10
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended October 31, 1998 Commission File No. 0-8299
CAMELOT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-0691531
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2661 Midway Road, Suite 224-226, Carrollton, Texas 75006
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (972) 733-3005
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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report.
Shares outstanding at
Class October 31, 1998
Common stock, $0.01 par value 5,027,055
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
I N D E X
Page No.
Part I FINANCIAL INFORMATION (UNAUDITED):
Item 1. Consolidated Balance
Sheets 3
Consolidated Statements of
Operations 5
Consolidated Statements of
Cash Flows 6
Notes to Consolidated
Financial Statements 8
Items 2. Management's Discussion
and Analysis of Financial
Condition and Results of
Operations 9
Part II OTHER INFORMATION 11
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
ASSETS
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October 31, 1998April 30, 1998
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $ 4,287 $ 152,765
Accounts receivable 17,197 48,156
Prepaid expenses - 40,486
Inventories, net of allowance for
obsolescence of $808,581 at
April 30, 1998 - 50,000
Total current assets 21,484 291,407
OTHER ASSETS
Preferred stock -
related party 530,917 611,305
Investment in equity of
Wincroft, Inc. (comprising
7,000 Preferred Shares and
903,000 Common Shares at
October 31, 1998 and 7,000
Preferred Shares and 1,028,000
Common Shares at April 30,1998)
net of allowance of $ 5,420,811
and $5,936,474 at October 31,
1998 and April 30, 1998,
respectively 973,022 1,065,582
Total other assets 1,503,939 1,676,887
$1,525,423 $1,968,294
</TABLE>
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
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October 31, 1998April 30, 1998
(Unaudited) (Audited)
CURRENT LIABILITIES
Accounts payable $ 136,164 $ 179,473
Accrued expenses 8,427 81,153
Total current liabilities 144,591 260,626
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 50,000,000
shares authorized, 5,027,055 and 1,784,200
shares issued at October 31, 1998
and April 30, 1998, respectively 50,271 17,842
Preferred stock, $.01 par value,
100,000,000 shares authorized,
1,345,308 and 1,453,400
shares issued and outstanding at
October 31, 1998 and April 30, 1998
respectively 13,453 14,534
Additional paid-in capital 35,630,660 35,768,983
Accumulated deficit (31,476,856) (31,256,995)
Less: treasury stock, at cost,
30,245 and 28,745
shares at October 31, 1998
and April 30, 1998 (2,836,696) (2,755,637)
Less Notes receivable related to purchase of
common stock - (81,059)
Total stockholders' equity 1,380,832 1,707,668
$1,525,423 $1,968,294
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three Months Ended
October 31,
1998 1997
REVENUE $ - $ 26,400
COST OF SALES - 106,500
GROSS PROFIT (LOSS) - (80,100)
OPERATING EXPENSES:
General and administrative 16,043 623,700
Depreciation and amortization - 64,400
Provision for Inventory E & O - -
16,043 135,000
LOSS FROM OPERATIONS (16,043) (903,200)
OTHER INCOME (EXPENSES):
Interest expense - -
Interest income 346 39,200
Dividend income - affiliate - 11,700
Gain (Loss) on disposition of assets 39,839 2,400
Total other income (expense) 40,185 53,300
INCOME (LOSS) FROM CONTINUING
OPERATIONS 24,142 (849,900)
DISCONTINUED OPERATIONS:
Loss on disposal (14,375) -
NET INCOME (LOSS) 9,767 (849,900)
DIVIDENDS ON PREFERRED STOCK - (3,700)
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON STOCKHOLDERS $ 9,767 $(846,200)
INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations $ (.005) $ (.539)
Loss from discontinued operations (.003) (.000)
Dividends on preferred stock (.000) (.002)
NET INCOME (LOSS) PER COMMON SHARE $ (.002) $ (.537)
WEIGHTED AVERAGE OF COMMON
STOCK OUTSTANDING 4,957,521 1,576,135
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Six Months Ended
October 31,
1998 1997
REVENUE $ 1,047 $1,688,400
COST OF SALES 2,658 2,161,700
GROSS PROFIT (LOSS) (1,611) (473,300)
OPERATING EXPENSES:
General and administrative 326,183 2,877,900
Depreciation and amortization - 191,000
Provision for Inventory E & 0 - 135,000
326,183 3,203,900
LOSS FROM OPERATIONS (327,794) (3,677,200)
OTHER INCOME (EXPENSES):
Interest expense - (43,100)
Interest income 840 94,800
Dividend income - affiliate - 23,300
Gain (Loss) on disposition of assets 157,619 3,400
Total other income (expense) 158,459 78,400
INCOME (LOSS) FROM CONTINUING
OPERATIONS (169,335) (3,598,800)
DISCONTINUED OPERATIONS:
Loss on disposal (14,375) (400)
NET INCOME (LOSS) (154,960) (3,599,200)
DIVIDENDS ON PREFERRED STOCK (4,800) (1,000)
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON STOCKHOLDERS $(159,760) $(3,600,200)
INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations $ (.031) $ (2.707)
Loss from discontinued operations (.003) (.000)
Dividends on preferred stock (.001) (.001)
NET INCOME (LOSS) PER COMMON SHARE $ (.035) $ (2.708)
WEIGHTED AVERAGE OF COMMON
STOCK OUTSTANDING 4,580,064 1,082,966
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Six Months Ended
October 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(159,760) $(3,599,100)
ADJUSTMENTS TO RECONCILE NET GAIN (LOSS) TO
NET CASH FROM OPERATING ACTIVITIES:
Depreciation and amortization - 200,200
(Gain) loss on disposal of assets (157,619) 14,500
Write-down of License Agreement - 453,300P
rovision for inventory obsolescence (40,000) 135,400
Non Cash transaction for securities 96,034 100,000
Change in assets and liabilities
Accounts and accrued receivables 30,959 154,200
Prepaid expenses 40,486 73,200
Inventories - 185,600
Cancellation of note receivable plus
accrued interest for surrender of
treasury stock (81,059) -
Accounts payable and accrued expenses 116,035 320,800
Net cash used by operating activities (154,924) (1,961,900)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment - (42,600)
Purchases of marketable securities - -
Proceeds from sale of property and
equipment 11,246 8,200
Loan to Director of Company - (59,400)
Deposits - 9,200
Licenses and product development - (688,600)
Net cash used by investing activities 11,246 (773,200)
CASH FLOW FROM FINANCING ACTIVITIES:
Sale of common stock - 5,000
Sale of preferred stock - -
Proceeds from notes payable - 800,000
Dividends on preferred stock (4,800) (1,000)
Purchase of Treasury Stock - (41,000)
Cash provided by financing activities (4,800) (763,000)
NET INCREASE (DECREASE) IN CASH (148,478) (1,972,100)
CASH AT BEGINNING OF PERIOD 152,765 4,113,400
CASH AT END OF PERIOD $ 4,287 $2,141,300
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ - $ 71,200
</TABLE>
See accompanying notes to these consolidated financial statements.
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NONCASH INVESTING AND FINANCING ACTIVITIES
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Six Months Ended
October 31,
1998 1997
During the period under review,
Meteor Technology, plc expensed the UK,
Ireland Distribution Rights to DigiPhone. (453,500)
During the period under review,
Meteor Technology issued shares in
settlement for rent obligations for
property previously occupied by
Telecredit Telekommunications GmbH (318,400)
During the period under review,
Camelot issued shares for commission
expense related to the $800,000 funding (100,000)
During the six months ended October 31, 1997,
the Company's preferred stock was
converted to common stock as follows:
2,330,000 Series I preferred
for 701,819 shares of restricted common
During the six months ended October 31, 1998,
the Company's preferred stock was
converted to common stock as follows:
159,000 Series L preferred for 1,745,964
shares of restricted common
During the six months ended October 31, 1998,
the Company cancelled a note receivable plus
interest for 1,500 common shares into
treasury 81,059
During the six months ended October 31, 1998
the Company paid off dividend due and redeemed
the Preferred Shares, Series E by transferring
125,000 restricted common shares in Wincroft,
Inc. at market value.
</TABLE>
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
ITEM 1. Financial Statements and Principles of Consolidation
The accompanying condensed consolidated financial statements have been
prepared in accordance with the instruction to Form 10-Q, and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation
have been included. These statements should be read in conjunction
with the audited financial statements and notes thereto included in
the Registrant's annual Form 10-K filing for the year ended April 30,
1998.
ITEM 2. Management Discussion and Analysis of Financial Condition
and Results of Operations
The Company's revenue for the quarter ended October 31, 1998 was $0
compared with $26,400 in the comparable quarter of 1997. Net profit
for the three month period was $9,767 compared with a loss for the
previous year of $849,900. These results are due to the lack of
operations as the subsidiaries ceased doing business.
The consolidated balance sheets for the period show stockholders'
equity of $1,380,832 compared with $1,707,668 for the financial year
ended April 30, 1998. Total assets were $1,525,423 compared with
$1,968,294 for the comparable period. The decrease in stockholders'
equity and total assets was due to the loss attributable to closing of
the operating subsidiaries. During the quarter under review the
Company failed to make its dividend payment on the Preferred Shares,
Series E and paid off the dividend due and redeemed the Preferred
Shares by transferring 125,000 restricted common shares in Wincroft,
Inc. at market value. The Company's principal asset is a shareholding
in Wincroft, Inc.
Liquidity and Capital Resources
Net cash used by operating activities for the six months ended
October 31, 1998 was $154,924 compared with $1,961,900 in 1997. Net
cash supplied by investing activities was $11,246 compared with net
cash used of $773,200 in 1997. Net cash used by financing activities
was $4,800 compared with $763,000 in 1997. Cash of $4,287 compares
with $ 152,765 at April 30, 1998.
The Company does not have any plans for capital expenditures. The
Company has negligible cash resources and will experience liquidity
problems over the next twelve months due to its lack of revenue unless
it is able to raise funds from outside sources. There are no known
trends, demands, commitments, or events that would result in or that
is reasonably likely to result in the Company's liquidity increasing
or decreasing in a material way.
Year 2000 Readiness Disclosure
The Company is aware of the issues associated with the programming
code in existing computer systems as the year 2000 approaches. The
issue is whether computer systems will properly recognize date-
sensitive information when the year changes to 2000. Management is
currently assessing the year 2000 compliance issue. The Company will
expend necessary resources to assure that its computer systems are
reprogrammed in time to deal effectively with transactions in the year
2000 and beyond. The Company presently believes that, with
modifications to existing software and conversions to new software,
the Year 2000 issue will not pose significant operational problems for
the Company's computer systems as so modified, converted or replaced.
The Company also believes that the cost of conversion, modification or
replacement will not have a material adverse effect on the Company's
financial condition or results of operations. However, if such
modifications and conversions are not completed timely or third
parties on which the Company relies are unable to address this issue
in a timely manner, the Year 2000 issue may have a material impact on
the operations of the Company.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Exhibits and Reports on Form 8-K.
(a) Exhibits:
3(1) Articles of
Incorporation: Incorporated by reference to
Registration Statement filed on
Form 10, June 23, 1976.
3(2) Bylaws: Incorporated by
reference as
immediately above.
(10) 1991 Incentive Stock
Option Plan: Incorporated by
reference to
proxy statement for
1991.
Reports on Form 8-K: NONE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereto duly authorized.
CAMELOT CORPORATION
(Registrant)
By: /s/ Daniel Wettreich
DANIEL WETTREICH,
President
Treasurer and Principal
Financial Officer
Date: December 15, 1998
[ARTICLE] 5
<TABLE>
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[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] APR-30-1998
[PERIOD-END] OCT-31-1998
[CASH] 4287
[SECURITIES] 973022
[RECEIVABLES] 17197
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 21484
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 1525423
[CURRENT-LIABILITIES] 144591
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 13453
[COMMON] 50271
[OTHER-SE] 1317108
[TOTAL-LIABILITY-AND-EQUITY] 1525423
[SALES] 0
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 16043
[OTHER-EXPENSES] (40185)
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] 9767
[INCOME-TAX] 9767
[INCOME-CONTINUING] 24142
[DISCONTINUED] (14375)
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 9767
[EPS-PRIMARY] (.002)
[EPS-DILUTED] (.002)
</TABLE>
