UNITED
STATESSECURITIES AND EXCHANGE COMMISSIONWashington,
D.C. 20549

_________________

FORM
10-Q





_________________

þ   QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For
the quarterly period ended: March 31, 2013

or

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

For
the transition period from: ______ to ______

_________________







KENERGY
SCIENTIFIC, INC.



(Exact
name of registrant as specified in its charter)



_________________

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

56 Junction Road, Fleminton, New Jersey
08822(Address of Principal Executive Offices) (Zip Code)

(908)788-0077(Registrant’s
telephone number, including area code)

N/A(Former
name or former address and former fiscal year, if changed since last report)

_________________

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

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

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company.

|Large accelerated filer  o | Accelerated filer  o | Non-accelerated filer  o | Smaller reporting company  þ
|-------------------------- | -------------------- | ------------------------ | ----------------------------

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



APPLICABLE
ONLY TO CORPORATE ISSUERS





Indicate
the number of shares outstanding of the issuer's common stock, as of the latest practical date: 62,270 shares outstanding of Preferred
Stock, par value $1.00 per share; 3,017,475,719 shares outstanding of Class A Common Stock, no par value and 10,000 shares outstanding
of Class B Common Stock, par value $.01 per share, as of May 14, 2013.

























KENERGY
SCIENTIFIC, INC.

TABLE
OF CONTENTS







|            | Part
    I – Financial Information                                                                           | Page
|----------- | ------------------------------------------------------------------------------------------------------------ | ----
|            |                                                                                                              |     
|Item
    1. | Condensed
        Financial Statements                                                                       |     
|            | Condensed
        Balance Sheets – March 31, 2013 and
        December
        31, 2012                      | 1   
|            | Condensed
        Statements of Operations – Three months
        Ended
        march 31, 2013 and 2012      | 2   
|            | Condensed
        Statements of Operations – Three months
        Ended
        March 31, 2013 and 2012      | 3-4 
|            | Notes
        to Condensed Financial Statements                                                              | 5-24
|Item
    2. | Management’s
        Discussion and Analysis of Financial Position
        And
        Results of Operations | 25  
|Item
    4. | Controls
        and Procedures                                                                              | 27  
|            | Part
        II – Other Information                                                                          |     
|Item
    2. | Unregistered
        Sales of Equity Securities and Use of Proceeds                                          | 29  
|Item
    6. | Exhibits                                                                                                     | 29  







EXPLANATORY
NOTE

These
Financial Statements are part of the Quarterly Report on Form 10-Q for the three months ended March 31, 2013 and do not contain
financial statements audited or reviewed by an independent registered public accounting firm for the three months ended March
31, 2013 and 2012 or the year ended December 31, 2012.





1





Part
1. Financial Statements



Item
1 - Financial Statements

|KENERGY
    SCIENTIFIC, INC.
|----------------------------
|CONDENSED
    BALANCE SHEETS
|                            
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|                            



See
accompanying notes to condensed financial statements

1











|KENERGY SCIENTIFIC, INC.                         
|-------------------------------------------------
|CONDENSED STATEMENTS OF OPERATIONS               
|(Unaudited)                                      
|                                                 
|                                                 
|                                                 
|Net sales                                        
|Cost of sales                                    
|                                                 
|Gross margin (loss)                              
|                                                 
|Operating expenses:                              
|General and administrative expenses              
|Depreciation and amortization                    
|                                                 
|Total operating expenses                         
|                                                 
|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 |  | $ | 882,241       |  |  | $ | (1,835,338 | )
|                                                |  |   |               |  |  |   |            |  
|Basic income (loss) per common share            |  | $ | 0.00          |  |  | $ | (0.15      | )
|Diluted income (loss) per common share          |  | $ | 0.00          |  |  | $ | (0.15      | )
|                                                |  |   |               |  |  |   |            |  
|Weighted average shares outstanding -           |  |   |               |  |  |   |            |  
|Basic (see note 5)                              |  |   | 1,949,070,779 |  |  |   | 12,583,885 |  
|Diluted (see note 5)                            |  |   | 4,000,000,000 |  |  |   | 12,583,885 |  









See
accompanying notes to condensed financial statements

2











|KENERGY SCIENTIFIC, INC.              
|--------------------------------------
|CONDENSED STATEMENTS
    OF CASH FLOWS
|(Unaudited)                           



|                                                                                                                           | Three
    months Ended                                                   |                   
|-------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------------------
|                                                                                                                           | March
31,
                                                          2012 | March
31, 2011    
|Cash
    flows from operating activities:                                                                                  |                                                                          |                   
|Net
    income (loss)                                                                                                      | $
    882,241                                                            | $
    (1,835,338) 
|Adjustments
        to reconcile net income (loss) to net
        cash
        provided by (used in) operating activities: |                                                                          |                   
|Amortization
    of intangibles and depreciation expense                                                                   | 8,967                                                                    | 7,666             
|(Gain)
    loss on valuation of derivative                                                                                 | (1,317,233)                                                              | 1,611,049         
|Amortization
    of debt discount                                                                                          | 52,762                                                                   | 36,694            
|Beneficial
    interest on conversion of debt                                                                              | 201,677                                                                  | 7,048             
|Imputed
    interest on related party debt                                                                                 | 1,156                                                                    | 1,948             
|Changes
    in assets and liabilities:                                                                                     |                                                                          |                   
|Decrease
    in accounts receivable                                                                                        | 185                                                                      | 391               
|Decrease
    (increase) in inventories                                                                                     | 82,845                                                                   | (249)             
|Decrease
    (increase) in prepaid expenses                                                                                | 1,780                                                                    | 44                
|Increase
        in accounts payable and accrued
        Liabilities                                                       | 5,952                                                                    | 100,943           
|Increase
    in amounts due to related parties                                                                             | 33,861                                                                   | 32,500            
|Net
    cash (used in) operating activities                                                                                | (45,807)                                                                 | (37,304)          
|                                                                                                                           |                                                                          |                   
|Cash
    flows from investing activities:                                                                                  |                                                                          |                   
|Purchase
    of intangible assets                                                                                          | -                                                                        | 2,470)            
|Net
    cash (used in) investing activities                                                                                | -                                                                        | (2,470)           
|                                                                                                                           |                                                                          |                   
|Cash
    flows from financing activities:                                                                                  |                                                                          |                   
|Issuance
    of promissory notes                                                                                           | 45,000                                                                   | 37,500            
|Net
    cash provided by financing activities                                                                              | 45,000                                                                   | 37,500            
|                                                                                                                           |                                                                          |                   
|Net
    (decrease) in cash and cash equivalents                                                                            | (807)                                                                    | (2,274)           
|                                                                                                                           |                                                                          |                   
|Cash
    and cash equivalents at beginning of period                                                                       | 829                                                                      | 6,960             
|                                                                                                                           |                                                                          |                   
|Cash
    and cash equivalents at end of period                                                                             | $            22                                                          | $
           4,686
|                                                                                                                           |                                                                          |                   
|SUPPLEMENTAL
        CASH FLOW INFORMATION:                                                                                |                                                                          |                   
|Taxes
    paid                                                                                                             | $                -                                                       | $                -
|Interest
    paid                                                                                                          | $                -                                                       | $                -
|                                                                                                                           |                                                                          |                   
|                                                                                                                           |                                                                          |                   
|See accompanying notes to condensed financial statements                                                                   |                                                                         
|                                                                                                                           |                                                                         





3











|KENERGY SCIENTIFIC, INC.                          
|--------------------------------------------------
|CONDENSED STATEMENTS
    OF CASH FLOWS (Continued)
|(Unaudited)                                       



Supplemental
Schedule of Non-Cash Financing Activities:



|For
    the three months ended March 31, 2013:
|----------------------------------------------
|a)                                            
|b)                                            
|c)                                            
|d)                                            
|e)                                            
|f)                                            
|g)                                            



|For
    the three months ended March 31, 2012:
|----------------------------------------------
|a)                                            
|b)                                            







See
accompanying notes to condensed financial statements

4





KENERGY
SCIENTIFIC, INC.

NOTES
TO CONDENSED FINANCIAL STATEMENTS

MARCH
31, 2013 and 2012



|Note |  | 1 	Background
|---- |  | -------------



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



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



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



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



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



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



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”. 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.



Note
2 	Business Operations



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



5







Products
and Services



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



|(a) | On
    June 18, 2009, the Company acquired rights and ownership from GlynnTech, Inc. of technology and pending patent applications
    relating to cancer treatment drug delivery systems, and the technology transfer into the Company included a prototype, numerous
    variations on designs, CAD drawings, pending patent applications, risk analysis studies, development history and presentation
    documents.  The sale was “at cost” of GlynnTech, Inc. in the amount of $182,600.00.  The Agreement
    called for the aggregate purchase price to be in various denominations of one-year notes. The business objective was to transfer
    a potentially significant profit opportunity from GlynnTech, Inc. to Kenergy Scientific, Inc.  Three presentations
    had previously been made to pharmaceutical industry candidates and feedback indicated a high level of interest in potential
    purchase of this technology following FDA approval of this product.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | In
    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, third party companies will review various microturbine products to license and sell.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              





Product
Development



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



Business
Development



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



|1. | Continuously
    develop product ideas, manufacturing and supply alliances;                           
|-- | ------------------------------------------------------------------------------------------------------
|2. | Expand
    sales opportunities through diverse resources;                                             
|3. | Create
    a continuous flow of ideas and inventions to develop patent and/or new product opportunity;



Strategic
Alliances



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

6









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.



Intellectual
Property Rights



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



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



Employees



Kenneth
P. Glynn was elected to the positions of President, Secretary and Chairman of the Board on June 16, 2009. On July 1, 2009 and
subsequently renewed on July 1, 2010 and 2011, the Company entered into a one (1) year employment agreement with Mr. Glynn to
serve as President and Chief Executive of the Company at an annual base salary of $96,000 for the first year. On July 1, 2012
the Company renewed Mr. Glynn’s employment agreement for an additional one (1) year at an annual base salary of $144,000
for the year. It is the present intention of Mr. Glynn to defer a portion of his salary payment for at least the next 6 months.



As
of March 31, 2013, we had one employee, Kenneth P. Glynn. All other participants in Company activities are through purchased support
services and independent contractors.



Properties



We
do not own any real property. We rent office space from GlynnTech, Inc. located at 56 Junction Road, Flemington, New Jersey. We
also rented 2,375 square feet of retail sales space from Flemington Mall, LLC for our GreenSmart retail store, which was vacated
on March 1, 2013. We intend to continue renting such spaces and anticipate no relocation of our offices. We are unaware of any
environmental problems in connection with these locations, and, because of the nature of our activities, do not anticipate such
problems.



Kenergy
Scientific’s Management



Kenneth
P. Glynn was elected to the positions of President, Secretary and Chairman of the board on June 16, 2009.



7









| |  | 
| |  | 

|Note |  | 3 	Going Concern
|---- |  | ----------------



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



For
the three months ended March 31, 2013, the Company had a negative cash flow from operations, negative working capital and a loss
from operations. These matters raise substantial doubt about the Company's ability to continue as a going concern. Therefore,
recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued
operations of the Company, which in turn, is dependent upon the Company's ability to raise capital and/or generate positive cash
flow from operations.



Management
plans on developing new products and increasing their sales to new customers, to achieve profitability and to generate a positive
cash flow. However, these plans are dependent upon obtaining additional capital. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might
be necessary in the event the Company cannot continue in existence.

| |  | 
| |  | 

|Note |  | 4 	 Summary of Significant
Accounting Policies
|---- |  | ----------------------------------------------



a) Basis
of Presentation



The
accompanying condensed unaudited interim financial statements included herein have been prepared, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission ("SEC"). The condensed financial statements and notes
are presented as permitted on Form 10-Q and do not contain information included in the Company's annual statements and notes.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested
that these condensed financial statements be read in conjunction with the December 31, 2012 unaudited financial statements and
the accompanying notes thereto. The financial statements that were reported in the Company’s Form 10-K for the fiscal year
ended December 31, 2012 do not contain audited financial statements audited by an independent registered public accounting firm.
While management believes the procedures followed in preparing these condensed financial statements are reasonable, the accuracy
of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the
Company later in the year. These results are not necessarily indicative of the results to be expected for the full year.



These
condensed unaudited financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion
of management, are necessary to present fairly the operations and cash flows for the periods presented.



b) Use of
Estimates



The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.

8









c) Revenue
Recognition



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

d)
Product Warranties

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



e) Research
and Development Costs



Research
and development costs are charged to expense as incurred.



f) Cash
and Cash Equivalents



The
Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
There were no cash equivalents at March 31, 2013 and December 31, 2012.



g)
Intangible Assets



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



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



h)
Income Taxes



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

9







i)
Derivative Liabilities



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



j)
Fair Value of Instruments

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



k) Concentrations
of Credit Risk



Financial
instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable
and cash. As of March 31, 2013 and December 31, 2012, the Company believes it has no significant risk related to its concentration
within its accounts receivable.

The
Company maintains cash and cash equivalent balances at a financial institution that is insured by the Federal Deposit Insurance
Corporation up to $250,000. There were no uninsured cash balances at March 31, 2013 and December 31, 2012.



|Note |  | 5		Income (Loss) Per
Share
|---- |  | --------------------------



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

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

|                                                                                                                                           |   | Three
    months Ended |   | Three
    months Ended
|------------------------------------------------------------------------------------------------------------------------------------------ | - | ---------------------- | - | ----------------------
|                                                                                                                                           |   | March
    31, 2013     |   | March
    31, 2012    
|Basic net
    income (loss) per share computation:                                                                                         |   |                        |   |                       
|Net
    income (loss) attributable to common stockholders                                                                                  | $ | 882,241                | $ | (1,835,338)           
|Weighted-average
    common shares outstanding (see below)                                                                                 |   | 1,949,070,779          |   | 12,583,885            
|Basic
        net income (loss) per share attributable to
        common
        stockholders (see below)                                  | $ | 0.00                   | $ | (0.15)                
|                                                                                                                                           |   |                        |   |                       
|Diluted
        net income (loss) per share computation                                                                                    |   |                        |   |                       
|Net
    income (loss) attributable to common stockholders                                                                                  | $ | 882,241                | $ | (1,835,338)           
|Weighted-average
    common shares outstanding (see below)                                                                                 |   | 1,949,070,779          |   | 12,583,885            
|Incremental
        shares attributable to the assumed conversion of
        Convertible
        debenture and convertible promissory note |   | 2,050,929,221          |   | --                    
|Total
    adjusted weighted-average shares                                                                                                 |   | 4,000,000,000          |   | 12,583,885            
|Diluted
        net income (loss) per share attributable to
        common
        stockholders (see below)                                | $ | 0.00                   | $ | (0.15)                



10











At
March 31, 2013, the Company had common stock equivalents of 32,749,559,972, but when added to the common stock outstanding, they
are in excess of the authorized capital, so the maximum authorized shares of 4,000,000,000 are shown for diluted earnings per
common share calculations. At March 31, 2012 the Company had common stock equivalents of 241,540,640.



|Note |  | 6	Intangible Assets
|---- |  | -------------------



At
March 31, 2013 and December 31, 2012, intangible assets consist of the following:





|                               |  |   | 2013     |   |  |   | 2012     |  
|------------------------------ |  | - | -------- | - |  | - | -------- | -
|Speech-enabled auto dialer     |  | $ | 17,025   |   |  | $ | 17,025   |  
|Cancer drug delivery system    |  |   | 182,600  |   |  |   | 182,600  |  
|“Green” trademark applications |  |   | 2,145    |   |  |   | 2,145    |  
|Kenergy patent portfolio       |  |   | 54,870   |   |  |   | 54,870   |  
|Smart Bell                     |  |   | 5,000    |   |  |   | 5,000    |  
|Less: accumulated amortization |  |   | (115,343 | ) |  |   | (107,019 | )
|Intangible assets, net         |  | $ | 146,297  |   |  | $ | 154,621  |  



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



Note
7	Income Taxes



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

11









At March
31, 2013 and December 31, 2012 deferred tax assets consist of the following:



|                          |  |   | 2013       |   |  |   | 2012     |  
|------------------------- |  | - | ---------- | - |  | - | -------- | -
|Deferred tax assets       |  | $ | 1,035,000  |   |  | $ | 986,000  |  
|Less: valuation allowance |  |   | (1,035,000 | ) |  |   | (986,000 | )
|Net deferred tax asset    |  | $ | 0          |   |  | $ | 0        |  





At
March 31, 2013 and December 31, 2012, the Company had federal net operating loss carry forwards in the approximate amounts of
$3,050,000 and $2,900,000, respectively, available to offset future taxable income. The Company established valuation allowances
equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future
periods.



Note
8	Related Party Transactions



On
June 1, 2009 and June 2, 2009, the Company issued two (2) one-year promissory notes in the aggregate of $37,000 to GlynnTech,
Inc, for GlynnTech to assume a like amount of current obligations that the Company was unable to pay from current operations.
The debt was due on or before the 1st anniversary and was interest free.



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



On
December 28, 2009, the Company completed the transfer of the patent rights and technology relating to cancer drug delivery systems
developed by GlynnTech, Inc. by the issuance of three (3) one-year promissory notes for the aggregate amount of $125,000. The
promissory notes are due on or before the 1st anniversary of the notes and are interest free.



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



On
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 of the original note are unchanged.



The
aggregate value of the GlynnTech promissory notes are $75,000 at March 31, 2013 and December 31, 2012. For the three months ended
March 31, 2013, the Company calculated $1,156 as imputed interest at a rate of 6.25% which was charged to interest expenses and
credited to Additional paid-in capital.



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



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



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



12







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



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



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



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



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



During
the year ended December 31, 2012, the Company issued an aggregate of 1,202,057,500 shares of Class A common stock to Mr. Glynn
as repayment of $120,823 of deferred compensation and accrued interest that Mr. Glynn earned in 2009 and 2010. These shares contain
a restrictive legend which will limit Mr. Glynn’s ability to liquidate these into the open market.



On
July 1, 2012, the Company extended the employment agreement with Mr. Glynn for an additional one (1) year period for Mr. Glynn
to serve as President and CEO of the Company at an annual base salary of $144,000. During 2012 and the three month ended March
31, 2013, Mr. Glynn drew only a portion of his annual salary and the balance is being deferred. As of March 31, 2013, the total
amount due to Mr. Glynn for unpaid compensation is $207,677.



During
the three years ended December 31, 2012, GlynnTech, Inc and Mr. Glynn have paid some bills on behalf of the Company. As of March
31, 2013, the aggregate amounts due for these payments is $26,658.



On
July 1, 2012, the Company extended the Administrative Services Agreement with GlynnTech, Inc to provide back office administrative
support to the Company. The administrative services agreement was for an initial term of one year and was extended for an additional
one-year periods at the Company’s request. The amended fees are $7,500 per month but may be reduced in scope or eliminated
at any time upon 90 days’ prior written notice by the Company to GlynnTech.



13









Note
9	 Convertible Promissory Note and Derivative Liability (Related Party)



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



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



On
March 5, 2008, the Company converted its outstanding accounts payable to iVoice, Inc. for unpaid administrative services in the
amount of $50,652 into a convertible promissory note at the rate of prime plus 1 percent per annum. Additional amounts of $42,209
were added to this note based on any unpaid administrative services, and will accrue interest at the above specified rate from
date of advance until paid.



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



As
of March 31, 2013, the outstanding balance on the Convertible Promissory Note was $79,936 plus accrued interest of $17,217.



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



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



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



In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Promissory
Note met the criteria of an embedded derivative, and therefore the conversion feature of this Promissory Note needed to be bifurcated
and accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes
model with the following assumptions: risk free interest rate: 5.6%; expected dividend yield: 0%: expected life: 5 years; and
volatility: 263.04%. The accounting guidance instructs that the conversion options are a derivative liability. As such, at March
5, 2008 the Company recorded the conversion options as a liability, recorded a debt discount of $50,652, and charged Other Expense
- Loss on Valuation of Derivative for $67,530, resulting primarily from calculation of the conversion price. For the three months
ended March 31, 2013, the Company recorded a Gain on Valuation of Derivative in the amount of $360,141. For the year ended December
31, 2012, the Company recorded a Loss on Valuation of Derivative in the amount of $910,314.











Note
10 Convertible Debenture and Derivative Liability



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



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



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



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

15









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



As
of March 31, 2013, the outstanding balance on the E-Lionheart Convertible Debentures were $626,123. During the calendar year 2011,
the Company notified E-Lionheart that the Company was disputing the balances due upon this debenture due to miscalculations of
the effective conversion rates used by E-Lionheart and as of the date of this filing, the dispute has not been settled.



In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture
met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and
accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes
model with the following assumptions: risk free interest rate: 5.6%; expected dividend yield: 0%: expected life: 3 years; and
volatility: 165.62%. The accounting guidance instructs that the conversion options are a derivative liability. As such, in March
2007 the Company recorded the conversion options as a liability, recorded a debt discount of $1,000,000, and charged Other Expense
- Loss on Valuation of Derivative for $124,479, resulting primarily from calculation of the conversion price. For the three months
ended March 31, 2013, the Company recorded a Gain on Valuation of Derivative in the amount of $385,942. For the year ended December
31, 2012, the Company recorded a Loss on Valuation of Derivative in the amount of $613,148.



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



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



On 
March 6, 2012, the Company consented to the cancelation of the wrap around agreement with EPIC Worldwide and the reassignment
of a new wrap around agreement with ATG, Inc. for $50,000 plus accrued interest of $26,050. Concurrent with the cancelation of
the wrap around agreement, the Company also recorded a Gain on Valuation of Derivative in the amount of $154,201 on the retirement
of the derivative liability.



As
of December 31, 2012, the outstanding balance on the EPIC Convertible Notes were $0.



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





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

16









In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture
met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and
accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes
model with the following assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%: expected life: 1 years; and
volatility: 301.66% to 308.06%. The accounting guidance instructs that the conversion options are a derivative liability. As such,
on the issue dates, the Company recorded the conversion options as a liability and recorded a debt discount of $143,408. For the
three months ended March 31, 2013, the Company recorded a Gain on Valuation of Derivative in the amount of $273,277 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 $450,598 on the fluctuation in the current market prices.



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



On
March 13, 2012, the Company amended the terms of the August 26, 2011 note to change the Variable Conversion Price to equal thirty
five (35%) multiplied by the average of the lowest two Trading Prices of the Common Stock during the thirty (30) Trading Day period
immediately preceding the Conversion Date.



During
the year ended December 31, 2012 the Company issued an aggregate of 63,885,238 shares of Class A common stock to Asher for repayment
of debt valued at $105,230. The difference in the market value and the reduction in debt of $25,600 was charged to beneficial
interest in the amount of $79,630. During the three months ended March 31, 2013 the Company issued an additional 363,852,814 shares
of Class A common stock to Asher for repayment of debt valued at $113,498. The difference in the market value and the reduction
in debt and accrued interest of $30,200 was charged to beneficial interest in the amount of $83,298.



As
of March 31, 2013 and December 31, 2011, the outstanding balance on these Convertible Promissory Notes was $10,700 and $39,400,
respectively.

17









In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture
met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and
accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes
model with the following assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%: expected life: .75 years; and
volatility: 212.29%. The accounting guidance instructs that the conversion options are a derivative liability. As such, on the
issue dates, the Company recorded the conversion options as a liability, recorded a debt discount of $65,000, and charged Other
Expense - Loss on Valuation of Derivative for $24,294. For the three months ended March 31, 2013, the Company recorded a Gain
on Valuation of Derivative in the amount of $110,602 on the 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 the fluctuation in the current market
prices.



On
February 16, 2012, March 14, 2012 and November 27, 2012, the Company issued an additional three (3) convertible promissory notes,
in an aggregate of $60,000, to Asher Enterprises, Inc. (“Asher”). Amounts due under these notes are due on or before
November 21, 2012, December 19, 2012 and March 1, 2014, respectively, and pays interest at the rate of 8% per annum. Asher has
the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price
equal to fifty five percent (55%) of the Average of the lowest two (2) Trading Prices of the Common Stock during the twenty (20)
Trading Day period immediately preceding the Conversion Date. Asher may not convert the note into shares of Class A Common Stock
if such conversion would result in Asher beneficially owning in excess of 4.99% of the then issued and outstanding shares of Class
A Common Stock.



As
of March 31, 2013, the outstanding balance on these Convertible Promissory Notes were $60,000.



In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture
met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and
accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes
model with the following assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%: expected life: .75 and 1.19
years; and volatility: 278.05%, 301.94% and 473.96%, respectively. The accounting guidance instructs that the conversion options
are a derivative liability. As such, on the issue dates, the Company recorded the conversion options as a liability, recorded
a debt discount of $60,000, and charged Other Expense - Loss on Valuation of Derivative for $115,115. For the three months ended
March 31, 2013, the Company recorded a Loss on Valuation of Derivative in the amount of $2,909 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 $214,003
on the fluctuation in the current market prices.



On
March 6, 2012, the Company consented to the reassignment of the outstanding balance of the EPIC Worldwide wrap around agreements
to ATG, Inc. (“ATG”). The outstanding balance of principal and accrued interest was $76,050. ATG subsequently entered
into an Assignment and Assumption Agreement with UAIM Corporation (“UAIM”) to assign $10,000 of these funds from ATG
to UAIM. Amounts due under these agreements are due on or before March 6, 2013 and pays interest at the rate of 15% per annum.
ATG and UAIM have the right to convert a portion or the entire outstanding principal into the Company's Class A Common Stock at
a Conversion Price equal to $0.0005 per share. 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 of 4.99% of the then issued and outstanding shares
of Class A Common Stock.

18









During
the year ended December 31, 2012, the Company issued an aggregate of 11,200,000 shares of Class A common stock for repayment of
$5,600 of convertible debenture in lieu of cash pursuant to the terms of the wrap around agreement.



As
of March 31, 2013, the outstanding balance on these agreements were $70,450.



In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Debenture
met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and
accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes
model with the following assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%: expected life: 1.00 years;
and volatility: 295.14. The accounting guidance instructs that the conversion options are a derivative liability. As such, on
the issue dates, the Company recorded the conversion options as a liability, recorded a debt discount of $76,050, and charged
Other Expense - Loss on Valuation of Derivative for $2,925,649. For the three months ended March 31, 2013, the Company recorded
a Gain on Valuation of Derivative in the amount of $33,430 on the 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 $2,954,881 on the fluctuation in the
current market prices.



In
conjunction with the consent and assignment of $45,000 of the Basner note (see Note 11) to Southridge Partners II LP (“Southridge
Allonges”), the Company consented to provide Southridge with the right to convert a portion or the entire outstanding principal
into the Company's Class A Common Stock at a Conversion Price equal to sixty percent (60%) of the lowest closing bid price of
the Common Stock during the five (5) trading days immediately preceding the Conversion Date. Southridge may not convert the note
into shares of Class A Common Stock if such conversion would result in Southridge beneficially owning in excess of 9.99% of the
then issued and outstanding shares of Class A Common Stock.



On
January 30, 3013 and March 11, 2013, the Company issued two convertible promissory notes, in an aggregate of $10,000, to Southridge
Partners II LP (“Southridge Debt”). Amounts due under these notes are due on or before January 31, 2014 and March
31, 2014, respectively. Southridge has the right to convert a portion or the entire outstanding principal into the Company's Class
A Common Stock at a Conversion Price equal to the lesser of (a) $0.01 or (b) fifty percent (50%) of the lowest closing bid price
during the twenty (20) trading days immediately preceding the Conversion Date.



During
the year ended December 31, 2012, the Company issued an aggregate of 58,102,182 shares of Class A common stock for repayment of
$45,000 of convertible debt to Southridge in lieu of cash pursuant to the terms of the Securities Transfer Agreement.



As
of March 31, 2013, the outstanding balance on the Southridge Debt was $10,000.



In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Southridge
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: 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 as a liability in the aggregate of $75,519, recorded a debt discount
in the aggregate of $45,000, and charged Other Expense - Loss on Valuation of Derivative in the aggregate for $30,519. For the
year ended December 31, 2012, the Company recorded a Gain on Valuation of Derivative in the amount of $42,589 on the 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 $42,589 on the fluctuation in the current market prices.

19









In
conjunction with the consent and assignment of $93,700 of the Basner notes, DeJonge notes and Opal notes (see Note 11) to Star
City Capital, LLC (“Star City Allonges”), the Company consented to provide Star City with the right to convert a portion
or the entire outstanding principal into the Company's Class A Common Stock at a Conversion Price equal to fifty percent (50%)
of the lowest closing bid price of the Common Stock during the five (5) trading days immediately preceding the Conversion Date.
Star City may not convert the note into shares of Class A Common Stock if such conversion would result in Star City beneficially
owning in excess of 9.99% of the then issued and outstanding shares of Class A Common Stock.



During
the year ended December 31, 2012, the Company issued an aggregate of 132,365,250 shares of Class A common stock for repayment
of $24,969 of convertible debt and interest to Star City in lieu of cash pursuant to the terms of the various Securities Transfer
Agreements.



During
the three months ended March 31, 2013, the Company issued an aggregate of 536,528,400 shares of Class A common stock for repayment
of $29,474 of convertible debt and interest to Star City in lieu of cash pursuant to the terms of the various Securities Transfer
Agreements.



As
of December 31, 2012, the outstanding balance on the Star City Allonges was $36,170.



In
accordance with ASC 815, "Derivatives and Hedging", the Company determined that the conversion feature of the Southridge
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 $103,496, recorded a debt discount of $54,520, and charged
Other Expense - Loss on Valuation of Derivative for $48,976. 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.





Note
11 Promissory Notes



On
June 15, 2011, the Company issued a promissory note, in an aggregate of $25,000, to Stuart W. DeJonge (“DeJonge”).
Amounts due under this note are due on or before January 15, 2012 and pays interest at the rate of 9% per annum. On January 15,
2012, the Company defaulted on this note and as such, the lender may take whatever action he may elect to recover his loss while
continuing to accrue 9% interest. In February 2013, the Company consented to the assignment an aggregate of $28,770 of the DeJonge
note and accrued interest to affiliates of Star City Capital, LLC. On February 27, 2013, the Company issued replacement promissory
notes, in the aggregate of $20,000. As of March 31, 2013, the outstanding balance on the new DeJonge notes was $20,000 and accrued
interest of $159.

20









On
July 12, 2011, the Company issued a promissory note, in an aggregate of $15,000, to Opal Marketing Corp. (“Opal”).
Amounts due under this note are due on or before March 15, 2012 and pays interest at the rate of 7% per annum. On March 15, 2012,
the Company defaulted on this note and as such, the lender may take whatever action he may elect to recover his loss while continuing
to accrue 7% interest. On February 19, 2013, the Company consented to the assignment of $15,000 of the Opal note to affiliates
of Star City Capital, LLC. As of March 31, 2013, the outstanding balance on the Opal Marketing Corp. note was $0 and accrued interest
of $1,671.



On
July 22, 2011, the Company issued a promissory note, in an aggregate of $100,000, to Charles M. Basner (“Basner”).
Amounts due under this note are due on or before March 22, 2012 and pays interest at the rate of 7% per annum. On March 22, 2012,
the Company defaulted on this note and as such, the lender may take whatever action he may elect to recover his loss while continuing
to accrue 7% interest. During the year ended December 31, 2012 and the three months ended March 31, 2013, the Company consented
to the assignment an aggregate of $100,000 of the Basner note to Southridge Partners II LP and to Star City Capital, LLC. During
the year ended December 31, 2012 and the 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 of the original note are unchanged. As of March 31, 2013,
the aggregate balances balance on the Basner notes was $141,600 and accrued interest of $11,788.



On
July 22, 2012, the Company issued a promissory note, in an aggregate of $25,000, to Fred Erxleben. Amounts due under this note
are due on or before January 25, 2013 and pays interest at the rate of 10% per annum. On January 25, 2013, the Company defaulted
on this note and as such, the lender may take whatever action he may elect to recover his loss while continuing to accrue 10%
interest. As of March 31, 2013, the outstanding balance on the Fred Erxleben note was $25,000 and accrued interest of $1,726.



Note
12 Capital Stock



Pursuant
to Kenergy Scientific's certificate of incorporation, as amended, as of March 31, 2013, the Company is authorized to issue 1,000,000
shares of Preferred Stock, par value of $1.00 per share, 4,000,000,000 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
March 5, 2012, the Company amended its Certificate of Incorporation to increase the number of authorized Class A Common Stock
Shares to 625,000,000, as authorized by the Board of Directors and adopted by the shareholders on February 15, 2012. The effect
of this amendment was to increase the authorized shares from 125,000,000 to 625,000,000.



On
November 28, 2012, the Company amended its Certificate of Incorporation to increase the number of authorized Class A Common Stock
Shares to 4,000,000,000, as authorized by the Board of Directors and adopted by the shareholders on November 15, 2012. The effect
of this amendment was to increase the authorized shares from 625,000,000 to 4,000,000,000.



a)
Preferred Stock

21









As
of March 31, 2013, Kenergy Scientific has issued 75,000 shares of Preferred Stock to Southridge Partners II LP (the “Investor”),
pursuant to the terms of the Equity Purchase Agreement. These shares shall be convertible at the option of the Investor into shares
of the Company’s common stock at a conversion price equal to seventy percent (70%) of the average of the two (2) lowest
Closing Prices for the five (5) trading days immediately preceding a conversion notice. The Preferred Stock shall have no registration
rights.



For
the year ended December 31, 2012, the Company had the 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
the three months ended March 31, 2013, the Company had the following transactions in itsPreferred
stock:

|i) | The
    Company issued 43,142,857 shares of Class A common stock in exchange for 6,040 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
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

b)
Class A Common Stock



As
of March 31, 2013 and December 31, 2012, there are 4,000,000,000 shares of Class A Common Stock authorized, no par value, and
2,491,709,429 and 1,480,028,558 shares were issued and outstanding, respectively.

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



For
the three months ended March 31, 2013, the Company had the following transactions in its Class A common stock:

|(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.                                                            



22







c)
Class B Common Stock



As
of March 31, 2013, there are 50,000,000 shares of Class B Common Stock authorized, par value $.01 per shareand 10,000 shares were issued and outstanding. Each holder of Class B Common Stock has voting rights equal to 100 shares
of Class A Common Stock. A holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the
number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount
of the lowest price that Kenergy Scientific, Inc. had ever issued its Class A Common Stock. Upon liquidation, dissolution, or
winding-up, holders of Class B Common Stock will be entitled to receive distributions.



d)
Class C Common Stock



As
of March 31, 2013, there are 20,000,000 shares of Class C Common Stock authorized, par value $.01 per share. Each holder of Class
C Common Stock is entitled to 1,000 votes for each share held of record. Shares of Class C Common Stock are not convertible into
Class A Common Stock. Upon liquidation, dissolution or wind-up, the holders of Class C Common Stock are not entitled to receive
the Company’s net assets pro rata. As of March 31, 2013, no shares were issued or outstanding.



Note
13 Additional paid-in capital



As
of March 31, 2013, the Company has owed as much as $437,000 to a related party director of the Company. The loans are non-interest
bearing, unsecured and due at various times up to December 28, 2010 and are included in the loans payable, related party balance.
However, ASC 835-30 “Imputation of Interest” has been applied to impute the interest on loan from June 1, 2009 as
there was no interest rate stipulated in the agreements. An accumulation of $44,451 has been imputed as interest over the periods
and as per ASC 835-30, has been credited to Additional paid-in capital.



Note
14 Stock Options



During
2005, the Company adopted the 2005 Stock Incentive Plan and the 2005 Directors’ and Officers’ Stock Incentive Plan
(“Plan”) in order to attract and retain qualified personnel. Under the Plans, the Board of Directors, in its discretion
may grant stock options (either incentive or non-qualified stock options) to officers, directors and employees. The Company has
not issued any stock options as of March 31, 2013.



Note
15 New Accounting Pronouncements



There
were various other updates recently issued, most of which represented technical corrections to the accounting literature or application
to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations
or cash flows.



Note
16 Fair Value Measurements



ASC
825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities
required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it
would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent
risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity
to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes
three levels of inputs that may be used to measure fair value:

23









Level
1 - Quoted prices in active markets for identical assets or liabilities.



Level
2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets
with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant
inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full
term of the assets or liabilities.



Level
3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.



To
the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination
of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of
the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair
value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.



Items
recorded or measured at fair value on a recurring basis in the accompanying financial statements consisted of the following items
as of March 31, 2013 and December 31, 2012.



March
31, 2013

|                             |  | Level I |   | Level II |  | Level III |   | Total
|---------------------------- |  | ------- | - | -------- |  | --------- | - | -----
|Convertible promissory notes |  | $       | — |          |  | $         | — |      
|Total Liabilities            |  | $       | — |          |  | $         | — |      



December
31, 2012

|                             |  | Level I |   | Level II |  | Level III |   | Total
|---------------------------- |  | ------- | - | -------- |  | --------- | - | -----
|Convertible promissory notes |  | $       | — |          |  | $         | — |      
|Total Liabilities            |  | $       | — |          |  | $         | — |      



Note
19 Subsequent Events



During
the second quarter of 2013, the Company has issued an aggregate of 482,605,000 shares of Class A common stock for repayment of
$24,130 of convertible debt and interest due to Star City Capital and Affilitates pursuant to the various Securities Purchase
Agreements.

During
the second quarter of 2013, the Company has issued 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.

24





|Item |  | 2.	MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|---- |  | ----------------------------------------------------------------------------------------



Forward
Looking Statements



A
number of the statements made by the Company in this report may be regarded as “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995.



Forward-looking
statements include, among others, statements concerning the Company’s outlook, pricing trends and forces within the industry,
the completion dates of capital projects, expected sales growth, cost reduction strategies and their results, long-term goals
of the Company and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts.



All
predictions as to future results contain a measure of uncertainty and accordingly, actual results could differ materially. Among
the factors that could cause a difference are: changes in the general economy; changes in demand for the Company’s products
or in the cost and availability of its raw materials; the actions of its competitors; the success of our customers; technological
change; changes in employee relations; government regulations; litigation, including its inherent uncertainty; difficulties in
plant operations and materials; transportation, environmental matters; and other unforeseen circumstances. For a discussion of
material risks and uncertainties that the Company faces, see the discussion in the Form 10−K for the fiscal year ended December
31, 2012 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”. Kenergy Scientific may seek to expand its operations through additional sales and marketing activity and the acquisition
of additional businesses. Any potential acquired additional businesses may be outside the current field of operations of Kenergy
Scientific. Kenergy Scientific may not be able to identify, successfully integrate or profitably manage any such business or operations.



Results
of Operations



During
the three months ended March 31, 2013, the Company sold $5,145 of solar powered products and products made from recycled materials
as compared to $16,522 for the three months ended March 31, 2012. This decrease is primarily due to the decline in interest in
Green products at the company-owned retail GreenSmart store which opened in the 4th quarter of 2011.



Gross
margin for the three months ended March 31, 2013 of $179 represents a Gross margin % to sales of 3.5%. For the three months ended
March 31, 2012, Gross margin % to sales of 48.3%. These decrease in margin % is the result of giving heavy discounts to loyal
customers as the Company moved to close the company-owned retail GreenSmart store.

25









Total
operating expenses decreased $12,476 (7.6%) to $151,713 for the three months March 31, 2013, as compared to the same period in
the prior year. The decrease was primarily the result of lower professional fees offset by increases in general operating expenses
and higher deferred salaries.

Total
other income (expense) for the three months ended March 31, 2013 was total income of $1,033,775 as compared to total expense of
$1,679,123 for the three months ended March 31, 2012, for a favorable change of $2,712,898. This change was primarily attributed
to the change from a loss to a gain on revaluation of derivatives of $2,928,282 offset by a higher beneficial interest expense
of $194,628 and an increase in amortization of debt discount of $16,068 when compared to the prior year.

Net
income for the three months ended March 31, 2013 was $882,241 as compared to a net loss of $253,484 for the three months ended
March 30, 2012. The favorable changes for the three months ending March 31, 2013 were primarily from the favorable changes in
revaluation of derivatives and lower operating expense offset by the and lower gross margin and increased interest expense and
amortization of debt discount.

Liquidity
and Capital Resources



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

During
the three months ended March 31, 2013, the Company was able to raise an additional $45,000 of additional short term trade debt
from unrelated investors.



The
Company currently has no other significant sources of working capital or cash commitments. However, no assurance can be given
that Kenergy Scientific will raise sufficient funds from such financing arrangements, or that Kenergy Scientific will ever produce
sufficient revenues to sustain its operations, or that a market will develop for its common stock for which a significant amount
of Kenergy Scientific’s financing is dependent upon.



For
the three months ended months March 31, 2013, the Company had a net decrease in cash of $807. The Company’s principal sources
and uses of funds were as follows:



Cash
used by operating activities.The Company used $45,807 in cash for operating activities for the three months ended March 31,
2013 and used $37,304 in cash for operating activities for the three months ended March 31, 2012. The current cash operating losses
of $170,430 are being partially funded by deferred payments to vendors and related parties.



Cash
used by investing activities.The Company used $2,470 in cash for investing activities for the three months ended March 31,
2012. These amounts were for the prosecution and filings related to the Company’s patent portfolio.

Cash
provided by financing activities. For the three months ended March 31, 2013, the Company provided $45,000 in financing activities
by the issuance of promissory notes to unrelated parties.



There
was no significant impact on the Company’s operations as a result of inflation for the three months ended March 31, 2013.



26







Financing
Commitments

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, 2013, 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.



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.



28





Part
II. Other Information



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



|(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.                                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.                                                                              
|(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.                                                                                
|(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.



Item
3. Defaults Upon Senior Securities.



On
January 25, 2013, the Company defaulted on the Fred Erxleben note and as such, the lender may take whatever action he may elect
to recover his loss while continuing to accrue 10% interest.





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.









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.











|Date: May 17, 2013 | Kenergy Scientific, Inc.                                                            
|------------------ | ------------------------------------------------------------------------------------
|                   | By: /s/ Kenneth P. Glynn                                                            
|                   | Kenneth P. GlynnPresident, Chief Executive
     Officer, and Chief Financial Officer













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









|Date: May 17, 2013 | Kenergy Scientific, Inc.                                                            
|------------------ | ------------------------------------------------------------------------------------
|                   | By: /s/ Kenneth P. Glynn                                                            
|                   | Kenneth P. GlynnPresident, Chief Executive
     Officer, and Chief Financial Officer









|Date: May 17, 2013 | Kenergy Scientific, Inc.
|------------------ | ------------------------
|                   | By: /s/ Kenneth W. Moser
|                   | Kenneth W. MoserDirector













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.

























---