3
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 January 31, 1999 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 January 31, 1999
Common stock, $0.01 par value 6,293,740
<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
<TABLE>
<S> <C> <C>
January 31, 1999April 30, 1998
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $ 806 $ 152,765
Accounts receivable 16,597 48,156
Prepaid expenses - 40,486
Inventories, net of allowance for
obsolescence of $808,581 at
April 30, 1998 - 50,000
Total current assets $ 17,403 291,407
OTHER ASSETS
Preferred stock -
related party 530,917 611,305
Investment in equity of
Wincroft, Inc. (comprising
7,000 Preferred Shares and
700,000 Common Shares at
January 31, 1999 and 7,000
Preferred Shares and 1,028,000
Common Shares at April 30,1998)
net of allowance of $5,408,435
and $5,936,474 at January 31,
1999 and April 30, 1998,
respectively 970,549 1,065,582
Total other assets 1,501,466 1,676,887
$1,518,869 $1,968,294
</TABLE>
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
January 31, 1999April 30, 1998
(Unaudited) (Audited)
CURRENT LIABILITIES
Accounts payable $ 47,359 $ 179,473
Accrued expenses 6,981 81,153
Total current liabilities 54,340 260,626
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 50,000,000
shares authorized, 6,293,740 and 1,784,200
shares issued at January 31, 1999
and April 30, 1998, respectively 62,937 17,842
Preferred stock, $.01 par value,
100,000,000 shares authorized,
1,345,305 and 1,453,400
shares issued and outstanding at
January 31, 1999 and April 30, 1998
respectively 13,453 14,534
Additional paid-in capital 35,729,588 35,768,983
Accumulated deficit (31,504,753) (31,256,995)
Less: treasury stock, at cost,
30,745 and 28,745
shares at January 31, 1999
and April 30, 1998 (2,836,696) (2,755,637)
Less Notes receivable related to purchase of
common stock - (81,059)
Total stockholders' equity 1,464,529 1,707,668
$1,518,869 $1,968,294
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
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Three Months Ended
January 31,
1999 1998
REVENUE $ - $ 22,500
COST OF SALES - 32,600
GROSS PROFIT (LOSS) - (10,100)
OPERATING EXPENSES:
General and administrative 4,599 752,100
Depreciation and amortization - 151,000
Provision for Inventory E & O - -
4,599 903,000
LOSS FROM OPERATIONS (4,599) (913,200)
OTHER INCOME (EXPENSES):
Interest expense - 600
Interest income 6 4,600
Dividend income - affiliate - 11,700
Gain (Loss) on disposition of assets (54,655) -
Total other income (expense) (54,655) 16,900
INCOME (LOSS) FROM CONTINUING
OPERATIONS (59,248) (869,300)
DISCONTINUED OPERATIONS:
Loss on disposal - (14,000)
NET INCOME (LOSS) (59,248) (910,300)
DIVIDENDS ON PREFERRED STOCK - -
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON STOCKHOLDERS $ (59,248) $(910,300)
INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations $ (.010) $ (.569)
Loss from discontinued operations (.000) (.009)
Dividends on preferred stock (.000) (.000)
NET INCOME (LOSS) PER COMMON SHARE $ (.010) $ (.578)
WEIGHTED AVERAGE OF COMMON
STOCK OUTSTANDING 6,144,552 1,576,136
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
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Nine Months Ended
January 31,
1999 1998
REVENUE $ 1,047 $1,710,900
COST OF SALES 2,658 2,194,300
GROSS PROFIT (LOSS) (1,611) (483,400)
OPERATING EXPENSES:
General and administrative 330,782 3,630,000
Depreciation and amortization - 342,000
Provision for Inventory E & 0 - 135,000
330,782
LOSS FROM OPERATIONS (332,393) (4,490,400)
OTHER INCOME (EXPENSES):
Interest expense - (42,500)
Interest income 846 99,400
Dividend income - affiliate - 35,000
Gain (Loss) on disposition of assets 102,964 3,400
Total other income (expense) 103,810 5,300
INCOME (LOSS) FROM CONTINUING
OPERATIONS (228,583) (4,495,100)
DISCONTINUED OPERATIONS:
Loss on disposal (14,375) (14,400)
NET INCOME (LOSS) (242,958) (4,509,500)
DIVIDENDS ON PREFERRED STOCK (4,800) (1,000)
NET INCOME (LOSS) ATTRIBUTABLE TO
COMMON STOCKHOLDERS $(247,758) $(4,510,500)
INCOME (LOSS) PER SHARE:
Income (loss) from continuing operations $ (.049) $ (2.255)
Loss from discontinued operations (.003) (.007)
Dividends on preferred stock (.001) (.000)
NET INCOME (LOSS) PER COMMON SHARE $ (.053) $ (2.262)
WEIGHTED AVERAGE OF COMMON
STOCK OUTSTANDING 5,037,908 1,993,950
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<S> <C> <C>
Nine Months Ended
January 31,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(247,758) $(4,510,500)
ADJUSTMENTS TO RECONCILE NET GAIN (LOSS) TO
NET CASH FROM OPERATING ACTIVITIES:
Depreciation and amortization - 361,900
(Gain) loss on disposal of assets (102,964) 14,500
Write-down of License Agreement - 453,300P
rovision for inventory obsolescence - 135,400
Non Cash transaction for securities 96,034 860,200
Change in assets and liabilities
Accounts and accrued receivables (31,559) 43,100
Prepaid expenses (40,486) 124,700
Inventories (50,000) 224,800
Cancellation of note receivable plus
accrued interest for surrender of
treasury stock 81,059 -
Accounts payable and accrued expenses 206,286 167,400
Net cash used by operating activities (89,388) (2,125,200)
CASH FLOW FROM INVESTING ACTIVITIES:
Loss on discontinued operations 14,375 -
Purchases of property and equipment - (45,100)
Purchases of marketable securities - (222,000)
Proceeds from sale of property and
equipment 2,740 8,200
Loan to Director of Company - (59,400)
Deposits 4,727 15,500
Licenses and product development 846 (688,600)
Dividends Received - -
Net cash used by investing activities 22,688 (991,400)
CASH FLOW FROM FINANCING ACTIVITIES:
Sale of common stock - 6,000
Sale of preferred stock - -
Proceeds from notes payable 600 800,000
Dividends on preferred stock (4,800) (5,800)
Purchase of Treasury Stock (81,059) (41,000)
Cash provided by financing activities (85,259) 759,200
NET INCREASE (DECREASE) IN CASH (151,959) (2,357,400)
CASH AT BEGINNING OF PERIOD 152,765 4,113,400
CASH AT END OF PERIOD $ 806 $1,756,000
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ - $ 71,200
</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
CAMELOT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NONCASH INVESTING AND FINANCING ACTIVITIES
Nine Months Ended
January 31,
1999 1998
During the period ending January 31,1998
Meteor Technology, plc expensed the UK,
Ireland Distribution Rights to DigiPhone. (453,500)
During the period ending January 31,1998,
Meteor Technology issued shares in
settlement for rent obligations for
property previously occupied by
Telecredit Telekommunications GmbH (318,400)
During the period ending January 31, 1998,
Camelot issued shares for commission
expense related to the $800,000 funding (100,000)
During the nine months ended January 31, 1998,
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 nine months ended January 31, 1999,
the Company's preferred stock was
converted to common stock as follows:
162,000 Series L preferred for 2,342,301
shares of restricted common
During the nine months ended January 31, 1999,
the Company cancelled a note receivable plus
interest for 1,500 common shares into
treasury 81,059
During the nine months ended January 31, 1999,
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.
During the nine months ended January 31, 1999,
the Company settled a payable by the issuance
of 307,923 common shares 4,619
During the nine months ended January 31, 1999,
the Company transferred 3,000 restricted common
shares in Wincroft, Inc. at market value
in payment of services (1,001)
During the nine months ended January 31, 1999,
the Company wrote off some of the Preferred
Shares-Affiliate to better reflect their
current value (80,388)
<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 January
31, 1999.
ITEM 2. Management Discussion and Analysis of Financial Condition
and Results of Operations
The Company's revenue for the quarter ended January 31, 1999 was $0
compared with $22,500 in the comparable quarter of 1998. Net loss for
the three month period was $(59,248) compared with a loss for the
previous year of $(910,300). 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 $1,464,529 compared with $1,707,668 for the financial year
ended April 30, 1998. Total assets were $1,518,869 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 nine months 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.
During the nine months under review, several inactive subsidiaries
have been dissolved by their state of incorporation due to a lack of
funding. As the Registrant has determined to reduce operations there
was no need to continue to expend funds on inactive subsidiaries. As
of February 22, 1999 Registrant is aware of the following subsidiaries
dissolved by the state:
Third Planet Publishing, Inc.
Kids University, Inc.
Maxmedia Distributing, Inc.
Atlantic Media, Inc.
Camelot Creative Designs, Inc.
Management expects that additional subsidiaries will become inactive.
Liquidity and Capital Resources
Net cash used by operating activities for the nine months ended
January 31, 1999 was $89,388 compared with $2,125,200 in 1998. Net
cash supplied by investing activities was $22,688 compared with net
cash used of $991,400 in 1998. Net cash used by financing activities
was $85,259 compared with $759,200 provided in 1998. Cash of $806
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.
(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: March 3, 1999
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] APR-30-1999
[PERIOD-END] JAN-31-1999
[CASH] 806
[SECURITIES] 1501466
[RECEIVABLES] 16597
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 17403
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 1518869
[CURRENT-LIABILITIES] 54340
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 13453
[COMMON] 62937
[OTHER-SE] 1388139
[TOTAL-LIABILITY-AND-EQUITY] 1518869
[SALES] 1047
[TOTAL-REVENUES] 1047
[CGS] 2658
[TOTAL-COSTS] 330782
[OTHER-EXPENSES] 103810
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] (288583)
[INCOME-TAX] (288583)
[INCOME-CONTINUING] (288583)
[DISCONTINUED] (14375)
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (247758)
[EPS-PRIMARY] (.053)
[EPS-DILUTED] (.053)
</TABLE>
