Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

(TITLE OF CLASS)

Common Stock, par value $.01 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes x  No o

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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 the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

The aggregate market value of the registrant’s Common Stock held by non-affiliates of the Registrant based on the closing price as reported on the Pink Sheet Market on February 5, 2010 was $12,011,032.

Remainder of page intentionally left blank

Table of Contents

As of December 31, 2009, 587,691,586 Shares of the Registrant’s Common Stock, $0.01 par value, were outstanding.

Portions of the Registrant’s Proxy Statement for its 2008 Annual Meeting of Stockholders, which was held on January 7, 2009, are incorporated in Part III of this Form 10-K.

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 date.  Mr. Lindo does 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 totaling fifty million (50,000,000) shares, as collateral for the loan.  The five million (5,000,000) shares have been issued and are included as collateral.  All of Mr. Lindo’s Kenilworth shares are legended “Restricted Securities”.

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 pays a nominal one and one-half percent (1.5%) interest from November 2006.  Mr. Lindo agreed to pay the interest which totaled $25,725 through December 31, 2009.  Mr. Lindo provides his services to the Company without any remuneration.

At a regular meeting of the Board of Directors held on January 7, 2010, the Board unanimously approved (with Mr. Lindo abstaining) to extend the $750,000 loan with interest payments until December 31, 2010.

Remainder of page intentionally left blank

2

Table of Contents

TABLE OF CONTENTS

FORWARD LOOKING STATEMENTS

In addition to historical information, this Annual Report on Form 10-K contains certain forward-looking statements and Risk Factors. We expressly disclaim any obligations on undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statement is based in whole or in part.

Readers should amongst the other statements contained herein and future filings with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q to be filed, carefully review in Item 7 the following: “Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 and Risk Factors”. All of the Risk Factors contained therein should be carefully read.

3

Table of Contents

INTRODUCTORY NOTE TO PART IV

The Amendment No. 1 on FORM 10-K filed to restate certain amounts which changed as the results of having been ordered by the Securities and Exchange Commission to file the Company’s Financials as a “Development Stage Company” from the period beginning November 24, 1998 to December 31, 2008, the elimination of $4,256,926, which was the amount the Company disbursed on or about September 28, 1998 to exit from Chapter 7 Bankruptcy Proceedings, and certain adjustments to losses sustained for the periods ended December 31, 2002, 2003 and 2004 for having discounted Convertible Promissory Notes from between ten cents ($0.10) per share and twelve cents ($0.12) per share to five cents ($0.05) per share.  The Company also added in PART II Item 5 — MARKET PRICES OF THE COMPANY’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS: d) The Company has outstanding at February 5, 2010 600,551,586 Common Shares.  The Company issued 12,860,000 restricted Common Shares since December 31, 2009.  All of the restricted shares may have the restrictions lifted pursuant to new Rule 144 B within six (6) months which will substantially depress the trading price of the Company’s Common Stock.

The Company’s management has always been objectionable 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 ONLY applies to Bankrupt Companies that exit from Bankruptcy Proceedings that do not pay all approved creditors in full.

Remainder of page intentionally left blank

4

Table of Contents

PART I

ITEM 1 — DESCRIPTION OF BUSINESS

THE COMPANY

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 emerging from Bankruptcy Proceedings in September 1998.  Kenilworth had been presented as a Development Stage Company, through September 30, 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 and cable subscribers and other casino gamblers 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.

Pursuant to a TEST SIMULCAST AGREEMENT by and among: Kenilworth Systems Corporation, Caribbean Casino & Gaming Corporation, the owner/operator of the NEW Sosua Grand Casino and the Casino Director (the Casino Regulatory Authority) of the Dominican Republic, Kenilworth has been broadcasting, via the Internet, live, in-progress Roulette table action around the world.  A world’s first from a licensed, government regulated casino instead of only from STUDIO CASINOS.

The ability to play along from Remote Locations from government regulated casinos will permanently influence casino wagering in the future.  No longer will U.S. residents have to spend money and travel to gamble at a casino when they can play along from the privacy of their own homes, with drinks and snacks purchased at supermarket prices.  In these difficult economic times, it is entertainment at minimal costs,  with bets starting at the price of a slot machine handle pull.

Employing the latest Internet technology and placing television cameras in strategic locations above the casino table games, without disrupting the normal game-monitoring activities, and transmitting the table games over the Internet networks (in countries that permit Internet wagering) to television sets and laptops, which become a platform for playing along with the casino games.

Kenilworth titled the overall system “Roulabette”.  There are thirty-eight million (38,000,000) satellite and seventy-three million (73,000,000) cable TV subscribers in the United States and more than one billion (1,000,000,000) subscribers throughout the rest of the industrialized world (“The Market”).  On average, households in the U.S. have three (3) TV’s.  (It is important since the satellite and cable companies will charge a separate fee for transmitting the table games).  Public gathering places can accommodate one thousand (1,000) or more TV sets streamed via the Internet.  With wagering possible in homes, hotel rooms, resort rooms, pubs, restaurants, race tracks and other public gathering places the Company believes it will become a more than $500 billion annual net win Market within five (5) years throughout the industrialized world.

To best market the casino games, the Company is selecting lotteries throughout the world to manage and operate the distribution and cash handling (deposits to play and paying winnings) using the lotteries’ existing databases for the sale of lottery tickets, and paying winnings at regular lottery licensed terminal locations.

All forty-four (44) lotteries in the United States are owned and operated by County and State agencies.  Throughout the rest of the world, lotteries are owned by government agencies or non profit charitable agencies that distribute the net earnings to benefit social and charitable programs, or by private entities that

5

Table of Contents

pay a percentage of their net win to designated government agencies. These foreign lotteries also have the same databases as lotteries in the United States; most lotteries throughout Europe also pool their lotteries between countries, not unlike Mega Millions and PowerBall in the United States, which makes the distribution simpler and very cost effective for both Kenilworth and the lotteries.

As we proved in the Dominican Republic, there are no technical breakthroughs required.  What is needed is to get through the maze of Local, County, State and Federal regulations in each U.S. State and foreign countries.  When the first State in the United States grants the Company permission to transmit the broadcast from one of its casinos to their residents and to States that do not have any casinos, (the entire East coast of the United States), the other forty-three (43) States with lotteries will join expeditiously. The same will occur in foreign countries.

Kenilworth expects to share the net win revenue with all participating entities that provide Roulabette gaming without costs of any kind.  State lotteries or their private operators will receive a proposed minimum of forty percent (40%) of the total net win from their respective jurisdictions.

In States and foreign countries that designate exclusively lottery proceeds to schools and their teachers it is a welcome contribution.  It also will help close state budget gaps.

In addition, throughout the United States and most foreign countries there are hundreds of facilities that simulcast live in-progress horse/dog races.  At most facilities there are several large TV screens that show the races from the different tracks with general theater-type seating for patrons and at private cubicles with television sets outfitted with touch screens.  The cubicles rent for additional fees.  After players open an account and select pin numbers, they can watch, in privacy, each race offered on the different tracks on the TV and place wagers on the different races.  The players may also watch sporting events, the news, the stock market reports, and in the near future Roulabette, live, in-progress casino table games.  The simulcast centers have their own databases to manage the cash deposit and pay winnings on the horse/dog races and will be able to manage the casino games, on the same methods as the lotteries will manage Roulabette.  With private TV’s, available in simulcast centers, especially at night, when fewer tracks are operating.

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 will provide interaction, fun and far more excitement than playing virtual games on video lottery terminals. It is the next best thing to actually being at the table in the casino.

To conduct additional live broadcasts from future permanent locations 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 obtain governmental permission and commence broadcasting from a casino in the United States together with other casinos throughout the world.

In 1990, we developed and delivered for the TAB (Totalizator Agency Board) a quasy government agency of the State of Victoria, Australia, a cashless slot machine system. Both systems required debit cards and central mainframe computers to manage the wagers. By making use of the expertise applied in the development of the aforementioned systems and the experience gained from the Roulette broadcasts in the Dominican Republic we plan to develop a second-generation Roulabette System that will manage the wagers by the patented microprocessor installed in TV set-top boxes or an attachment directly connected to the TV set or installed in the millions of lap top computers to receive Internet broadcasts that will reach $500 billion annually.  The extra traffic will be overwhelmingly the core of the Internet requiring to manage the wagering in the TVs and lap tops to avoid mistakes and possible fraud. This as planned would allow a player in an interactive manner, at a remote location (outside the casino confines), to experience the actual play and excitement at the casino table game and to make wagers on the various games, without having to be physically present at the casino or casino table.  There are no assurances we will be able to successfully develop.

6

Table of Contents

We also propose for slot machine manufacturers to develop “Roulabette Slot Machines”.  The Roulabette Slot will offer the regular slot or video lottery games and by the touch of a button, the live in-progress casino table games.  Slot players are offered a change of pace at the cost of a slot handle pull.  The games are transmitted to the Roulabette Slot via the Internet (all broadcasts are encrypted to prevent unauthorized use of the broadcasts).

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. There are now believed to be more than ten million (10,000,000) slot machines played throughout the world, outside of casino confines.

Project Roulabette is a concept now in motion and intended to be built out further, there can be no assurances that it will ever be built.  The Patented microprocessors to be installed in the TV set top boxes have not been designed.

SUMMARY:

(1.)          Kenilworth continues to fine tune its patented technology dubbed Roulabette System.  It now plans to “outsource” the manufacturing of all the components instead as formerly manufacture some of the equipment in its twenty-six thousand (26,000) square foot facility then located in Melville, NY.  Roulabette would allow casino patrons and other players to play along with live in-progress casino table games such as Roulette, Craps, Baccarat and more via digital cable television or Internet broadcasts (simulcasts) emanating from strictly regulated casinos located in the United States and other locations around the world, to self-sufficient computer terminals dubbed “Roulabette Slots”, digital cable TV set top boxes, lap top computers on the Internet in countries that permit Internet gaming. The Roulabette terminal is a proposal intended to be built and there can be no assurances that it will ever be built.  The microprocessors to be installed in the TV set top boxes have not been designed. We have as at December 31, 2009, 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.

(2.)          We believe the thousand virtual casino websites via the Internet obtain sixty percent (60%) of their annual revenue from customers in the U.S.  These website have been shut down when President Bush signed the Internet Enforcement Act of 2006.

Simulcast broadcasts via the Internet around the world must meet, and will be supervised by, the regulations by 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 or used.  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).

Kenilworth was the first to use color personal computers (PC’s) to replace electromechanical slot machines (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 game, 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 into its present business provided security systems to ninety-two (92) out of the one hundred and four (104) Nuclear Electric Power Generating Plants in the U.S. and seventeen (17) foreign countries, as well as

7

Table of Contents

automated time/attendance systems located at a major department store chains and one (1) U.S. automobile manufacturing plant.

The Department Stores (Gimble’s, Alexander’s and Klein’s) went out of business; the Union Members destroyed our test equipment at the Chrysler, Jefferson Plant in Michigan. After the accident at the Three Mile Island Station in Pennsylvania in March 1979 growth of Nuclear Power Plants in the United States slowed.  Patenting our unique security system would have been a security breach.  Kenilworth management instead opted to take the cash out of the casino industry.

SUMMARY OF PROPOSED BRIDGE LOAN/UNDERWRITING THAT EARNS $50 MILLIION FOR THE BRIDGE LOAN PROVIDERS

Kenilworth is soliciting a bridge loan that requires only $30,000,000 in actual cash that will be repaid in an underwriting projected to take place during the second or third period this year (2010).

The $30,000,000 will be deposited in an escrow account controlled and administered by the bridge loan lenders.  The incentive for the lenders is a $50,000,000 profit by purchasing 200,000,000 shares of Kenilworth Common Stock, par value $0.01 per share at $0.05 per share ($10,000,000) directly from the Company that is not required to be evidenced or deposited in escrow, and the purchase of 200,000,000 Common Shares in a proposed Dutch Auction, conducted on behalf of the bridge lenders, at a minimum per share price of $0.05 and a maximum offering price of $0.15 per share that requires the $30 million. The lenders profits are earned by acquiring 400,000,000 Common Shares that are sold in the underwriting at $30.00 per share for a net profit of $50,000,000. The other $200,000,000 required for the bridge loan are deferred and cancelled when the proceeds from the underwriting are disbursed.

As part of the underwriting Kenilworth’s Common Stock will be reverse split 100-1 with approximately eleven million (11,000,000) Common Shares issued and outstanding when the underwriting is completed.  The underwriters are expected to sell 4,000,000 Common Shares at $30.00 per share, in the underwriting for $240,000,000 from which the bridge lenders receive $84,000,000 (itemized on page 13/14).

After adjusting for the purchase of 400,000,000 shares pre-reverse split by the bridge loan lenders and the $10,000,000 for the purchase of the 200,000,000 shares of Common Stock directly from the Company, Kenilworth will receive, net of all expenses, including underwriters, legal fees and printing costs, approximately $117,000,000.  On a pro forma balance sheet basis, Kenilworth will have a book value of $16.10 per share with 11,000,000 shares outstanding (after the 100-1 reverse split) plus $35,967,224 tax carry forward loss per share of $3.93 totaling = $20.78 with cash of $110,000,000. With the potential future business it supports a proposed stock offering price of $30.00 per share. ($0.30 before the reverse split).

The bridge loan documents will contain a clause similar to a Material-Adverse-Change-Clause that will permit the cancellation of the bridge loan.  Kenilworth will pay the twelve percent (12%) interest on the loan from the date the escrow deposit is made for the Dutch Auction in the event the Company fails to obtain a firm underwriting commitment or is unable to receive sufficient buyers in a best effort commitment.

The fees payable to the escrow agent, American Stock Transfer & Trust Company (the Dutch Auction manager) will be paid by Kenilworth.

PROPOSAL TO SWAP SECURITIES WITH CHINA’S WEALTH FUND

In April 2008, Kenilworth’s management decided that, as an American publicly traded Company for more than forty-one (41) years, it wanted to position itself to swap Preferred Stock paying a five percent (5%) annual dividend with U.S. Securities owned by China thereby becoming a surrogate for Chinese investments in the U.S.

Kenilworth is authorized to issue 50 million Series of Convertible Preferred Stock; none is presently issued and outstanding.

8

Table of Contents

China’s Sovereign Wealth Fund, the China Investment Corporation (CIC), was established on September 29, 2007 and financed with $200 billion in initial capital. The CIC was created to improve the rate of return on China’s $1.5 trillion in foreign exchange reserves. One of CIC’s first investments was $3 billion in a non-voting stake (approximately 9.3%) in Blackstone Group, L.P., public offering in 2007 at $28.00 per share that opened trading at $38.00 per share in the public offering. Blackstone Group, L.P. is one of the largest independent alternative asset managers in the world.  Shortly thereafter, the CIC invested $5 billion in Morgan Stanley, and made other unprofitable investments in Fannie Mae and Freddie Mac.  Recently the CIC acquired additional shares of Blackstone Group, L.P. both in the open market and directly from Blackstone Group L.P. and made substantial investments in amusement, shopping centers and hotel companies.

The continuing U.S. spending to revive the economy does not provide any encouragement for China to get their investment back soon.  Their purchases of additional U.S. Bonds are protecting their huge investments in the U.S. dollar. Congress would reject any purchases of more than ten percent (10%) by the CIC of any of our prime industrial firms.  For example, Congress rejected China’s bid to acquire all of Conoco’s foreign oil companies and their oil reserves.

We believe we can temper Congress’ objections with our plan.  With the swapped U.S. treasuries, we will borrow from the Fed window U.S. dollars to make investments that will be recommended and controlled by managers such as Blackstone Group, L.P.  For instance: provide capital for Citibank to repay its TARP money, bring Lehman Brothers out of bankruptcy and restore it to its old self and purchase some of the soft assets from other banks.  Collectively, it will expedite the U.S. recovery and get the U.S. out of running our auto and other TARP companies that the government has no expertise to operate.

Our first step has to be to move Kenilworth from a penny stock to a $30.00 per share stock.  That is the very reason we are embarking on the bridge loan, underwriting and reverse splitting our Common Stock.  With our gambling patent ownership we should be able to prevail.

Kenilworth is the only publicly traded manufacturing company in the United States that exited from 16 years in Chapter 11 and 7 bankruptcy proceedings having paid one hundred percent (100%) cash distribution to the creditors and paid in full all administration fees and expenses after securing $4.5 million in debt owed to the Company.

It parallels our position as one of the only companies best suited to swap our Preferred Stock for China’s U.S. securities. The same scenario applies to Middle East oil producing Sovereign Wealth Funds.

9

Table of Contents

PROPOSED UNDERWRITING

Expected to take place during the second or third quarter period in 2010.

The offering will include a 100-1 Reverse Split.

MARKETING STRATEGY/SALES PLAN

Our marketing strategy consists of developing the Roulabette Slot terminal and the Roulabette System simulcasts. We estimate at this time, that we will need at least approximately ten million dollars ($10,000,000) for promoting the Roulabette System. We do not have this money nor do we have any agreements or understanding to procure this money. We may never get this money. If we do obtain this money, it may not be sufficient. Further, should such monies be available it may not be available on terms satisfactory to Kenilworth or it may be available on such terms that substantially dilute the interest of existing shareholders. If we obtain this money, we will need substantial additional funds for the proposed marketing plan and there can be no assurances that such funds will ever be available to allow Kenilworth to engage in business on a profitable basis.

At the present time, we engage only two (2) technically oriented employees who are able to assist in the development of Roulabette System. It will be necessary for us to obtain additional personnel qualified and with the expertise to develop the Roulabette System further. We would require additional employees and several more consultants in respective locations and there can be no assurances of our being able to obtain any necessary personnel. There can be no assurances of the availability of any such employees and consultants.

The Company will outsource the development of the Roulabette System and the microprocessors for the TV set top boxes and laptops.

10

Table of Contents

In the United States, Kenilworth must refrain from using the Worldwide Web (WWW) Internet to manage wagers from individuals outside of the casino confines. It is presently against the law. In Roulabette, the play-along broadcast emanates from casinos that are regulated by strict and comprehensive rules and state and jurisdiction regulations, enforced by gaming control regulators and everybody plays along with the same live table game. There is a world of difference between playing in a virtual make believe casino compared with an actual casino.

For the reasons stated, Kenilworth will ask state lotteries, Off-Track Betting (OTB) corporations, pari-mutuel race tracks, and other state and federal regulated agencies to manage the wagers from individuals playing along on their PC’s, laptops and their television sets using interactive TV set top boxes that convert regular television sets into minicomputers within their state or jurisdiction. There can be no assurances that we will be able to obtain any arrangement with any of these entities or that they would be on suitable terms.

The individuals would have to pre-deposit funds into an account with the wager management company and then place wagers with their credit balance. The wagers and running balances will be transmitted to the Roulabette player’s PC, television sets, laptops with telephone lines not crossing any state lines, similar in principle to telephone accounts wagering offered by the New York State Off-Track Betting Corporation and the state of Nevada casino sports book and recently with remote purchase of lottery tickets in many states within the United States.

After we obtain permission to play Roulabette, of which there can be no assurances, in a given state and engages a wager management organization in order to promote interactive television to the state’s residents, Kenilworth would install the eighteen (18) inch dish antenna and converter box required to receive digital satellite TV programming and interactive TV at its own cost, if the subscriber opens a Roulabette wagering account for two hundred dollars ($200). In addition, Kenilworth would pay the monthly subscription fees to view all digital TV programming offered and the Internet service provider (ISP) subscription fee if the customer wagers at least one hundred twenty dollars ($120) each month — win, lose, or draw — makes no difference.  In the U.S. the contracts would be financed by the satellite carrier such as EchoStar and DirecTV, or cable companies.

In states with approved lottery and/or other gambling legislation, we plan to introduce Roulabette Slot terminals to hotels, clubs (similar to card clubs in California) and resorts, to provide upscale gathering places for tourists and local residents. Charitable organizations that are permitted to conduct “Nevada Nights” and Bingo games may wish to offer Roulabette gaming on a more permanent basis. To receive the broadcast signal, all that would be required is an eighteen (18) inch dish TV antenna and distribution equipment. The Roulabette terminals are intended to be self-sufficient and accept dollar bills (or script, to control the amount an individual is allowed to wager in one day or other time period). We plan to lease all the equipment necessary to participants for a share of the profits.

To gain approval for our Roulabette-style gambling in jurisdictions that have not approved any gambling legislation, Kenilworth proposes to engage lobbyists to introduce, promote, and obtain legislative approval to permit Roulabette-style gambling. Our strategy is to find depressed resort areas and have the resort/hotel operators convince their local politicians of the benefits to their business and the local economies and request them to promote legislative approval, either state-wide or limited to their areas. Riverboat gambling started to rehabilitate decaying waterfronts. Roulabette can do the same in depressed economic areas.  No assurances can be given that we can obtain any such approvals.

When the live casino TV broadcasts are beamed for global viewing, Kenilworth will seek out similar organizations, as proposed for the United States and betting shops and slot route operators that can provide the servicing of individual accounts and placement of Roulabette terminals in hotels, clubs, pubs, racetracks, etc. In all instances, we plan to offer only profit sharing arrangements to franchisees, which will require leasing all the equipment necessary to the franchisee, to discourage competition.

In overseas installations, wherever permitted, Kenilworth will make use of the WWW Internet only to manage the wagers, and only in jurisdictions that permit the data collection of the gambler, not for the live broadcast.

11

Table of Contents

In the event a substantial amount is won by a player, Kenilworth will make the payment to the winner, via money wire transfer, to the establishment which managed the wager, within twenty-four (24) hours.  Kenilworth will establish a worldwide cage for winning payments; or, a guarantee payment by a well-recognized international bank.

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 broadcast the live casino table games from companies that own casinos throughout the industrialized world. 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 and Roulabette related trademarks and service marks. 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 ROULABETTE, as in pre-marked cards similar to lottery cards to select number in each game, used with terminals “ROULABETTE SWIPE CARD” to activate set-top boxes to play Roulabette and “PLAY ALONG WITH ROULABETTE, LIVE” and MULTI-USE GAMING MACHINE.

DELAYED APPROVAL OF PATENTS IN CHINA, HONG KONG AND JAPAN

In 2008, we reported that after a seven (7) year delay, China and Hong Kong have accepted our Roulabette System patents for remote live, in-progress casino table game wagering action.  Since then Japan has also accepted our Roulabette patents.

To assist us in our marketing efforts in China, we are pleased to confirm that we have signed contracts with Charles P. Wang and Fred Catapano. Both gentlemen have each more than thirty (30) years of experience, with Chinese government agencies and Chinese marketing and possess the appropriate “know how”.

We were surprised at the Japanese approval. Japan has NO CASINOS which translates to us, that they would entertain remote wagering from other Asian countries that offer casino action.  Otherwise, why approve something that will not, in the near Japanese future, occur?  Affluent Japanese gamblers visit South Korea, the Philippines and of late, Macau.  That leaves the average wage earner to play Pachinko games in Japan for their gambling entertainment.  The Pachinko player is the potential remote casino table game player.

China now leads the world with 231 million laptop owners; a mere seventeen percent (17%) of its population, compared with 216 million seventy-one percent (71%) owners that use the Internet in the United States.   Adoption of the Roulabette system is capable of providing five times more Internet players in China than in the United States once the most sought after market in the world.

12

Table of Contents

Charles P. Wang Dossier

1988-1993 Former President — China Institute of America
Premiere culture and education organization promoting better U.S./China relations since 1933.

Former Executive Director — Chinese America Planning Counsel
Largest social service organization serving Asian Americans in New York.

1995-2001 Former Vice Chairman U.S. Commission on Civil Rights
Appointed by President George Bush.

Former Assistant Commissioner — NY State Department of Social Services
Under Governor Mario Cuomo.

Introduces and accompanies Chinese Heads of State and Dignitaries when they visit with U.S. Congressional, State and City Officials and at meetings at the United Nations in New York.

Mr. Wang was invited to meet Chinese Premier Wen Jiaboa while he was attending the September United Nations meetings of World Leaders.

Mr. Catapano is the owner of Well Made Toys Manufacturing Corp., one of the largest U.S. manufacturers and importer of toys from China with offices in Hong Kong and elsewhere in China.  With his thirty (30) years of experience in dealing with Chinese Government Officials and manufacturers, many of which are government owned, Kenilworth has members of his office staff expertise available in facilitating our Roulabette marketing plans. They are well acquainted with how to procure talent and “know how” in China.  Mr. Catapano is a major Kenilworth shareholder.

GOVERNMENT REGULATIONS

Except for the ongoing, live, in-progress Roulette game at the Sosua Grand Casino in Puerto Plata, Dominican Republic, 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. The following 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.

Federal

The Federal Gambling Devices Act of 1962 (the “Federal Act”) makes it unlawful for a person to manufacture, deliver, or receive gaming machines, gaming machine type devices and components thereof across interstate lines unless that person has first registered with the Attorney General of the United States.

In addition, various record keeping and equipment identification requirements are imposed by the Federal Act. Violations of the Federal Act may result in seizure or forfeiture of equipment, as well as other penalties.

Other Regulations

The manufacture, distribution, sale, and use of slot machines are controlled by state and federal law, which may also apply to our Roulabette gaming terminals. Certain foreign countries permit the importation, sale, or operation of slot machines. Where importation is permitted, some countries prohibit or restrict the payout feature of the traditional slot machine or limit the operation of slot machines to a controlled number of casinos or casino-like locations. Certain of these jurisdictions also require the licensing of gaming

13

Table of Contents

devices. Our Roulabette terminals may be considered similar to slot machines and may have to meet these regulations.

FABRICATION/ASSEMBLY OPERATION

When we start to market the Roulabette Wagering System, of which there can be no assurances, we plan to engage sub-contractors to assemble/manufacture the terminals from standard or specially manufactured (to our specifications) electronic, TV, and other components purchased from vendors or manufactured by subcontractors.

EMPLOYEES

Kenilworth, at present, has four (4) full time employees to perform administrative work and software development work related to the ongoing casino wagering from the Dominican Republic and marketing around the world, in addition to the officers that manage the affairs of the Company. The Company has engaged consultants to assist us in the United States, Europe and Asian markets and that may manage the proposed INTERNET transmission programs, and others that may assist in the marketing of Roulabette broadcasts throughout the industrialized world.

Kenilworth maintains medical insurance for the two (2) office employees, who do not contribute to the costs of the Plan.

BACKLOG

We do not have any backlog.

ITEM 2 — PROPERTIES

Kenilworth leases two thousand seven hundred plus (2,700+) square feet in an office building paying three thousand seven hundred dollars ($3,700) per month rent plus fuel and electric cost adjustments from the date of the lease, renewed for a five (5) year term to end in March 2015.

ITEM 3 — LEGAL PROCEEDINGS

Since exiting from Chapter 7 Bankruptcy Proceedings on September 23, 1998, Kenilworth has not been involved in any significant legal proceedings.

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

The names, ages and positions held by each of Kenilworth’s directors and executive officers are as follows:

14

Table of Contents

All of the above Executive Officers and Directors have been elected to serve until the next Annual Meeting of Shareholders or until their respective successors are elected and qualified. The Board presently anticipates that the next Shareholders Meeting will be held during the second quarter period of 2010.

PART II

ITEM 5 — MARKET PRICES OF THE COMPANY’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

(a)          Kenilworth exited from Bankruptcy Proceedings in September of 1998, its Common Stock which had been trading on the NASDAQ National Market, is now trading on the OTC Pink Sheets under the old trading symbol “KENS”. The following table sets forth high and low closing sales prices for our Common Stock, as reported on the OTC Pink Sheets.

(b)         Holders. There were approximately ten thousand (10,000) holders of record of Common Stock of Kenilworth as of March 5, 2010.

(c)          Dividends. Kenilworth has not paid any dividends on its Common Stock. We plan to apply any earnings it achieves to expansion of the business and does not expect to pay any dividends in the foreseeable future.

15

Table of Contents

(d)         No underwriters were involved in the sale of the unregistered Convertible Promissory Notes and Stock Purchase and Option Agreements.  Exemption from registration is claimed under Section 4(2) of the SEC Act of 1933 as amended.  The proceeds from the sale of all unregistered securities have all been used for working capital.

The Company has outstanding 587,691,586 Common Shares.  All of the restricted shares may have the restriction lifted pursuant to new SEC Rule 144 B within six (6) months which may substantially depress the trading price of the Company’s stock.

(e)          The  Equity Compensation Plan expired in November 27, 2006.  The Company plans to ask the Shareholders to approve a future plan when the Company’s business becomes more viable and profitable.

ITEM 6 — SELECTED FINANCIAL DATA

The following table summarizes certain selected financial data and is qualified by reference to, and should be read in conjunction with, the Consolidated Financial Statements and related Notes thereto and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere herein.

Selected Financial Data for the five (5) years ended December 31, 2009, are as Follows:

SUMMARY OF OPERATIONS

ITEM 7 — MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion following should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K.

(A) RESULTS OF OPERATIONS

Since we exited from bankruptcy proceedings on September 28, 1998, we have had no revenues from operations, and therefore sustained losses from general administration expenses amounting to $1,054,596 in 2009, $1,074,193 in 2008 and $1,093,538 in 2007.  Kenilworth has had no revenues from operations since exiting from Bankruptcy Proceedings in September 1998.

(B) LIQUIDITY AND CAPITAL RESOURCES

Kenilworth has not conducted any new business operations since 1991. At December 31, 2009, 2008 and 2007 we had a deficiency in working capital of $318,796, $302,138 and $301,957 respectively. In Kenilworth’s present state of operation to continue a viable business plan, Kenilworth requires little funding. We have been dependant upon the resources of its Chairman and Chief Executive Officer, who receives no compensation, and funds received from private investors, totaling $1,036,000 in 2009,

16

Table of Contents

$511,000 in 2008 and $832,500 in 2007.  In addition the Company issued restricted Common Stock for services totaling $345,000 for 11,500,000 shares in 2009, $523,565 for 52,355,522 shares in 2008 and $306,400 for 10,240,000 shares in 2007.

Our present plans are to continue to develop a wagering system titled “Roulabette” that would allow patrons all over the industrialized world to view and wager on live casino table games on terminals placed in hotels, resorts, bars and other public gathering places and in homes and offices on personal computers (PC’s) or television sets connected to set top boxes and laptop computers Interactive TV via digital satellite and digital cable broadcasts emanating from strictly regulated casinos.  At present we do not have sufficient liquidity and capital resources to develop our business or to remain in business and we may never have such resources.

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

The information contained in this Form 10-K 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.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this Annual Report on this Form 10-Kcontains statements that are forward-looking, including, but not limited to, statements relating to our business strategy and development activities as well as other capital spending, financing sources, the effects of regulation (including gaming and tax regulations), expectations concerning future operations, margins, profitability and competition. Any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, in some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “would,” “could,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “continue” or the negative of these terms or other comparable terminology. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us. These risks and uncertainties include, but are not limited to, our lack of recent operating history, our dependence on Herbert Lindo, our Chairman and Chief Executive Officer who is eighty-four (84) years old and existing management, general domestic or international economic conditions, pending or future legal  proceedings, changes in federal or state tax laws or the administration of such laws, changes in gaming laws or regulations (including the legalization of gaming in certain jurisdictions), applications for licenses and approvals under applicable jurisdictional laws and regulations (including gaming laws and regulations).  You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us. We undertake no obligation to publicly release any revisions to such forward-looking statements to reflect events or circumstances after the date of this 10-K report for the year ended December 31, 2009, and subsequent events reported in this FORM 10-K.

Remainder of page intentionally left blank

17

Table of Contents

RISK FACTORS

NO OPERATING HISTORY

We have had no new revenues from operations since 1991. We exited from bankruptcy proceedings in 1998 without assets and liabilities. We have had no revenues from operations since then and we may never have any revenues from operations in the future, which may result in the termination of our business.

WE HAVE NO WORKING CAPITAL

As of December 31, 2009 the working capital deficiency of Kenilworth was $318,796. This will not enable Kenilworth to achieve any of its planned operations. There can be no assurances that Kenilworth will again have sufficient working capital to engage in its planned operations.  Although we have been able to obtain working capital from investors that purchase Convertible Promissory Notes, Stock Purchase and Options Agreements and by issuing restricted Common Shares for services rendered.

OUR BUSINESS IS ONLY IN THE PLANNING STAGE

Kenilworth’s business except for the completion of the $9,000,000 contract with the Totalizator Agency Board of Victoria, Australia, and the revenue from providing encoded access cards to United States and foreign Nuclear Electric Generating Plants, remains in the planning stage. The Company does not receive any income from the live, in-progress Roulette table game from the new Sosua Grand Casino in the Dominican Republic. We plan to engage in the development, manufacturing by subcontractors, and marketing of an operation entitled Roulabette. Roulabette would allow casino patrons and other players to play along from remote locations with live in-progress casino table games such as Roulette, Craps, Baccarat and more via digital satellite and digital cable television and Internet broadcasts (simulcasts) emanating from strictly regulated casinos located in the United States or via the Internet in other locations around the world, to self-sufficient computer terminals dubbed “Roulabette” and digital satellite and cable TV set top boxes, and other computer devices. The Roulabette terminals are a proposal intended to be built and there can be no assurances that it will ever be built.  The microprocessors to be installed in the TV set top boxes or attached to TVs have not been designed. We have, as at December 31, 2009, no specific agreements, customers or proposals for any future business and there can be no assurances that we will ever have same.

WE NEED AT LEAST TEN MILLION DOLLARS ($10,000,000)

In order to commence to develop the Roulabette terminal and the Roulabette broadcasts, we estimate at this time, that we will need at least approximately ten million dollars ($10,000,000). We do not have this money nor do we have any agreements or understanding to procure this money. We may never get this money. If we do obtain this money, it may not be sufficient. Further, should such monies be available it may not be available on terms satisfactory to Kenilworth or it may be available on such terms that substantially dilute the interest of existing shareholders. If we obtain this money, we will need substantial additional funds for the proposed marketing plan and there can be no assurances that such funds will ever be available to allow Kenilworth to engage in business on a profitable basis.

OUR BUSINESS IS SUBJECT TO OUR ABILITY TO OBTAIN AND RETAIN KEY PERSONNEL

At the present time, we only employ two (2) software designers and a number of software consultants who will be able to develop Roulabette. It will be necessary for us to obtain additional personnel qualified and with the expertise to develop Roulabette. We believe at this time we would require additional employees and several more consultants. There can be no assurances of the availability of any such employees and consultants.  The Company expects to outsource the development of Roulabette and the microprocessors for the TVs, set top boxes, PCs and laptop computers.  No assurances can be given that the Company will be able to do this successfully.

18

Table of Contents

WE ARE DEPENDANT UPON HERBERT LINDO

Kenilworth has been dependant upon the services of its Chairman and Chief Executive Officer Herbert Lindo who is eighty-four (84) years old. Herbert Lindo has performed his services during the past nineteen (19) years without compensation. Should Kenilworth procure working capital, there can be no assurances that he will continue to work without receiving compensation. There also can be no assurances of Herbert Lindo’s continued availability.  We believe without assurances that present management is capable to continue our present plans in the event that Herbert Lindo is not available.

RAPID CHANGES IN TECHNOLOGY

The technology and Roulabette in general is subject to rapid change. Kenilworth will need to maintain an ongoing research and development effort of which there can be no assurances of success or availability of funds.  Additionally, there can be no assurances that the development of technologies and products by competitors will not render the Kenilworth’s products or technologies non-competitive or obsolete.

WE ARE ENGAGED IN A HIGHLY COMPETITIVE INDUSTRY

Our business is subject to significant competition. Competition exists from larger companies that possess substantially greater technical, financial, sales and marketing resources that Kenilworth presently possesses. Such competition is expected to increase. Such increased competition may have a material adverse effect on Kenilworth’s ability to successfully market its products.

WE WERE GRANTED A PATENT FOR THE VARIOUS ASPECTS OF SIMULCAST WAGERING

On June 10, 2003, the U.S. Patent for the various aspects of wagering on live in-progress casino table games was granted by the U.S. Patent Office to Herbert Lindo, the Inventor and which Patent was assigned by Herbert Lindo to the Company in August 2000.  We filed the Patent for approval in fifty-one (51) countries in the industrialized world including Russia and China. There can be no assurances that foreign patents will be issued and the challenges will not be instituted against the validity or enforceability of our patent.  Herbert Lindo also filed two (2) Patents in the U.S. Patent Offices in September and October 2004 which Patents have been published to use lottery terminals to accept deposits for wagers placed with the TV set top boxes and the use of Play Cards similar to lottery tickets, which have also been assigned to the Company by Herbert Lindo.  A Patent Application for Multi-Use Gaming Machines invented by Herbert Lindo and Gordon Coplein, Esq. was published on February 1, 2007 and assigned, by the inventors, to Kenilworth.

OUR ROULABETTE TERMINALS ARE SUBJECT TO VARIOUS FEDERAL, STATE, LOCAL AND FOREIGN JURISDICTION LAWS AND REGULATIONS

The use of the Roulabette System may be subject to various federal, state and local laws and regulations both in the United States and foreign countries. There can be no assurances that we will ever be able to obtain licenses or permits necessary to conduct our business or that we will be able to comply with these applicable laws and regulations.

The Roulabette System is planned to allow casino patrons and other players to play along with live, in-progress casino table games such as Roulette, Craps, Baccarat and more via digital satellite television and digital cable programming emanating from regulated casinos, via the Internet to countries that permit Internet streaming.

OUR OFFICERS AND DIRECTORS WILL HAVE SIGNIFICANT CONTROL OVER US AND MAY APPROVE OR REJECT MATTERS CONTRARY TO A VOTE OF OUR SHAREHOLDERS

Our executive officers and directors together with their affiliates beneficially own a significant percentage of our outstanding common stock. These stockholders, if acting together, will be able to significantly

19

Table of Contents

influence all matters requiring approval by our stockholders including the election of directors and the approval of mergers or similar transactions even if the stockholders disagree.

SHARES ELIGIBLE FOR FUTURE SALE COULD CAUSE OUR STOCK PRICE TO FALL

If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could fall. As of February 5, 2010 we added 12,860,000 restricted shares of Common Stock outstanding, which are eligible for sale by our Shareholders under new SEC Rule 144 B of the Securities Act of 1933 as amended which reduces the holding period to six (6) months or are otherwise registered for sale.

WE DO NOT INTEND TO PAY DIVIDENDS

We are not able to pay any dividends because we have no funds available to do so. Even if we had funds available, we do not intend or declare to pay any dividends on our common stock in the near future.

ITEM 8 — FINANCIAL STATEMENTS

The financial statements, the accompanying notes are filed as part of this Report annexed at the end of this report.  See ITEM 15.

ITEM 9 — CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On October 2, 2006, Demetrius & Company, L.L.C. (“Demetrius”) resigned as independent registered public accountants of Kenilworth Systems Corporation (the “Company”).  The Company’s Board of Directors accepted the resignation of Demetrius.

The report of Demetrius on the Company’s financial statements as of December 31, 2004 and for the year then ended neither contains an adverse opinion or a disclaimer of opinion nor is modified as to uncertainty, audit scope or accounting principles, except that the opinion includes an explanatory paragraph that the Company has incurred operating losses since its inception as a development stage company for the period beginning September 24, 1998, which raises substantial doubt about the Company’s ability to continue as a going concern.  Demetrius did not issue a report on the Company’s financial statements as of December 31, 2005 or for the years then ended.

During the fiscal years ended December 31, 2004 and 2005 and the period from January 1, 2006 to October 2, 2006, there were no disagreements with Demetrius on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Demetrius, would have caused it to make reference to the subject matter of the disagreement in connection with its report.

Effective February 5, 2007, the Company engaged KGS, LLP as its independent certified public accountants with respect to the fiscal years ended December 31, 2005, 2006 and 2007.  The Company’s Board of Directors approved the engagement of KGS, LLP.  KGS, LLP. has not yet audited any of the Company’s financials from the time Demetrius ended their audit engagement.  The delay was not caused by KGS, LLP.

ITEM 9A — CONTROLS AND PROCEDURES

a.)           Disclosure Controls and Procedures

The Company has evaluated, under the supervision and with the participation of the Company’s management including the Company’s Chairman, Chief Executive Officer who is also its Financial Officer.  The effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15 (e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of

20

Table of Contents

the end of the period covered by this Report.  Because of the inherent limitations in all control systems evaluation of controls can provide only reasonable assurance that all control issues and instances of fraud, if any, within the Company have been detected.  However, based on that evaluation, the Company’s Chairman and Chief Executive Officer who is also the Company’s Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Report at a reasonable assurance level.

b.)          Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting that occurred during the annual period ending December 31, 2009, that has materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting.

PART III

ITEM 10 — DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Herbert Lindo has been President, Treasurer and Chief Financial Officer of Kenilworth since 1972. Since Kenilworth’s emergence from bankruptcy, he has also served as Chief Executive Officer until July 17, 2002 when Gino Scotto was elected to that office.   When Mr. Scotto resigned in November 2005, Mr. Lindo resumed the position of Chief Executive Officer.  Mr. Lindo devotes his full time to the business of Kenilworth.

Kit Y. Wong has served as a Director of Kenilworth since 1999, since December 2005 he also serves as Secretary of the Company. He is part owner and operator of several Chinese restaurants in the New York metropolitan area.  Mr. Wong devotes only a portion of his time to the business of Kenilworth.

Patrick J. Mc Devitt has been a licensed representative for Securities firms for the past nine (9) years. He retired in 2003 from the Securities business and joined his wife in the CPA business.  Mr. Mc Devitt devotes only a portion of his time to the business of Kenilworth.

Joyce D. Clark has served as a Director of Kenilworth since 1998. Since 1991 she has served as controller of Long Island Wholesalers Inc., a wholesale door manufacturer and recently started her own tax filing entity. She is also the sister of Betty S. Svandrlik, the former Corporate Secretary, who is engaged in business as a medical transcriber. Joyce D. Clark is the ex-wife of Herbert Lindo, they divorced in 1980.   Mrs. Clark devotes only a portion of her time to the business of Kenilworth.

Edward Vietmeier is a professional golfer and participates in major golf tournaments throughout the United States.  He is also the operator of a public golf course in Pennsylvania.  The immediate members of his family are shareholders of our Company’s stock. Mr. Vietmeier devotes only a portion of his time to the business of Kenilworth.

21

Table of Contents

DIRECTORS IN OTHER PUBLIC COMPANIES

Kit Wong, a Director of the Company, serves as a Director of a private plastic extrusion company.

CRIMINAL/BANKRUPTCY/SEC VIOLATIONS WITHIN THE LAST FIVE (5) YEARS

NONE

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires Kenilworth’s Executive Officers and Directors, and persons who beneficially own more than ten percent (10%) of our Common Stock, to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission. Executive Officers, Directors and greater than ten percent (10%) beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Through December 31, 2007 only Herbert Lindo, Chairman and Chief Executive Officer owns beneficially more than ten percent (10%) of our Common Stock.  The Company is presently reviewing the compliance for the foregoing.

AUDIT COMMITTEE AND CHARTER

The following Charter has been adopted with respect to an Audit Committee.  We have not, however, at this time appointed an Audit Committee.

The Audit Committee of the Board of Directors (the “Audit Committee”) shall have the responsibility to assist the Board of Directors in fulfilling its fiduciary and other obligations with respect to accounting and financial matters. Specifically, and without limiting the generality of the foregoing, the Audit Committee shall:

The Audit Committee will be comprised of at least three (3) Independent Directors.

22

Table of Contents

Code of Ethics

The Registrant has not yet adopted a written formal Code of Ethics. However, the Registrant’s Officers intend to comply with all honest and ethical requirements including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in reports and documents that the Registrant files with or submits to the Securities and Exchange Commission and in other public communications made by the Registrant; compliance with applicable governmental laws, rules and regulations; prompt internal reporting of any violations of the foregoing to an appropriate person and accountability for adherence of the foregoing. A formal Code of Ethics is expected to be adopted shortly and will be filed with the Securities and Exchange Commission.

ITEM 11 — EXECUTIVE COMPENSATION

a.)           The following table sets forth the exercise of options and SARs during the fiscal year ended December 31, 2009.

Aggregated Option/SAR Exercises in Last Fiscal Year
And FY-End Option/SAR Values

NONE

No options or SARs were granted during the year ended December 31, 2008.  Herbert Lindo exercised his five million (5,000,000) share Option on November 27, 2006.

b.)          The Registrant has no employment agreements with any of its Executive Officers or Directors.

c.)           The Registrant has no compensation committee at this time.

d.)          Stock Performance Graph is not applicable.

23

Table of Contents

TOTAL RETURN TO SHAREHOLDER’S
(DIVIDENDS REINVESTED MONTHLY)

Kenilworth has not declared a dividend since its inception in 1968.

e.)           The following table sets forth the total compensation of the President and each Executive Officer of Kenilworth whose total salary and bonus exceeds $100,000.

SUMMARY COMPENSATION TABLE

Herbert Lindo received no compensation during the past four (4) years and no Executive Officer received any compensation in excess of $100,000 during the past three (3) fiscal years.

ITEM 12 — SECURITY OWNERSHIP OF CETAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth as of March 1, 2010 the ownership with respect to each Executive Officer and Director and each person known to own beneficially more than five percent (5%) of the Company’s Common Stock.

The information provided in the table is based on Kenilworth’s records, information filed with the Securities and Exchange Commission and information provided to Kenilworth, except where otherwise noted.

The number of shares beneficially owned by each person, Director or Executive Officer is determined under rules of the Securities and Exchange Commission, and the information is not necessarily indicative of beneficial ownership for any other purpose.  Under such rules, beneficial ownership includes any shares as to which the individual has the right to acquire as of May 31, 2008 through the exercise of any stock option or other right.  Unless otherwise indicated, each person has sole voting and investment power (or shares such powers with his spouse) with respect to the shares set forth in the following table:

BENEFICIAL OWNERSHIP TABLE

24

Table of Contents

The percent of class has been determined with 587,691,586 shares issued and outstanding on December 31, 2009.

ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

NONE

ITEM 14 — PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company has appointed KGS, LLP. as Independent Auditor’s for the fiscal year ending December 31, 2006, 2007 and 2008 and to restate the Company’s financials as A Development Stage Company as directed by the SEC.  KGS, LLP. has not commenced the audit for the respective years.  The Company’s back office accountants, which were not timely compensated during some of their work, halted the financial preparation for the audit.  As the result of the delays, KGS, LLP resigned in 2008.  The Company has not as yet engaged an Independent Auditor.

Fees Incurred by Kenilworth

Fees for professional services provided are estimated:

The Company has no Audit Committee.

PART IV

ITEM 15—EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  (1) Financial Statements

(b)   On July 12, 2002 Kenilworth filed an 8-K in which the Company reported the following event:

Herbert Lindo, Chairman and Chief Executive Officer of Kenilworth Systems Corporation (“Kenilworth”) since 1972, advised the Company’s Board of Directors that on June 26, 2002 the Sheriff of Nassau County (the “Sheriff”) sold at a purported Public Auction Sale (the “Sale”) 10,333,450 restricted common shares of Kenilworth Systems Corporation (the “Shares”) that he had owned and which represented control (14% of the outstanding shares) of Kenilworth, for one thousand dollars ($1,000) or $0.000095 per share.  The Shares were sold to Tappan Zee Capital Corp. (“Tappan Zee”).  On the date of the Sale the Shares had a market value of nine hundred thirty thousand ten dollars and fifty cents ($930,010.50).  The Sheriff seized and sold the Shares on behalf of Tappan Zee, as a result of a claim by Tappan Zee in a disputed civil suit brought in the New York Supreme Court for $128,062.  Tappan Zee was both the foreclosing party and the purchaser.  Herbert Lindo owned real estate at the time valued in excess of $128,062 which the Sheriff could have seized instead of the Kenilworth Shares.

25

Table of Contents

Kenilworth claims that the Sheriff’s Auction Sale was conducted in a fraudulent manner by (1) failing to comply with the rules and regulations set forth under the Securities and Exchange Commission Act of 1933 and 1934, as amended (The “Acts”) the New York State Securities Laws, and (2) by failing to properly advertise the Sale, failing to notify any or all Kenilworth shareholder’s (numbering approximately 5,500), and (3) failing to register the Restricted Shares with the Securities and Exchange Commission before conducting the Sale or in the absence of registering the Shares, obtain a No-Action letter from the Commission permitting the Public Sale, and (4) by making an immediate distribution of the Restricted Shares, and (5) by concluding the auction sale despite only one (1) bidder that appeared and bid only one thousand dollars ($1,000) for all the shares when the market value of the 10,333,450 shares was nine hundred thirty thousand ten dollars and fifty cents ($930,010.50).  He should have adjourned the auction and then advertise the auction sale in appropriate newspapers that quoted Kenilworth Systems Corporation shares which has traded since 1968 under the trading symbol “KENS” on organized exchanges NASDAQ and OTC, and (6) by failing to file required notices of 13 D-G as provided under the Acts.  Tappan Zee and its Counsel and the Sheriff’s department were advised in court documents and correspondence that their acts violated Federal and State Securities Laws and of the existence of the Real Property, prior to the Sale.

By the attorneys for Tappan Zee’s failure to seize the Real Property owned by Herbert Lindo raises the question of complicity to take control of Kenilworth instead of satisfying a disputed claim for $128,062.

Kenilworth or Herbert Lindo, as an individual will seek in Federal or State Courts to cancel the 10,333,450 shares, which were subject of the Sheriff Auctions Sale, and seek triple damages under RICO on behalf of the shareholders of Kenilworth, the damaged parties.  Herbert Lindo and Kenilworth have not commenced any proceedings against the Sheriff’s Office of Nassau County and Tappan Zee and the attorney’s representations Tappan Zee since we believe that the Statue for Security Fraud has no expiration date.

At the this time, the Company does not wish to spend the substantial funds required to commence the action nor does Mr. Lindo have the time, at present, to assist in any law suit Kenilworth may institute on behalf of its Shareholders.

Kenilworth will distribute the proceeds, if any, from any settlement or court award to the Shareholders that owned Kenilworth Common Stock on or before June 26, 2002.

In June 2003, the Madison Bank of Blue Bell, Pennsylvania returned two million (2,000,000) of the wrong fully distributed shares by Tappan Zee for cancellation to American Stock Transfer and Trust Company, Kenilworth’s Stock Transfer Agents.  Since the Madison Bank was complacent with Tappan Zee in the fraudulent seizure and auction of the shares, neither Herbert Lindo nor Kenilworth issued general releases to the Madison Bank, although the subsequent Madison Bank and Kenilworth Agreement provided for the releases.  The Company was desirous of having the two million (2,000,000) shares returned, reducing the claim against the Nassau County Sheriff’s Department and for future free distribution to Kenilworth’s shareholders on record on June 26, 2002 which were not made aware by the Sheriff of the Auction Sale.

ITEM 15—EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

26

Table of Contents

REPORT ON FORM 8-K

None

ITEM 8.01   OTHER EVENTS

None

ITEM  9.01             FINANCIAL STATEMENTS AND EXHIBITS

(c)                                  Exhibits

The following exhibits are annexed hereto:

On February 7, 2007 the Company reported on FORM 8-K/A:

Item 4.01               Changes in Registrant’s Certifying Accountant.

On October 2, 2006, Demetrius & Company, L.L.C. (“Demetrius”) resigned as independent registered public accountants of Kenilworth Systems Corporation (the “Company”).  The Company’s Board of Directors accepted the resignation of Demetrius.

The report of Demetrius on the Company’s financial statements as of December 31, 2004 and for the year then ended neither contains an adverse opinion or a disclaimer of opinion nor is modified as to uncertainty, audit scope or accounting principles, except that the opinion includes an explanatory

27

Table of Contents

paragraph that the Company has incurred operating losses since its inception as a development stage company for the period beginning November 24, 1998, which raises substantial doubt about the Company’s ability to continue as a going concern.  Demetrius did not issue a report on the Company’s financial statements as of December 31, 2005 or for the year then ended.

During the fiscal years ended December 31, 2004 and 2005 and the period from January 1, 2006 to October 2, 2006, there were no disagreements with Demetrius on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Demetrius, would have caused it to make reference to the subject matter of the disagreement in connection with its report.

Effective February 5, 2007, the Company engaged KGS, LLP as its independent certified public accountants with respect to the fiscal years ended December 31, 2005 and 2006.  The Company’s Board of Directors approved the engagement of KGS, LLP.

Item 9.01                                             Financial Statements and Exhibits.

(d)                                 Exhibits.

16.                               Letter from Demetrius & Company, L.L.C. to the Securities and Exchange Commission.

Exhibit 16

[LETTERHEAD OF DEMETRIUS & COMPANY, L.L.C.]

February 27, 2007

Securities and Exchange Commission
Mail Stop 7561
100 F Street NE
Washington, DC 20549

Ladies and Gentlemen:

We have read the statements made by Kenilworth Systems Corporation which were provided to us on February 27, 2007, which we understand will be filed with Commission pursuant Item 4.01 in the Form 8-K/A. We agree with the statements under Item 4.01 concerning firm. We have no basis to agree or disagree with other statements made.

Yours truly,

On February 7, 2007 the Company reported on FORM 8-K:

ITEM 4.01 CHANGE OF INDEPENDENT AUDITORS:

The Company engaged KGS, LLP as its Independent Certifying Accountants.  The former Auditors, Demetrius & Company, LLP had advised the Company, on October 2, 2006, that the client-auditor relationship has ceased.  The ending of the relationship was not as the result of any dispute.

On November 12, 2008 the Company reported on FORM 8-K:

Item 4.01 Changes in Registrant’s Certifying Accountant

28

Table of Contents

On November 6, 2008, KGS, LLP resigned as Independent Registered Public Accountant of Kenilworth Systems Corporation (the “Company”). The Company’s Board of Directors, at a special meeting held on November 12, 2008 at which a quorum of Directors was present, accepted the resignation of KGS, LLP and authorized the Company to engage a new independent registered public accountant for the Board to approve and introduced for approval by the shareholders at the Annual Meeting of Shareholders on January 7, 2009, for the year ended December 31, 2009.

There were no disagreements with KGS, LLP.

Item 9.01 Financial Statement Exhibits

d. Exhibits.

16. Letters from KGS, LLP to the Securities and Exchange Commission dated November 6, 2008 and November 12, 2008.

Exhibit 16

November 6, 2008

Mr. Herbert Lindo

Kenilworth Systems Corporation

185 Willis Avenue

Suite #4

Mincola, NY 11501

Dear Mr. Lindo:

Effective February 7, 2007, Kenilworth Systems Corporation, the “Company”, engaged KGS LLP (“KGS”) to audit the Company’s financial statements as of and for the years ended December 31, 2005 and 2006. During the time frame from being engaged to date, the Company has filed various financial statements with the Securities and Exchange Commission without submitting the final documents for the review or audit of KGS. Since KGS has not been provided the necessary documents, we have not completed any auditing or review procedures to express an opinion or any other form of assurances on the financial statements submitted.

In light of these facts, this is to confirm that the client-auditor relationship between the Company (commission file No. 0-08962) and KGS LLP has ceased.

Very truly yours,

29

Table of Contents

November 12, 2008

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Gentlemen:

We have read Item 4.01 of Form 8-K dated November 12, 2008, of Kenilworth Systems Corporation and are in agreement with the statements contained in Item 4.01.

Remainder of page intentionally left blank

30

Table of Contents

KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, (Unaudited)

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

31

Table of Contents

KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

Remainder of page intentionally left blank

32

Table of Contents

KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS