KENILWORTH SYSTEMS CORP - Quarter Report: 2006 March (Form 10-Q)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

x	Quarterly report pursuant to Section 13 OR 15(D) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2006
OR
o	Transition report pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934

 

For the transition period from             to                   

 

Commission File Number: 0-08962

 

KENILWORTH SYSTEMS CORPORATION

(Exact name of registrant as specified in its charter)

 

 

(516) 741-1352

(Registrant’s telephone number, including area code)

 

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  x   No  o

State the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practical date

The number of shares of common stock, $.01 par value of the Registrant outstanding as of March 31, 2006 was 226,606,679.

 

 

 Table of Contents

KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

INDEX

 

Part I.		Financial Information
Item 1.		Financial Statements		4
		Condensed Consolidated Balance Sheets (unaudited) - March 31, 2006 and December 31, 2005		4
		Condensed Consolidated Statements of Operation and Deficit (unaudited) - Three months ended March 31, 2006 and 2005, and the period from inception, as a Development Stage Company, to March 31, 2006		5
		Condensed Consolidated Statements of Cash Flows (unaudited) - Three months ended March 31, 2006 and 2005, and the period from inception, as a Development Stage Company, to March 31, 2006		6
		Condensed Notes to Consolidated Financial Statements (unaudited)		8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.		Quantitative and Qualitative Disclosures About Market Risk
Item 4.		Controls and Procedures
Part II.		Other Information		14
Item 1.		Legal Proceedings		14
Item 6.		Exhibits		14
Signature				15

 

FORWARD LOOKING STATEMENTS

The information contained in this Form 10-Q and Kenilworth’s other filings with the Securities Exchange Commission may contain “forward-looking” statements within the meaning of section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created thereby. Such information involves important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward looking statements herein. Future operating results may be adversely affected as a result of a number of factors.

You should not rely on forward-looking statements in this Form 10-Q. This Form 10-Q contains forward-looking statements that involved risks and uncertainties. We use words such as “anticipates”, “believes”, “plans”, “expects”, “future”, “intends” and similar expressions to identify such forward-looking statements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-Q. Our actual results could differ materially from those anticipated in these

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forward-looking statements for many reasons, including the risks faced by Kenilworth as described below and elsewhere in this Form 10-Q.

RISKS

Specific reference is made to each of the risks described in Item 7 of the Form 10-K/A Amendment No. 1 for December 31, 2005 under the discussion “Cautionary Statement For Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 and Risk Factors”. Reference is also made to future filings under Forms 10-Q and Forms 10-K and filings under the Securities Exchange Act of 1934 as amended and as may be applicable under the Securities Act of 1933 as amended.

INTRODUCTORY NOTE

This FORM 10-Q is being filed as a “Development Stage Company” from the period beginning November 24, 1998 to the present at March 31, 2006, including a charge in the amount of $4,256,926, which was the amount the Company disbursed on September 28, 1998 to be discharged from Chapter 7 Bankruptcy Proceedings.

d) The Company issued 137,302,093 shares of its Restricted Common Stock since January 1, 2002.  All of the shares may have the restrictions lifted pursuant to Rule 144 and 144K within one (1) or two (2) years which may substantially depress the trading price of the Company’s Stock in the future.

During the three (3) month period ended September 30, 2005, the Company expensed the 25,000,000 shares to be issued to Herbert Lindo, the Chairman, CEO and Chief Financial Officer at the rate of $0.05 per share.  At the Shareholders Meeting held on September 13, 2005, the Shareholders approved the issuance of 25,000,000 shares to Herbert Lindo.

At the Shareholders Meeting held on May 28, 2003, the Shareholders approved the issuance of 20,000,000 shares to be issued to Herbert Lindo the Chairman and President of the Company.  Unlike the 25,000,000 shares issuable to Herbert Lindo, which were expensed, the 20,000,000 shares were not expensed.

Herbert Lindo requested to have the 45,000,000 shares issued during the period ended March 31, 2006.  The Company expensed the 20,000,000 shares during the period at the rate of $0.015 per share, which amounted to a reduced capital adjustment of 53,652 instead of $303,652.

During the period ended March 31, 2006, the Company made certain adjustments to the number of shares outstanding which did not require capital changes.

 

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KENILWORTH SYSTEMS CORPORATION
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)

		March 31, 2006			December 31, 2005
ASSETS
CURRENT ASSETS
Cash		$	3,777		$	5,495
Prepaid expenses		160,000			280,000
Loan receivable — including from stockholders		26,300			26,300
Total current assets		190,077			311,795
PROPERTY AND EQUIPMENT — NET		49,010			49,010
PATENT REGISTRATION COSTS		78,552			76,763
SECURITY DEPOSIT		9,422			9,422
Total assets		$	327,061		$	446,990
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	173,868		$	224,842
Payroll taxes payable and accrued expenses		87,756			43,878
Loans payable — automobile		705			2,820
Total current liabilities		262,329			271,540
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock - par value $.01 per share; authorized 2,000,000 shares; no shares issued and outstanding
Common stock - par value $.01 per share; authorized 500,000,000 shares; issued and outstanding 226,606,679 and 142,126,245 shares, respectively		2,266,066			2,000,362
Additional paid-in capital		29,913,108			29,859,456
Accumulated deficit		(32,243,906		)	(31,894,818		)
Total stockholders’ equity		64,732			175,450
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY		$	327,061		$	446,990

 

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

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KENILWORTH SYSTEMS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING DEVELOPMENT STAGE
FOR THE THREE MONTHS ENDED MARCH 31,
(Unaudited)

		Three months ended March 31,						Period from November 24, 1998 to
		2006			2005			March 31, 2006
Revenues
Sales		0			0			0
Expenses
Selling, general and administrative		$	349,088		$	161,303		$	8,449,455
Other income (expenses)
Interest income		—			—			922
Interest expense		—			(54,062		)	(811,312		)
Total other income (expense)		—			(54,062		)	(810,390		)
Net loss		$	(349,088	)	$	(215,365	)	$	(8,449,455	)
Basic and diluted loss per share		(0.0016		)	(0.002		)
Weighted average number of shares outstanding		213,321,462			139,838,745

 

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KENILWORTH SYSTEMS CORPORATION
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		Three Months ended March 31						Period from November 24, 1998 to
		2006			2005			March 31, 2006
Cash flows from operating activities
Net loss		$	(349,088	)	$	(215,365	)	$	(4,124,400	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation		3,301			3,236			23,141
Amortization of patent		1,888			1,323			11,087
Accretion of convertible debt discount		—			—			72,656
Beneficial conversion feature		—			54,000			669,097
Common stock issued for services		6,500,000			51,096			7,748,660
Common stock issued to induce debt conversion		6,082,000			—			6,145,276
Common stock issued for interest due on notes payable		—			—			8,501
Accrued interest transferred to capital		—			61			4,270
Other					—			21,100
Increase (decrease) in cash attributable to changes in assets and liabilities:
Prepaid expenses		160,000			31,250			153,750
Loan receivable - employee		(6,300		)	(1,800		)	(6,300		)
Accounts payable and accrued expenses		(173,868		)	(104,274		)	184,092
Payroll taxes payable		87,756			18,139			87,756
Net cash used in operating activities		(374,669		)	(162,334		)	(374,669		)
Cash flows from investing activities
Payment of loan receivable-stockholder		—			—			(4,000		)
Proceeds from loan receivable-stockholder		—			—			4,000
Payment of patent costs		(7,200		)	(387		)	(67,026		)
Purchase of property and equipment					—			(58,567		)
Security deposit		(9,422		)	—			(4,250		)
Net cash used in investing activities		16,622			(387		)	(113,221		)
Cash flows from financing activities
Proceeds from loans payable - stockholders		—			25,000			85,000
Payment of loans payable - stockholders		—			—			(10,000		)
Proceeds from loans payable - related parties		—			13,000			154,137
Repayment of loans payable - related parties		—			(21,950		)	(137,967		)
Proceeds from convertible notes payable					125,000			1,400,361
Proceeds from sale of common stock		325,000			10,000			457,600
Proceeds from stock subscriptions receivable		154,000			15,000			40,000
Net cash provided by financing activities		64,732			166,050			1,728,763
Net change in cash					3,329			3,334
Cash - beginning of period		3,334			5			—
Cash - end of period		$	3,777		$	3,334		$	3,334

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Supplemental disclosure of non-cash activities:
Common stock issued for patent costs		$	—		$	—		$	10,000
Exchange of loans payable for convertible notes payable		$	—		$	—		$	50,000
Conversion of notes payable to common stock		$	—		$	125,000		$	1,388,500
Conversion of loan payable - related party to common stock		$	—		$	16,170		$	16,170
Cancellation of stock subscriptions receivable		$	—		$	—		$	29,000
Common stock issued for subscriptions receivable		$	20,000		$	—		$	71,500

 

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

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KENILWORTH SYSTEMS CORPORATION
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Kenilworth Systems Corporation and subsidiaries (“Kenilworth”) beginning as of January 1, 2006 contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated balance sheets as of March 31, 2006 and December 31, 2005 and the related statements of operations and cash flows for the three (3) month periods ended March 31, 2006 and 2005.  These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on FORM 10-K, restated as a Development Stage Company, filed with the Securities and Exchange Commission on August 28, 2006.

The results of operations for the three (3) month period ended March 31, 2006 are not necessarily indicative of the results for the entire year ending December 31, 2006.

NOTE 2 - THE COMPANY AND NATURE OF BUSINESS

Kenilworth Systems Corporation (the “Company”) was incorporated in New York in April 1968 and since emerging from bankruptcy proceedings now plans to be engaged in the business of developing and having terminals and other equipment manufactured and design systems that permit individuals from remote locations, to play along with live in progress casino table games via TV (simulcast) satellite and Internet cable broadcast around the world.

The Company was in bankruptcy proceedings under Chapter 7 and 11 of the Bankruptcy Code for the period from August 28, 1982 through September 28, 1998. The Company ceased all operations, between February 2, 1991 through September 28, 1998.

NOTE 3 - PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Kenilworth Systems Corporation and its wholly owned subsidiaries: Video Wagering Systems Corporation, Roulabette™ Nevada Corporation, Kenilworth Systems Nevada Corporation, Kenilworth Systems (UK) Limited, Kenilworth Satellite Broadcasting Corporation (a Delaware Corporation) and Satellite Gaming Consultants, Inc. (a Delaware Corporation). None of these subsidiaries has any assets or liabilities, except Satellite Gaming Consultants, Inc.

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NOTE 4 - GOING CONCERN UNCERTAINTY

As indicated in Note 2, the Company emerged from Chapter 7 in September 1998 and has not yet commenced revenue producing operations. These factors create uncertainty as to the Company’s ability to operate as a going-concern and continue in business. Management plans to develop a wagering system that allows casino patrons and individuals outside the casino to play along remotely with live in-progress casino table games. The Company plans to obtain the necessary funding by offering its Common Stock, Senior Cumulative Convertible Preferred Shares and/or continue to sell Convertible Promissory Notes in private placements. There can be no assurances the Company can be successful in obtaining such financing.

The accompanying financial statements have been prepared assuming the Company is a going-concern and do not reflect adjustments, if any that would be necessary if the Company were not a going-concern.

NOTE 5 - CONVERTIBLE PROMISSORY NOTES

During the quarters ended March 31, 2006 and March 31, 2005 respectively, the Company sold to various private investors $154,000 and $125,000 principal amount of Convertible Promissory Notes bearing interest at rates ranging from 4.00% to 8.00% per annum.  The Notes had a one-year term and were immediately convertible at the option of the noteholder into shares of restricted common stock based on conversion prices ranging from $.05 to $.10 per share.  All Notes issued in the quarters ended March 31, 2006 and March 31, 2005 were converted into a total of 12,582,000 and 2,500,000 common shares, respectively.

NOTE 6 - NON CASH TRANSACTIONS

Common shares issued for services

2006:

The Company issued 26,500,000 shares as compensation for services rendered during the first quarter period ended March 31, 2006.  The services were valued at $403,662.

2005:

The Company issued 1,175,000 shares as compensation for services rendered during the first quarter period ended March 31, 2005.  The services were valued at $51,096.

NOTE 7 - SUBSEQUENT EVENTS

Subsequent to March 31, 2006, the Company raised an additional $105,000 from the sale of Convertible Promissory Notes.

In April 2006, the Company entered into a consulting agreement for a one-year term.  As additional compensation, the consultants received 2,000,000 shares of restricted common stock upon signing.

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ITEM 2.      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Since we emerged from bankruptcy proceedings on September 23, 1998 we have had no revenues from operations. We sustained substantial losses from general administrative expenses amounting of $3,815,302 and $768,229 in year 2005 and 2004 and for the three-months ended March 31, 2006 we sustained losses amounting to $349,088 compared to a loss of $215,365 for the quarter ending March 31, 2004. Kenilworth has had no revenues from operations during the past fourteen (14) years and there can be no assurances that it will ever have revenues from present planned operations.

LIQUIDITY AND CAPITAL RESOURCES

Our present plans are to develop a wagering system dubbed “Roulabette™” that would allow patrons in the industrialized world to play and wager on live in-progress simulcast casino table games on TV’s placed in hotels, resorts, bars and other public gathering places and in homes and offices on personal computers (PC’s) or television sets connected to set top boxes for Interactive TV via digital satellite, digital cable and Internet broadcasts emanating from strictly regulated casinos.

GENERAL

Since early in the year 2000 we have been solely engaged in developing patents, markets and investigating how best to obtain Governmental approvals, by engaging lobbyists and consultants that would allow television satellite and cable subscribers throughout the industrialized world to play and wager along with live, in-progress casino table games (Roulette, Craps, Baccarat and more) from strictly regulated casinos located in the United States and other locations around the world.

Employing the latest encrypted satellite and cable technology and placing television cameras in strategic locations above the casino table games, without disrupting the normal game-monitoring activities, (a separate control room would direct the various camera angles), and transmitting the table games over the digital satellite, digital cable and Internet networks to television sets (“TV’s”), which become a platform for playing along with the casino games wherever TV’s are located.

Kenilworth titled the overall project “Roulabette™”.  There are 120 million TV subscribers in the United States and more than 300 million subscribers throughout the rest of the world (“The Market”).  On average, households in the U.S. have 2 ½ TV’s.  (It is important since the satellite and cable companies will charge a separate fee for transmitting the table games).  Public gathering places can accommodate (be able to network) up to 200 TV sets with a simple satellite receiving dish or direct cable connections.  With wagering possible in homes, hotel rooms, resort rooms, pubs, restaurants, race tracks and other public gathering places the Company believes will become a more than $500 billion net win Market within five (5) years (2011) throughout the industrialized world.

To best market the casino games, the Company is selecting lotteries throughout the world to manage and operate the distribution and cash handling (deposits to play and paying winnings) using the lotteries’ existing databases for the sale of lottery tickets, and paying winnings at regular lottery licensed terminal locations.

All forty one (41) lotteries in the United States are owned and operated by County and State agencies.  Throughout the rest of the world lotteries are owned by government agencies or non profit charitable agencies that distribute the net earnings to benefit social and charitable programs, or by private entities that pay a percentage of their net win to designated government agencies.

These foreign lotteries also have the same databases as lotteries in the United States, except most lotteries throughout Europe pool their lotteries between countries, not unlike Mega Millions and PowerBall in the United States, which makes the distribution simpler and very cost effective for both Kenilworth and the lotteries.

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There are no technical breakthroughs required.  The technology is readily available.  What is needed is to get through the maze of Local, County, State and Federal regulations in each U.S. State and foreign countries.  When the first State in the United States grants the Company permission to transmit the broadcast from one of its casinos to their residents and to States that do not have any casinos, (the entire East coast of the United States), the other forty (40) States with lotteries will join expeditiously.

Kenilworth will share the net win revenue with all participating entities that provide Roulabette™ gaming without costs of any kind. Lotteries will receive a minimum of forty percent (40%) of the total net win from their respective jurisdictions.

In States and foreign countries that designate exclusively lottery proceeds to school and their teachers it is a welcome contribution.  It also will help close budget gaps.

In addition, throughout the United States there are five hundred (500) facilities that simulcast live in-progress horse/dog races.  At all facilities there are several large TV screens that show the races from the different tracks with general theater type seating for patrons and at private cubicles with television sets outfitted with touch screens.  The cubicles rent for additional fees.  After players open an account and select pin numbers, they can watch each race offered on the different tracks on the TV and place wagers on the different races by simply changing channels.  The players may also watch sporting events, the news, the Stock market reports, and in the near future Roulabette™, live, in-progress casino table games.  The simulcast centers have their own databases to manage the cash deposit and pay winnings on the horse/dog races and will be able to manage the casino games, on the same methods as the lotteries will manage Roulabette™.  With fifty to one hundred fifty (50-150) private TV’s, available in simulcast centers, especially at night, when fewer tracks are operating.

When playing along with live table games from a highly regulated jurisdiction, players will be assured that the game results are exactly what they see; and, playing along with live casino table games such as Roulette, Craps and Baccarat we believe will provide interaction, fun and far more excitement than playing make believe animated (virtual) games. It is the next best thing, we believe, to actually being at the table in the casino.

To conduct the initial broadcast Kenilworth believes it will require ten million dollars ($10,000,000) and there are no assurances we will ever be able to obtain any of such money. At present, the Company does not have the funds readily available but hopes to obtain same, from investors, as soon as Kenilworth can commence broadcasting from a casino in the United States or other casinos throughout the world.

In prior years, Kenilworth completed a prototype system that allowed casino patrons to play along with live in-progress casino table games only within the confines of a casino, via closed circuit television. Also in 1990, we developed and delivered for the TAB (Totalizator Agency Board) a quasy government agency of the State of Victoria, Australia, a cashless slot machine system. Both systems required debit cards and central mainframe computers to manage the wagers. By making use of the expertise applied in the development of the aforementioned systems we plan to develop a second-generation system that will manage the wagers by the microprocessor installed in TV set-top boxes to receive satellite broadcasts. This as planned would allow a player in an interactive manner, at a remote location (outside the casino confines), to experience the actual play and excitement at the casino table game and to make wagers on the various games, without having to be physically present at the casino or casino table.  There are no assurances we will be able to successfully develop any system.

We also propose for slot machine manufacturers to develop “Roulabette™ Slot Machines”.  The Roulabette™ Slot will offer the regular slot or video lottery games and by the touch of a button, the live in-progress casino table games.  Slot player are offered a change of pace at the cost of a slot handle pull.  The games are transmitted to the Roulabette™ Slot via satellite or the Internet (all broadcasts are encrypted to prevent unauthorized use of the broadcasts).

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Where authorized, hotels, resorts clubs and other public gathering places will be able to offer casino table game action in their establishments without incurring the costs to operate a casino. The Roulabette™ Slot is expected to offer an alternative to slot machine players. There are now believed to be more than ten (10) million slot machines played throughout the world.

Kenilworth will seek to promote to state lotteries and foreign jurisdictions, and other state regulated entities, the ability to operate websites that will manage the wagers.  There are no assurances that the necessary approvals will be granted.

We believe there are powerful arguments for state legislatures to amend their Lottery Acts to include “Play Along with Roulabette™ Live”. Lottery revenue is gradually decreasing in every state. Thirty-two (32) states and the District of Columbia are pooling their lottery prizes with the “PowerBall” and “Big Game” national lotteries. In most of these states, the state lottery finds it difficult to obtain sufficient numbers of players to make up a minimum weekly lottery prize of one million dollars ($1,000,000). In most states, the revenue from lottery play benefits education. States need something more attractive to restore revenue. With “Play Along with Roulabette™ Live”, there is interaction, excitement and fun. All which we believe may be at much better odds than may be offered by the lotteries. The lotteries can establish maximum wagers daily, weekly and monthly limits, and monitor compulsive gamblers, and almost prevent 100% of the underaged from wagering on Roulabette™ by use of lottery terminals to make deposits in cash to wager along.

Project Roulabette™ is a concept intended to be developed and there can be no assurances that it will ever be developed successfully.  The Patented microprocessors to be installed in the TV set top boxes or the Television set directly have not been designed.  We have as at March 31, 2006, no firm developed agreement, customers except our agreement with the Philippines Amusement and Gaming Corporation (PAGCOR) for proposals submitted for future business and there can be no assurances that we will ever have same.

Kenilworth plans to obtain the necessary funding by offering in Private Placements, Common Shares, Convertible Promissory Notes, and Cumulative Convertible Preferred Shares and/or by the sale of limited joint venture participations in future Roulabette™ franchises. There can be no assurances that the Company will be able to secure any of these funds.

THE STATUS WITH PAGCOR

During January 2006, the Company reestablished negotiations with the Philippines Amusement and Gaming Corporation (“PAGCOR”) for permission to broadcast live, in-progress casino table games from their casinos.

PAGCOR is the Republic of the Philippines chartered government gaming monopoly.  PAGCOR partially owns and exclusively operates all fourteen (14) Filipino casinos, some of which are located in exclusive resort facilities frequented by Asian patrons (tourists).

In March 2006, Kenilworth conducted a live, in-progress casino table game test to demonstrate the ability to broadcast the table games, for around the world viewing, without disrupting the normal security monitoring and protecting the privacy of players at adjoining table games.  The film clip of the test broadcast which was made at a roulette table located in the new Hyatt Hotel and Casino, Manila, is available for viewing on our website www.kenilworthsys.com (see Press Release: Monday, March 6, 2006).

In April 2006, Kenilworth guaranteed to pay PAGCOR monthly payments, for hosting the broadcasts when they commence, for a contract period of ten (10) years; US $1 million for year one (1); US $2 million for years two (2) and three (3); US $5 million for years four (4) through seven (7) and US $10 million for every year thereafter, totaling US $636,000,000 over the ten (10) year period.

The payments have to be made regardless from where we broadcast.  Kenilworth requires the flexibility to broadcast from other casinos besides the Philippines.

 

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In July 2006, PAGCOR granted us to commence the first live, in-progress casino table game broadcasts to emanate from the new (August 2005) Hyatt Hotel & Casino in Manila, Philippines.

We have acquired the broadcast site for Roulabette™.  Now we have to obtain agreements for locations that will permit us to receive the broadcasts.  We are in an active search in Europe, including Eastern Europe, South America, China, India and the Pacific Rim nations.  We filed our patents in all of these jurisdictions.

 

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PART II.
OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS:

None

Item 2.    CHANGE IN SECURITIES:

None

Item 3.    DEFAULT UPON SENIOR SECURITIES:

None

Item 4.    SUBMISSION OF A MATTER TO A VOTE OF SECURITIES HOLDERS:

None

Item 5.    OTHER INFORMATION:

The Company plans to hold its Annual Meeting of Shareholders in October/November 2006 or any adjournment thereof with proxy materials mailed to shareholders of record in September/October 2006 prior to the proposed meeting dates.

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K:

Ex 31.1 Certification of Chief Financial Officer of the Company Required by Rule 13a-14(a) or Rule 15d-14(c) of the Exchange Act

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed in its behalf by the undersigned thereunto duly authorized.

 

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