The annual Kens letter is out....
K E N I L W O R T H
S Y S T E M S C O R P O R A T I O N
December 13, 2013
Dear Fellow Shareholder,
It gives me pleasure to report that 2013 has been a year of positive accomplishments and challenges met. Two important projects have been moved substantially forward; Accounting, audit, and regulatory compliance; and monetization of the Company’s intellectual property (the Patents). It is gratifying that both endeavors are on track to complete in the first half of 2014.
When I joined Kenilworth, the financial and shareholder records were not in acceptable form and audited financials were completed only through 2004. The SEC and FINRA of course required audited statements through 2012 to remain a fully reporting company. It was necessary to build a working accounting system and produce auditable financial statements. Thanks to very capable accountants Scott Goodman and Simone Smith, and the tirelessness of Administrative Assistant Maureen Plovnick, a state of the art accounting system has been installed and is now producing accurate, auditable financial data for your Company. Shareholder records are computerized and up to date; and Financials for 2010, 2011, 2012 and 2013 are now ready for audit. 2006--2009 are in an advanced state of preparation. We retained Friedman, LLP, an established auditing firm who started work in August.
Finance of a small public company is always a challenge, but one that Kenilworth has met thanks to loyal shareholders who clearly see this opportunity. A few small private placements have been successfully completed; which will be shortly followed by a private placement, equity structured, for experienced institutional and individual investors.
The significant cash commitment necessary to complete the Kenilworth table gaming “WagerPort” technology has been greatly reduced by a licensing agreement that requires little funding from Kenilworth, but garners a significant royalty stream when operations begin in the second half of 2014. Software applications are being written by very experienced software developers in the US, UK and India. The licensee, WagerPort Limited, is raising project financing independently of Kenilworth. To supervise and oversee completion of the project on behalf of Kenilworth, we retained the Maritime Communications Group (www.maricoms.net), capable international consultants.
Significant technical milestones were met in 2013: Completion of the concept design phase for WagerPort data acquisition module that will capture the HD video in 3D and stereo audio from live table games in casinos; Determination of packet transmission latency between local wagering users and the “cloud” where the wagering software will reside; Implementation of the decision to deploy Kenilworth’s WagerPort system on tablet computers and smartphones; Determination of high security methods to be used, including user positive identification by hand print recognition and password protection; and Completion of a method of automatic geo-location of the player by GPS enabled and wireless device tower triangulation, and by IP address. Finally, Kenilworth will shortly complete acquisition of a critical piece of technology needed to remotely supervise our gaming servers in the Internet “cloud” and co-located in the casinos.
Financial statements for 2013, currently in preparation, will see a much improved balance sheet with improved shareholder’s equity. Our consulting investment bankers are forecasting cash flow to Kenilworth of over $1 million in 2014, $10--15 million in 2015, increasing very substantially thereafter.
Operating costs have been substantially lowered, and will be further reduced in 2014 by shifting more costs to consultants and outsourcing much of the development of technology as Kenilworth moves from R & D to operations.
Happy New Year to all and thanks for your confidence.
Dan W. Snyder III, Chairman and CEO
DSnyder@KenilworthSys.com
