9
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 July 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.)
2415 Midway Road, Suite 115, 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 July 31, 1998
Common stock, $0.01 par value 4,580,064
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
CAMELOT CORPORATION AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands)
<TABLE>
<S> <C> <C>
July 31, 1998 April 30, 1998
(Unaudited)(Audited/Adjusted)
CURRENT ASSETS
Cash and cash equivalents $ 4,714 $ 152,765
Accounts receivable 47,251 48,156
Prepaid expenses - 40,486
Inventories, net of allowance for
obsolescence of $848,581 and
$808,581 at July 31, 1998
and April 30, 1998 10,000 50,000
Total current assets 61,965 291,407
OTHER ASSETS
Preferred stock -
related party 611,305 611,305
Investment in equity of
Wincroft, Inc. net
of allowance of $5,936,474
at July 31, 1998 and April
30, 1998 1,065,582 1,065,582
Total other assets 1,676,887 1,676,887
$1,738,852 $1,968,294
</TABLE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
(In Thousands)
<TABLE>
<S> <C> <C>
July 31, 1998 April 30, 1998
(Unaudited)(Audited/Adjusted)
CURRENT LIABILITIES
Accounts payable $ 192,349 $ 179,473
Accrued expenses 46,480 81,153
Total current liabilities 238,829 260,626
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 50,000,000
shares authorized, 4,580,064 and 1,784,200
shares issued at July 31, 1998
and April 30, 1998, respectively 45,801 17,842
Preferred stock, $.01 par value,
100,000,000 shares authorized,
1,345,310 and 1,453,400
shares issued and outstanding at
July 31, 1998 and April 30, 1998
respectively 13,453 14,534
Additional paid-in capital 35,739,943 35,768,983
Accumulated deficit (31,462,478) (31,256,995)
Less: treasury stock, at cost,
30,245 and 28,745
shares at July 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 1,500,023 1,707,668
$1,738,852 $1,968,294
</TABLE>
See accompanying notes to these consolidated financial statements.
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In Thousands, Except Share and Per Share Data)
<TABLE>
<S> <C> <C>
Three Months Ended
July 31,
1998 1997
REVENUE $ 1,047 $1,662,000
COST OF SALES 2,658 2,055,200
GROSS PROFIT (LOSS) (1,611) (393,200)
OPERATING EXPENSES:
General and administrative 316,358 2,151,400
Depreciation and amortization - 229,400
316,358 2,380,800
LOSS FROM OPERATIONS (317,969) (2,774,000)
OTHER INCOME (EXPENSES):
Interest expense - (43,100)
Interest income 494 55,600
Dividend income - affiliate - 11,600
Gain (Loss) on disposition of assets 117,780 1,000
Total other income (expense) 118,274 25,100
INCOME (LOSS) FROM CONTINUING
OPERATIONS (200,683) (2,748,900)
DISCONTINUED OPERATIONS:
Loss on disposal (0) (400)
NET INCOME (LOSS) (200,683) (2,749,300)
DIVIDENDS ON PREFERRED STOCK (4,800) (4,700)
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON STOCKHOLDERS $(205,483) $(2,754,000)
INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations $ (0.04) $ (2,539)
Loss from discontinued operations (0.00) (.000)
Dividends on preferred stock (0.00) (.004)
NET INCOME (LOSS) PER COMMON SHARE $ (0.04) $(2,543)
WEIGHTED AVERAGE OF COMMON
STOCK OUTSTANDING 4,580,064 1,082,966
</TABLE>
See accompanying notes to these consolidated financial statements.
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In Thousands)
<TABLE>
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Three Months Ended
July 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(205,483) $(2,748,900)
ADJUSTMENTS TO RECONCILE NET GAIN (LOSS) TO
NET CASH FROM OPERATING ACTIVITIES:
Depreciation and amortization - 161,900
(Gain) loss on disposal of assets 117,780 14,100
Write-down of Distribution Agreement - 453,300P
rovision for inventory obsolescence (40,000) 400
Change in assets and liabilities
Accounts and accrued receivables 905
147,100
Prepaid expenses 40,486 9,100
Inventories - 171,300
Cancellation of note receivable plus
accrued interest for surrender of
treasury stock (81,059) -
Accounts payable and accrued expenses 21,797 516,800
Net cash used by operating activities (143,251) (1,274,900)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment - (24,300)
Purchases of marketable securities - -
Loan to Director of Company - (29,600)
Deposits - (5,300)
Licenses and product development - (367,700)
Net cash used by investing activities - (426,900)
CASH FLOW FROM FINANCING ACTIVITIES:
Sale of common stock 5,000
Sale of preferred stock -
Dividends on preferred stock (4,800) (4,700)
Purchase of Treasury Stock - (41,000)
Cash provided by financing activities (4,800) (40,700)
NET INCREASE (DECREASE) IN CASH (148,051) (1,742,500)
CASH AT BEGINNING OF PERIOD 152,765 4,113,400
CASH AT END OF PERIOD $ 4,714 $2,370,900
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)
(In Thousands)
NONCASH INVESTING AND FINANCING ACTIVITIES
Three Months Ended
July 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 quarter ended July 31, 1997,
the Company's preferred stock was
converted to common stock as follows:
2,255,000 Series I preferred
for 662,181 shares of restricted common
During the quarter ended July 31, 1998,
the Company's preferred stock was
converted to common stock as follows:
140,400 Series L preferred for 1,298,973
shares of restricted common
Cancellation of note receivable plus
interest for 1,500 common shares into
treasury
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 July 31, 1997 was $1,047
compared with $1,662,000 in the comparable quarter of 1997. Net loss
for the three month period was $205,483 compared with a loss for the
previous year of $2,748,900. 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 $1,500,023 compared with $1,707,668 for the financial year
ended April 30, 1998. Total assets were $1,738,852 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.
Liquidity and Capital Resources
Net cash used by operating activities for the three months ended
July 31, 1998 was $143,251 compared with $1,274,900 in 1997. Net cash
used by investing activities was $0 compared with $426,900 in 1997.
Net cash used by financing activities was $4,800 compared with
$40,700 in 1997. Cash and securities of $4,714 compares with $152,765
at April 30, 1998.
The Company does not have any plans for capital expenditures. The
Company 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 Issue
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.
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.
(b) 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: September 15, 1998
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] APR-30-1998
[PERIOD-END] JUL-31-1998
[CASH] 4714
[SECURITIES] 0
[RECEIVABLES] 47251
[ALLOWANCES] 0
[INVENTORY] 10000
[CURRENT-ASSETS] 61965
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 1738852
[CURRENT-LIABILITIES] 238829
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 13453
[COMMON] 45801
[OTHER-SE] 1440769
[TOTAL-LIABILITY-AND-EQUITY] 1738852
[SALES] 1047
[TOTAL-REVENUES] 1047
[CGS] 2658
[TOTAL-COSTS] 316358
[OTHER-EXPENSES] (118274)
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] (205483)
[INCOME-TAX] (205483)
[INCOME-CONTINUING] (205483)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (205483)
[EPS-PRIMARY] (0.04)
[EPS-DILUTED] (0.04)
</TABLE>
