UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-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 September 30, 2003
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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13-2610105 |
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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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(Zip Code) |
(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 ý No o
State the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practical date
The number of shares of common stock, $.01 par value of the Registrant outstanding as of November 1, 2003 was: 126,888,594
PART IV – INTRODUCTORY NOTE
a) The Company’s Financials have not been reviewed by an Independent Auditor.
b) The financials are presented as a Development Stage Corporation.
c) The acquisition cost of Patent No. US 6,575,834 BI has been reduced from $2,500,000 to $357,100. Accordingly, the Financial Statements for the quarter annual periods ending March 31 and June 30, 2003 on FORM 10-Q will be restated to adjust the reduction of the acquisition cost of the Patent (see Note 10).
PART I – FINANCIAL INFORMATION
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Controls and Procedures |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
To the extent that the information presented in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 discusses financial projections, information or expectations about our proposed products or markets, or otherwise makes statements about future events, such statements are forward-looking. We are making these forward-looking statements in reliance on the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks and uncertainties are described, among other places in this Quarterly Report, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
In addition, we disclaim any obligations to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report. When considering such forward-looking statements, you should keep in mind the risks referenced above and the other cautionary statements in this Quarterly Report.
PART I – FINANCIAL INFORMATION
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Consolidated Balance Sheets as of September 30, 2003 (unaudited) and December 31, 2002 (unaudited) |
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KENILWORTH SYSTEMS CORPORATION
INDEX TO FORM 10-Q
FINANCIAL INFORMATION
KENILWORTH SYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
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September
30 |
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December
31 |
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(unaudited) |
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ASSETS |
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Cash |
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$ |
23,176 |
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$ |
10,071 |
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Prepaid expenses |
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125,000 |
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232,544 |
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Due from sale of Convertible Note |
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50,000 |
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— |
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Property, Plant and Equipment, Net |
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15,408 |
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13,263 |
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CURRENT ASSETS |
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$ |
213,584 |
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$ |
255,878 |
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Patent |
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357,100 |
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TOTAL ASSETS |
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$ |
570,684 |
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$ |
255,878 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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Accrued Liabilities |
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$ |
123,831 |
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$ |
93,883 |
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Payroll Taxes Payable |
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8,400 |
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13,575 |
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Notes Payable within one year |
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128,196 |
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— |
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Notes Payable after one year (auto) |
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9,369 |
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— |
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TOTAL LIABILITIES |
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$ |
269,796 |
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$ |
107,458 |
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Common Stock, $.01 par value, authorized 200,000,000 shares; issued and outstanding 89,304,589 in December 31, 2002 and 126,888,594 on September 30, 2003 |
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$ |
1,268,885 |
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$ |
893,045 |
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Paid in capital |
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25,331,142 |
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24,872,604 |
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Deficit |
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(26,499,139 |
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(25,617,229 |
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TOTAL STOCKHOLDERS’ EQUITY |
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$ |
300,888 |
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$ |
148,420 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
570,684 |
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$ |
255,878 |
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See accompanying notes.
3
KENILWORTH SYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATION AND DEFICIT
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Three-Months
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Nine-Months
Ended |
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2003 |
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2002 |
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2003 |
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2002 |
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(unaudited) |
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(unaudited) |
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(unaudited) |
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(unaudited) |
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Revenues: |
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Sales |
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0 |
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0 |
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0 |
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0 |
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Costs and Expenses: |
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Selling, general and administrative expenses |
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$ |
89,451 |
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$ |
321,191 |
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$ |
781,910 |
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$ |
428,900 |
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Total Costs and Expenses |
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89,451 |
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321,191 |
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781,910 |
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428,900 |
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Net loss |
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89,451 |
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321,191 |
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781,910 |
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428,900 |
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Deficit-Beginning of period |
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(26,309,688 |
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(24,995,482 |
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(25,617,229 |
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(24,956,940 |
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Deficit-End of period |
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(26,399,139 |
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(25,385,840 |
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(26,399,139 |
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(25,385,840 |
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Loss per Share of common stock |
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0.0007 |
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0.005 |
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0.006 |
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0.004 |
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Average number of shares outstanding |
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126,888,594 |
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89,204,589 |
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124,388,139 |
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89,204,589 |
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See accompanying notes.
4
KENILWORTH SYSTEMS CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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Nine-month
ended |
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2003 |
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2002 |
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(unaudited) |
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(unaudited) |
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CASH FLOWS USED IN OPERATING ACTIVITIES |
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Net Loss |
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$ |
775,426 |
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(107,709 |
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Adjustments to reconcile net income to net cash used in operating activities: |
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Stock issuance for services rendered |
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176,520 |
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268,628 |
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Depreciation |
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1,992 |
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6,212 |
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Changes in operating assets and liabilities: |
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Due from shareholder |
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50,000 |
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42,106 |
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Prepaid expenses |
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