Kenergy Scientific Inc (OTCMKTS:KNSC) Gets A Fresh Start

On July 10, 2017, Kenergy Scientific Inc (OTCMKTS:KNSC), the Miami company behind the chain of Hibachi Grill & Noodle Bar, released its 2017 first quarter results. Both the revenues and net earnings increased by a decent amount. Additionally, it was stated that sales will maintain an upward trend through the rest of 2017. Due to this news, we decided to assess the financial ability of the company. The recent reverse merger consummated by KNSC will also be analyzed. Also, we will note an interesting catalyst. Have a look at the most recent share price action and note the sharp increase in volume created by the earnings release on July 10, 2017.SourceHibachi Noodle BarsSourceKNSC was incorporated in New Jersey on November 10, 2004. It operated in different business sectors until a change of control occurred in the beginning of 2015. The owner of Hibachi Grills and Noodle Bars located in the Miami, Florida bought the company. Thus, we will focus on this promising and growing restaurant business.Hibachi Noodle Bar’s Hibachi Grill & Noodle Bar was established in 2010 in Miami, FL. The restaurant offers "Fast, Fresh, Authentic Pan Asian Food". The menu includes authentic Japanese Food, wherein clients can find "soups and salads, hibachi chicken, steak and seafood, to fried rice, noodle bowls and Yakisoba as well as Thai dishes". The company states that the food is prepared using the highest quality ingredients, and customer service and satisfaction is the top priority.The chain has two restaurants as of July 11, 2017. We found a photo of one of the restaurants at TripAdvisor. Have a look:This photo of Hibachi Grill & Noodle is courtesy of TripAdvisorWe found good comments on the Yelp profile of the company. You may read the following one made by Chevonne W., who made 203 other reviews in the website and is an elite member in Yelp.

"The Mongolian beef was great. I have had better hibachi but it was still good. great place to order delivery with. They are fast and the prices are pretty good. I also loved the little dumplings For the price, they were stellar and def will be ordering a couple of batches of those next time." Source

As expected, we also found bad comments about the restaurant, but the overall marks were good; 4.5 stars out of 5. Visit the Yelp website or leave a comment if you have had the experience of eating at Hibachi. Market participants always value customers feedback when a restaurant is assessed.The change of controlOn February 26, 2015, the market got to know in this filing that an investment group had acquired three billion two hundred million shares of Class A Common Stock and ten thousand shares of Class B Common Stock. It was a private transaction. Finally, on April 18, 2015, a reverse merger took place. Hibachi Grill, Inc. was acquired by KNSC, and the control of the company was transferred to the owner of this chain of restaurants.Recent Developments and market reactionAfter the announcement of the change of control, the market did not receive more news. We needed to wait until July 10, 2017, when new earnings results were put out. The numbers reported were good as compared to the same period in 2016. The revenue increased 45% from $252,169 to $562,218. Additionally, the net earnings increased by 27% and adjusted net earnings increased by the same amount. Adel Nassar, President, and CEO of KNSC, explained the news with the following terms:

"In the first quarter, we are pleased that sales growth on a store to store basis, was positive for both company-owned locations, and outperforming any projections in casual dining segment. We believe our dishes, which are carefully prepared with only the highest quality ingredients, coupled with our focus on customer service and satisfaction, which are our top priority, has led to the improved margins and profitability." Source

Additionally, the company has high expectations for this year. Same-store sales growth month-over-month is expected and the company expects to open a restaurant at a third location.In our opinion, the good expectations expressed along with the good earnings reported were responsible for the share price increase. Additionally, the market saw an astonishing amount of volume that day. More than 200 million shares changed hands that day.

SourceCaveat Emptor Sign was removed in July, 2017Like the people on the iHub forum, we saw that the OTC Markets Exchange removed the Caveat Emptor Sign from the company's profile on July 11, 2017. This is a great news, and we believe that it may cause a good reaction in the share price in the long term.Caveat Emptor Sign was probably placed by the exchange, because the company was not releasing the due documentation on time. A letter from the lawyers of the company, which was received on June 22, 2017, may have helped convince the exchange to retire the bad sign. We believe that the market may push up the share price now given that the company is more respected.ConclusionTwo very good things happened in July. First of all, the company released its Q1 2017 earnings, which were celebrated by the market. The most relevant item in the communication was that the company expects to open a third restaurant and sales will continue growing. In addition, the fact that the caveat emptor sign was removed from the company's profile is very positive. The market may push up the share price in the near future because of this reason. To sum up, the company is growing and releasing good news. We certainly expect more positive developments from KNSC.We will updating out subscribers as soon as we know more. For the latest updates on KNSC, sign up below!Image courtesy of Zach Bruce via FlickrDisclosure: We have no position in KNSC and have not been compensated for this article.