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KENILWORTH SYSTEMS CORPORATION AND SUBSIDIARIES
| Contact Information | Business Description |
| Kenilworth Systems Corp. 185 Willis Avenue Suite #4 Mineola, NY 11501 http://www.kenilworthsystemscorporation.com
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Kenilworth in Active Negotiations with Investors Providing $30 million for Dutch Auction
A Financial Consultant, engaged by the Company, has been in active negotiations with a group of potential investors that are interested in providing the funding for the Dutch Auction, Subject to obtaining an underwriter and approval by the SEC.
SUMMARY OF PROPOSED BRIDGE LOAN/UNDERWRITING THAT EARNS $50 MILLIION IN A SECURED INVESTMENT
Kenilworth is soliciting a $230,000,000 bridge loan that requires only $30,000,000 in actual cash that will be repaid in a proposed underwriting later this year.
The $30,000,000 will be deposited in an escrow account controlled and administered by the bridge loan lender. The incentive for the lender 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 maximum offering price of $0.15 per share that will require the $30 million. The lenders profits are earned by acquiring 400,000,000 Common Shares that are sold in the underwriting at $35.00 per share, after @ 100-1 reverse split that is part of the underwriting, for a net profit of $50,000,000. The other $200,000,000 required for the bridge loan is deferred and cancelled when the proceeds from the underwriting are disbursed.
After the reverse split and underwriting there will be 8,900,036 Common Shares outstanding that include the 6,571,428 Common Shares at $35.00 per share ($0.35 before the reverse split) sold in the underwriting.
After adjusting for the purchase of 400,000,000 shares pre-reverse split by the bridge loan lenders, the cancellation of the additional non-issued funding of $200,000,000 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, $117,000,000. On a pro forma balance sheet basis, Kenilworth Common Shares, the only shares outstanding, will have a book value of $13.14 per share with 8,900,036 shares outstanding (after the 100-1 reverse split) plus $35,000,000 tax carry forward loss per share of $3.93 which will equal $17.07 with cash of $117,000,000. In addition to the potential future business, it supports a proposed stock offering price of $35.00 per share ($0.35 before the reverse split).
An additional $10,000,000 will be available to Kenilworth if, in the Dutch Auction, the maximum price paid for shares averages $0.10 per share. There are 490,036,586 shares outstanding as at June 30, 2009 with options to acquire additional shares at an average per share price of $0.01 per share totaling 132,409,500 shares. Many of our shareholders that hold options to acquire additional shares at an average price of $0.01 will tender the shares they own now and exercise their options with the proceeds.
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 will be paid by Kenilworth.
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http://www.kenilworthsystemscorporation.com/media/RouletteVideo360x200.mov
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