**UNITEDSTATES********SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

 

**FORM10-Q**

 

**(Mark One)**

 

| ý                                                                                                     |   | **Quarterly report pursuant to  Section 13 OR 15(D) of the Securities Exchange Act of 1934**  |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|
|                                                                                                       |   |                                                                                               |
| **For  the quarterly period ended March 31, 2004**                                                    |
|                                                                                                       |   |                                                                                               |
| **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) |

 
| **New  York**                                              |   | **84-1641415**                        |
|------------------------------------------------------------|--------|---------------------------------------|
| (State of  incorporation)                                  |   | (I.R.S. employer  identification no.) |
|                                                       |   |                                  |
| **185  Willis Avenue, Mineola, New York**                  |   | **11501**                             |
| (Address of principal  executive offices)                  |   | (Zip Code)                            |
|                                                       |   |                                  |
| **(516)  741-1352**                                        |
| (Registrant’s telephone  number, including area code) |

 

Indicate by check mark whether the Registrant (1) hasfiled all reports required to be filed by section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for suchshorter 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  ý   No  o

 

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

 

The number of shares of common stock, $.01 par valueof the Registrant outstanding as of May 10, 2004 was 120,107,300

 

 

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PART IV – INTRODUCTORYNOTE

 

a)                                      The financials are presented as aDevelopment Stage Corporation.

b)                                     The acquisition cost of Patent No. U.S.6,575,834 which originally was presented on a Pro-Forma basis, in the amount of$2,500,000, the value the Company placed on the Patent, has been eliminated andis now included in the restated financials on Form 10-Q/A for the quarterperiod ended March 31, 2003 at the actual costs to file the Patent of$357,100 which include the costs to file the Patent in forty-nine (49)industrialized countries around the world.

 
| PART I – FINANCIAL INFORMATION |
|-------------------------------------|
|                                |   |
| Item 1.                             | Financial Statements |
| Item  2.                            | Management’s  Discussion and Analysis of Financial Condition and Results of Operations |
| Item 3.                             | Controls and Procedures |
|                                |   |
| PART II – OTHER INFORMATION    |
|                                |   |
| Item 2.                             | Changes in Securities and Use of  Procedures |
| Item  6.                            | Exhibits  and Reports on Form 8-K |

 

SPECIAL NOTE REGARDINGFORWARD-LOOKING STATEMENTS

 

To the extent that the information presented in thisQuarterly Report on Form 10-Q for the quarter ended March 31, 2004discusses financial needs and projections, information or expectations aboutour proposed products or markets, or otherwise makes statements about futureevents, such statements are forward-looking.  We are making theseforward-looking statements in reliance on the safe harbor provision of thePrivate Securities Litigation Reform Act of 1995.  Although we believethat the expectations reflected in these forward-looking statements are basedon reasonable assumptions, there are a number of risks and uncertainties thatcould cause actual results to differ materially from such forward-lookingstatements.  These risks and uncertainties are described, among otherplaces in this Quarterly Report, in “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” and in the Form 10-K for thefiscal year ended December 31, 2003.

 

In addition, we disclaim any obligations to update anyforward-looking statements to reflect events or circumstances after the date ofthis Quarterly Report.  When considering such forward-looking statements,you should keep in mind the risks referenced above and the other cautionarystatements in this Quarterly Report.

 

PART I– FINANCIAL INFORMATION

 
| Item 1. | FINANCIAL STATEMENTS                                                                                                      |
|---------|---------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                      |
|    | Consolidated  Balance Sheets as of March 31, 2004 and December 31, 2003                                         |
|    |                                                                                                                      |
|    | Consolidated  Statements of Operations for the three (3) months period ended March 31,  2004 and March 31, 2003 |
|    |                                                                                                                      |
|    | Consolidated  Statements of Cash Flows for the three (3) months ended March 31, 2004  and March 31, 2003        |
|    |                                                                                                                      |
|    | Notes  to Consolidated Financial Statements                                                                               |

 

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KENILWORTH SYSTEMSCORPORATION

INDEX TO FORM 10-Q

 

PART I.

FINANCIAL INFORMATION

 

ITEM 1.  FINANCIALSTATEMENTS

 

KENILWORTH SYSTEMSCORPORATION

CONDENSED CONSOLIDATEDBALANCE SHEETS

 
|                                                                                                                                                               |   | **March 31  2004** |       | **December 31  2003** |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|----------------------------|------------|
|                                                                                                                                                               |   | **(unaudited)**         | ** ** |                       | ** ** |
|                                                                                                                                                               |   |                    |       |                       |       |
| ASSETS                                                                                                                                                             |   |                    |       |                       |       |
|                                                                                                                                                               |   |                    |       |                       |       |
| Cash                                                                                                                                                               |   | $                       | 126,272    |                       | $          | 7,136 |   |
| Due from Shareholders (subscriptions)                                                                                                                              |   | —                  |       | 50,000                     |       |
| Prepaid Expenses                                                                                                                                                   |   | 125,000                 |       | 187,500                    |       |
| Property, Plant and Equipment, Net                                                                                                                                 |   | 12,302                  |       | 12,302                     |       |
| CURRENT ASSETS                                                                                                                                                     |   | 263,574                 |       | $                          | 256,938    |   |
| Patent, Net                                                                                                                                                        |   | 330,848                 |       | 336,100                    |       |
| TOTAL ASSETS                                                                                                                                                       |   | $                       | 594,422    |                       | $          | 593,038 |   |
|                                                                                                                                                               |   |                    |       |                       |       |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                |   |                    |       |                       |       |
| Accounts Payable                                                                                                                                                   |   | $                       | 71,675     |                       | $          | 119,097 |   |
| Payroll Taxes Payable                                                                                                                                              |   | 1,772                   |       | 13,018                     |       |
| Notes Payable                                                                                                                                                      |   | 54,422                  |       | 142,231                    |       |
| TOTAL LIABILITIES                                                                                                                                                  |   | $                       | 127,869    |                       | $          | 274,346 |   |
|                                                                                                                                                               |   |                    |       |                       |       |
| Common Stock, $.01 par value, authorized  200,000,000 shares; issued and outstanding 104,412,753 in December 31,  2003 and 120,107,300 on March 31, 2004 |   | $                       | 1,201,073  |                       | $          | 1,044,126 |   |
|                                                                                                                                                               |   |                    |       |                       |       |
| Paid in capital                                                                                                                                                    |   | 26,080,815              |       | 25,723,963                 |       |
| Deficit                                                                                                                                                            |   | (26,815,335             | )          | (26,449,397                | )          |
| TOTAL STOCKHOLDERS’ EQUITY                                                                                                                                    |   | $                       | 466,553    |                       | $          | 318,692 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                    |   | $                       | 594,422    |                       | $          | 593,038 |   |

 

See accompanying notes.

 

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KENILWORTH SYSTEMSCORPORATION

CONDENSED CONSOLIDATEDSTATEMENTSOF OPERATION AND DEFICIT

 
|                                         |   | **Three-month  ended  March 31** |    |
|----------------------------------------------|--------|---------------------------------------|---------|
|                                         |   | **2004**                              |    | **2003** |   |
|                                         |   | **(unaudited)**                       |    |   |   |
|                                         |   |                                  |    |   |   |
| Revenues:                                    |   | $                                     | 0       |   | $ | 0 |   |
| Sales                                        |   |                                  |    |   |   |
| Costs and Expenses:                          |   |                                  |    |   |   |
| Selling, general and administrative expenses |   | $                                     | 365,939 |   | $ | 553,475 |   |
| Total Costs and Expenses                     |   | $                                     | 365,939 |   | $ | 553,475 |   |
|                                         |   |                                  |    |   |   |
| Net loss                                     |   | $                                     | 365,939 |   | $ | 553,475 |   |
| Net loss                                     |   | $                                     | 365,939 |   | $ | 553,475 |   |
| Deficit — Beginning of period           |   | (26,449,396                           | )       | (25,617,229 | ) |
| Deficit — End of period                 |   | (26,815,335                           | )       | (26,170,704 | ) |
|                                         |   |                                  |    |   |   |
| Loss per Share of common stock               |   | $                                     | 0.003   |   | $ | 0.005 |   |
| Average number of shares outstanding         |   | 121,295,121                           |    | 98,650,945 |   |

 

See accompanying notes.

 

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KENILWORTH SYSTEMSCORPORATION

AND SUBSIDIARIES

CONDENSED CONSOLIDATEDSTATEMENTS OF CASH FLOWS

 
|                                                                          |   | **Three-month  ended  March 31** |    |
|-------------------------------------------------------------------------------|--------|---------------------------------------|---------|
|                                                                          |   | **2004**                              |    | **2003** |   |
|                                                                          |   | **(unaudited)**                       |    |   |   |
| CASH FLOWS USED IN OPERATING ACTIVITIES                                       |   |                                  |    |   |   |
|                                                                          |   |                                  |    |   |   |
| Net Loss                                                                      |   | $                                     | 365,939 |   | $ | 553,475 |   |
| Adjustments to reconcile net income to net cash  used in operating activities |   |                                  |    |   |   |
| Changes in Accounts Receivable and Prepaid Expense                            |   | 112,500                               |    |   |   |
| Depreciation                                                                  |   |                                  |    | 664 |   |
| Increase (decrease) in due to related party                                   |   | (87,809                               | )       | (429 | ) |
| Increase (Decrease) in accrued liabilities                                    |   | (58,668                               | )       | 201,148 |   |
|                                                                          |   |                                  |    |   |   |
| NET CASH USED IN OPERATING ACTIVITIES                                         |   | (399,916                              | )       | (352,092 | ) |
|                                                                          |   |                                  |    |   |   |
| Cash flows from Investing Activities                                          |   |                                  |    |   |   |
| Purchase of Equipment                                                         |   | $                                     | 0       |   | $ | (13,461 | ) |
| Amortization of Patent                                                        |   | 5,251                                 |    |   |   |
| CASH FLOWS FROM                                                               |   |                                  |    |   |   |
| Conversion of Promissory Notes                                                |   | 513,800                               |    | 338,483 |   |
|                                                                          |   |                                  |    |   |   |
| FINANCING ACTIVITIES                                                          |   |                                  |    |   |   |
| Increase (decrease) in due to Affiliate                                       |   | —                                |    | 20,000 |   |
| Proceeds from issuance of Convertible Promissory  Note                        |   | —                                |    | 35,000 |   |
| Net cash provided by financing Activities                                     |   | $                                     | 513,800 |   | $ | 380,022 |   |
| Net Increase (Decrease) in cash                                               |   | 119,136                               |    | (7,930 | ) |
| CASH — BEGINNING OF PERIOD                                               |   | 7,136                                 |    | 20,880 |   |
| CASH — END OF PERIOD                                                     |   | $                                     | 126,272 |   | $ | 12,950 |   |

 

See accompanying notes.

 

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KENILWORTH SYSTEMSCORPORATION

NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - BASIS OF PRESENTATION

 

In the opinion of management, the accompanyingunaudited condensed consolidated financial statements of Kenilworth SystemsCorporation and subsidiaries (“Kenilworth”) beginning as of January 1,2004 contain all adjustments (consisting of only normal accruals) necessary topresent fairly the consolidated balance sheets as of March 31, 2004 andDecember 31, 2003 and the related statements of operations and cash flowsfor the three (3) month periods ended March 31, 2004 and 2003.

 

The results of operations for the three (3) monthperiod ended March 31, 2004 are not necessarily indicative of the resultsfor the entire year.

 

NOTE 2 - THE COMPANY AND NATURE OF BUSINESS

 

Kenilworth Systems Corporation (the “Company”) wasincorporated in New York in April 1968 and since emerging from bankruptcyproceedings and now plans to be engaged in the business of developing andmanufacturing terminals and design systems that permit individuals from remotelocations, to play along with live in progress casino table games via TV(simulcast) satellite and satellite cable broadcast around the world.

 

The Company was in bankruptcy proceedings underChapter 7 and 11 of the Bankruptcy Code for the period from August 28,1982 through September 23, 1998. The Company ceased all operations,between February 2, 1991 through September 23, 1998.

 

NOTE 3 - PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include theaccounts of Kenilworth Systems Corporation and its wholly owned subsidiaries:Video Wagering Systems Corporation, RoulabetteTM Nevada Corporation, KenilworthSystems Nevada Corporation and Kenilworth Systems (UK) Limited. None of thesesubsidiaries has any assets or liabilities.

 

NOTE 4 - EARNINGS PER SHARE

 

The Company computes and presents earnings (loss) pershare in accordance with the requirements of Statement of Financial AccountingStandards (“SFAS”) No. 128 “Earnings Per Share”.

 

Basic loss per share is based on the weighted-averagenumber of shares of common stock outstanding for the period, which were($0.008), ($0.003), and ($0.005) respectively for the year endedDecember 31, 2003, and the periods March 31, 2004 and March 31,2003.

 

Diluted earnings per share have not been presented inthe accompanying financial statements because the effect of conversion ofconvertible promissory notes was anti-dilutive.

 

NOTE 5 - INCOME TAXES

 

The Company uses the liability method to account forincome taxes in accordance with requirements of SFAS No. 109.

 

The Company is a “C” Corporation for tax purposes.

 

The Company estimates that it has availableapproximately ten million dollars ($10,000,000) in net operating losscarry-forwards, which expire at various dates through 2020. Utilization of theNOL carry-

 

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forward may be limited under various sections of theInternal Revenue Code depending on the nature of the Company’s operations.

 

The Company has a deferred tax asset of approximatelytwo million eight hundred thousand dollars ($2,800,000) arising from its netoperating loss carry-forwards. The deferred tax asset has been fully reserveddue to the uncertainty of future realization.

 

NOTE 6 - USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

 

The preparation of financial statements in conformitywith generally accepted accounting principles requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period. Actual results could differ from these estimates.

 

NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The Company’s financial statements include cash,receivables and accounts payable. Due to the short-term nature of theseinstruments, the fair value of these instruments approximates their recordedvalues.

 

NOTE 8 - PROPERTY AND EQUIPMENT

 

Property and Equipment are stated at cost. Forfinancial reporting purposes, property and equipment are depreciated utilizingthe Straight-Line Method over the estimated useful lives of the related assetsas follows:

 

|             |   | **YEARS** |   |
|------------------|--------|-----------|--------|
|             |   |      |   |
| Office Equipment |   | 5         |   |
| Vehicles         |   | 5         |   |

 

Property and Equipment consist of the following as ofMarch 31, 2004 and March 31, 2003:

 
|                              |   | **Three-month  ended  March 31** |   |
|-----------------------------------|--------|---------------------------------------|--------|
|                              |   | **2004**                              |   | **2003** |   |
|                              |   |                                  |   |   |   |
| Office Equipment                  |   | $                                     | 3,351  |   | 3,939 |   |
| Vehicles                          |   | 11,500                                |   | 13,461 |   |
|                              |   | $                                     | 14,851 |   | $ | 17,400 |   |
| Less-Accumulated Amortization     |   | 2,549                                 |   | 664 |   |
| Total Property and Equipment, Net |   | $                                     | 12,302 |   | $ | 16,736 |   |

 

Depreciation expense for the quarters endedMarch 31, 2004 and March 31, 2003 was $2,549 and $664 respectively.

 

NOTE 9 - CONVERTIBLE PROMISSORY NOTES

 

During the year 2003, the Company sold one (1) yearConvertible Promissory Notes totaling four hundred and six thousand($406,000).  At the option of the Note Holders, the Notes were convertibleinto Common Stock of the Company at the rate of between one (1) share for each$0.07 and $0.10 of face value of the indebtedness represented by the Notestogether with accrued interest at the annual rate of two percent (2%) above theprime rate quoted by Citibank of N.A. Management believed it was unable torepay the Notes when they become due, in order to induce the Note Holders toconvert the Notes by year end 2003 when the quoted price per Common Share, astraded on the Pink Sheet Market was between $0.035 and $0.06 per share, theCompany offered to convert the Notes at the rate of one (1) share for each$0.05 of indebtedness

 

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represented by each Note, together with accruedinterest.  As the result of the Company’s offer, all Note Holdersconverted their Notes into 7,712,606 restricted shares of authorized butunissued Common Stock, including accrued interest, at an average price of $0.05per share.

 

During the first quarter period ended March 31,2004, the Company sold one (1) year Convertible Promissory Notes totaling$422,000.  At the option of the NoteHolders, the Notes were convertible into Common Stock of the Company at therate of $0.10 per share.  At the requestof the Company all Note Holders converted their Notes by January 31, 2004at the rate of one (1) share for each $0.05 per share of the principal amountof the Notes without any accrued interest. The Company’s Common Stock was trading on the Pink Sheets at that timebetween $0.06 and $0.075 per share.  Asthe result of the Company’s offer all Note Holders converted their Notes into9,114,699 restricted shares for the $422,000 face amount of Notes, thusavoiding to carry the Notes on the Company’s balance sheet as indebtednesswhich could have made the Company insolvent with the cost of traveling to theAsian markets by members of the Company and the costs associated engagingconsultants in the various Asian jurisdictions.

 

NOTE 10 - GOING CONCERN UNCERTAINTY

 

As indicated in Note 2, the Company emerged fromChapter 7 in September 1998 and has not yet commenced operations. Thesefactors create uncertainty as to the Company’s ability to operate as agoing-concern and continue in business. Management plans to develop a wageringsystem that allows casino patrons and individuals outside the casino to playalong with live in-progress casino table games. Among the first steps in theplan is to conduct testing. Unless the Company is able to obtain sufficientfunds, none of the tests and initial development work can commence. The Companyplans to obtain the necessary funding by offering its Common Stock, SeniorCumulative Convertible Preferred Shares and/or continue to sell ConvertiblePromissory Notes in private placements, or selling limited joint ventureparticipations in future “play along with casino game” franchises. There can beno assurances the Company can be successful in obtaining such financing.

 

The accompanying financial statements have beenprepared assuming the Company is a going-concern and do not reflectadjustments, if any that would be necessary if the Company were not agoing-concern.

 

NOTE 11 – NON CASH TRANSACTIONS

 

During the year ended December 31, 2003 theCompany issued 7,395,558 shares of restricted Common Stock in payment forservices rendered in the amount of $596,440 an average price of $0.08 pershare.  The amount did not include2,500,000 shares for the services rendered by the Directors of the Company (SeeNote 13).

 

During the First Quarter period ended March 31,2004 the Company issued 6,580,000 shares of restricted Common Stock in paymentsfor services rendered in the amount of $296,800, an average price of $0.05 pershare.  The amount includes $250,000 forservices rendered by Directors of the Company.

 

In connection with the emergence from bankruptcy inSeptember 1998 the trustee distributed four million three hundred thousandfour hundred and three dollars ($4,300,403) to pay one hundred percent (100%)of all approved claims.

 

NOTE 12 - COMMITMENTS AND CONTINGENCIES

 

OUTSTANDING PAYROLL TAXES

 

During the year 2000, the Internal Revenue Servicecontended that the Company owes payroll taxes including interest and penaltiestotaling almost $400,000 for various periods from 1985-1991. The Companycommenced negotiations with the IRS to resolve these issues. In management’sopinion, no accruals are necessary since it believes that these assessments areincorrect and were discharged in its bankruptcy proceedings.  As theresult of the Internal Revenue Service claim, similar claims were made by

 

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the New York State Income Tax Authorities which claimswere negotiated and have been officially cancelled by the New York State TaxingAuthorities on July 1, 2002.

 

NOTE 13 – PREPAID ITEMS

 

At the Board of Directors Meeting held inSeptember 2003 the Board approved the issuance of two million five hundredthousand (2,500,000) shares of authorized but unissued Common Stock of theCorporation to the Directors in lieu of Director’s Compensation and Director’sLiability insurance for the ensuing year: Gino Scotto, Kit Wong, Patrick J.McDevitt, Joyce Clark and Maureen Plovnick each were issued five hundredthousand (500,000) shares of restricted Common Stock of the Company at a priceof ten cents ($0.10) per share, the equivalent of fifty thousand dollars($50,000) for each Director, a total of $250,000.  The $250,000 isrecorded for shares issued as paid in capital in the first quarter period in2004.  In the last quarter of 2003 andthe first quarter of 2004, the Company expensed $62,500 as administrativeexpenses.

 

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

 

RESULTS OF OPERATIONS

 

Since we emerged from bankruptcy proceedings onSeptember 23, 1998 we have had no revenues from operations. We sustainedsubstantial losses from general administrative expenses amounting of $832,168and $660,289 in year 2003 and 2002 and for the three-months ended March 31,2004 we sustained losses from general administrative expenses amounting to$365,939 compared to a loss of $553,475 for the quarter ending March 31,2003. Kenilworth has had no revenues from operations during the past twelve(12) years and there can be no assurances that it will ever have revenues frompresent planned operations.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Our present plans are to develop a wagering systemdubbed “RoulabetteTM” that would allow patrons in the industrialized world toplay and wager on live in-progress simulcast casino table games on terminalsplaced in hotels, resorts, bars and other public gathering places and in homesand offices on personal computers (PC’s) or television sets connected to settop boxes for Interactive TV via digital satellite and digital cable broadcastsemanating from strictly regulated casinos.

 

A first step will be to conduct a one (1) month testof the system at a casino site to prove the viability of broadcasting livein-progress table games around the world.

 

To conduct the tests Kenilworth believes it willrequire initially five million dollars ($5,000,000) to (a) purchase computers,digital television broadcast equipment and table games; and, (b) defray thecost of the facility and pay the salaries of six (6) employees who arespecialists in software design, TV broadcasts, and mechanical design, for aperiod of eighteen (18) months, and from time to time, consultants who willassist the design team. In order to market Project RoulabetteTM while thedevelopment of the terminals proceeds we will require an additional fivemillion dollars ($5,000,000) to hire management and marketing people to securefuture orders for the system.

 

Unless we are able to obtain these funds, of whichthere are no assurances, none of the tests and initial development work canbegin; and we will not be able to commence our planned business.

 

Kenilworth plans to obtain the necessary funding byoffering in Private Placements, Common Shares, Convertible Promissory Notes,and Cumulative Convertible Preferred Shares and/or by the sale of limited jointventure participations in future RoulabetteTM franchises. There can be noassurances that the Company will be able to secure any of these funds.

 

When the tests are completed and we have obtained allrequired licenses from the gaming control regulators and state legislatures orforeign jurisdictions to broadcast the live in-progress casino table games andhas contracts with franchisees to place terminals around the world andfranchise television

 

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broadcasters, we expect to commence normal business.Kenilworth will also seek to obtain production financing from regular bankingsources to finance the manufacturing of the RoulabetteTM terminals. There can beno assurances that any such financing and approvals will be available to us.

 

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR”PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND RISKFACTORS

 

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

 

You should not rely on forward-looking statements inthis Form 10-Q. This Form 10-Q contains forward-looking statements thatinvolved risks and uncertainties. We use words such as “anticipates”,“believes”, “plans”, “expects”, “future”, “intends” and similar expressions toidentify such forward-looking statements. You should not place undue relianceon these forward-looking statements, which apply only as of the date of thisForm 10-Q. Our actual results could differ materially from those anticipated inthese forward-looking statements for many reasons, including the risks faced byKenilworth as described below and elsewhere in this Form 10-Q.

 

RISKS

 

Specific reference is made to each of the risksdescribed in Item 7 of the Form 10-K for December 31, 2003 under thediscussion “Cautionary Statement For Purposes of the Safe Harbor Provisions ofthe 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 andfilings under the Securities Exchange Act of 1934 as amended and as may beapplicable under the Securities Act of 1933 as amended.

 

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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 ofShareholders on July 21, 2004 or any adjournment thereof with proxymaterials mailed to shareholders of record on June 28, 2004 prior to theproposed 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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