KENILWORTH SYSTEMS CORP - Quarter Report: 2011 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, 2011
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)
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New York |
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84-1641415 |
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(State of incorporation) |
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(I.R.S. employer identification no.) |
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185 Willis Avenue, Mineola, New York |
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11501 |
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(Address of principal executive offices) |
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(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
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o |
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Accelerated filer o |
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Non-accelerated filer o |
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Smaller reporting company x |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
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, 2011 was 678,651,586.
Disclaimer:
As stated in Kenilworth’s prior 10-K for the period ended December 31, 2010, the Company’s management team has changed. Management is dependent on the probability that financial information contained in the Company’s previous 10-Qs and 10-Ks is correct. The Company actively engaged in the process of hiring an accounting firm to review and audit the books of the corporation retroactively to 2005 when the last audited statements were filed in the 2004 10-K.
We continue the presentation of the financials and notes as Mr. Lindo had presented them in the 2009 10-K and subsequent 10-Qs for 2010. If it becomes necessary (a strong possibility) we will restate them in a form acceptable by the S.E.C.
We shall also continue to use the format used in the previous filings to avoid confusion.
We believe that all material transactions have been disclosed in this 10-Q, but an audit could reveal additional items.
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KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
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Part I. |
Financial Information |
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Item 1. |
Unaudited Condensed Consolidated Financial Statements |
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Condensed Consolidated Balance Sheets (unaudited) — March 31, 2011 and December 31, 2010 |
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Condensed Notes to Consolidated Financial Statements (unaudited) |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk — Not Applicable |
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Item 4. |
Controls and Procedures |
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FORWARD LOOKING STATEMENTS
The information contained in this Form 10-Q and Kenilworth’s other filings with the Securities Exchange Commission 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 involve 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 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 in Part II of the Form 10-K for December 31, 2010 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
The Company’s management has always objected to the SEC designation as a Development Stage Company. The Company made a one hundred percent (100%) cash distribution to all approved creditors and paid in full all administrative fees and expenses when we exited from Bankruptcy Proceedings.
The Development Stage Company designation applies ONLY to Bankrupt Companies that exit from Bankruptcy Proceedings that do not pay all approved creditors in full.
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KENILWORTH SYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND DEFICIT
AS OF MARCH 31,
(Unaudited)
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For the three-months ended |
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March 31, |
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2011 |
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2010 |
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Revenues |
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Sales |
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$ |
0 |
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$ |
0 |
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Expenses |
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Selling, general and administrative |
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$ |
78,092 |
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$ |
91,611 |
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Other income (expenses) |
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— |
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— |
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Interest income |
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0 |
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0 |
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Interest expense |
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0 |
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0 |
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Total other income (expense) |
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0 |
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0 |
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NET LOSS |
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$ |
78,092 |
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$ |
91,611 |
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Basic and diluted loss per share |
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$ |
0.0004 |
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0.0004 |
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Weighted average number of shares outstanding |
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678,651,586 |
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617,201,586 |
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The accompanying notes are an integral part of these financial statements.
KENILWORTH SYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31,
(Unaudited)
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March 31, |
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December 31, |
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ASSETS |
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CURRENT ASSETS |
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Cash |
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$ |
224 |
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$ |
4,647 |
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Prepaid expenses |
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22,500 |
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30,000 |
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Loan receivable — from vendors including accrued interest |
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58,600 |
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58,600 |
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Receivable from the Estate of Herbert Lindo (Note 8) |
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785,821 |
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785,821 |
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TOTAL CURRENT ASSETS |
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$ |
867,145 |
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$ |
879,068 |
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PROPERTY AND EQUIPMENT — NET |
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987 |
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SECURITY DEPOSIT |
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13,677 |
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13,677 |
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TOTAL ASSETS |
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$ |
880,822 |
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$ |
893,732 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts payable and accrued expenses |
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85,010 |
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95,802 |
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Payroll taxes payable (Note 7) |
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190,694 |
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180,720 |
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Loans payable — including accrued interest |
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21,601 |
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21,601 |
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TOTAL CURRENT LIABILITIES |
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$ |
297,305 |
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$ |
298,123 |
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STOCKHOLDERS’ EQUITY (DEFICIT) |
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Preferred Stock - par value $.01 per share; authorized 50,000,000 shares; no shares issued and outstanding |
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0 |
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Common stock - par value $.01 per share; authorized 1,000,000,000 shares; issued and outstanding 678,651,586 and 678,651,586 shares, respectively |
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6,786,516 |
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6,786,516 |
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Additional paid-in capital |
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32,431,988 |
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32,431,988 |
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Accumulated deficit |
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(38,998,473 |
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(38,920,381 |
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TOTAL STOCKHOLDER’S EQUITY |
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583,517 |
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595,609 |
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TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY |
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$ |
880,822 |
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$ |
893,732 |
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The accompanying notes are an integral part of these financial statements.
KENILWORTH SYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE-MONTHS ENDED MARCH 31,
(Unaudited)
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2011 |
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2010 |
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Cash flows from operating activities |
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Net loss |
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(78,092 |
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(86,401 |
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Increase (decrease) in cash attributable to changes in assets and liabilities: |
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Prepaid expenses |
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22,500 |
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60,000 |
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Loan Receivable |
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52,400 |
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52,400 |
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Accounts payable and accrued expenses |
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(85,010 |
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(91,611 |
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Payroll taxes payable |
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(140,694 |
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(143,000 |
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Net cash used in operating activities |
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Net cash used in investing activities |
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0 |
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0 |
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Cash flows from financing activities |
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Proceeds from Paid in Capital |
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Proceeds from convertible notes payable |
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Proceeds from sale of common stock |
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0 |
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421,900 |
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Proceeds from stock subscriptions receivable |
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Net cash provided by financing activities |
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0 |
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421,900 |
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Net change in cash |
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Cash — beginning of period |
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4,647 |
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123,633 |
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Cash - end of period |
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$ |
224 |
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$ |
4,647 |
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The accompanying notes are an integral part of these financial statements.
KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
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, 2010 contain all adjustments (consisting of only normal accruals) necessary to present fairly the consolidated balance sheets as of March 31, 2011 and December 31, 2010 and the related statements of operations and cash flows for the three (3) month periods ended March 31, 2011 and 2010 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 for the fiscal year ended December 31, 2010.
The results of operations for the three (3) month period ended March 31, 2011 are not necessarily indicative of the anticipated results for the entire year ending December 31, 2011.
NOTE 2 - THE COMPANY AND NATURE OF BUSINESS
Kenilworth Systems Corporation (the “Company”) was incorporated in New York in April 1968 and since exiting from bankruptcy proceedings in 1998 plans to be engaged in the business of developing systems that permit individuals from remote locations, to play along with live, in-progress casino table games via Internet and Cable Broadcasts 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), KenSysCo International and Convergent Networks. None of these subsidiaries has any assets or liabilities, except for KenSysCo Corporation.
NOTE 4 - GOING CONCERN UNCERTAINTY
As indicated in Note 2, the Company exited 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 continues to obtain the necessary funding by offering its Common Stock, Senior Cumulative Convertible Preferred Shares, and Convertible Promissory Notes and/or Stock Purchase and Option Agreements in private placements to qualified buyers. There can be no assurances the Company can be successful in continuing to obtain 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 AND STOCK PURCHASE AND OPTION AGREEMENTS
STOCK OPTIONS
For the period April 2008 through May 2009, the Company granted Stock Options for 115,709,000 restricted Common Shares, par value $0.01 per share at an average price of $0.011 per share in connection with the private sale to accredited investors of Stock Purchase and Option Agreements. The Option grant is for a period of two (2) years from the date of the Stock Purchase and Option Agreements.
NOTE 6 - NON CASH TRANSACTIONS
Common shares issued for services
2011:
No shares were issued.
2010:
The Company issued six million (6,000,000) shares to Directors and employees as compensation for services rendered in the twelve (12) months ended December 31, 2010.
2009:
The Company issued 23,179,000 shares as compensation for services rendered. The services were valued at $347,686.
2008:
The Company issued 20,675,000 shares as compensation for services rendered. The services were valued at $418,500.
PREPAID EXPENSES
Prepaid expenses consist of the unamortized value of stock issued to directors and employees for their services for the twelve (12) month period ending September 30, 2010. The balance will be amortized on a straight-line basis over the remaining term. The directors receive no other compensation.
NOTE 7 — PAYROLL TAXES PAYABLE
New management has requested assistance from the IRS and New York State in resolving the Company’s tax issues. The Company had previously made agreements with the IRS and New York State to make scheduled payments of past payroll taxes and interest. We believe this did not happen as planned. At present, new management is working with the IRS and New York State to determine the tax and interest due.
NOTE 8 - RECEIVABLE FROM HERBERT LINDO
On November 27, 2006 Herbert Lindo, the Chairman and Chief Executive Officer exercised a five million (5,000,000) share option for seven hundred fifty thousand dollars ($750,000) at fifteen cents ($0.15) per share pursuant to the Company’s Performance and Equity Plan. The price per share was the price for the Option which would have expired on the following day. Mr. Lindo did not own any other Options pursuant to the Plan. The average market price of the Common Stock for the thirty (30) days prior to November 27, 2006 was high: $0.05, low: $0.03. As provided in the Plan, Herbert Lindo borrowed the seven hundred fifty
thousand dollars ($750,000) from the Company and pledged the five million (5,000,000) and other shares he owns, as collateral for the loan. The five million (5,000,000) shares were issued as restricted shares.
At a regular meeting of the Board of Directors in July 2008, the Board unanimously approved (with Mr. Lindo abstaining) to extend the $750,000 loan until December 31, 2009, provided Mr. Lindo agreed to pay a nominal one and one-half percent (1.5%) interest from November 2006. Mr. Lindo agreed to pay the interest which totaled $53,438 through September 30, 2010. Mr. Lindo provided his services to the company without any remuneration. The loan remains open at September 30, 2010. The Company will look to the Estate of Herbert Lindo for payment.
NOTE 9 - SUBSEQUENT EVENTS
None to report.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Since we exited from bankruptcy proceedings on September 23, 1998 we have had no revenues from operations. We sustained substantial losses from general administrative expenses amounting to $38,920,281 through December 31, 2010 and for the three-months ended March 31, 2011 we sustained a loss amounting to $78,092. Kenilworth has had no revenues from operations during the past seventeen (17) years and there can be no assurances that it will ever have revenues from present planned operations.
LIQUIDITY AND CAPITAL RESOURCES
Current management, under the guidance of Dan Snyder, has several plans it hopes to put in place. Our intentions are to protect the shareholders and Directors and bring the Company into a well run 21st century cutting edge company through the following steps:
a.) Review the books and records of the Company for the previous six (6) years, have all necessary filings updated and/or restated as needed, reach agreements with all authorities and present audited financials.
b.) Protect the valuable intellectual properties assets (patents, etc.).
c.) Foster aggressive growth by acquisition and development of our core capabilities.
Of course, there are no assurances that we can obtain the financing or achieve these goals.
Kenilworth Systems Corporation is an integrated technology corporation with intellectual property assets and technical capabilities in the live online gaming sector.
Kenilworth has begun a major corporate restructuring designed to focus the Company’s efforts on its core business and maximize shareholder value. A new wholly owned subsidiary, KenSysCo Corp, holds and operates Kenilworth’s intellectual property assets such as the Company’s live-gaming patents and other patents pending. KenSysCo will conduct all operations related to use of the patents in licensed casinos outside of the USA. It is the intention to rapidly develop this subsidiary; then spin it out to existing Kenilworth shareholders in mid-2011 as a publicly traded company.
A second wholly owned subsidiary, Convergent Networks, Inc. was formed to continue and greatly expand Kenilworth’s application of broadband technology in the gaming sector, as well as the broadcast media to support these operations. This subsidiary also intends to acquire companies in the rapidly expanding digital convergence and social networking segments. Mr. Snyder indicated that Kenilworth will likely also spin out this new subsidiary to existing shareholders of Kenilworth in mid-2011.
Our present plans are to continue developing a wagering system, “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, digital satellite, digital cable and Internet broadcasts emanating from strictly regulated casinos.
ITEM 1—DESCRIPTION OF BUSINESS
Kenilworth Systems Corporation hereinafter referred to as “Kenilworth”, the “Company” or “we”, was incorporated on April 25, 1968 under the laws of the State of New York. Kenilworth has been a publicly traded Company since August 1968 formerly on the National NASDAQ Market, presently on the OTC Pink Sheet Market since exiting from bankruptcy proceedings in September 1998. Kenilworth was formerly presented as a Development Stage Company. The Company believes this designation is incorrect. The Company exited from Chapter 7 Proceedings having made a 100% cash distribution to all approved creditors for their entire claims and paid, in full, all administrative fees and expenses. The designation is hindering the Company in its operations and management dropped the Development Stage Company designation in the third quarter period of 2009.
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, cable subscribers and internet network throughout the industrialized world to play and wager along from remote locations 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, cable and Internet 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 (in countries that permit Internet wagering) to television sets, computers, cell phones or other electronic devices, which become a platform for playing along with the casino games wherever TV’s are located.
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 broadcasts Kenilworth believes it will require a minimum of 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 casinos outside the United States.
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.
We have as at March 31, 2011 no firm agreements, customers, or proposals for any future business and there can be no assurances that we will ever have same. Reference is also made to each of the “Risk Factors” that are set forth in Item 7 of FORM 10-K for the year ended December 31, 2010.
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.
We have as at March 31, 2011 no firm agreements, customers, or proposals for any future business and there can be no assurances that we will ever have same. Reference is also made to each of the “Risk Factors” that are set forth in Item 7 of FORM 10-K for the year ended December 31, 2010.
The Unlawful Internet Gambling Enforcement Act of 2006 banning wagering over the Internet in the U.S. has not yet been repealed and may never be, despite the efforts of Representative Barney Frank’s HR 2267 Internet Gambling Regulation, Consumer Protection, and Enforcement Act. If and when it is passed gaming must meet, and will be supervised by, the regulations of the gaming authorities of the broadcasting casino and the jurisdiction, which receives the broadcast. We believe the supervision will not be difficult to enforce, because all simulcast wagering is “cash only”, from regulated, supervised betting sites. There are no wire money transfers with banks and no credit or debit cards permitted. We believe this fact should ease any opposition from concerned citizens and anti-gambling groups, as regulation and enforcement responsibility will be vested in each individual state or foreign jurisdiction. We have no assurances that this will be attainable.
However, other international jurisdictions do not have similar laws, and we plan to aggressively market licensing of our patents and technology to these jurisdictions outside the borders of the U.S. It remains unclear as to our ability to succeed and our ability to raise the necessary funds to achieve our goals.
Kenilworth was the first to use color personal computers to replace electromechanical slot machines in 1988. We provided the software for the first Tabaret located at the Menzie at the Rialto in Melbourne, Australia, which opened in November 1990. This consisted of cashless, variable denomination and multiple games, virtual PAT’s (“Player Activated Terminals”). Prior thereto Kenilworth sponsored, with the assistance of three (3) Nevada casino operators, legislation to permit cashless wagering in the state of Nevada. The legislation, which is in the form of an amendment to existing casino control statutes, permits the use of account cards (debit cards) and was signed into law by Governor Richard H. Bryan on June 13, 1985.
Kenilworth has been a publicly traded Company since 1968. Prior to commencing its endeavors in its present business in 1988, it also provided security systems to Nuclear Electric Generating Plants in the U.S. and foreign countries, as well as time/attendance systems at a major department store chain.
MARKETING STRATEGY/SALES PLAN
The Company intends to aggressively pursue agreements of our licensing technology and expertise in locations outside the U.S.A., as well as promoting the repeal of the Unlawful Internet Gambling Enforcement Act of 2006. In our reorganization plan, we address the need for an offshore subsidiary to promote and facilitate the gaming applications of our related patents. The other wholly owned subsidiary will continue and greatly expand our application of broadband technology through acquisitions.
It will be necessary for us to obtain additional personnel qualified and with the expertise to further develop Roulabette. We would require additional employees and several more consultants and there can be no assurances of our being able to obtain the necessary personnel. There can be no assurances of the availability of any such employees and consultants.
COMPETITION
Many segments of the gaming industry are characterized by intense competition, with a large number of companies offering the same type of wagering products and services. None of these companies, at present, are believed to offer the same or similar equipment or systems as intended by Roulabette. The most likely competition will come from slot machine manufacturers who could relatively quickly adapt slot machines to play along with live casino table games. We believe there are three (3) major slot machine manufacturers in the world, all of which have vastly greater capital resources and substantially more personnel than the Company and may have under development systems that directly compete with Roulabette.
Our present plans are to license our technology to companies that own casinos throughout the industrialized world from which they will broadcast the live casino table game. Other casino owners may start their own broadcasts and have their own terminals manufactured that compete with Kenilworth after Kenilworth has done all its pioneering for play-along wagering.
PATENTS, TRADEMARKS AND INTELLECTUAL PROPERTY
Our most important assets are Patents we have acquired. Our patents are filed in fifty-one (51) industrialized countries of the world and are approved, both in Russia and recently in China and Japan, after a seven (7) year delay. The Patent granted on June 10, 2003 titled “SYSTEM AND METHOD FOR REMOTE ROULABETTE AND OTHER GAME PLAY USING GAME TABLE AT A CASINO” and Patent Application filed October 15, 2003, entitled “METHOD AND SYSTEM FOR SUPPLYING FUNDS TO A TERMINAL FOR REMOTE WAGERING”, “MULTI-USE GAMING MACHINE” trademarks.
GOVERNMENT REGULATIONS
Kenilworth has no licenses from any casino regulating authorities and may not require any casino licenses at the present time and may never become able to obtain any licenses that may be required in the future. Each state has its own regulations, and in states where Kenilworth does business, Kenilworth will have to comply with these regulations and there can be no assurances that it will be able to do so or obtain the necessary license in an applicable jurisdiction. This discussion is not necessarily complete or current, regarding laws and regulations that may be applicable to us. Any present laws are also subject to future change, amendment or cancellation and there is no assurance that Kenilworth will be able to meet those requirements.
None
None
Item 4. DEFAULT UPON SENIOR SECURITIES:
None
The Company plans to hold its next Annual Meeting of Shareholders as soon as practicable with proxy materials mailed to shareholders of record at least twenty (20) days prior to the proposed meeting date. Our new management team, auditors and counsel are anticipating a number of issues to be voted on at that time.
Item 7. EXHIBITS AND REPORTS ON FORM 8-K:
Ex 31.1 Certification of Chief Executive Officer of the Company Required by Rule 13a-14(a) or Rule 15d-14(c) of the Exchange Act
Ex 32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2007.
SUBSEQUENT EVENTS:
As disclosed in the second quarter 2010 10-Q, Mr. Lindo the Chairman and CEO passed away on July 25, 2010. The Board of Directors implemented the Company’s succession plan, electing Mr. Dan Snyder to carry on Mr. Lindo’s responsibilities as Chief Executive Officer, Chairman of the Board, Chief Financial Officer, President, Treasurer and Director.
The Company issued 2,500,000 of restricted Common Shares through November 11, 2010 in connection with the sale of a Stock Purchase and Option Agreement ($20,000).
The Board of Directors has met several times in the interim to discuss and vote on issues and plans. The formation of two (2) subsidiaries was announced on October 18, 2010 in a press release (see below).
KENI LWORTH SYSTEM S CORPORATION REORGANIZES
Mineola NY — October 18, 2010 - Kenilworth Systems Corp (OTC: KENS.PK) (“Kenilworth”) today announced a major corporate restructuring designed to focus the Company’s efforts on its core business and maximize shareholder value.
Dan W. Snyder III, President and CEO, said that “The Directors have approved a plan that will break Kenilworth into three companies, each with a well defined area of business. To advance this plan Kenilworth has formed two new subsidiaries.”
A new wholly owned subsidiary, KenSysCo Corp, holds and operates Kenilworth’s intellectual property assets such as the Company’s live-gaming patents and other patents pending. KenSysCo will conduct all operations related to use of the patents in licensed casinos outside of the USA. It is the intention to rapidly develop this subsidiary; then spin it out to existing Kenilworth shareholders in early 2011 as a publicly traded company.
A second wholly owned subsidiary, Convergent Networks, Inc. was formed to continue and greatly expand Kenilworth’s application of broadband technology in the gaming sector, as well as the broadcast media to support these operations. This subsidiary also intends to acquire companies in the rapidly expanding digital convergence and social networking segments. Mr. Snyder indicated that Kenilworth will likely also spin out this new subsidiary to existing shareholders of Kenilworth in early 2011.
Kenilworth Systems Corporation is an integrated technology corporation with intellectual property assets and technical capabilities in the live online gaming sector. The Company is based in Mineola, New York.
The formation of KenSysCo International, Ltd., Antigua, West Indies was announced on November 15, 2010 in a press release (see below).
Kenilworth Systems Expands Internationally
MINEOLA, NY—(Marketwire - November 10, 2010) - Kenilworth Systems Corp. (PINKSHEETS: KENS) today announced a significant step forward in the corporate restructuring designed to focus the Company’s efforts to maximize shareholder value.
Dan W. Snyder III, President and CEO, said, “I am pleased to report that the management team has made significant progress in implementing the plan approved by the Directors only a few weeks ago.”
“The Company has successfully completed the formation of subsidiary KenSysCo International Ltd. in Antigua, West Indies. Antigua, long known as one of the best regulated international gaming countries in the world, is the ideal location for KenSysCo International to aggressively market the Kenilworth technology,” Snyder noted.
“KenSysCo International is to conduct all operations related to use of the Kenilworth patents by licensed gaming operators outside of the USA. This move provides a significant opportunity to follow up on the interest expressed by substantial casino and online gaming operators in the Caribbean, Central America and around the world.”
Kenilworth Systems Corporation is an integrated technology corporation with intellectual property assets and technical capabilities in the live online gaming sector. The Company is based in Mineola, New York.
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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KENILWORTH SYSTEMS CORPORATION |
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By: |
/s/ Dan W. Snyder |
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Chief Executive Officer, President, and Director |
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May 13, 2011 |