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, 2008

 

OR

 

o  Transition report pursuant to Section 13 or 15(D) of the Securities Exchange

Act of 1934

 

For the transition period from             to

 

Commission File Number: 0-08962

 

KENILWORTH SYSTEMS CORPORATION

(Exact name of registrant as specified in its charter)

 

 

(516) 741-1352

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x   No  o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, indefinitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

 

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):

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o  Yes    x   No

 

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, 2008 was 341,479,484.

 

 

Table of Contents

 

KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

 

INDEX

 

Part I.		Financial Information
Item 1.		Financial Statements
		Condensed Consolidated Balance Sheets (unaudited) - March 31, 2008 and December 31, 2007	1
		Condensed Consolidated Statements of Operation (and Deficit) (unaudited) - Three months ended March 31, 2008 and 2007, and the period from inception, as a Development Stage Company, to March 31, 2008	2
		Condensed Consolidated Statements of Cash Flows (unaudited) - Three months ended March 31, 2008 and 2007, and the period from inception, as a Development Stage Company, to March 31, 2008	3
		Condensed Notes to Consolidated Financial Statements (unaudited)	7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.		Quantitative and Qualitative Disclosures About Market Risk
Item 4.		Controls and Procedures
Part II.		Other Information	9
Item 1.		Description of Business	9
Item 2.		Legal Proceedings	14
Items 3,4,5,6			14
Item 7.		Exhibits	14
Signature			16

 

 

FORWARD LOOKING STATEMENTS

 

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

 

You should not rely on forward-looking statements in this Form 10-Q. This Form 10-Q contains forward-looking statements that involved risks and uncertainties. We use words such as “anticipates”, “believes”, “plans”, “expects”, “future”, “intends” and similar expressions to identify such forward-looking statements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-Q. Our actual results could differ materially from those anticipated in these 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, 2007 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 10-Q has not been reviewed by the Independent Auditor.

 

This Form 10-Q is being filed as a “Development Stage Company” from the period beginning November 24, 1998 to the present at March 31, 2008, including a charge in the amount of $4,256,926, which was the amount the Company disbursed on September 28, 1998 to exit from Chapter 7 Bankruptcy Proceedings.

 

d) The Company issued 62,971,191 shares of its Restricted Common Stock since December 31, 2006.  All of the shares may have the restrictions lifted pursuant to new Rule 144 B within six (6) months after April 15, 2008 which may substantially depress the trading price of the Company’s Stock in the future.

 

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

 

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

 

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

 

During the period ended March 31, 2007 and 2006, the Company made certain adjustments to the number of shares outstanding which did not require capital changes.

 

 

KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

		March 31, 2008			December 31, 2007
ASSETS
CURRENT ASSETS
Cash		$	21,401		$	1,232
Prepaid expenses		60,000			80,000
Loan receivable — including from stockholders		20,120			20,120
Receivable from Herbert Lindo (Note 8)		750,000			750,000
TOTAL CURRENT ASSETS		851,521			851,352
PROPERTY AND EQUIPMENT — NET		13,382			14,868
SECURITY DEPOSIT		17,777			13,677
TOTAL ASSETS		$	882,680		$	879,897
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	183,793		$	210,717
Payroll taxes payable (Note 7)		121,591			73,341
Loans payable – including accrued interest		19,429			19,129
TOTAL CURRENT LIABILITIES		324,813			303,187
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock - par value $.01 per share; authorized 2,000,000 shares; no shares issued and outstanding
Common stock - par value $.01 per share; authorized 500,000,000 shares; issued and outstanding 341,479,484 and 327,741,562 shares, respectively		3,414,794			3,277,415
Additional paid-in capital		31,142,514			31,137,730
Accumulated deficit		(33,999,441		)	(33,838,435		)
TOTAL STOCKHOLDER’S EQUITY		557,867			576,710
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY		$	882,680		$	879,897

 

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

 

4

 

KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT

ACCUMULATED DURING DEVELOPMENT STAGE

FOR THE THREE MONTHS ENDED MARCH 31,

(Unaudited)

 

		Three months ended March 31,						Period from November 24, 1998 to
		2008			2007			March 31, 2008
Revenues
Sales		0			0			0
Expenses
Selling, general and administrative		$	161,006