP, a Delaware limited partnership (“Southridge”),
whereby the parties entered into (i) an equity purchase agreement and (ii) a registration rights agreement. Pursuant to the terms
of the Equity Agreement, for a period of twenty-four (24) months commencing on the effective date of the initial Registration
Statement covering the Registrable Securities, Southridge shall commit to purchase up to $17,500,000 of the Company’s Class
A common stock, no par value per share (the “Put Shares”). The purchase price of the Put Shares under the Equity Agreement
is equal to ninety-one percent (91%) of the lowest closing price of the stock following the five (5) trading days after which
a put notice is deemed delivered to Southridge in the manner provided by the Equity Agreement. The Company also entered into the
Registration Rights Agreement with Southridge. Pursuant to the terms of the Registration Rights Agreement, the Company is obligated
to file a registration statement with the U.S. Securities and Exchange Commission to cover the Registrable Securities within 90
days of closing and thereafter the Company shall use its commercially reasonable efforts to cause the Registration Statement to
be declared effective by the SEC within five (5) business days after notice from the SEC that the Registration Statement may be
declared effective.

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
the three months ended March 31, 2014, 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.







- 23 -







Item
4. 	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.













































- 24 -





Part
II. Other Information



Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.



|(a) | The
    Company issued an aggregate of 101,033,200 shares of Class A common stock for repayment of convertible debenture and accrued
    interest in lieu of cash, valued at $10,103.                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The Company issued
    an aggregate of 221,571,800 shares of Class A common stock for repayment of convertible debenture and accrued interest in
    lieu of cash, valued at $22,157.                                                                               
|(c) | The Company issued
    an aggregate of 160,000,000 shares of Class A common stock for repayment of convertible debenture and accrued interest in
    lieu of cash, valued at $16,000.                                                                               
|(d) | The Company has
    issued an aggregate of 43,161,290 shares of Class A common stock upon conversion of 6,690 shares of Convertible Preferred
    Shares with Southridge Partners pursuant to the terms of the Equity Purchase Agreement finalized on July 16, 2012.
|(e) | The Company issued
    2,200,000,000 shares of Class A common stock to Mr. Glynn as repayment of $88,000 of deferred compensation and accrued interest
    that Mr. Glynn earned in 2009, 2010 and 2011.                                                            



Item
3. Defaults Upon Senior Securities.



On
March 6, 2013, the Company defaulted on the ATG, Inc note and as such, the default interest will increase to 24.99% retroactive
to the inception of the agreement.



Item
6.	Exhibits



|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.



















- 25 -







SIGNATURES



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







|Kenergy Scientific, Inc. | June 13, 2014        |                        
|------------------------ | -------------------- | -----------------------
|                         |                      |                        
|By:                      | /s/ Zoran Cvetojevic |                        
|                         |                      | Zoran Cvetojevic       
|                         |                      | Chief Executive 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.











|    | June 13, 2014        |                        
|--- | -------------------- | -----------------------
|    |                      |                        
|By: | /s/ Zoran Cvetojevic |                        
|    |                      | Zoran Cvetojevic       
|    |                      | Chief Executive Officer













































- 26 -





INDEX
OF EXHIBITS



|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.

















































































- 27 -