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, 1998
or
[ ] 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)
<TABLE>
<CAPTION>
New York 13-2610105
<S> <C> <C>
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
54 Kenilworth Road, Mineola, New York 11501
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (516) 741-1352
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE OTC BULLETIN BOARD
Securities registered pursuant to section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of class)
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 [ ]
Number of shares of common stock, $.01 par value outstanding as of March
31, 1999:
62,164,018
<PAGE>
KENILWORTH SYSTEMS CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements PAGE
Consolidated Balance Sheets as of
March 31, 1999 and December 31, 1998 3
Statement of Operations for the three-month
period ended March 31, 1999. No comparative
statement for the prior year period has been
presented. The Company was in Chapter 7
Bankruptcy Proceedings from January 1991 until
September 29, 1998. The Company did not have
any operation during these proceedings. 5
Consolidated Statements of cash flows for the
3 month period ended March 31, 1999 6
Consolidated Notes to Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 14
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a vote of
Security Holders 15
Item 6. Financial Data Schedule (for electronic
filing purposes) 17
Signature Page 17
<PAGE>
KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, for the three-month period ended March 31,
1999 (unaudited) and for the period beginning
November 29, 1998 and ending December 31, 1998 (audited)
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<CAPTION>
ASSETS: MARCH DEC
1999 1998
<S> <C> <C> <C>
Current Assets:
Cash $ 5,215 $ -0-
TOTAL CURRENT $ 5,215 $ -0-
ASSETS
Total Assets $ 5,215 $ -0-
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE>
KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, for the three-month period ended March 31,
1999 (unaudited) and for the period beginning
November 29, 1998 and ending December 31, 1998 (audited)
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<CAPTION>
LIABILITIES: MARCH DEC.
1999 1998
<S> <C> <C> <C>
Current Liabilities:
Accounts payable: Accrued
liabilities $ 174 $ 7,912
TOTAL CURRENT LIABILITIES $ 174 $ 7,912
STOCKHOLDERSS' EQUITY:
Common Stock, $.01 par value,
authorized 100,000,000 shares;
issued and outstanding:
60,477,352 on December 31 1998
and 62,164,018 on March 31, 621,640 604,773
1999
Paid-in capital 23,783,013 23,774,346
Deficit (24,399,612) (24,387,031)
5,041 (7,912)
Total Liabilities and
Stockholder's Equity $ 5,212 $ -0-
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE>
KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS of OPERATION and DEFICIT
for the three-month period ended March 31, 1999, for the period beginning
November 29, 1998 ending December 31, 1998 and the period beginning January
1, 1991 ending September 29, 1998
and the year ending 1990
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<CAPTION>
MARCH 1999 DEC. 1998 NOV. 1998 1990
<S> <C> <C> <C> <C>
Revenues:
Sales $ -0- $ -0- $ -0- $3,367,155
Less: Discount (51,115)
on sales
-0- -0- -0- 3,316,040
Costs and Expenses:
Cost of sales -0- -0- -0- 2,188,439
Selling, general
and 3,148 7,912 -0- 1,747,839
administrative
expenses
Research and -0- -0- -0- 319,150
development
Amortization of -0- -0- -0- 181,921
goodwill
Interest expense -0- -0- -0- 65,428
(income)
Total Costs and 3,148 7,912 -0- 4,502,777
Expenses
Net income
(loss)
before other (9,533) -0- -0- (1,186,737)
income
and (losses)
OTHER INCOME AND
(LOSSES):
Sale of assets -0- -0- 3,676,347 -0-
Other gains -0- -0- 108,000 -0-
Interest income -0- -0- 516,056 -0-
Total Other -0- -0- 4,300,403 -0-
Income
(a) Payment of
liabilities
net of
eliminations
(b) bankruptcy
costs
(c) elimination of
assets
(d) cancellation
of -0- -0- (8,767,921) -0-
treasury stock
Other losses -0- -0- (4,473,518) -0-
Net income (12,581) (7,912) (4,467,518) (1,186,737)
(loss)
Deficit-Beginning of (24,387,031) (24,379,119) (19,911,601) (18,724,864)
period
Deficit-End of year $(24,399,612) $(24,387,031) $(24,379,119) $(19,911,601)
Earnings (Loss) per
share $-0- $-0- ($.07) ($.02)
of common stock
(Note 5)
Fully diluted
earnings $-0- $-0- ($.07) ($.02)
(loss) per share
Average number of
shares 60,477,352 60,477,352 60,477,352
outstanding
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE>
KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS of CASH FLOWS
for the three-month period ended March 31, 1999 (unaudited)
and the period ended December 31, 1998 (unaudited)
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<CAPTION>
MARCH DEC.
1999 1998
<S> <C> <C> <C>
Cash from Operating Activities:
Net loss $12,581 $7,912
Adjustments to reconcile net loss
to net cash used for operating
activities:
Depreciation and amortization -0- -0-
COMMON STOCK ISSUED AS CONSIDERATION FOR SERVICES 9,534 -0-
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE (7,738) 7,912
NET CASH (USED FOR) OPERATING
ACTIVITIES 10,785 -0-
Cash flows from Financing Activities:
PROCEEDS FROM PRIVATE PLACEMENT 16,000 -0-
COSTS ASSOCIATED WITH PRIVATE
PLACEMENT -0- -0-
NET INCREASE IN CASH 5,215 -0-
CASH AT BEGINNING OF PERIOD -0- -0-
CASH AT END OF PERIOD $5,215 $ -0-
Schedule of Non-Cash Investing
Activities:
ISSUANCE OF STOCK PURSUANT TO CONSULTING AGREEMENT AND
REIMBURSEMENT FOR $40,000 COST INVESTIGATING FEASIBILITY
OF STARTING ROULABETTE IN THE DOMINICAN REPUBLIC
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE>
KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(a) BASIS OF PRESENTATION, REGULATION AND CERTAIN SIGNIFICANT RISKS
AND UNCERTAINTIES
The Company's financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business.
The consolidated balance sheet for the period ended March 31, 1999 and
the related consolidated statement of operations and statement of cash
flows are unaudited and reflect all normal and recurring adjustments
that are, in the opinion of management, necessary for a fair
presentation of the results for the interim period. The results of
operations for the three-month period ended March 31, 1999 are not
necessarily indicative of the operating results for the full year.
Certain information and footnote disclosure normally included in the
financial statements prepared in accordance with generally accepted
accounting principals have been condensed or omitted. It is suggested
that the accompanying consolidated financial statements be read in
conjunction with the Summary of Accounting Policies and Notes to the
Consolidated Financial Statements included in the Company's annual
report on form 10-K for the year ended December 31, 1998.
(b) Summary of Significant Accounting Policies:
1 Basis for Presentation
The consolidated financial statements include the accounts of the
Company and all its subsidiaries. All intercompany
transactions and accounts have been eliminated.
In September 1986 the Company exchanged 466,000 shares of its
common stock for all of the outstanding common stock of Video
Wagering Corporation ("Video"). This transaction had been
accounted for under the purchase method of accounting, and
accordingly, Video's operations have been included in the
consolidated statement of operations from acquisition date.
The excess of cost over net assets acquired of $7,094,930 is
reflected as goodwill. The Company previously had an advance
to Video of $4,600,000 and an investment in its preferred
stock of $4,200,000. This investment resulted from the
<PAGE>
KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Company's sale in 1982 of its research and development to
Video. This sale resulted in a profit to the Company of
$4,700,000, which has been eliminated as a prior period
adjustment.
2 Property, Plant and Equipment
Depreciation is computed on the straight-line method over the
estimated useful lives of the related assets.
Leasehold improvements are amortized over the shorter of the
lease term or the estimated useful life of the assets.
The cost of maintenance, repairs and minor renewals is charged to
either expense or manufacturing overhead, major renewals and
betterments are capitalized.
When assets are sold or otherwise disposed of, gains or losses
thereon, computed on the basis of the difference between
depreciated costs and proceeds, are credited or charged to
income, and cost and accumulated depreciation are removed from
the accounts.
3 Inventories
Inventory is valued at the lower of cost (first-in, first-out
basis) or market.
4 Goodwill
Goodwill arising from the acquisition of a wholly owned
subsidiary in 1986 was being amortized over 40 years and was
eliminated during the prior period.
(a) Business of the Company
Prior to February 5, 1991, when the Chapter 7 Trustee was appointed
and all Company operation ceased, the Company was engaged primarily
in the development, manufacturing and marketing of cashless casino
wagering systems. In a cashless system, coins, bills, and tokens
are replaced by debit cards issued by the casino operator to reduce
cash handling and its associated security costs. In addition, the
system offers variable denomination play (25 cents, 50 cents, $1.00
and $5.00) on each slot machine.
<PAGE>
KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company currently will be engaged in the development,
manufacturing, marketing, and operation of "Roulabette", a system
that allows casino patrons to play along with live table games in
progress, via closed circuit television, on Roulabette terminals
located within the casino confines. The Roulabette terminals are
similar to slot machines. They have a television screen for viewing
the live action from the table games, and a separate touch
screen to place the wager. For the first time casino patrons will be
able to play along and participate and wager as little as $.25 on an
actual in-progress casino table game - Roulette, Craps, Baccarat, and
Blackjack. The Roulabette terminals accept bills in all denominations,
up to $100, and pay winnings by issuing bar code receipts that are
cashed at the casino cage.
Ultimately the Company will propose to arrange to broadcast the closed
circuit casino table game action throughout the United States and the
rest of the industrialized world, via digital direct TV. This will
permit individuals all over the world to view the live action TV
broadcast on their television sets, and play along on their Personal
Computers (PC's), any time, day or night. To provide 24 hour live
casino play, the broadcasts will originate, at different times, from
casinos located in Atlantic City, New Jersey, Las Vegas, Nevada, and
Monte Carlo, Monaco.
4. History of the Company
In 1971 the Company discontinued its business of teaching the
operation of Key Punch and Key Verifier machines. Between 1972 and
1979, the Company engaged in the research and development of a
method to chemically encode and decode invisible data into plastic
cards, paper cards, tickets or tokens which cannot be easily
counterfeited or altered without destroying the encoded data. In
1979, the Company commenced commercial operations and no longer
considered itself a Development Stage Enterprise.
Throughout the 1980's the Company experienced working capital shortages
that climaxed on August 31, 1982, when the Company filed a voluntary
petition for reorganization under Chapter 11 of the United States
Bankruptcy Code. From August 31, 1982 to June 7, 1985, the Company
operated during reorganization proceedings. When the Company's Plan
of Reorganization was confirmed, debts for employee
<PAGE>
KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
withholding taxes totaling approximately $1.5 million were not
discharged and remained outstanding, plus interest and penalties.
Although the Company obtained a Final Decree on April 27, 1988, the
Bankruptcy Court retained jurisdiction in the matters relating to the
unpaid taxes.
On February 5, 1991 the Company's Chapter 11 case was converted to a
Chapter 7 proceeding and a Trustee was appointed.
From February 1991 through September 1998, Kenilworth was inactive,
except that Herbert Lindo, the President and Chairman of the Board of
Directors of Kenilworth when the Trustee was appointed, assisted the
Trustee which resulted in obtaining $4,424,056 for the Kenilworth
Estate from the sale of substantially all of the estate's assets..
In September 1998 a United States Bankruptcy Judge in the Eastern
District of New York approved the Final Report and Accounts submitted
by the Chapter 7 Trustee of the Estate of Kenilworth and, after
obtaining approval from the U.S. Trustee, the Kenilworth Trustee made
the one hundred percent (100%) cash distribution to the creditors and
paid in full all administration fees and expenses. With the
Bankruptcy Court's approval, all of the books and records since
inception of Kenilworth have been released to Herbert Lindo and the
Company emerged from bankruptcy with no assets and no liabilities.
Management of the Company plans to obtain approximately four million
dollars ($4,000,000) of new working capital by offering in a private
placement, Senior Cumulative Convertible Preferred Shares and/or by the
sale of limited joint venture participation's in future Roulabette
franchises.
Under the Chapter 11 Plan of Reorganization, the Company
discharged all debt other than secured debt and governmental
obligations by issuing to creditors one (1) share of authorized
but unissued common stock, par value $.01 per share, (the only
class of securities of the Company) for each $3.00 of debt, and
simultaneously set up a $500,000 sinking fund to redeem stock
issued in settlement of debt at $3.00 per share, on a pro-rata
basis.
<PAGE>
KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On June 7, 1985, The Company issued 2,094,034 shares in
settlement of $6,282,102 and on September 7, 1985, redeemed
167,000 of those shares with the $500,000 from the sinking fund.
The funds for the sinking fund and for the secured creditors and
governmental obligations totaling $750,000 were obtained by
issuing 753,892 shares to a small group of private investors. The
Company also issued 1,281,723 shares for legal and Chapter XI
administrative fees totaling $512,689. The price per share of $.40
for the legal and administrative fees is the same price the
Company fixed in the private placement of restricted shares and
convertible debentures concluded for the new working capital
after the confirmation. For financial accounting purposes, the
Company credited to paid-in capital the shares issued, measured by
the quoted market value of the Company's traded shares on the
national Association of Securities Dealers Automated Quotation
System (NASDAQ) on the date the shares were issued. To the extent
the credits exceeded the amounts attributed to paid-in capital,
they were credited to non-recurring income as extraordinary items.
To the extent the credits were less than the amount attributed to
paid-in capital, they were recorded as non-recurring losses as
extraordinary items.
The Company's common shares issued in settlement of debt and in
connection with the sale of shares in the private placements for
the sinking fund and priority claims, including the legal and
administrative fees, were not restricted securities, (as defined
by the Securities Act of 1933), but may be resold by the creditors
and purchasers at any time by an exemption provided in Section 5 of
the Securities Act of 1933, as amended, and Section 1145 of the
Federal Bankruptcy Code.
As a result of the Reorganization plan, the Company charged general
and administrative expenses as extraordinary items.
All accounts payable and other liabilities of the Company that were
outstanding at the date the Company entered into chapter XI
proceedings were settled in the Plan of Reorganization.
<PAGE>
KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Chapter 7 Proceedings
On October 27, 1988, the Bankruptcy Court reopened the Chapter XI
case for failure by the Company to pay the government obligations.
On February 5, 1991 the Company's Chapter XI case was converted to
a Chapter 7 procedure for failure to pay the government
obligations, and a Trustee was appointed.
Analysis of Common Stock Issued, Paid-In Capital
and Gains and Losses as the Result of Stock issued
222 in Plan of Reorganization
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<CAPTION>
Average
Market price Credited to Extra-
Amount of Common Of stock Paid-in Ordinary
Debt or Stock On Date of Capital and Gain or
obligation Issued Issuance Common stock (loss)
<S> <C> <C> <C> <C> <C>
Class IV Creditors $2,228,349 887,252 $1.5148 $1,471,067 $752,069
Settlement of
lawsuits
previously not
recorded 1,163,012 $1.7238 $2,004,748 ($2,004,748)
Legal and
Administrative
Fees 1,169,298 $.2268 $1,434,455 ($1,434,455)
$2,228,349 3,219,562 $4,910,270 ($2,687,134)
Less stock
redeemed (167,000) $1.7500 (292,250) ($207,750)
$2,228,349 3,052,562 $4,618,020 ($2,894,884)
</TABLE>
<PAGE>
KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Equipment, Furniture and Leasehold Improvements
<TABLE>
<CAPTION>
Dec. 31, Dec. 31, Dec. 31,
1998 1990 1989 Useful Life
<S> <C> <C> <C> <C>
Automobiles $ -0- $ 60,503 3 - 4 years
Furniture and Equipment -0- 467,566 $431,066 4 - 8 years
Leasehold Improvements -0- 88,551 88,551 Life of Lease
Total -0- 616,920 519,617
Less: Accumulated
Depreciation and
Amortization -0- 497,131 415,315
$ -0- $119,789 $103,302
The unamortized portion was eliminated in 1998.
<PAGE>
KENILWORTH SYSTEMS CORPORATION and SUBSIDIARIES
LIST OF SUBSIDIARIES
(a) Video Wagering Systems Corporation a Delaware corporation.
(b) Roulabette Corporation a Nevada corporation.
<PAGE>
ITEM 2 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
(a) Liquidity and Capital Resources:
Between February 5, 1991, when the Trustee for the Estate of Kenilworth
Systems Corporation was appointed, and September 29, 1998, when the
Trustee paid in cash one hundred (100) cents on the dollar of all
approved creditors' claims and administration fees and expenses, the
Company did not conduct any business and operations.
In November 1991 the Trustee, on orders from the Bankruptcy Court, sold
at public auction substantially all of the assets of the Kenilworth
Estate, for $2,800,000 (two million eight hundred thousand dollars) and
an additional $1,000,000 (one million dollars) escrow deposit to be
available to add to the purchase price, in order to pay all creditors
and other expenses one hundred (100) cents on the dollar. After the
Trustee paid all claims, the Trustee refunded $123,652.62 of the $1.0
million escrow deposit to the purchaser.
Thus, the Company emerged from bankruptcy proceedings with no assets,
no liabilities, and approximately $22,000,000 in available carry-forward
income tax credits.
Present plans are to develop a wagering system, dubbed "Roulabette",
that allows patrons visiting a casino and individuals at home, offices,
clubs, or other gathering places all over the industrialized world, to
play along on live casino table games, either via closed circuit
television in the casino confines, or the broadcast of the same live
action via digital direct satellite TV broadcast around the world.
The first step will be to conduct a three (3) month test of the system
at the proposed Company facility and, after successfully completing the
test, to test a system at a casino preferably located in Atlantic City.
Each test will be with forty (40) Roulabette terminals.
To conduct these two tests will require $1,600,000 to; a) purchase
computers, digital television broadcast equipment and table games; and,
b) defray the cost of the facility and pay the salaries of six (6)
employees who are specialists in software design, TV broadcasts, and
mechanical design, for a period of eighteen (18) months, and from time
to time, consultants who will assist the design team.
Unless the Company is able to obtain these funds, none of the tests and
initial development work can commence.
<PAGE>
The Company plans to obtain the necessary funding by offering in a
Private Placement, Senior Cumulative Convertible Preferred Shares and/or
by the sale of limited joint venture participations in future Roulabette
franchises.
When the tests are completed and the Company has obtained licenses from
the gaming control regulators for the sale of Roulabette systems to U.S.
casinos, the Company will obtain production financing from regular banking
sources to finance the manufacturing of the Roulabette terminals leased
or sold.
Results of Operations
During the short period since the Company emerged from bankruptcy
proceedings, September 29, 1998 to December 31, 1998, the Company had no
sales or operation. In fiscal year 1990, the last period the Company had
sales from operation, revenue increased by 74% from $1,940,832 in fiscal
1989, to $3,316,040 in fiscal 1990. Net income in 1989 was a loss of
$735,288 which loss increased by 61% to $1,186,737 in 1990.
PART II OTHER INFORMATION
ITEM 1 Legal Proceedings:
None
ITEM 2 Changes in Securities:
None
ITEM 3 Defaults Upon Senior Securities:
None
ITEM 4 Submission of Matters to a Vote of Security Holders:
The Company has not held a meeting of shareholders since 1988 because
the cost of soliciting proxies and holding a meeting for the large number
of persons (approximately 11,000) who own its shares is excessively
costly. The directors and officers continue to serve under provisions of
the By-Laws which allow them to continue in office until their
successors are elected and take office.
At the next Annual Meeting of Shareholders the shareholders of the
Company will be asked to ratify the following: (a) An amendment to the
Company's Certificate of Incorporation to increase the authorized number
of Common Shares from 61,000,000 shares to 100,000,000 shares, and to
permit the Company's Board of Directors, without further action by the
shareholders, to issue from time to time up to 1,000,000 authorized but
unissued shares
<PAGE>
of Preferred Stock, and to fix and determine the terms, limitations, relative
rights and preferences of the Preferred Stock, in order to obtain financing,
capital and/or acquire other businesses that can improve the performance or
growth of the Company. When any shares of Preferred Stock are issued, certain
rights of their holders may affect the rights of the holders of Common Stock.
In addition to any other powers conferred on the Preferred Stock, holders of
the Preferred Stock would have, under New York General Corporation Law, the
right to vote as a separate class on any increased, decrease or change in the
rights of the Preferred Stock. The affirmative vote of a majority of the
outstanding shares of Preferred Stock would be required for approval of any
such increase, decrease, or change. The authority of the Board of Directors
to issue shares of Preferred Stock with characteristics it determines (such
as preferential voting, conversion redemption and liquidation rights) may
have a deterrent effect on persons who might wish to make a takeover BID to
purchase shares of the Company at a price which might be attractive to its
shareholders. However, the Board of Directors must fulfill its fiduciary
obligation to the Company and its shareholders in evaluating any takeover BID;
and (b) The creation of a stock option and stock award plan (the "Plan") which
will authorize the grant of options to purchase common shares of the Company
to key employees (including directors who are employees), which may be
"incentive stock options" (ISO's) within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, or nonqualified options. The Plan
also will provide for the grant of stock appreciation rights and stock awards
to eligible participants subject to forfeiture restrictions; (c) The creation
of a Directors Stock Option Plan pursuant to which stock options are awarded
to those directors who are not officers or employees of the Company ("outside
directors"). Presently, there are no outside directors. The plan will permit
the Company to recruit and retain outside directors who will use their best
efforts to promote the success of the Company's business, (d) The election of
members to the Board of Directors; and (e) Ratify the selection of Arthur
Yorkes and Company as the independent public accountant of the Company for the
ensuing fiscal year.
Management at present does not know of any other matters that may be
presented to a vote at the Annual Meeting of Shareholders.
ITEM 5 Other Information
None
ITEM 6 Exhibits and Reports on Form 8-K:
(b) The Registrant filed the following Forms 8-K during this reporting
period.
Form 8-K dated May 15, 1999 Change of Independent Auditors for the
Company.
<PAGE>
ITEM 7 Financial Data Schedule (For Electronic Filing Purposes
Only)
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPEARTIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
Cash $5,215
Marketable Securities --
Notes and Accounts Receivable --
Allowance for Doubtful Accounts --
Inventory --
Total Current Assets 5,215
Property, Plant and Equipment --
Accumulated Depreciation --
Total Assets 5,215
Total Current Liabilities 174
Bonds, Mortgages and Similar Debt --
Preferred Stock / Mandatory Redemption --
Preferred Stock / No Mandatory Redemption --
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KENILWORTH SYSTEMS CORPORATION
Herbert Lindo
May 15, 199 By: Herbert Lindo, President
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