speechswitch10k.htm

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

EXHIBIT INDEX

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

No. Description

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

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

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

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

10.1*

$1,000,000 Secured Convertible Debenture dated March 30, 2007 between SpeechSwitch, Inc and YA Global Investments (f/k/a/ YA Global Investments (f/k/a Cornell Capital Partners) (filed as Exhibit 10.1 to SpeechSwitch, Inc.’s Form 8-K filed on May 15, 2007 and incorporated herein by reference.

10.2*

Irrevocable Transfer Agent Instructions by and among SpeechSwitch, Inc., YA Global Investments (f/k/a/ YA Global Investments (f/k/a/ Cornell Capital Partners) and Fidelity Transfer Company (filed as Exhibit 10.2 to SpeechSwitch, Inc.’s Form 8-K filed on May 15, 2007 and incorporated herein by reference.

10.3*

Amendment to Amended and Restated Standby Equity Distribution Agreement, dated December 12, 2005 between SpeechSwitch, Inc. and YA Global Investments (f/k/a/ YA Global Investments (f/k/a/ Cornell Capital Partners) (filed as Exhibit to SpeechSwitch, Inc.’s Form 8-K filed on May 15, 2007 and incorporated herein by reference.

10.4*

Security Agreement dated May 8, 2007 between SpeechSwitch, Inc. and Jerome Mahoney. (filed as Exhibit 10.4 to SpeechSwitch, Inc.’s Form 8-K filed on May 15, 2007 and incorporated herein by reference.

10.5*

Investor Relations Agreement dated May 4, 2007 by and between the SpeechSwitch, Inc and StoneRidge Capital, LLC, d/b/a UpTick ("UpTick"). (filed as Exhibit 10.1 to SpeechSwitch, Inc’s Form 8-K filed on May 16, 2007 and incorporated herein by reference.

10.6*

Consulting Agreement between SpeechSwitch, Inc. and Jerome Mahoney dated February 1, 2008. (filed as Exhibit 10.1 to SpeechSwitch, Inc’s Form 100-Q filed on May 15, 2008 and incorporated herein by reference.)

10.7	Amendment No. 1 to Administrative Services Agreement, dated March 5, 2008, between SpeechSwitch, Inc. and iVoice, Inc. filed herein.

10.8	Convertible Promissory Note from SpeechSwitch, Inc. to iVoice, Inc, dated March 5, 2008 filed herein.

10.9	Security Agreement, dated March 5, 2008, between SpeechSwitch, Inc. and iVoice, Inc. filed herein.

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

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

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

_________________

* Previously filed.

SPEECHSWITCH, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2008 and 2007

SPEECHSWITCH, INC.

FINANCIAL STATEMENTS

CONTENTS

		Page

FINANCIAL STATEMENTS

	Balance Sheets	F-1

	Statements of Operations	F-2

	Statements of Changes in Stockholders' Deficit	F-3

	Statements of Cash Flows	F-4 to F-5

	Notes to Financial Statements	F-6 to F-25

SPEECHSWITCH, INC.

Balance Sheets as of December 31

ASSETS	2008 Unaudited			2007 Audited
Current assets:
Cash and cash equivalents	$	8,371		$	185,581
Accounts receivable, net of allowance for doubtful
accounts of $2,862		617			5,500
Prepaid expenses and other		904			11,115
Total current assets		9,892			202,196
Intangible assets, net		2,315			5,720

Total assets	$	12,207		$	207,916
LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued expenses	$	682,366		$	670,527
Due to related parties		319,910			227,482
Deferred maintenance contracts		3,786			5,291
Notes payable to related parties		71,756			124,268
Convertible promissory note, net of unamortized debt discount of $66,759		13,177			-
Convertible debenture, net of unamortized debt discount of $381,650 and $729,419, respectively		539,690			245,821
Derivative liability		935,451			2,536,646
Total current liabilities		2,566,136			3,810,035
Commitments Stockholders’ Deficit:
Preferred stock, $1.00 par value; authorized 1,000,000 shares; no shares issued and outstanding		-			-
Common stock:
Class A – no par value; authorized 10,000,000,000 shares; 1,400,096,193 shares issued and outstanding at December 31, 2008; 383,858,924 shares issued and outstanding at December 31, 2007		806,814			606,787
Class B - $.01 par value; authorized 50,000,000 Shares; no shares issued and outstanding		-			-
Class C - $.01 par value; authorized 20,000,000 Shares; no shares issued and outstanding		-			-
Additional paid-in capital		2,119,085			2,125,375
Accumulated deficit		(5,479,828	)		(6,334,281	)
Total stockholders’ deficit		(2,553,929	)		(3,602,119	)

Total liabilities and stockholders’ deficit	$	12,207		$	207,916

The accompanying notes are an integral part of the financial statements

F-1

SPEECHSWITCH, INC.

Statements of Operations

For the Years Ended December 31

	2008 Unaudited			2007 Audited

Net sales	$	53,759		$	68,881

Cost of sales		15,769			23,916

Gross profit		37,990			44,965

Operating expenses:
Selling and marketing expenses		67,087			119,097
General and administrative expenses		272,385			413,709
Depreciation and amortization		3,405			3,405
Research and development expenses		52,057			77,160

Total operating expenses		394,934			613,371

Loss from operations		(356,944	)		(568,406	)

Other income/(expense):
Interest income		1,529			2,319
Interest expense		(142,021	)		(115,341	)
Other income		31,704			167,422
Amortization of debt discount		(360,946	)		(270,581	)
Gain (loss) on valuation of derivative		1,681,131			(1,536,646	)

Total other income (expense)		1,211,397			(1,752,827	)

Gain (loss) before provision for income taxes		854,453			(2,321,233	)

Provision for income taxes		-			-
Net income (loss) attributable to common shares	$	854,453		$	(2,321,233	)

Basic income (loss) per common share	$	0.00		$	(0.02	)
Diluted income (loss) per common share	$	0.00		$	(0.02	)

Weighted average number of shares outstanding:
Basic		1,043,665,103			105,265,140
Diluted		10,000,000,000			105,265,140

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

F-2

SPEECHSWITCH, INC.

Statements of Changes in Stockholders’ Deficit (Unaudited)

	Preferred Stock				Common Stock A				Common Stock B				Common Stock C
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders’ Deficit
Balance at January 1, 2007		-	$	-		30,640,651	$	343,311		-	$	-		-	$	-	$	2,147,688		$	(4,013,048	)	$	(1,522,049	)

Issuance of common stock pursuant to terms of the Equity Line of Credit with YA Global		-		-		213,666,729		128,645		-		-		-		-		(22,313	)		-			106,332
Common stock issued for repayment of convertible debenture		-		-		63,288,890		32,425		-		-		-		-		-			-			32,425
Common stock issued for repayment of debt		-		-		44,200,000		26,771		-		-		-		-		-			-			26,771
Common stock issued for legal fees		-		-		7,900,000		14,436		-		-		-		-		-			-			14,436
Common stock issued for investor relations costs and consulting fees		-		-		17,000,000		51,000		-		-		-		-		-			-			51,000
Common stock issued in lieu of cash compensation		-		-		7,162,654		10,199		-		-		-		-		-			-			10,199
Net loss for the year ended December, 31, 2007		-		-		-		-		-		-		-		-		-			(2,321,233	)		(2,321,233	)
Balance at December 31, 2007		-		-		383,858,924		606,787		-		-		-		-		2,125,375			(6,334,281	)		(3,602,119	)

Issuance of common stock pursuant to terms of the Equity Line of Credit with YA Global (f/k/a/ Cornell Capital Partners)		-		-		134,770,603		36,355		-		-		-		-		(6,290	)		-			30,065
Common stock issued for repayment of convertible debenture		-		-		408,466,666		76,111		-		-		-		-		-			-			76,111
Common stock issued for repayment of promissory note		-		-		151,000,000		18,875		-		-		-		-		-			-			18,875
Common stock issued for repayment of debt		-		-		196,000,000		52,306		-		-		-		-		-			-			52,306
Common stock issued in lieu of cash compensation		-		-		126,000,000		16,380		-		-		-		-		-			-			16,380
Net income for the year ended December, 31, 2008		-		-		-		-		-		-		-		-		-			854,453			854,453
Balance at December 31, 2008		-	$	-		1,400,096,193	$	806,814		-	$	-		-	$	-	$	2,119,085		$	(5,479,828	)	$	(2,553,929	)

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

F-3

SPEECHSWITCH, INC.

Statements of Cash Flows

For the Years Ended December 31


	2008 Unaudited			2007 Audited
Cash flows from operating activities:
Net income (loss)	$	854,453		$	(2,321,233	)
Adjustments to reconcile net income (loss) to net cash
(used in) operating activities:
Amortization of intangibles		3,405			3,405
(Gain) loss on valuation of derivative		(1,681,131	)		1,536,646
Amortization of discount on debt		360,946			270,581
Beneficial interest on conversion of debt		66,100			22,328
Common stock issued for investor relations costs		-			21,000
Common stock issued for consulting services		-			30,000
Common stock issued for compensation		10,080			10,199
Common stock issued for legal fees		-			14,436

Changes in certain assets and liabilities:
Decrease in accounts receivable		4,883			8,801
Decrease (increase) in prepaid expenses		10,211			(2,140	)
Increase in accounts payable and
accrued expenses		103,855			159,996
Increase in due to related parties		92,428			72,569
(Decrease) increase in deferred maintenance contracts		(1,505	)		3,754

Net cash (used in) operating activities		(176,275	)		(169,658	)

Cash flows from financing activities:
Issuance of common stock through equity financing		30,065			106,332
Repayment of notes payable to related party		(31,000	)		(7,000	)

Net cash provided by (used in) financing activities		(935	)		99,332

Net (decrease) in cash and cash equivalents		(177,210	)		(70,326	)

Cash and cash equivalents, beginning of year		185,581			255,907

Cash and cash equivalents, end of year	$	8,371		$	185,581

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

Non cash transactions:
Note payable converted to convertible debenture	$	-		$	1,000,000
Accounts payable converted to convertible promissory note	$	92,016		$	-

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

F-4

SPEECHSWITCH, INC.

Statements of Cash Flows (Unaudited)

Supplemental Schedule of Non-Cash Financing Activities:

For the Year Ended December 31, 2008:

a) The Company issued 126,000,000 shares of Class A common stock of the Company with a fair market value of $16,380 to an officer of the Company for compensation expense of $10,080. The difference in the market value and the value of the services was charged to beneficial interest in the amount of $6,300.

b) The Company issued 196,000,000 shares of Class A common stock with a fair market value of $52,306 to an officer to reduce the promissory note by $21,512. The difference in the market value and the loan reduction was charged to beneficial interest in the amount of $30,794.

c) The Company issued 134,770,603 shares of Class A common stock for fees pursuant to the Equity Line of Credit with YA Global Investments valued at $36,355. Issuance costs of $6,290 were incurred and charged to additional paid-in capital.

d) The Company issued 408,466,666 shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $76,111 to reduce the convertible debenture by $53,900. The difference in the market value and the reduction in debt was charged to beneficial interest in the amount of $22,211.

e) The Company issued 151,000,000 shares of Class A common stock with a fair market value of $18,875 to iVoice, Inc. to reduce the convertible promissory note by $12,080. The difference in the market value and the reduction in debt was charged to beneficial interest in the amount of $6,795.

For the Year Ended December 31, 2007:

a) The Company issued 7,900,000 shares of Class A common stock with a fair market value of $14,436 for legal expenses valued at $5,688. The difference in the market value and the value of the services was charged to beneficial interest in the amount of $8,748.

b) The Company issued 7,000,000 shares of Class A common stock of the Company as repayment of investor relations expenses. The value of the stock was $21,000.

c) The Company issued 7,162,654 shares of Class A common stock of the Company with a fair market value of $10,199 to an officer of the Company for compensation expense of $5,157. The difference in the market value and the value of the services was charged to beneficial interest in the amount of $5,042.

d) The Company issued 10,000,000 shares of Class A common stock of the Company as repayment of consulting fees. The value of the stock was $30,000.

e) The Company issued 44,200,000 shares of Class A common stock with a fair market value of $26,771 to an officer to reduce the promissory note by $12,108. The difference in the market value and the loan reduction was charged to beneficial interest in the amount of $14,663.

f) The Company issued 213,666,729 shares of Class A common stock for fees pursuant to the Equity Line of Credit with YA Global Investments (f/k/a Cornell Capital Partners) valued at $128,645. Issuance costs of $22,313 were incurred and charged to additional paid-in capital.

g) The Company issued 63,288,890 shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $32,425. The difference in the market value and the reduction in debt was charged to beneficial interest in the amount of $6,965.

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

F-5

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

NOTE 1 - BACKGROUND

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. When we refer to or describe any agreement, contract or other written instrument of the Company in these notes, we may also be referring to an agreement, contract or other written instrument that had been entered into by iVoice Technology 3 and thereafter assigned to the Company.

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 intends to continue to develop, market and license the automated speech attendant software, which runs on industry-standard hardware and performs speech recognition.

The Spin-off transaction was accomplished, on August 5, 2005, 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 conjunction with the Spin-off, SpeechSwitch entered into a temporary administrative service agreement with iVoice. This agreement will continue on a month-to-month basis until such time as we are able to replace any or all of the services currently being provided by iVoice.

On August 5, 2005, SpeechSwitch assumed $190,000 in accrued liabilities and related party debt incurred by iVoice. The debt assumed is convertible into SpeechSwitch Class B Common Stock at the option of the holder as later described in these notes.

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.

NOTE 2 - BUSINESS OPERATIONS

The Company develops, markets and licenses the lines of business relating to iVoice's Speech- Enabled Auto Attendant, Name Dialer and Speech Software Developers Kit (Speech SDK) products, which were developed by iVoice. Speech recognition is used to recognize what a person says, and through the use of natural language understanding, derives the meaning of what is said. The Company also offers a range of support services that enable its customers and channel partners to develop voice-driven applications that use the Company’s software. Our products are designed to be “people oriented”, with features that can be readily used with out special training and manuals. Our product line of Speech SDK, incorporate this philosophy. SpeechSwitch markets, promotes and sells its speech-enabled products primarily through telephony reseller channels. The Company also sells direct to end users in geographic locations where an authorized reseller does not exist. On direct sales orders, the Company is able to achieve greater profit margins through higher direct selling prices.

F-6

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

The Company employs one full-time employee and one part-time employee. SpeechSwitch may seek to expand its operations through additional sales and marketing activity and the acquisition of additional businesses. Any potential acquired additional businesses may be outside the current field of operations of SpeechSwitch. SpeechSwitch may not be able to identify, successfully integrate or profitably manage any such businesses or operations. Currently, SpeechSwitch has no plans, proposals or arrangements, either orally or in writing, regarding any proposed acquisitions and is not considering any potential acquisitions.

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. The Company has relied on iVoice, Inc. for administrative, management, research and other services.

As of December 31, 2008, the Company had a negative cash flow from operations, negative working capital and limited availability to raise new capital. These matters raise substantial doubt about the Company's ability to continue as a going concern. Therefore, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn, is dependent upon the Company's ability to raise capital and/or generate positive cash flow from operations.

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

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

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Presentation

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

b) Use of Estimates

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

F-7

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

c) Revenue Recognition

The Company derives its revenues from the licensing of its software product and optional customer support (maintenance) service. The Company's standard license agreement provides for a one-time fee for use of the Company's product in perpetuity for each computer or CPU in which the software will reside. The Company's software application is fully functional upon delivery and implementation and does not require any significant modification or alteration. The Company also offers customers an optional annual software maintenance and support agreement for the subsequent one-year periods. Such maintenance and support services are free for the first year the product is licensed and is considered the warranty period. The software maintenance and support agreement provides free software updates, if any, and technical support the customer may need in deploying or changing the configuration of the software. Generally, the Company does not license its software in multiple element arrangements whereby the customer purchases a combination of software and maintenance. In a typical arrangement, software maintenance services are sold separately from the software product; are not considered essential to the functionality of the software and are purchased at the customer's option upon the completion of the first year licensed.

The Company does not offer any special payment terms or significant discount pricing. Normal and customary payment terms require payment for the software license fees when the product is shipped. Payment for software maintenance is due prior to the commencement of the maintenance period. It is also the Company's policy to not provide customers the right to refund any portion of its license fees. With respect to the sale of software license fees, the Company recognizes revenue in accordance with Statement of Position 97-2, Software Revenue Recognition (SOP 97-2), as amended, and generally recognizes revenue when all of the following criteria are met: (1) persuasive evidence of an arrangement exists generally evidenced by a signed, written purchase order from the customer, (2) delivery of the software product on Compact Disk (CD) or other means to the customer has occurred, (3) the perpetual license fee is fixed or determinable and (4) collectibility, which is assessed on a customer-by-customer basis, is probable.

With respect to customer support services, upon the completion of one year from the date of sale, considered to be the warranty period, the Company offers customers an optional annual software maintenance and support agreement for subsequent one-year periods. Sales of purchased maintenance and support agreements are recorded as deferred revenue and recognized over the respective terms of the agreements.

Due to the nature of the business and one-time contracts, it is unlikely that any one customer will impact revenues in future periods.

F-8

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

d) Product Warranties

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

e) Research and development costs

Research and development costs are charged to operations as incurred.

f) Advertising Costs

Advertising costs are expensed as incurred and included in selling expenses. For the years ended December 31, 2008 and 2007, advertising expense amounted to $541 and $1,914, respectively.

g) Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2008 and 2007.

h) Income Taxes

The Company accounts for income taxes under the Statement of Financial Accounting Standards Board ("FAS") No. 109. Under FAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

i) Organization Costs

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

j) Intangible Assets

In May and December 2003, the Company was issued two patents by the U.S. Patent and Trademark Office for its Speech-Enabled Automatic Telephone Dialer. The patents expire 20 years from the date of the original patent filings. All accumulated costs incurred with respect to the Company's patent filings have been capitalized. Costs related specifically to the awarded patents are now being amortized on a straight basis over the life of the patents. All capitalized intangibles have been reviewed for impairment. In doing so, management has determined there has been no impairment of the intangible assets at December 31, 2008.

F-9

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

k) Income (loss) per Share

Basic and diluted net income (loss) per share available to common stockholders is presented in conformity with SFAS No. 128, “Earnings per Share.” 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. Diluted loss per share for the year ended December 31, 2007 does not include common stock equivalents, as these shares would be anti-dilutive. The computation of diluted loss per share also does not assume conversion, exercise or contingent exercise of securities due to the beneficial conversion of related party accounts as these shares that would have an anti-dilutive effect.

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

	December 31, 2008		December 31, 2007
Basic net income (loss) per share computation:
Net income (loss) attributable to common stockholders	$	854,453	$	(2,321,233	)
Weighted-average common shares outstanding		1,043,665,103		105,265,140
Basic net income (loss) per share attributable to common stockholders	$	0.00	$	(0.02	)

Diluted net income (loss) per share computation:
Net income (loss) attributable to common stockholders	$	854,453	$	(2,321,233	)
Weighted-average common shares outstanding		1,043,665,103		105,265,140
Incremental shares attributable to the assumed conversion of convertible debenture and convertible promissory note		8,856,334,897		--
Weighted-average common shares outstanding		10,000,000,000		105,265,140
Basic net income (loss) per share attributable to common stockholders	$	0.00	$	(0.02	)

The Company had common stock equivalents in excess of its authorized capital at December 31, 2008, so the maximum authorized shares of 10,000,000,000 are shown for diluted earnings per common share calculations. The Company had common stock equivalents of 10,901,903,565 at December 31, 2008.

l) Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash. As of December 31, 2008 and 2007, the Company believes it has no significant risk related to its concentration within its accounts receivable.

F-10

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

The Company maintains cash and cash equivalent balances at a financial institution that is insured by the Federal Deposit Insurance Corporation up to $100,000. The uninsured cash balances at December 31, 2008 and 2007 were $0 and $85,581, respectively.

m) Derivative Liabilities

During April 2003, the Financial Accounting Standards Board issued SFAS 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS 133, "Accounting for Derivative Instruments and Hedging Activities." The statement requires that contracts with comparable characteristics be accounted for similarly and clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS 149 is effective for contracts entered into or modified after June 30, 2003, except in certain circumstances, and for hedging relationships designated after June 30, 2003. The financial statements for the years ended December 31, 2008 and 2007 include the recognition of the derivative liability on the underlying securities issuable upon conversion of the YA Global Investments (“YA Global”) Convertible Debentures and iVoice Convertible Promissory Notes.

n) Fair Value of Instruments

The Company estimates that the fair value of all financial instruments at December 31, 2008 and 2007, as defined in FAS 107, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

o) Recent Accounting Pronouncements

In September 2006, The Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurement" ("SFAS No. 157"). This standard provides guidance for using fair value to measure assets and liabilities. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. Prior to SFAS No. 157, the methods for measuring fair value were diverse and inconsistent, especially for items that are not actively traded. The standard clarifies that for items that are not actively traded, such as certain kinds of derivatives, fair value should reflect the price in a transaction with a market participant, including an adjustment for risk, not just the company's mark-to-model value. SFAS No. 157 also requires expanded disclosure of the effect on earnings for items measured using unobservable data. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The adoption of SFAS 157 did not have a material impact on the Company's financial position or results of operations.

F-11

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans -- An Amendment of FASB Statements No. 87, 88, 106, and 132R." This standard requires an employer to: (a) recognize in its statement of financial position an asset for a plan's over funded status or a liability for a plan's underfunded status; (b) measure a plan's assets and its obligations that determine its funded status as of the end of the employer's fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Those changes will be reported in comprehensive income. The requirement to recognize the funded status of a benefit plan and the disclosure requirements are effective as of the end of the fiscal year ending after December 15, 2006. The requirement to measure plan assets and benefit obligations as of the date of the employer's fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. The adoption of SFAS 158 did not have a material impact on the Company's financial position or results of operations.

In June 2007, the FASB ratified the consensus in EITF Issue No. 07-3 "Accounting for Nonrefundable Payments for Goods or Services to Be Used in Future Research and Development Activities" (EITF 07-3), requiring that nonrefundable advance payments for future research and development activities be deferred and capitalized. Such amounts should be expensed as the related goods are delivered or the related services are performed. The statement is effective for fiscal years beginning after December 15, 2007. The adoption of EITF 07-3 did not have an impact on the Company's financial position or results of operations.

In June 2007, the FASB ratified EITF Issue No. 06-11 "Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards" (EITF 06-11), which requires entities to record tax benefits on dividends or dividend equivalents that are charged to retained earnings for certain share-based awards to additional paid-in capital. In a share-based payment arrangement, employees may receive dividends or dividend equivalents on awards of non-vested equity shares, non-vested equity share units during the vesting period, and share options until the exercise date. Generally, the payment of such dividends can be treated as deductible compensation for tax purposes. The amount of tax benefits recognized in additional paid-in capital should be included in the pool of excess tax benefits available to absorb tax deficiencies on share-based payment awards. EITF 06-11 is effective for fiscal years beginning after December 15, 2007, and interim periods within those years. The adoption of EITF 06-11 did not have an impact on the Company's financial position or results of operations.

In December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 requires that ownership interests in subsidiaries held by parties other than the parent, and the amount of consolidated net income, be clearly identified, labeled, and presented in the consolidated financial statements within equity, but separate from the parent’s equity. It also requires once a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value. Sufficient disclosures are required to clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 will be effective beginning January 1, 2009. The adoption of SFAS 160 will not have an impact on the Company’s financial statements.

F-12

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

In December 2007, the FASB issued SFAC No 141(R), “Business Combinations.” This statement provides new accounting guidance and disclosure requirements for business combinations. SFAS No 141(R) is effective for business combinations which occur in the first fiscal year beginning on or after December 15, 2008.

In December 2007, the FASB finalized the provisions of the Emerging Issues Task Force (EITF) Issue No. 07-1, “Accounting for Collaborative Arrangements.” This EITF Issue provides guidance and requires financial statement disclosures for collaborative arrangements. EITF Issue No. 07-1 is effect for financial statements issued for fiscal years beginning after December 15, 2008. The Company is currently assessing the effect of EITF Issue No. 07-1 on its financial statements, but it is not expected to be material.

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"), which clarifies the definition of fair value whenever another standard requires or permits assets or liabilities to be measured at fair value. Specifically, the standard clarifies that fair value should be based on the assumptions market participants would use when pricing the asset or liability, and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS No. 157 does not expand the use of fair value to any new circumstances, and must be applied on a prospective basis except in certain cases. The standard also requires expanded financial statement disclosures about fair value measurements, including disclosure of the methods used and the effect on earnings.

In February 2008, FASB Staff Position ("FSP") FAS No. 157-2, "Effective Date of FASB Statement No. 157" ("FSP No. 157-2") was issued. FSP No. 157-2 defers the effective date of SFAS No. 157 to fiscal years beginning after December 15, 2008, and interim periods within those fiscal years, for all nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Examples of items within the scope of FSP No. 157-2 are nonfinancial assets and nonfinancial liabilities initially measured at fair value in a business combination (but not measured at fair value in subsequent periods), and long-lived assets, such as property, plant and equipment and intangible assets measured at fair value for an impairment assessment under SFAS No. 144.

The partial adoption of SFAS No. 157 on January 1, 2008 with respect to financial assets and financial liabilities recognized or disclosed at fair value in the financial statements on a recurring basis had a material impact on the Company's financial statements. See Note 4 for the fair value measurement disclosures for these assets and liabilities. The Company is in the process of analyzing the potential impact of SFAS No. 157 relating to its planned January 1, 2009 adoption of the remainder of the standard.

On January 1, 2008, the Company adopted SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, Including an amendment of FASB Statement No. 115" ("SFAS No. 159"). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value, which are not otherwise currently required to be measured at fair value. Under SFAS No. 159, the decision to measure items at fair value is made at specified election dates on an instrument-by-instrument basis and is irrevocable. Entities electing the fair value option are required to recognize changes in fair value in earnings and to expense upfront costs and fees associated with the item for which the fair value option is elected. The new standard did not impact the Company's consolidated financial statements, as the Company did not elect the fair value option for any instruments existing as of the adoption date. However, the Company will evaluate the fair value measurement election with respect to financial instruments the Company enters into in the future.

F-13

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” (“SFAS 161”), which modifies and expands the disclosure requirements for derivative instruments and hedging activities. SFAS 161 requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation and requires quantitative disclosures about fair value amounts and gains and losses on derivative instruments. It also requires disclosures about credit-related contingent features in derivative agreements. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. SFAS 161 encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of SFAS 161 is not expected to have a material impact on our consolidated financial condition or results of operations.

In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets. FSP 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS 142, Goodwill and Other Intangible Assets, and adds certain disclosures for an entity’s accounting policy of the treatment of the costs, period of extension, and total costs incurred. FSP 143-3 must be applied prospectively to intangible assets acquired after January 1, 2009. The Company is currently evaluating the impact that FSP 142-3 will have on its financial position or results of operations.

In May 2008, the Financial Accounting Standards Board (the “FASB”) issued FAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“FAS 162”). This statement identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in accordance with GAAP. With the issuance of this statement, the FASB concluded that the GAAP hierarchy should be directed toward the entity and not its auditor, and reside in the accounting literature established by the FASB as opposed to the American Institute of Certified Public Accountants (AICPA) Statement on Auditing Standards No. 69, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The adoption of FAS 162 is not expected to have a material impact on the Company’s results from operations or financial position.

F-14

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

In June 2008, the FASB ratified Emerging Issues Task Force (“EITF”) Issue No. 08-3, “Accounting by Lessees for Nonrefundable Maintenance Deposits” (“EITF 08-3”). This statement provides guidance for accounting for nonrefundable maintenance deposits. It also provides revenue recognition accounting guidance for the lessor. This statement is effective for fiscal years beginning after December 15, 2008. The adoption of EITF 08-3 will not have a material effect on our financial statements.

NOTE 5 - FAIR VALUE MEASUREMENTS

On January 1, 2008, the Company adopted SFAS No. 157 "Fair Value Measurements"("SFAS 157"). SFAS 157 defines fair value, provides a consistent framework for measuring fair value under Generally Accepted Accounting Principles and expands fair value financial statement disclosure requirements. SFAS 157's valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. SFAS 157 classifies these inputs into the following hierarchy:

Level 1 Inputs- Quoted prices for identical instruments in active markets.

Level 2 Inputs- Quoted prices for similar instruments in active markets;

quoted prices for identical or similar instruments in markets that are

not active; and model-derived valuations whose inputs are observable or

whose significant value drivers are observable.

Level 3 Inputs- Instruments with primarily unobservable value drivers.

The following table represents the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2008 and 2007.

December 31, 2008

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

Convertible promissory notes	$	-	$	13,177	$	-	$	13,177
Note payable to related parties		-		71,756		-		71,756
Convertible debentures		-		539,690		-		539,690
Derivative liabilities		-		935,451		-		935,451
Total Liabilities	$	-	$	1,560,074	$	-	$	1,560,074

F-15

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

December 31, 2007

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

Note payable to related parties	$	-	$	124,268	$	-	$	124,268
Convertible debentures		-		245,821		-		245,821
Derivative liabilities		-		2,536,646		-		2,536,646
Total Liabilities	$	-	$	2,906,735	$	-	$	2,906,735

NOTE 6 - INTANGIBLE ASSETS

Intangible assets consist of accumulated costs incurred with respect to the Company’s patent filings originally paid for by iVoice for $24,000 in May and December 2003. These assets were valued at $16,800 at the date of the spin-off from iVoice, Inc. Additional filing costs of $225 were capitalized on August 26, 2005. These assets are reflected at cost, net of accumulated amortization of $14,710. The net value of intangible assets was $2,315 and $5,720 at December 31, 2008 and 2007, respectively.

In accordance with FAS 142 goodwill and indefinite-lived intangible assets are reviewed for impairment at least annually, and whenever events or changes in circumstances indicate the carrying amounts of the assets may be impaired. We have elected to perform our impairment review during the fourth quarter of each year, in conjunction with our annual planning cycle. The Company has determined no impairment of indefinite-lived intangible assets was necessary at December 31, 2008.

NOTE 7 - RELATED PARTY TRANSACTIONS

In conjunction with the Spin-off, SpeechSwitch has entered into a temporary administrative services agreement with iVoice. The administrative services agreement will continue on a month-to-month basis until SpeechSwitch has found replacement services for those services being provided by iVoice or can provide these services for itself. Administrative services were $50,952 and $50,652, respectively, for the years ended December 31, 2008 and 2007.

The Company also assumed an outstanding promissory note in the amount of $190,000 payable to Jerry Mahoney, President and Chief Executive Officer of iVoice and was previously the non-executive Chairman of the Board of SpeechSwitch. This amount is related to funds loaned to iVoice and is unrelated to the operations of SpeechSwitch. The note will bear interest at the rate of Prime plus 2.0% 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. During the year ended December 31, 2008, Mr. Mahoney received 196,000,000 shares of Class A common stock as a repayment of $21,512 and received cash payments of $31,000 to reduce the promissory note. As of December 31, 2008, the outstanding balance due to Mr. Mahoney is $71,756 plus accrued interest of $88,915. As of December 31, 2007, the outstanding balance due to Mr. Mahoney is $124,268 plus accrued interest of $62,553.

F-16

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

SpeechSwitch entered into a five-year employment agreement with Mr. Mahoney as of August 1, 2004. Mr. Mahoney will serve as SpeechSwitch’s Non-Executive Chairman of the Board for a term of five years. As consideration, SpeechSwitch agreed to pay Mr. Mahoney the sum of $85,000 the first year with an annual increase based on the Consumer Price Index every year thereafter. SpeechSwitch also agreed to pay Mr. Mahoney a bonus for each merger or acquisition completed by the Company equal to six percent (6%) of the gross consideration paid or received by SpeechSwitch in a merger or acquisition completed by the Company during the term of the agreement. This bonus would be payable in the form of cash, debt, or shares of our Class B Common Stock at the option of Mr. Mahoney. On February 7, 2008, the Company announced that it had accepted the resignation of Mr. Jerry Mahoney as Non-Executive Chairman of the Company. For the one month ended January 31, 2008, Mr. Mahoney deferred $7,702 of his compensation. Effective February 1, 2008, Mr. Mahoney entered into a consulting arrangement with the Company and Mr. Mahoney will be paid $92,428 annually with an annual increase based upon the Consumer Price Index. Mr. Mahoney agrees to accept compensation in the form of Class B common stock in lieu of cash for as long as the Board of Directors decides in their sole discretion that the Company does not have the financial resources to pay Mr. Mahoney in cash. Mr. Mahoney deferred $84,726 of his consulting fees for the eleven months ended December 31, 2008. As of December 31, 2008 total deferred compensation and consulting fees due Mr. Mahoney was $319,910.

F-17

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

SpeechSwitch entered into an employment agreement with Bruce Knef as of November 8, 2004. Pursuant to the terms of the employment agreement, as amended on November 22, 2006, Mr. Knef will serve as SpeechSwitch’s President and Chief Executive Officer until November 7, 2007. Mr. Knef continues to serve as President and Chief Executive Officer without a formal employment agreement. As consideration, SpeechSwitch agreed to pay Mr. Knef a base salary of $85,000 during the term. In addition, SpeechSwitch agreed to pay Mr. Knef incentive compensation based on the amount of total revenues collected by SpeechSwitch. If SpeechSwitch records and collects total revenues in an amount greater than $300,000 but less than $2,000,000, Mr. Knef will receive a bonus equal to 7.5% of the total revenues of the Company. If SpeechSwitch records and collects total revenues in an amount greater than $2,000,000, in addition to the 7.5% bonus, Mr. Knef will also receive a bonus equal to 3.5% of the total revenues of the Company in excess of $2,000,000. However, if the Company’s pre-tax profit margin for the year is less than 35%, Mr. Knef’s aggregate bonus will be reduced by 35%. Pursuant to an amendment to the employment agreement entered into on November 22, 2006, SpeechSwitch also agreed to pay Mr. Knef additional compensation of $15,000 annually, which is payable in quarterly disbursements of the Company’s Class A common stock issued under the 2005 Directors’ and Officers’ Stock Incentive Plan.

NOTE 8 – CONVERTIBLE PROMISSORY NOTE AND DERIVATIVE LIABILITY

SpeechSwitch, Inc. has entered into a temporary administrative services agreement with iVoice. The administrative services agreement will continue on a month-to-month basis until SpeechSwitch has found replacement services for those services being provided by iVoice or can provide these services for itself. In March 2008, the administrative services agreement was amended to provide that accrued and unpaid administrative services shall be aggregated 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 may be 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. For the period ended December 31, 2008, unpaid administrative services in the amount of $42,210 were added to the original convertible promissory note of $50,652.

iVoice, Inc. 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 to iVoice, or its assigns 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.

F-18

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

During the year ended December 31, 2008, the Company issued 151,000,000 shares of Class A common stock with a fair value of $18,875 to reduce the convertible promissory note in the amount of $12,080. The difference in the market value and the convertible promissory note reduction was charged to beneficial interest in the amount of $6,795.

As of December 31, 2008, the outstanding balance on the Convertible Promissory Note was $79,936.

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

In the event of (a) default in payment of any installment of principal or interest hereof as the same becomes due and such default is not cured within ten (10) days from the due date, or (b) default under the terms of any instrument securing this Note, and such default is not cured within fifteen (15) days after written notice to maker, then in either such event the holder may, without further notice, declare the remainder of the principal sum, together with all interest accrued thereon, and the prepayment premium, if any, at once due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time. The unpaid principal of this Note and any part thereof, accrued interest and all other sums due under this Note shall bear interest at the rate of prime plus 2 percent per annum after default until paid.

The promissory note holders have a security interest in substantially all of the assets of the Company.

In accordance with Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities", ("FASB 133"), 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: 5 years; and volatility: 263.04%. The accounting guidance instructs that the conversion options are a derivative liability. At March 5, 2008 the Company recorded the conversion options as a liability of $118,182, recorded a debt discount of $50,652, and charged Other Expense - Loss on Valuation of Derivative for $67,530, resulting primarily from calculation of the conversion price. For the year ended December 31, 2008, the Company recorded a Loss on Valuation of Derivative in the amount of $37,827. The fair value of the embedded conversion was estimated at the December 31, 2008 using the Black-Scholes model with the following assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%: expected life: 4.17 years; and volatility: 174.18%.

F-19

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

NOTE 9 – CONVERTIBLE DEBENTURE AND DERIVATIVE LIABILITY

On March 30, 2007, SpeechSwitch, Inc. 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.

During the year ended December 31, 2008, the Company issued 408,466,666 shares of Class A common stock with a fair value of $76,111 to reduce the convertible promissory note in the amount of $53,900. The difference in the market value and the convertible promissory note reduction was charged to beneficial interest in the amount of $22,211.

The debenture is secured by substantially all of the assets of the Company. As of December 31, 2008 and 2007, the outstanding balance on the Convertible Debenture was $921,340 and $975,240, respectively.

In accordance with Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”, (“FASB 133”), the Company determined that the conversion feature of the Debenture met the criteria of an embedded derivative, and therefore the conversion feature of this Debenture needed to be bifurcated and accounted for as a derivative. The fair value of the embedded conversion was estimated at the date of issuance using the Black-Scholes model with the following assumptions: risk free interest rate: 5.6%; expected dividend yield: 0%: expected life: 3 years; and volatility: 165.62%. The accounting guidance instructs that the conversion options are a derivative liability. As such, in March 2007 the Company recorded the conversion options as a liability, recorded a debt discount of $1,000,000, and charged Other Expense - Loss on Valuation of Derivative for $124,479, resulting primarily from calculation of the conversion price. For the year ended December 31, 2008, the Company recorded a Gain on Valuation of Derivative in the amount of $1,718,958. For the year ended December 31, 2007, the Company recorded a Loss on Valuation of Derivative in the amount of $1,536,646.

F-20

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

Additionally, on March 30, 2007, the Company, YA Global and the Company's transfer agent, Fidelity Transfer Company, entered into an Irrevocable Transfer Agent Instructions related to the conversion of the Debenture.

NOTE 10 – STANDBY EQUITY DISTRIBUTION AGREEMENT

On August 31, 2005, SpeechSwitch, Inc. entered into a Standby Equity Distribution Agreement (the SEDA”) with YA Global Investments (f/k/a/ Cornell Capital Partners) (“YA Global”) (was amended and restated on December 12, 2005) whereby YA Global agrees to purchase up to $10 million of the Company’s Class A Common Stock (the “Common Stock”) over a two-year period.

The purchase price of the Common Stock shall be at ninety-five percent (95%) of the lowest trading price of the Company’s Common Stock during the five consecutive trading day period following the notification by the Company of its request for an advance from Cornell Capital Partners under the SEDA. In connection with the SEDA, the Company entered into an Escrow Agreement, Registration Rights Agreement and Placement Agent Agreement. As of December 31, 2008, the Company has sold in the aggregate 358,862,703 shares of Class A Common Stock to YA Global for proceeds of $265,199, which are net of fees and discounts of $52,322.

NOTE 11 - CAPITAL STOCK

Pursuant to SpeechSwitch's certificate of incorporation, as amended, the Company is authorized to issue 1,000,000 shares of Preferred Stock, par value of $1.00 per share, 10,000,000,000 shares of Class A Common Stock, no par value per share, 50,000,000 shares of Class B Common Stock, par value $0.01 per share, and 20,000,000 shares of Class C Common Stock, par value $0.01 per share. Below is a description of SpeechSwitch's outstanding securities, including Preferred Stock, Class A Common Stock, Class B Common Stock, and Class C Common Stock.

a) Preferred Stock

SpeechSwitch is authorized to issue 1,000,000 shares of Preferred Stock, par value $1.00 per share. As of December 31, 2008, SpeechSwitch has not issued any shares of Preferred Stock.

F-21

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

b) Class A Common Stock

As of December 31, 2008, there are 10,000,000,000 shares of Class A Common Stock authorized, no par value, and 1,400,096,193 shares were issued and outstanding.

As of December 31, 2007, there are 10,000,000,000 shares of Class A Common Stock authorized, no par value, and 383,858,924 shares were issued and outstanding.

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

For the year ended December 31, 2008, the Company had the following transactions in its Class A common stock:

The Company issued 126,000,000 shares of Class A common stock of the Company to a director and officer of the Company for payment compensation in the amount of $10,080. The difference in the market value of the shares issued of $16,380 and the amount of compensation was charged to beneficial interest in the amount of $6,300.

The Company issued 196,000,000 shares of Class A common stock, with a fair market value of $52,306 to an officer of the Company as repayment of $21,512 of a promissory note. The difference in the market value of the shares issued and the reduction in the loan was charged to beneficial interest in the amount of $30,794.

·	Pursuant to the terms of the Standby Equity Distribution Agreement, the Company issued 134,770,603 shares of Class A common stock to Y A Global Investments for the net proceeds of $30,065.

·	The Company issued 408,466,666 shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $76,111. The difference in the market value and the reduction in debt of $53,900 was charged to beneficial interest in the amount of $22,211.

·	The Company issued 151,000,000 shares of Class A common stock to iVoice, Inc. for repayment of convertible promissory note, valued at $18,875. The difference in the market value and the reduction in debt of $12,080 was charged to beneficial interest in the amount of $6,795.

For the year ended December 31, 2007, the Company had the following transactions in its Class A common stock:

·	The Company issued 7,900,000 shares of Class A common stock, with a fair market value of $14,436 for legal services valued at $5,688 as repayment of accrued legal fees. The difference in the market value and the value of the services was charged to beneficial interest in the amount of $8,748.

F-22

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

The Company issued 44,200,000 shares of Class A common stock, with a fair market value of $26,771 to an officer of the Company as repayment of $12,108 of a promissory note. The difference in the market value of the shares issued and the reduction in the loan was charged to beneficial interest in the amount of $14,663.

·	Pursuant to the terms of the Standby Equity Distribution Agreement, the Company issued 213,666,729 shares of Class A common stock toYA Global Investments (f/k/a/ Cornell Capital Partners) for the net proceeds of $106,332.

·	The Company issued 7,000,000 shares of Class A common stock of the Company as payment of Investor Relations fees, value of the stock was $21,000.

·	The Company issued 10,000,000 shares of Class A common stock of the Company as payment for consulting fees, value of the stock was $30,000.

The Company issued 7,162,654 shares of Class A common stock of the Company to a director and officer of the Company for payment compensation in the amount of $5,157. The difference in the market value of the shares issued and the amount of compensation was charged to beneficial interest in the amount of $6,424.

·	The Company issued 63,288,890 shares of Class A common stock for repayment of convertible debenture in lieu of cash, valued at $32,425. The difference in the market value and the reduction in debt was charged to beneficial interest in the amount of $6,965.

c) Class B Common Stock

As of December 31, 2008, there are 50,000,000 shares of Class B Common Stock authorized, par value $.01 per share. Each holder of Class B Common Stock has voting rights equal to 100 shares of Class A Common Stock. A holder of Class B Common Stock has the right to convert each share of Class B Common Stock into the number of shares of Class A Common Stock determined by dividing the number of Class B Common Stock being converted by a 20% discount of the lowest price that SpeechSwitch, Inc. had ever issued its Class A Common Stock. Upon liquidation, dissolution, or winding-up, holders of Class B Common Stock will be entitled to receive distributions. As of December 31, 2008, no shares were issued or outstanding.

d) Class C Common Stock

As of December 31, 2008, there are 20,000,000 shares of Class C Common Stock authorized, par value $.01 per share. Each holder of Class C Common Stock is entitled to 1,000 votes for each share held of record. Shares of Class C Common Stock are not convertible into Class A Common Stock. Upon liquidation, dissolution or wind-up, the holders of Class C Common Stock are not entitled to receive the Company’s net assets pro rata. As of December 31, 2008, no shares were issued or outstanding.

F-23

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

NOTE 12 - STOCK OPTIONS

Stock Option Plans

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

The Company did not issue any stock options for the years ended December 31, 2008 and 2007.

NOTE 13 - INCOME TAXES

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

	December 31,
	2008			2007
Federal income tax rate		(34.0	)%		(34.0	)%
State income tax, net of federal benefit		( 4.1	)%		( 4.1	)%
Effect of valuation allowance		38.1	%		38.1	%
Effect income tax rate		0.0	%		0.0	%

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

At December 31, 2008 and 2007 deferred tax assets consist of the following:

	2008			2007

Deferred tax assets	$	598,000		$	494,000
Less: Valuation allowance		(598,000	)		(494,000	)

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

At December 31, 2008 and 2007, the Company had federal net operating loss carryforwards in the approximate amount of $1,760,000 and $1,450,000, 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.

F-24

SPEECHSWITCH, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2008 and 2007

NOTE 14 – SUBSEQUENT EVENTS

Departure of Directors or Certain Officers and Election of Directors

On April 15, 2009, Bruce Knef resigned as President of the Company.

On June 17, 2009, Kenneth P. Glynn was elected as Board of Directors member and Chairman of the Board of Directors.

On June 17, 2009, Kenneth P. Glynn was appointed President and Secretary of the company.

On June 17, 2009, Bruce Knef resigned from the Board of Directors of the company.

Other Events.

Due to the economy and/or product differentiation, SpeechSwitch, Inc. experienced its last sales in the field of speech recognition and autodialing systems and support in the first quarter of 2009.

On June 16, 2009 and June 17, 2009, Kenneth P. Glynn acquired debt owed by SpeechSwitch, Inc. to third party creditors as follows:

(1)	Promissory Note to Jerome Mahoney dated August 5, 2005 having a balance on December 31, 2008 of $80,956.27, and accruing interest, and thus having a balance of $82,035.42 as of April 30, 2010;

(2)	Deferred Compensation to Jerome Mahoney as of December 31, 2008 equal to $273,696.20 and accrued interest of $95,901.88 through May 31, 2009 and additional interest from that date through April 30, 2010 of $10,035.51 totaling $379,633.58;

(3)	Convertible promissory note to iVoice, Inc. dated March 5, 2008 in the amount of $50,651.52, and having a balance on May 31, 2009, including additional dispersements and interest, of $84,113.39, and from that date through April 30,2010 of $1,857.21, totaling $85,968.59; and

(4)	Loan from iVoice Technology, Inc. to SpeechSwitch, Inc. in the amount of $3,600.00.

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

In June 2009, the company moved its headquarters from Matawan, NJ to Flemington, NJ.

F-25

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

SPEECHSWITCH, INC. (Exact name of registrant)

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

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

Issuer's telephone number 908-788-0077

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

PART I
Item 1. Business	4
Item 2. Properties	24
Item 3. Legal proceedings	24

PART II
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	25
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.	30
Item 8. Financial Statements and Supplementary Data	34
Item 9A(T). Controls & Procedures	35


PART III
Item 10. Directors, Executive Officers and Corporate Governance	37
Item 11. Executive Compensation.	40
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	43
Item 13. Certain Relationships and Related Transactions and Director Independence	44
Item 14. Principal Accountant Fees and Services	46

PART IV
Item 15. Exhibits and Financial Statement Schedules	46

2007	High	Low
First quarter	$.01600	$.00400
Second Quarter	$.00588	$.00150
Third Quarter	$.00250	$.00050
Fourth quarter	$.00100	$.00019
2008	High	Low
First Quarter	$.00069	$.00013
Second Quarter	$.00019	$.00013
Third Quarter	$.00013	$.00013
Fourth quarter	$.00013	$.00013

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


Not approved by Shareholders:
Stock Incentive Plan	0	n/a	2,000,000

Name	Age at December 31, 2008	Position with SpeechSwitch, Inc.	Term

Jerome R. Mahoney	48	Non-Executive Chairman of the Board	8/04 - 2/08

Mark Meller	49	Director	2/08 - 10/08

Bruce R. Knef	52	Director, President, Chief Executive	11/04 - 6/09
		Officer and Chief Financial Officer

Kenneth P. Glynn	61	Director, President, Chief Executive	6/09 - present
		Officer and Chief Financial Officer

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

Bruce Knef(1)	2008	$66,067	$10,080(2)	$76,147
President and Chief	2007	$92,014	$5,157(3)	$97,171
Executive Officer

(1)	Mr. Knef had served as our President and Chief Executive Officer from November 3, 2004 until April 15, 2009. Mr. Knef’s employment contracts are for a term of one-year at a base salary of $85,000 per year and Mr. Knef can earn commissions based on the Company achieving certain levels of sales.
(2)	Mr. Knef received 126,000,000 shares of Class A common stock of the Company with a fair market value of $16,380 for compensation expense of $10,080. The difference in the market value and the value of the services was appropriately charged to beneficial interest in the amount of $6,300.
(3)	Mr. Knef received 7,162,654 shares of Class A common stock of the Company with a fair market value of $11,581 for compensation expense of $5,157. The difference in the market value and the value of the services was appropriately charged to beneficial interest in the amount of $6,424.

Name	Year	Fees Earned or Paid in Cash ($)	All Other Compensation ($)	Total Compensation ($)

Jerome R. Mahoney, Non-Executive Chairman of the Board(1)	2008	$7,702(2)	$52,512(3)	$60,214
Mark Meller(4)	2008	$0	$0	$0

(2)	For the year ended December 31, 2008, $7,702 were accrued and unpaid.

(3)	Mr. Mahoney received 196,000,000 shares of Class A common stock with a fair market value of $52,306 to reduce the promissory note by $21,512. The difference in the market value and the loan reduction was appropriately charged to beneficial interest in the amount of $30,794. In addition, Mr. Mahoney received $31,000 in cash to reduce the promissory note.

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

None	0	0	0	0 / 0

Name	Title of Class	Common Stock Beneficially Owned	Percentage Ownership(1)
Bruce R. Knef,	Class A Common Stock	126,000,000	9%
Director, President and Chief	Class B Common Stock	0	0%
Executive Officer	Class C Common Stock	0	0%

Jerome R. Mahoney,	Class A Common Stock	48,064,100(2)	3%(2)
Non-Executive Chairman of	Class B Common Stock	480,582(3)	100%(3)
The Board	Class C Common Stock	0	0%

YA Global Investments LP	Class A Common Stock	12,232,461,538(4)	90%(4)
101 Hudson Street, Suite 3700	Class B Common Stock	0	0%
Jersey City, NJ 07302	Class C Common Stock	0	0%

All directors and executive	Class A Common Stock	126,000,000	0%
officers as a group	Class B Common Stock	0	0%
	Class C Common Stock	0	0%

SERVICES	2008	2007

Audit Fees	$12,000	$19,000

Audit - Related Fees	-0-	-0-

Tax fees	-0-	$ 250

All Other Fees	-0-	-0-

Total	$12,000	$19,250

By:	/s/ Kenneth P. Glynn
	Kenneth P. Glynn
	President, Chief Executive Officer and Chief Financial Officer

By:	/s/ Kenneth P. Glynn	November 10, 2010
	Kenneth P. Glynn
	President, Chief Executive Officer, Chief Financial Officer and Director