Delaware
|
7812
|
52-2195605
|
State
or Jurisdiction of Incorporation or Organization
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer Identification No.)
|
Title
of Each Class of Securities to be Registered
|
|
Number
of Units/Shares to be Registered
|
|
Proposed
Maximum
Offering
Price Per Unit
|
|
Proposed
Maximum
Aggregate
Offering
Price
|
|
Amount
of
Registration
Fee
(3)
|
|
|
|
|
|
|
|
|
|
Common
Stock, par value $.001 per share (1)
|
|
12,811,825
|
(2)
|
$0.036
|
|
$461,226
|
|
$14.16
|
|
|
|
|
|
|
|
|
|
Total
|
|
12,811,825
|
|
|
|
$461,226
|
|
$14.16
|
Page | |
Summary
Information
|
1
|
Disclosure
Concerning Our Recent Financing and Conversion of Notes and Exercise
of
Warrants
|
2
|
Risk
Factors
|
8
|
Use
of Proceeds
|
18
|
Penny
Stock Considerations
|
18
|
Selling
Stockholders
|
18
|
Plan
of Distribution
|
20
|
Legal
Proceedings
|
21
|
Directors,
Executive Officers, Promoters and Control Persons
|
21
|
Security
Ownership of Certain Beneficial Owners and Management
|
25
|
Description
of Securities
|
26
|
Interest
of Named Experts and Counsel
|
27
|
Disclosure
of Commission Position of Indemnification For Securities Act
Liabilities
|
27
|
Description
of Business
|
28
|
Management’s
Discussion and Analysis or Plan of Operations
|
38
|
Description
of Property
|
45
|
Certain
Relationships and Related Transactions
|
45
|
Market
For Common Equity and Related Stockholder Matters
|
46
|
Executive
Compensation
|
46
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
48
|
Available
Information
|
49
|
Financial
Statements
|
F-1
|
Common
Stock Offered by Selling Stockholders:
|
|
Up
to 12,811,825 shares which represented approximately ¹/3
of
our 38,435,475 non-affiliate common shares outstanding as of May
4,
2007.
|
|
|
|
Common
Stock to be Outstanding After the Offering:
|
|
Up
to 126,369,525 shares.
|
|
|
|
Use
of Proceeds:
|
|
We
will not receive any proceeds from the sale of the common
stock.
|
|
|
|
OTCBB
Symbol:
|
|
CMEG
|
1. |
At
closing on December 29, 2006 (“Closing”), the Investors purchased Notes
aggregating $600,000 and Warrants to purchase 10,000,000 shares
of CMEG
common stock; and
|
2. |
Upon
effectiveness of the Registration Statement, the Investors
will purchase
Notes aggregating
$400,000.
|
1.
|
Issuance
of common stock at a discount to the market price of such
stock;
|
2.
|
Issuance
of convertible securities that are convertible into an indeterminate
number of shares of Common Stock; or
|
3.
|
Issuance
of warrants during the “Lock-Up Period”, beginning on the Closing Date and
ending on the date the Registration Statement is declared effective.
|
1.
|
issuances
of securities in a firm commitment underwritten public offering
(excluding
a continuous offering pursuant to Rule 415 under the 1933 Act);
|
2. |
issuances
of securities as consideration for a merger, consolidation or
purchase of
assets, or in connection with any strategic partnership or joint
venture
(the primary purpose of which is not to raise equity capital),
or in
connection with the disposition or acquisition of a business,
product or
license by the Company;
|
3.
|
Camelot
Film Group, Inc. and Camelot Studio Group, Inc., two of the Company’s
wholly owned subsidiaries; or
|
4.
|
the
issuance of securities upon exercise or conversion of the Company’s
options, warrants or other convertible securities outstanding
as of the
date hereof or to the grant of additional options or warrants,
or the
issuance of additional securities, under any employment agreement,
contract, Company stock option or restricted stock plan approved
by the
shareholders of the Company.
|
§
|
The
occurrence of an event of default (as defined in the Notes and
listed
below) under the Notes;
|
§
|
Any
representation or warranty we made in the Security Agreement
or in the
Intellectual Property Security Agreement shall prove to have
been
incorrect in any material respect when made;
|
§
|
The
failure by us to observe or perform any of our obligations under
the
Security Agreement or Intellectual Property Security Agreement
for ten
(10) days after receipt of notice of such failure from the Investors;
and
|
§
|
Any
breach of, or default under, the
Warrants.
|
|
Price
Decreases By
|
|||
|
12/27/2006
|
25%
|
50%
|
75%
|
Average
Common Stock Price (as defined above)
|
$0.060
|
$0.045
|
$0.030
|
$0.015
|
Conversion
Price
|
$0.036
|
$0.027
|
$0.018
|
$0.009
|
100%
Conversion Shares
|
27,777,778
|
37,037,037
|
55,555,556
|
111,111,111
|
§
|
Fail
to pay the principal or interest when
due;
|
§
|
Fail
to issue shares of common stock upon receipt of a conversion
notice;
|
§
|
Fail
to file a registration statement within 30 days following the
Closing;
|
§
|
Breach
any material covenant or other material term or condition in
the Notes or
the Securities Purchase Agreement;
|
§
|
Breach
any representation or warranty made in the Securities Purchase
Agreement
or other document executed in connection with the financing
transaction;
|
§
|
Fail
to maintain the listing or quotation of our common stock on the
OTCBB or
an equivalent exchange, the Nasdaq National Market, the Nasdaq
SmallCap
Market, the New York Stock Exchange, or the American Stock Exchange;
|
§
|
Apply
for or consent to the appointment of a receiver or trustee for
us or any
of our subsidiaries or for a substantial part of our of our subsidiaries'
property or business, or such a receiver or trustee shall otherwise
be
appointed;
|
§
|
Have
any money judgment, writ or similar process shall be entered
or filed
against us or any of our subsidiaries or any of our property
or other
assets for more than $50,000, and shall remain unvacated, unbonded
or
unstayed for a period of twenty (20) days unless otherwise consented
to by
the Investors;
|
§
|
Institute
or have instituted against us or any of our subsidiaries any
bankruptcy,
insolvency, reorganization or liquidation proceedings or other
proceedings
for relief under any bankruptcy law or any law for the relief
of debtors;
or
|
§
|
Default
under any Note issued pursuant to the Securities Purchase
Agreement.
|
Finder’s
Fee(1)
|
|
Structuring
and
Due
Diligence
Fees(2)
|
|
Maximum
Possible
Interest
Payments(3)
|
|
Maximum
Redemption
Premium(4)
|
|
Maximum
Possible
Liquidated
Damages(5)
|
|
Maximum
First
Year Payments(6)
|
|
Maximum
Possible Payments(7)
|
|
Net
Proceeds
to
Company(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
$120,000
|
$20,000
|
$128,109.16
|
$427,560.18
|
$32,067.01
|
$100,967.47
|
$300,176.17
|
$860,000
|
(1)
|
The
Company paid to Lionheart Associates a fee of $120,000 on December
29,
2006 for arranging the financing pursuant to a Structuring Agreement
with
Lionheart.
|
(2)
|
Pursuant
to the Securities Purchase Agreement, the Company paid to The
National
Investment Resources, LLC $20,000 in structuring and due diligence
fees in
connection with the transaction.
|
(3)
|
Maximum
amount of interest that can accrue assuming all Notes aggregating
$1,000,000 were issued on December 27, 2006 and remain outstanding
until
the maturity date. Interest is payable quarterly provided that
no interest
shall be due and payable for any month in which the intraday
trading price
is greater than $0.07. The Company, at its option, may pay accrued
interest in either cash or, in shares of its common stock.
|
(4)
|
Under
certain circumstances we have the right to redeem the full principal
amount of the Notes prior to the maturity date by repaying the
principal
and accrued and unpaid interest plus a redemption premium of
40%. This
represents the maximum redemption premium the Company would pay
assuming
we redeem all of the Notes twelve (12) months from December 27,
2006.
|
(5)
|
Under
the Stock Purchase Agreement, the maximum amount of liquidated
damages
that the Company may be required to pay for the twelve (12) months
following the sale of all Notes is 3% of the outstanding principal
and
accrued and unpaid interest.
|
(6)
|
Total
maximum payments that the Company may be required to pay to the
Selling
Stockholders for the twelve (12) months following the sale of
all Notes is
comprised of $68,900.46 in first year interest and $32,067.01
in
liquidated damages. If we redeemed the Notes one year from the
Issuance
Date, then the total payments would be $1,528,527.65, which is
calculated
by adding the outstanding principal ($1,000,000), plus total
first year
interest payments ($68,900.46), plus liquidated damages ($32,067.01),
plus
maximum redemption premium ($427,560.18).
|
(7)
|
Total
maximum payments payable by Company, includes finder’s fees of $120,000,
structuring and due diligence fees of $20,000, maximum possible
interest
of $128,109.16 and maximum possible liquidated damages of $32,067.01.
We
also incurred $65,000 in legal fees for the transaction and filing
of this
registration statement, which would increase the possible maximum
payments
by Company to $365,176.17 and reduce the net proceeds to Company
to
$792,932.99. In addition, we were required to place in escrow
$15,000 for
the purchase of keyman insurance for our executives. We anticipate
the
premium to be less than $15,000 and the balance of money held
in escrow to
be returned to us after paying the initial premium. Assuming
the initial
premium is $15,000, would increase the possible maximum payments
by
Company to $380,176.17 and reduce the net proceeds to Company
to
$777,932.99.
|
(8)
|
Total
net proceeds to the Company assuming that the Company was not
required to
make any payments as described in footnotes 3, 4 and 5. We also
incurred
$65,000 in legal fees for the transaction and filing of this
registration
statement, and placed in escrow $15,000 for the purchase of keyman
insurance for our executives, both of which would increase the
possible
maximum payments by Company to $365,176.17 and $380,176.17, respectively,
and reduce the net proceeds to Company to $792,932.99 and $777,932.99,
respectively.
|
Market
Price(1)
|
|
Conversion
Price(2)
|
|
Shares
Underlying
Notes(3)
|
|
Combined
Market Price of Shares(4)
|
|
Total
Conversion
Price(5)
|
|
Total
Possible
Discount
to
Market
Price(6)
|
$0.07
|
$0.036
|
28,094,877
|
$1,966,641
|
$1,011,416
|
$955,225
|
(1)
|
Market
price per share of our common stock on the Issuance Date (December
27,
2006).
|
(2)
|
The
conversion price per share of our common stock underlying the
Notes on the
Issuance Date is calculated by the average of
the lowest three (3) intraday trading prices for our common shares
during
the twenty (20) trading days prior to the date the Notes were
issued
on
December 27, 2006 ($0.06 was the average),
less a 40% discount.
|
(3)
|
Total
number of shares of common stock underlying the Notes assuming
full
conversion as of the Issuance Date. Since the conversion price
of the
Notes may fluctuate as market prices fluctuate, the actual number
of
shares that underlie the Notes will also fluctuate.
|
(4)
|
Total
market value of shares of common stock underlying the Notes assuming
full
conversion as of the Issuance Date based on the market price
on the
Issuance Date.
|
(5)
|
Total
value of shares of common stock underlying the Notes assuming
full
conversion of the Notes as of the Issuance Date based on the
conversion
price.
|
(6)
|
Discount
to market price calculated by subtracting the total conversion
price
(result in footnote (5)) from the combined market price (result
in
footnote (4)).
|
Market
Price(1)
|
|
Exercise
Price(2)
|
|
Shares
Underlying
Warrants(3)
|
|
Combined
Market Price(4)
|
|
Total
Exercise
Price(5)
|
|
Total
Possible
Discount
to
Market
Price(6)
|
$0.07
|
$0.15
|
10,000,000
|
$700,000
|
$1,500,000
|
$0
|
(1)
|
Market
price per share of our common stock on the Issuance Date (December
27,
2006).
|
(2)
|
The
exercise price per share of our common stock underlying the Warrants
is
fixed at $0.15 except that the Warrants contain anti-dilution
protections
which in certain circumstances may result in a reduction to the
exercise
price.
|
(3)
|
Total
number of shares of common stock underlying the Warrants assuming
full
exercise as of the Issuance Date. Upon certain adjustments of
the exercise
price of the warrants, the number of shares underlying the warrants
may
also be adjusted such that the proceeds to be received by us
would remain
constant.
|
(4)
|
Total
market value of shares of common stock underlying the Warrants
assuming
full exercise as of the Issuance Date based on the market price
of the
common stock on the Issuance Date.
|
(5)
|
Total
value of shares of common stock underlying the Warrants assuming
full
exercise as of the Issuance Date based on the conversion
price.
|
(6)
|
Discount
to market price calculated by subtracting the total conversion
price
(result in footnote (5)) from the combined market price (result
in
footnote (4)). The result of an exercise of the Warrants at the
exercise
price and a sale at the market price would be a loss to the Selling
Stockholder. Since
the current closing price of our common stock is less than the
Warrants’
exercise price, the Warrants are out of the money and no profit
would be
realized as of May 4, 2007.
|
Gross
Proceeds Payable to Company(1)
|
|
Maximum
Possible Payments by Company(2)
|
|
Net
Proceeds to Company(3)
|
|
Combined
Total Possible Profit to Investors(4)
|
|
All
Payments + Possible Profit / Net Proceeds(5)
|
|
All
Payments + Possible Profit / Net Proceeds Averaged Over 3
Years(6)
|
$1,000,000
|
$300,176.17
|
$860,000
|
$955,225
|
145.98%
|
48.66%
|
(1)
|
Total
amount of the Notes.
|
(2)
|
Total
maximum payments payable by Company, includes finder’s fees of $120,000,
structuring and due diligence fees of $20,000, maximum possible
interest
of $128,109.16 and maximum possible liquidated damages of $32,067.01.
We
also incurred $65,000 in legal fees for the transaction and filing
of this
registration statement, which would increase the possible maximum
payments
by Company to $365,176.17 and reduce the net proceeds to Company
to
$792,932.99. In addition, we were required to place in escrow
$15,000 for
the purchase of keyman insurance for our executives. We anticipate
the
premium to be less than $15,000 and the balance of money held
in escrow to
be returned to us after paying the initial premium. Assuming
the initial
premium is $15,000, would increase the possible maximum payments
by
Company to $380,176.17 and reduce the net proceeds to Company
to
$777,932.99.
|
(3)
|
Total
net proceeds to the Company including the $120,000 finder’s fee and
$20,000 structuring and due diligence fees. We also incurred
$65,000 in
legal fees for the transaction and filing of this registration
statement,
and placed in escrow $15,000 for the purchase of keyman insurance
for our
executives, both of which would increase the possible maximum
payments by
Company to $365,176.17 and $380,176.17, respectively, and reduce
the net
proceeds to Company to $792,932.99 and $777,932.99,
respectively.
|
(4)
|
Total
possible profit to the Investors is based on the aggregate discount
to
market price of the conversion of the Notes and cashless exercise
of
Warrants. The Notes’ conversion price is calculated by the average
of
the lowest three (3) intraday trading prices for our common shares
during
the twenty (20) trading days prior to the date the Notes were
issued
on
December 27, 2006 ($0.06 was the average),
less a 40% discount. The
result of an exercise of the Warrants at the exercise price and
a sale at
the market price would be a loss to the Selling Stockholder.
Since
the current closing price of our common stock is less than the
Warrants’
exercise price, the Warrants are out of the money and no profit
would be
realized as of May 4, 2007.
|
(5)
|
Percentage
equal to the maximum possible payments by us in the transaction
($300,176.17) plus total possible discount to the market price
of the
shares underlying the Notes ($955,225), plus profit from 10,000,000
warrants in the money as of May 4, 2007 ($0), divided by the
net proceeds
to the Company resulting from the sale of the Notes
($860,000).
|
(6)
|
Calculated
by dividing 145.98% (footnote 5) by
3.
|
Number
of shares outstanding prior to convertible note transaction held
by
persons other than the Selling Stockholders, affiliates of the
Company and
affiliates of the Selling Stockholders.
|
38,435,475
|
Number
of shares registered for resale by Selling Stockholders or affiliates
in
prior registration statements.
|
0
|
Number
of shares registered for resale by Selling Stockholders or affiliates
of
Selling Stockholders that continue to be held by Selling Stockholders
or
affiliates of Selling Stockholders.
|
0
|
Number
of shares sold in registered resale by Selling Stockholders or
affiliates
of Selling Stockholders.
|
0
|
Number
of shares registered for resale on behalf of Selling Stockholders
or
affiliates of Selling Stockholders in current transaction.
|
12,811,825
|
§
|
election
of our board of directors;
|
§
|
removal
of any of our directors;
|
§
|
amendment
of our certificate of incorporation or bylaws; and
|
§
|
adoption
of measures that could delay or prevent a change in control or impede
a
merger, takeover or other business combination involving
us.
|
§
|
Make
a suitability determination prior to selling a penny stock to the
purchaser;
|
§
|
Receive
the purchaser’s written consent to the transaction; and
|
§
|
Provide
certain written disclosures to the
purchaser.
|
§
|
With
a price of less than $5.00 per
share;
|
§
|
That
are not traded on a “recognized” national exchange;
|
§
|
Whose
prices are not quoted on the NASDAQ automated quotation system (NASDAQ
listed stock must still have a price of not less than $5.00 per share);
or
|
§
|
In
issuers with net tangible assets less than $2.0 million (if the issuer
has
been in continuous operation for at least three years) or $10.0
million (if in continuous operation for less than three years), or
with
average revenues of less than $6.0 million for the last three
years.
|
Name
of Selling Stockholder(11)
|
Shares
of Common Stock Owned Prior
to
the
Offering(1)
|
Percent
of Common Shares Owned Prior to the Offering
|
Shares
of Common Stock to be Sold in The Offering
|
Number
of Shares Owned
After
the Offering
|
Percent
of Shares Owned
After
Offering
|
|
|
|
|
|
|
AJW
Partners, LLC (7)
|
0
|
0
|
1,114,629
(2)(3)
|
0
|
0%
|
|
|
|
|
|
|
AJW
Offshore, Ltd. (8)
|
0
|
0
|
7,661,471
(2)(4)
|
0
|
0%
|
|
|
|
|
|
|
AJW
Qualified Partners, LLC (9)
|
0
|
0
|
3,881,983
(2)(5)
|
0
|
0%
|
|
|
|
|
|
|
New
Millennium Capital Partners II, LLC (10)
|
0
|
0
|
153,742
(2)(6)
|
0
|
0%
|
|
|
|
|
|
|
Totals
|
0
|
0
|
12,811,825
|
0
|
0%
|
|
(1)
|
Based
on 113,557,700 shares outstanding as of May 4, 2007.
|
|
|
|
|
(2)
|
The
conversion has been calculated based on the maximum number of shares
the
investors can receive in accordance with the 8% Callable Secured
Convertible Notes, up to ¹/3
of
our non-affiliate shares of outstanding common stock. The number
of shares
set forth in the table for the Selling Stockholders represents
an estimate
of the number of shares of common stock to be offered by the Selling
Stockholders. The actual number of shares of common stock issuable
upon
conversion of the notes is indeterminate, is subject to adjustment
and
could be materially less or more than such estimated numbers depending
on
factors which cannot be predicted by us at this time including,
among
other factors, the future market price of the common stock. The
actual
number of shares of common stock offered in this prospectus, and
included
in the registration statement of which this prospectus is a part,
includes
such additional number of shares of common stock as may be issued
or
issuable upon conversion of the notes by reason of any stock split,
stock
dividend or similar transaction involving the common stock, in
accordance
with Rule 416 under the Securities Act of 1933 (the “Securities Act”).
Under the terms of the debentures, if the debentures had actually
been
converted on December 27, 2006, the conversion price would have
been
$0.036. Under the terms of the debentures, the debentures are convertible
by any holder only to the extent that the number of shares of common
stock
issuable pursuant to such securities, together with the number
of shares
of common stock owned by such holder and its affiliates (but not
including
shares of common stock underlying unconverted shares of the debentures)
would not exceed 4.99% of the then outstanding common stock as
determined
in accordance with Section 13(d) of the Exchange Act. Accordingly,
the
number of shares of common stock set forth in the table for the
Selling
Stockholders exceeds the number of shares of common stock that
the selling
stockholder could beneficially own at any given time through their
ownership of the debentures.
|
|
|
|
|
(3)
|
Represents
1,114,629 shares of our common stock issuable in connection with
the
conversion of the callable secured convertible note.
|
|
|
|
|
(4)
|
Represents
7,661,471 shares of our common stock issuable in connection with
the
conversion of the callable secured convertible note.
|
|
|
|
|
(5)
|
Represents
3,881,983 shares of our common stock issuable in connection with
the
conversion of the callable secured convertible note.
|
|
|
|
|
(6)
|
Represents
153,742 shares of our common stock issuable in connection with
the
conversion of the callable secured convertible note.
|
|
|
|
|
(7)
|
AJW
Partners, LLC is a private investment fund that is owned by its
investors
and managed by SMS Group, LLC. SMS Group, LLC of which Mr. Corey S.
Ribotsky is the fund manager, has voting and investment control
over the
shares listed below owned by AJW Partners, LLC.
|
|
|
|
|
(8)
|
AJW
Offshore, Ltd. is a private investment fund that is owned by its
investors
and managed by First Street Manager II, LLC. First Street Manager
II, LLC,
of which Corey S. Ribotsky is the fund manager, has voting and
investment
control over the shares listed below owned by AJW Offshore
Ltd.
|
|
|
|
|
(9)
|
AJW
Qualified Partners, LLC is a private investment fund that is owned
by its
investors and managed by AJW Manager, LLC of which Corey S. Ribotsky
and
Lloyd A. Groveman are the fund managers, have voting and investment
control over the shares listed below owned by AJW Qualified Partners,
LLC.
|
|
|
|
|
(10)
|
New
Millennium Capital Partners II, LLC is a private investment fund
that is
owned by its investors and managed by First Street Manager II,
LLC. First
Street Manager II LLC of which Corey S. Ribotsky is the fund manager,
has
voting and investment control over the shares listed below owned
by New
Millennium Capital Partners, LLC.
|
|
|
|
|
(11)
|
None
of the Selling Stockholders are broker-dealers or affiliates of
broker-dealers.
|
§
|
ordinary
brokers transactions, which may include long or short
sales;
|
§
|
transactions
involving cross or block trades on any securities or market where
our
common stock is trading;
|
§
|
purchases
by brokers, dealers or underwriters as principal and resale by such
purchasers for their own accounts pursuant to this prospectus, “at the
market” to or through market makers or into an existing market for the
common stock;
|
§
|
in
other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
or
|
§
|
any
combination of the foregoing, or by any other legally available
means.
|
1.
|
Not
engage in any stabilization activities in connection with our common
stock;
|
2.
|
Furnish
each broker or dealer through which common stock may be offered,
such
copies of this prospectus from time to time, as may be required by
such
broker or dealer; and
|
3.
|
Not
bid for or purchase any of our securities or attempt to induce any
person
to purchase any of our securities permitted under the Exchange
Act.
|
Name
|
Age
|
Position
|
Date
of Appointment
|
|||
Robert
P. Atwell
|
52
|
President,
Chief Executive Officer, Chairman
|
March
19, 2003
|
|||
George
Jackson
|
45
|
Secretary,
Chief Financial Officer, Director
|
April
1, 2005
|
|||
Michael
Ellis
|
55
|
Chief
Operating Officer
|
March
2006
|
|||
Jane
Olmstead, CPA
|
51
|
Director
|
December
1, 2004
|
|||
Rounsevelle
Schaum
|
73
|
Director
|
October
2002
|
•
|
the
subject of any bankruptcy petition filed by or against any business
of
which such person was a general partner or executive officer either
at the
time of the bankruptcy or within two years prior to that
time;
|
•
|
convicted
in a criminal proceeding or is subject to a pending criminal proceeding
(excluding traffic violations and other minor
offenses);
|
•
|
subject
to any order, judgment, or decree, not subsequently reversed, suspended
or
vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting
his
involvement in any type of business, securities or banking activities;
or
|
•
|
found
by a court of competent jurisdiction (in a civil action), the Commission
or the Commodity Futures Trading Commission to have violated a federal
or
state securities or commodities
law.
|
|
|
|
|
|
|
|
|
Title
of Class
|
|
Name
and Address of Beneficial Owner
|
|
Amount
and Nature of Beneficial Ownership
|
|
Percent
of Class(2)
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Robert
P. Atwell (1)
(3)
|
|
66,915,004
|
|
58.93%
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
George
Jackson (1)
|
|
3,559,955
|
|
3.13%
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Jane
Olmstead (1)
|
|
1,859,552
|
|
1.64%
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Rounsevelle
Schaum (1)
|
|
1,100,000
|
|
0.97%
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Michael
Ellis (1)
|
|
1,687,714
|
|
1.49%
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
All
officers and directors as a group (5 in number)
|
|
75,122,225
|
|
66.15%
|
|
|
|
|
|
|
|
|
|
Class
A Convertible Preferred Stock
|
|
Robert
P. Atwell (1)
|
|
5,100,000
|
|
100%
|
|
|
|
|
|
|
|
|
|
Class
A Convertible Preferred Stock
|
|
All
officers and directors as a group (1 in number)
|
|
5,100,000
|
|
100%
|
|
|
|
|
|
|
|
|
|
Class
B Convertible Preferred Stock
|
|
Robert
P. Atwell (1)
|
|
5,100,000
|
|
100%
|
|
|
|
|
|
|
|
|
|
Class
B Convertible Preferred Stock
|
|
All
officers and directors as a group (1 in number)
|
|
5,100,000
|
|
100%
|
|
§ |
Film
& Media Group
|
§ |
Camelot
Studio Group
|
§ |
Camelot
Production Services Group
|
§ |
Camelot
Films
|
§ |
Camelot
Features
|
§ |
Camelot
Distribution
|
§ |
Camelot
Television
|
§
|
Camelot
Digital Media
|
§ |
Studio
Development
|
§ |
Business
Development
|
§ |
Developer
|
§ |
Counsel
|
§ |
Academic
Program Development
|
§ |
Technology
|
§ |
Radio
and Music
|
§ |
Consulting
|
§ |
Financial
Services
|
§ |
Event
Management
|
·
|
The
manner in which development and pre-production activities are managed
can
have the largest impact on the quality, creative content and the
cost of
creating a motion picture.
|
·
|
There
are a number of factors that make it difficult for most production
companies to invest large amounts of time and a proportionally large
share
of a motion picture's overall budget into development and pre-production
activities.
|
·
|
The
factors that make it difficult for many motion picture projects to
invest
a major share of a film's time and financial resources into development
and pre-production activities may have created a pervasive business
culture that emphasizes moving projects towards principal photography
too
quickly.
|
·
|
A
very small percentage of all writers that want to have their screenplays
become completed motion picture projects will ever realize this
ambition.
|
·
|
A
very small percentage of all directors will participate in principal
photography in any given year.
|
·
|
The
percentage of qualified actors that never have the opportunity to
participate in a completed original motion picture that is released
commercially is substantial.
|
·
|
There
are large periods of unemployment for many individuals involved in
motion
picture production.
|
|
|
|
|
|
|
|
|
|
Months
After
|
|
|
Approximate
|
|
||
Release
Period
|
Initial
Release
|
|
|
Release
Period
|
|
||
|
|
|
|
|
|
||
Theatrical
|
|
--
|
|
|
|
0-3 months
|
|
Home
video/ DVD (1st cycle)
|
|
3-6 months
|
|
|
|
1-3 months
|
|
Pay-per-transaction
(pay per-view and video-on-demand)
|
|
4-8 months
|
|
|
|
3-4 months
|
|
Pay
television
|
|
9-12 months
|
**
|
|
|
18 months
|
|
Network
or basic cable
|
|
21-28 months
|
|
|
|
18-60 months
|
|
Syndication
|
|
48-70 months
|
|
|
|
12-36 months
|
|
Licensing
and merchandising
|
|
Concurrent
|
|
|
|
Ongoing
|
|
All
international releases
|
|
Concurrent
|
|
|
|
Ongoing
|
|
*
|
These
patterns may not be applicable to every film, and may change with
the
emergence of new technologies.
|
** |
First
pay television window.
|
·
|
advance
any sums in excess of the budget required to complete and deliver
the
film;
|
·
|
complete
and deliver the film itself; or
|
·
|
shut-down
the production and repay the financier all monies spent thus far
to
produce the film.
|
|
·
|
Completion
of our expanded detailed business
plan
|
|
·
|
Corporate
Funding Package
|
|
·
|
Acquisition
of several key acquisition targets
in entertainment media, including film production and
distribution
|
|
·
|
Complete
first round of Camelot Film Group
financing
|
|
·
|
Formal
Announcement of first Camelot Studio Group studio
location
|
|
·
|
Establishment
of Bridge Financing Program
|
·
|
The
manner in which development and pre-production activities are managed
can
have the largest impact on both the quality, or creative content,
and the
cost of creating a motion picture.
|
·
|
There
are a number of factors that make it difficult for most motion pictures
to
invest large amounts of time and a proportionally large share of
a motion
picture's overall budget into development and pre-production
activities.
|
·
|
The
factors that make it difficult for many motion picture projects to
invest
a major share of a film's time and financial resources into development
and pre-production activities may have created a pervasive business
culture that emphasizes moving projects towards principal photography
too
quickly.
|
·
|
A
very small percentage of all writers that want to have their screenplays
become completed motion picture projects will ever realize this
ambition.
|
·
|
A
very small percentage of all directors will participate in principal
photography in any given year.
|
·
|
The
percentage of qualified actors that never have the opportunity to
participate in a completed original motion picture that is released
commercially is substantial.
|
·
|
There
are large periods of unemployment for many individuals involved in
motion
picture production.
|
·
|
Obtain
Complete And Outright Ownership Of Scripts And Other Literary
Works:
We
anticipate that by offering the proper incentives to screenwriters
and
other authors of compelling literary works well suited for a film
project,
we should be able to acquire complete and outright ownership of these
copyrights for a fraction of what many producers would pay simply
to get
an option on a script. As mentioned, such writers have an incentive
that
fewer than 10% of Screenwriters Guild members expect to experience
in a
given year the true opportunity to have their vision become a theatrically
released motion picture. In addition, our plan calls for participating
writers to share in the success of their script, through profit
participation and indirectly in the success of other film projects
we
complete, through restricted shares of or common stock. This same
formula
is expected to allow us to attract directors, producers and other
creative
personnel with a passion for making pictures that the public wants
to
see.
|
·
|
A
Recurring 6-Month Cycle Of Pre-Production
Activities:
Our plans for the pre-production phase for each motion picture project
we
initiate is to utilize a recurring 6-month cycle that starts every
month
for a new film, enabling us to create a rolling pipeline of product.
Unlike our perception of pure independents and small production companies,
we don't anticipate that our pre-production phase could consume creative
resources by having producers, writers and directors hunt for additional
film financing. Instead, we anticipate that each film should have
a set
and fixed budget. We expect the additional time that should emerge,
if we
are successful, to allow the production designer, producers, director
of
photography and other personnel adequate time to find ways to increase
quality and reduce costs through skillful
planning.
|
·
|
Relatively
Firm Scheduling Of Film Projects:
Another feature we expect to emerge as a result of our planned approach
is
that it should allow relatively firm scheduling of the cast at a
very
early stage, something that we believe is rare in the world of pure
independent productions. During this same time, we expect the production
team to benefit from a mentoring environment that insures the creative
spark sought in each of our productions does not become an increasing
collection of unrealistic ambitions, leading to missed production
schedules. With these elements firmly in place, we would typically
expect
principal photography to begin in the fifth month of each
project.
|
·
|
Licensing
of videocassettes and digital video discs (DVDs)
|
|
·
|
Pay-per-view
cable and satellite licensing
|
|
·
|
Pay
television and Internet licensing
|
|
·
|
Broadcast
television, cable and satellite licensing
|
|
·
|
Hotels,
airlines and other non-theatrical exhibitions
|
|
·
|
|
Theatrical
exhibition
|
·
|
Syndicated
television licensing
|
|
·
|
Internet
Protocol TV (IPTV)
|
1.
|
At
closing on December 29, 2006 (“Closing”), the Investors purchased Notes
aggregating $600,000 and Warrants to purchase 10,000,000 shares of
CMEG
common stock;
|
2.
|
Upon
effectiveness of the Registration Statement, the Investors will purchase
Notes aggregating $400,000.
|
|
Closing
Bid
|
|
YEAR
2005
|
High
Bid
|
Low
Bid
|
1st
Quarter Ended March 31
|
$0.020
|
$0.015
|
2nd
Quarter Ended June 30
|
$0.060
|
$0.015
|
3rd
Quarter Ended September 30
|
$0.040
|
$0.030
|
4th
Quarter Ended December 31
|
$0.050
|
$0.030
|
|
|
|
YEAR
2006
|
High
Bid
|
Low
Bid
|
1st
Quarter Ended March 31
|
$0.130
|
$0.040
|
2nd
Quarter Ended June 30
|
$0.140
|
$0.084
|
3rd
Quarter Ended September 30
|
$0.160
|
$0.075
|
4th
Quarter Ended December 31
|
$0.129
|
$0.060
|
|
|
|
YEAR
2007
|
High
Bid
|
Low
Bid
|
1st
Quarter Ended March 31
|
$0.140
|
$0.051
|
Period
ended May 4, 2007
|
$0.090
|
$0.032
|
Name
and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan Compensation ($)
|
|
Non-Qualified
Deferred Compensation Earnings
($)
|
|
All
Other Compensation
($)
|
Totals
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Robert
P. Atwell,
(1)
President,
Chief
|
|
2006
|
|
250,000
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
250,000
|
|
Executive
Officer
|
|
2005
|
|
250,000
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
250,000
|
|
George
Jackson, (2)
Secretary,
Chief
|
|
2006
|
|
180,000
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
180,000
|
|
Financial
Officer
|
|
2005
|
|
60,705
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
60,705
|
|
Michael
Ellis, (3)
Chief
Operating
|
|
2006
|
|
200,000
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
200,000
|
|
Officer
|
|
2005
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
0
|
|
Jane
Olmstead, (4)
Chief
Financial
|
|
2006
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
0
|
|
Officer
(until 3/31/05)
|
|
2005
|
|
31,510
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
31,510
|
(1)
|
Mr.
Atwell's salary for 2006 is accrued and unpaid. We intend to convert
his
salary into stock at current market prices. Mr. Atwell's salary for
2005
was converted into stock at current market prices on the conversion
date.
The total number of shares issued to Mr. Atwell for accrued salary
in 2005
was 4,011,706, at a conversion price of $0.07 per share, based on
the
average closing bid price of the stock calculated on a monthly basis
during the fiscal year as reported by the OTCBB.
|
|
|
(2)
|
Mr.
Jackson's salary for 2006 is accrued and unpaid. We intend to convert
his
salary into stock at current market prices. Mr. Jackson's salary
for 2005
was converted into stock at current market prices on the conversion
date.
The total number of shares issued to Mr. Jackson for accrued salary
in
2005 was 1,455,372, at a conversion price of $0.07 per share, based
on the
average closing bid price of the stock calculated on a monthly basis
during the fiscal year as reported by the OTCBB.
|
|
|
(3)
|
Mr.
Ellis's salary for 2005 is accrued and unpaid. We intend to convert
his
salary into stock at current market prices. Mr. Ellis's salary for
2005
was converted into stock at current market prices on the conversion
date.
The total number of shares issued to Mr. Ellis for accrued salary
in 2005
was 233,547, at a conversion price of $0.043 per share, based on
the
average closing bid price of the stock calculated on a monthly basis
during the fourth quarter of 2005 as reported by the
OTCBB.
|
|
|
(4)
|
Ms.
Olmstead's salary for 2005 was converted into stock at current market
prices on the conversion date. The total number of shares issued
to Ms.
Olmstead for accrued salary in 2005 was 347,019, at a conversion
price of
$0.09 per share, based on the average closing bid price of the stock
calculated on a monthly basis during the first and second quarter
of 2005
as reported by the OTCBB.
|
|
|
|
Note:
All share average conversion prices were rounded
upward.
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - Malone& Bailey,
P.C.
|
F-2
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - Epstein, Weber & Conover, PLC |
F-3
|
|
|
BALANCE
SHEETS AS OF DECEMBER 31, 2006 and 2005
|
F-4
|
|
|
STATEMENTS
OF OPERATIONS FOR 2006, 2005 AND FOR INCEPTION TO DATE
|
F-5
|
|
|
STATEMENTS OF CASH FLOWS FOR 2006, 2005 AND FOR INCEPTION TO DATE |
F-6
- F-7
|
STATEMENTS
OF STOCKHOLDERS' DEFICIT
|
F-8-
F-9
|
|
|
NOTES
TO FINANCIAL STATEMENTS
|
F-10
TO F-14
|
Camelot
Entertainment Group, Inc.
(A
Development Stage Enterprise)
|
|
Balance
Sheet
|
|
|
ASSETS
|
December
31,
|
December
31,
|
|||||
|
2006
|
2005
|
|||||
Current
Assets
|
|||||||
Cash
|
$
|
435,533
|
$
|
3,023
|
|||
Prepaid
Expenses
|
6,424
|
8,816
|
|||||
Loan
Receivable
|
$
|
17,500
|
|||||
Deferred
Financing Costs
|
74,744
|
||||||
Total
Current Assets
|
534,201
|
11,839
|
|||||
|
|||||||
Other
Assets
|
10,000
|
||||||
Capitalized
Script Costs
|
75,800
|
18,800
|
|||||
Total
Other Assets
|
85,800
|
18,800
|
|||||
|
|||||||
Total
Assets
|
$
|
620,001
|
$
|
30,639
|
|||
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities
|
|||||||
Accounts
Payable and accured liabilities
|
$
|
103,673
|
86,135
|
||||
Accrued
Expenses - other
|
36,952
|
||||||
Stockholder
advances
|
186,000
|
||||||
Scorpion
Bay, LLC Note Payable
|
250,000
|
||||||
Total
Current Liabilities
|
576,625
|
86,135
|
|||||
Long
Term Liabilities
|
|||||||
Secured
Note Payable - NIR Fairhill, net of unamortized discount of
$598,479
|
1,521
|
||||||
Derivative
Liability - Compound embedded derivatives
|
538,890
|
||||||
Derivative
Liability - Warrant
|
698,390
|
||||||
Total
Long Term Liablilities
|
1,238,801
|
0
|
|||||
|
|||||||
Total
Liabilities
|
1,815,426
|
86,135
|
|||||
|
|||||||
Stockholders'
Equity
|
|||||||
Common
Stock; Par Value $.001 Per Share; Authorized
|
|||||||
150,000,000
Shares; 106,655,743 Shares and 93,649,859
|
|||||||
Issued
and Outstanding, respectively
|
106,656
|
93,649
|
|||||
Class
A Convertible Preferred Stock; Par Value $.01 per share
|
5,100
|
5,100
|
|||||
Authorized,
issued and outstanding 5,100,000 shares
|
|||||||
Class
B Convertible Preferred Stock; Par Value $.01 per share
|
5,100
|
5,100
|
|||||
Authorized,
issued and outstanding 5,100,000 shares
|
|||||||
Subscription
Receivable
|
(258,072
|
)
|
(258,072
|
||||
Capital
in Excess of Par Value
|
13,119,002
|
11,923,586
|
|||||
Deficit
Accumulated During the Development Stage
|
(14,173,211
|
)
|
(11,824,859
|
||||
|
|||||||
Total
Stockholders' Equity
|
(1,195,425
|
)
|
(55,496
|
||||
|
|||||||
Total
Liabilities and Stockholders' Equity
|
$
|
620,001
|
30,639
|
||||
|
|||||||
The
accompanying notes are an integal part of theses financial
statements.
|
Camelot
Entertainment Group, Inc.
|
||||||||||
(A
Development Stage Enterprise)
|
||||||||||
Statement
of Operations
|
||||||||||
|
||||||||||
|
||||||||||
|
From
|
|||||||||
|
Inception
on
|
|||||||||
|
April
21, 1999
|
|||||||||
|
For
the Year Ended,
|
through
|
||||||||
|
December
31,
|
December
31,
|
December
31,
|
|||||||
2006
|
2005
|
2006
|
||||||||
REVENUE
|
$
|
-
|
$
|
-
|
$
|
58,568
|
||||
Total
Revenue
|
$
|
-
|
$
|
-
|
$
|
58,568
|
||||
EXPENSES
|
||||||||||
Costs
of services
|
95,700
|
|||||||||
Sales
and Marketing
|
53,959
|
|||||||||
Research
& Development
|
252,550
|
|||||||||
General
& Administrative
|
1,554,907
|
4,500,141
|
10,147,473
|
|||||||
Impairment
of assets
|
2,402,338
|
|||||||||
Impairment
of investments in
|
||||||||||
other
companies
|
710,868
|
|||||||||
Total
Expenses
|
1,554,907
|
4,500,141
|
13,662,888
|
|||||||
NET
OPERATING LOSS
|
(1,554,907
|
)
|
(4,500,141
|
)
|
(13,604,320
|
)
|
||||
OTHER
INCOME (EXPENSES)
|
||||||||||
Interest
(Expense)
|
(822,925.00
|
)
|
-
|
(832,219
|
)
|
|||||
Other
income (expense)
|
29,480.00
|
-
|
7,828
|
|||||||
Gain/(loss)
for change in derivative liability
|
-
|
-
|
255,500
|
|||||||
Total
Other Income (Expenses)
|
(793,445.00
|
)
|
-
|
(568,891
|
)
|
|||||
NET
LOSS
|
(2,348,352
|
)
|
(4,500,141
|
)
|
$
|
(14,173,211
|
)
|
|||
BASIC
AND DILUTED LOSS PER COMMON SHARE
|
(0.02
|
)
|
(0.05
|
)
|
$
|
(0.30
|
)
|
|||
WEIGHTED
AVERAGE NUMBER OF
|
||||||||||
SHARES
OUTSTANDING
|
94,012,109
|
83,688,182
|
46,984,139
|
|||||||
The
accompanying notes are an integral part of these financial
statements.
|
Camelot
Entertainment Group, Inc.
|
||||||||||
(A
Development Stage Enterprise)
|
||||||||||
Statement
of Cash Flows
|
||||||||||
|
||||||||||
|
From
|
|||||||||
|
Inception
on
|
|||||||||
|
April
21, 1999
|
|||||||||
|
For
the Year Ended,
|
through
|
||||||||
|
December
31,
|
December
31,
|
December
31,
|
|||||||
|
2006
|
2005
|
2006
|
|||||||
OPERATING
ACTIVITIES
|
||||||||||
Net
(loss) income for the period
|
$
|
(2,348,352
|
)
|
$
|
(4,500,141
|
)
|
$
|
(14,173,211
|
)
|
|
|
||||||||||
Adjustments
to reconcile net (loss) to cash provided (used) by operating
activities:
|
||||||||||
Amortization
of deferred financing cost
|
256 | - | 256 | |||||||
Amortization
of discount associated with notes payable
|
1,521
|
- |
1,521
|
|||||||
Imputed
interest on shareholder loan
|
19,238
|
- | 19,238 | |||||||
Stock
issued for interest expense
|
135,150
|
- | 135,150 | |||||||
Loss
on derivative liability
|
666,761
|
- | 666,761 | |||||||
Gain
on derivative liability
|
(29,480 | ) | - | (29,480 | ) | |||||
Common
stock issued per dilution agreement
|
170,444
|
198,064
|
368,508
|
|||||||
Value
of options expensed
|
-
|
-
|
351,000
|
|||||||
Gain
on extinguishment of debt
|
-
|
-
|
(255,500
|
)
|
||||||
Depreciation
|
3,997
|
|||||||||
Amortization
of deferred compensation
|
-
|
-
|
1,538,927
|
|||||||
Common
Stock issued for services
|
651,088
|
595,010
|
2,533,935
|
|||||||
-
|
-
|
|||||||||
Common
Stock issued for expense reimbursement
|
-
|
22,000
|
||||||||
Common
Stock issued for technology
|
19,167
|
|||||||||
Impairment
of investments in other companies
|
-
|
710,868
|
||||||||
Impairment
of assets
|
2,628,360
|
|||||||||
Prepaid
services expensed
|
-
|
530,000
|
||||||||
Expenses
paid through notes payable proceeds
|
-
|
-
|
66,489
|
|||||||
Loss
on disposal of property and equipment
|
5,854
|
|||||||||
Preferred
Stock issued to shareholder
|
-
|
3,366,000
|
3,366,000
|
|||||||
Change
in assets and liabilities:
|
||||||||||
(increase)
decrease in other current assets
|
(15,108
|
)
|
(9,250
|
)
|
(24,358
|
)
|
||||
Increase
(decrease) in accounts payable & other a/p
|
173,287
|
(14,000
|
)
|
347,766
|
||||||
Increase
(decrease) in due to officers
|
-
|
- | - | |||||||
Net
Cash provided (used) by operating activities
|
(575,195
|
)
|
(364,317
|
)
|
(1,166,752
|
)
|
||||
Cash
flows from investing activities:
|
||||||||||
Purchase
of fixed assets
|
(6,689
|
)
|
||||||||
Purchase
of assets-Script Costs/business deposits
|
(67,000
|
)
|
(18,800
|
)
|
(85,800
|
)
|
||||
Cash
provided (used) from investing activities
|
(67,000
|
)
|
(18,800
|
)
|
(92,489
|
)
|
||||
Cash
flows from financing activities:
|
||||||||||
Contributed
capital
|
25,500
|
|||||||||
Borrowings
on related party debt
|
429,182
|
385,000
|
1,016,613
|
|||||||
Payments on related party debt |
(125,000
|
) | - |
(125,000
|
) | |||||
Borrowings
on debt
|
850,000
|
- |
855,998
|
|||||||
Deferred
financing cost
|
(75,000
|
) | - |
(75,000
|
) | |||||
Principal
payments on long term debt
|
(4,477
|
) | - |
(4,477
|
) | |||||
Cash
provided (used) in financing activities
|
1,074,705
|
385,000
|
1,693,634
|
Increase
(decrease) in cash
|
432,510
|
1,883
|
434,393
|
|||||||
Cash
at beginning of period
|
3,023
|
1,140
|
1,140
|
|||||||
Cash
at the end of the period
|
435,533
|
3,023
|
435,533
|
|||||||
Supplemental
cash flow information:
|
||||||||||
Noncash
investing and financial activities:
|
||||||||||
Creation
of debt discount
|
$ |
600,000
|
- | $ |
600,000
|
|||||
Stock
issued for related party debt
|
$
|
232,503
|
- | $ |
232,503
|
|||||
The
accompanying notes are an integral part of these financial
statements.
|
Camelot
Entertainment Group, Inc.
(A
Development Stage Enterprise)
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
STATEMENTS
OF CHANGES IN STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
(Deficit)
|
|||||||||||||||||||||||||||
|
Accumulated
|
|||||||||||||||||||||||||||
|
|
Additional
|
During
|
|||||||||||||||||||||||||
|
Common
Stock
|
Preferred
Stock
|
Paid-In
|
Development
|
Subscription
|
Deferred
|
||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Receivable
|
Compensation
|
Total
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance
at January 1, 2004
|
33,856,433
|
33,857
|
0
|
0
|
5,464,539
|
(6,059,442
|
)
|
0
|
0
|
(561,046
|
)
|
|||||||||||||||||
|
||||||||||||||||||||||||||||
Shares
issued for services
|
100,000
|
100
|
2,900
|
3,000
|
||||||||||||||||||||||||
Shares
issued for financing
|
6,791,287
|
6,791
|
196,948
|
203,739
|
||||||||||||||||||||||||
Subscriptions
receivable for financing agreement
|
0
|
0
|
(116,069
|
)
|
(116,069
|
)
|
||||||||||||||||||||||
Net
(loss) for the three months ended March 31, 2004
|
0
|
0
|
(103,522
|
)
|
(103,522
|
)
|
||||||||||||||||||||||
Balance
at March 31, 2004
|
40,747,720
|
$
|
40,748
|
$
|
0
|
$
|
0
|
$
|
5,664,387
|
(6,162,964
|
)
|
($116,069
|
)
|
$
|
0
|
($573,898
|
)
|
|||||||||||
Share
issued for services
|
24,009,000
|
24,009
|
1,085,500
|
1,109,509
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Share
issued for financing
|
7,604,562
|
7,605
|
0
|
0
|
221,460
|
(316,003
|
)
|
(86,938
|
)
|
|||||||||||||||||||
Advances
offset sub a/r
|
174,000
|
174,000
|
||||||||||||||||||||||||||
Shares
issued for debt
|
1,000,000
|
1,000
|
0
|
0
|
39,000
|
40,000
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Shares
issued for amt due
|
1,589,927
|
1,590
|
0
|
0
|
47,000
|
48,590
|
||||||||||||||||||||||
Value
of option exercised
|
351,000
|
351,000
|
||||||||||||||||||||||||||
Net
(loss)
|
(1,161,756
|
)
|
(1,161,756
|
)
|
||||||||||||||||||||||||
Balance
as of December 31, 2004
|
74,951,209
|
74952
|
0
|
0
|
7408347
|
(7,324,720
|
)
|
(258,072
|
)
|
(99,493
|
)
|
|||||||||||||||||
|
||||||||||||||||||||||||||||
Net
(loss) 1st quarter
|
(117,096
|
)
|
(117,096
|
)
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance
at March 31, 2005
|
74,951,209
|
74,952
|
$
|
0
|
$
|
0
|
7,408,347
|
(7,441,816
|
)
|
(258,072
|
)
|
$
|
0
|
(216,589
|
)
|
|||||||||||||
|
||||||||||||||||||||||||||||
Shares
issued for
|
4,000,000
|
4,000
|
0
|
0
|
216,000
|
0
|
220,000
|
|||||||||||||||||||||
consulting
services
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Shares
issued for
|
2,276,033
|
2,276
|
0
|
0
|
187,568
|
0
|
189,844
|
|||||||||||||||||||||
officers
salaries
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Shares
issued to
|
1,848,723
|
1,848
|
0
|
0
|
79,078
|
0
|
80926
|
|||||||||||||||||||||
Eagle
for expenses paid
|
||||||||||||||||||||||||||||
Net
Loss
|
(486,174
|
)
|
(486,174
|
)
|
||||||||||||||||||||||||
Subtotals
for 2nd quarter
|
8,124,756
|
8,125
|
0
|
0
|
482,646
|
0
|
490,771
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance
at June 30, 2005
|
83,075,965
|
83,076
|
0
|
0
|
7,890,993
|
(7,927,990
|
)
|
(258,072
|
)
|
(211,993
|
)
|
|||||||||||||||||
|
||||||||||||||||||||||||||||
Net
Loss
|
$
|
(127,024
|
)
|
(127024
|
)
|
|||||||||||||||||||||||
Balance
at Sept 30, 2005
|
83,075,965
|
83,076
|
0
|
0
|
7,890,993
|
$
|
(8,055,014
|
)
|
($258,072
|
)
|
(339,017
|
)
|
Balance
at Sept 30, 2005
|
83,075,965
|
83,076
|
0
|
0
|
7,890,993
|
$
|
(8,055,014
|
)
|
($258,072
|
)
|
(339,017
|
)
|
|||||||||||||
|
|||||||||||||||||||||||||
Shares
issued for
|
233,547
|
233
|
0
|
0
|
9,767
|
10,000
|
|||||||||||||||||||
consulting
services
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Shares
issued for
|
3,538,263
|
3,538
|
0
|
0
|
171,462
|
175,000
|
|||||||||||||||||||
officers
salaries
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Shares
issued to
|
1,452,662
|
1,453
|
0
|
0
|
118,219
|
119,672
|
|||||||||||||||||||
Eagle
for expenses paid
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Shares
issued to Eagle
|
1,762,271
|
1,762
|
120,991
|
122,753
|
|||||||||||||||||||||
20%
of shares issued
|
|||||||||||||||||||||||||
Shares
issued for
|
3,586,881
|
3,587
|
256,354
|
259,941
|
|||||||||||||||||||||
Shareholder
loans 2005
|
|||||||||||||||||||||||||
Net
Loss 4th Quarter
|
$
|
(3,769,845
|
)
|
(3,769,845
|
)
|
||||||||||||||||||||
Class
A Preferred Stock issued
|
5,100,000
|
5,100
|
555,900
|
561,000
|
|||||||||||||||||||||
Class
B Preferred Stock issued
|
5,100,000
|
5,100
|
2,799,900
|
2,805,000
|
|||||||||||||||||||||
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Balance
at Dec 31, 2005
|
93,649,589
|
93,649
|
10,200,000
|
10,200
|
11,923,586
|
(11,824,859
|
)
|
(258,072
|
)
|
(55,496
|
)
|
||||||||||||||
|
|||||||||||||||||||||||||
Shares
issued for
|
5,191,538
|
5,192
|
0
|
0
|
464,808
|
470,000
|
|||||||||||||||||||
officers
salaries
|
|||||||||||||||||||||||||
Shares
issued to Consultants
|
2,009,787
|
2,010
|
179,078
|
181,088
|
|||||||||||||||||||||
Shares
issued to Eagle
|
|||||||||||||||||||||||||
for
expenses paid
|
1,201,329
|
1,201
|
0
|
0
|
113,120
|
114,321
|
|||||||||||||||||||
|
|||||||||||||||||||||||||
Shares
issued to Eagle
|
1,270,772
|
1,271
|
0
|
0
|
116,911
|
118,182
|
|||||||||||||||||||
Shareholder
loans
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Shares
issued to Eagle
|
1,832,728
|
1,833
|
0
|
0
|
168,611
|
170,444
|
|||||||||||||||||||
per
agreement 20%
|
|||||||||||||||||||||||||
Net
Loss 2006
|
(2,348,352
|
)
|
(2,348352
|
)
|
|||||||||||||||||||||
Shares
issued to Scorpion
Bay LLC
|
1,500,000
|
1,500
|
0
|
0
|
133,650
|
135,150
|
|||||||||||||||||||
Imputed
interest on shareholder loan
|
19,238
|
19,238
|
|||||||||||||||||||||||
Balance
at Dec 31, 2006
|
106,655,743
|
106,656
|
10,200,000
|
10,200
|
13,119,002
|
(14,173,211
|
)
|
(258,072
|
)
|
(1,195,425
|
)
|
1.
|
BASIS
OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
|
1.
|
BASIS
OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES -
continued
|
2.
|
GOING
CONCERN
|
3.
|
ADVANCES
FROM AFFILIATE
|
4.
|
NOTES
PAYABLE
|
5.
|
DUE
TO OFFICERS
|
6. |
GENERAL
AND ADMINISTRATIVE EXPENSES
|
7. |
INCOME
TAXES
|
8. |
RELATED
PARTY TRANSACTIONS
|
9. |
COMMON
STOCK
|
Item
24.
|
Indemnification
of Directors and Officers.
|
Item
25.
|
Other
Expenses of Issuance and
Distribution.
|
Securities
and Exchange Commission registration fee
|
$
|
144.30
|
Transfer
Agent Fees (1)
|
$
|
2,000.00
|
Accounting
fees and expenses (1)
|
$
|
18,000.00
|
Legal
fees and expenses (1)
|
$
|
65,000.00
|
Consulting
fees and expenses (1)
|
$
|
120,000.00
|
Insurance
fees and expenses (1)
|
$
|
15,000.00
|
Document
fees and expenses (1)
|
$
|
20,000.00
|
Total
(1)
|
$
|
240,144.30
|
(1)
|
Estimated
|
Item
26.
|
Recent
Sales of Unregistered
Securities.
|
Item
27.
|
Exhibits.
|
Exhibit No.
|
|
Title
of Document
|
Location
|
|
|
|
|||
3.1.1
|
|
Certificate
of Incorporation
|
|
Incorporated
by reference as Exhibit 2.1 to Form 10-KSB filed April 17,
2001
|
|
|
|||
3.1.2
|
|
Amended
Certificate of Incorporation
|
|
Incorporated
by reference to Form 8-K filed June 29, 2004
|
|
|
|||
3.2
|
|
By-laws
|
|
Incorporated
by reference as Exhibit 2.1 to Form 10-KSB filed April 17,
2001
|
|
|
|||
4.1
|
|
Securities
Purchase Agreement dated December 27, 2006, by and among the Company
and
New Millennium Capital Partners II, LLC, AJW Qualified Partners,
LLC, AJW
Offshore, Ltd. and AJW Partners, LLC
|
|
Incorporated
by reference as Exhibit 4.1 to Form 8-K filed on February 1,
2007
|
|
|
|||
4.2
|
|
Form
of Callable Convertible Secured Note by and among New Millennium
Capital
Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd.
and AJW
Partners, LLC
|
|
Incorporated
by reference as Exhibit 4.2 to Form 8-K filed on February 1,
2007
|
|
|
|||
4.3
|
|
Form
of Stock Purchase Warrant issued to New Millennium Capital Partners
II,
LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners,
LLC
|
|
Incorporated
by reference as Exhibit 4.3 to Form 8-K filed on January 4,
2007
|
|
|
|||
4.4
|
|
Registration
Rights Agreement dated December 27, 2006 by and among New Millennium
Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore,
Ltd.
and AJW Partners, LLC
|
|
Incorporated
by reference as Exhibit 4.4 to Form 8-K filed on January 4,
2007
|
|
|
|||
4.5
|
|
Security
Agreement dated December 27, 2006 by and among the Company and New
Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,
AJW
Offshore, Ltd. and AJW Partners, LLC
|
|
Incorporated
by reference as Exhibit 4.5 to Form 8-K filed on January 4,
2007
|
|
|
|||
4.6
|
|
Intellectual
Property Security Agreement dated December 27, 2006 by and among
the
Company and New Millennium Capital Partners II, LLC, AJW Qualified
Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC
|
|
Incorporated
by reference as Exhibit 4.6 to Form 8-K filed on January 4,
2007
|
|
|
4.7
|
|
Structuring
Agreement with Lionheart
|
|
Incorporated
by reference as Exhibit 4.7 to Form 8-K filed on January 4,
2007
|
|
|
|||
4.8
|
|
Stock
Purchase Warrant issued to Lionheart Associates LLC d/b/a Fairhills
Capital
|
|
Incorporated
by reference as Exhibit 4.8 to Form 8-K filed on February 2,
2007
|
|
|
|||
5.1
|
|
Opinion
of legality and consent of Anslow & Jaclin, LLP
|
|
Filed
herewith
|
|
|
|
|
|
14.1
|
|
Code
of Ethics
|
|
Incorporated
by reference as Exhibit 14.1 to Form SB-2 filed on February 2,
2007
|
|
|
|
|
|
23.1
|
Consent of Epstein, Weber & Conover, PLC | Filed herewith | ||
23.2
|
Consent
of Malone &
Bailey PC
|
Filed herewith |
Item
28.
|
Undertakings.
|
(a)
|
Rule
415 Offering:
Undertaking
pursuant to Item 512(a) of Regulation S-B
|
|
|
||
The
undersigned registrant hereby undertakes:
|
||
|
||
1.
|
To
file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration
statement:
|
|
|
||
|
(a)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act;
|
|
||
|
(b)
|
To
reflect in the prospectus any facts or events arising after the effective
date of this registration statement, or most recent post-effective
amendment, which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration
statement; and notwithstanding the foregoing, any increase or decrease
in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
From
the low or high end of the estimated maximum offering range may be
reflected in the form of prospects filed with the Commission pursuant
to
Rule 424(b) if, in the aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement; and
|
|
||
|
(c)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in this registration statement or any material
change to such information in the registration
statement.
|
|
||
2.
|
That,
for the purpose of determining any liability under the Securities
Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein,
and the
offering of such securities at that time shall be deemed to be the
initial
bona fide offering thereof.
|
|
|
||
3.
|
To
remove from registration by means of a post-effective amendment any
of the
securities being registered hereby which remain unsold at the termination
of the offering.
|
|
|
||
4.
|
For
determining liability of the undersigned small business issuer under
the
Securities Act to any purchaser in the initial distribution of the
securities, the undersigned small business issuer undertakes that
in a
primary offering of securities of the undersigned small business
issuer
pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to he purchaser, if the securities
are
offered or sold to such purchaser by means of any of the following
communications, the undersigned small business issuer will be a seller
to
the purchaser and will be considered to offer or sell such securities
to
such purchaser:
|
|
||
|
(a)
|
Any
preliminary prospectus or prospectus of the undersigned small business
issuer relating to the offering required to be filed pursuant to
Rule 424
(Sec. 230. 424);
|
|
||
|
(b)
|
Any
free writing prospectus relating to the offering prepared by or on
behalf
of the undersigned small business issuer or used or referred to by
the
undersigned small business issuer;
|
|
||
|
(c)
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned small business
issuer or its securities provided by or on behalf of the undersigned
small
business issuer; and
|
|
||
|
(d)
|
Any
other communication that is an offer in the offering made by the
undersigned small business issuer to the
purchaser.
|
(b)
|
Request
for Acceleration of Effective Date:
Undertaking
pursuant to Item 512(e) of Regulation S-B
|
|
|
Insofar
as indemnification for liabilities arising under the Securities Act
may be
permitted to our directors, officers and controlling persons pursuant
to
the provisions above, or otherwise, we have been advised that in
the
opinion of the Securities and Exchange Commission such indemnification
is
against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities, other than the payment by us of expenses
incurred or paid by one of our directors, officers, or controlling
persons
in the successful defense of any action, suit or proceeding, is asserted
by one of our directors, officers, or controlling persons in connection
with the securities being registered, we will, unless in the opinion
of
our counsel the matter has been settled by controlling precedent,
submit
to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities
Act, and we will be governed by the final adjudication of such
issue.
|
(c)
|
For
Purposes of Determining Liability under the Securities
Act:
Undertaking
pursuant to Item 512(g) of Regulation S-B
|
|
|
The
undersigned registrant hereby undertakes that, for the purpose of
determining liability under the Securities Act to any
purchaser:
|
|
|
|
Each
prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance
on Rule
430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement
will,
as to a purchaser with a time of contract of sale prior to such first
use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement
or
made in any such document immediately prior to such date of first
use.
|
CAMELOT
ENTERTAINMENT GROUP INC.
|
|
|
|
By:
|
/s/
Robert P. Atwell
|
|
ROBERT
P. ATWELL
|
|
President,
Chief Executive Officer
|
|
|
Date:
|
May
11, 2007
|
|
|
|
|
CAMELOT
ENTERTAINMENT GROUP INC.
|
|
|
|
By:
|
/s/
George Jackson
|
|
GEORGE
JACKSON
|
|
Secretary,
Chief Financial Officer
|
|
(Principal
Accounting Officer)
|
Date:
|
May
11, 2007
|
|
|
|
|
CAMELOT
ENTERTAINMENT GROUP INC.
|
|
|
|
By:
|
/s/
Michael Ellis
|
|
MICHAEL
ELLIS
|
|
Chief
Operating Officer
|
|
|
Date:
|
May
11, 2007
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Robert P. Atwell
|
|
President,
Chief Executive Officer,
|
|
May
11, 2007
|
ROBERT
P. ATWELL
|
|
Chairman
|
|
|
|
|
|
|
|
/s/
George Jackson
|
|
Secretary,
Chief Financial Officer
|
|
May
11, 2007
|
GEORGE
JACKSON
|
|
(Principal
Accounting Officer), Director
|
|
|
|
|
|
|
|
/s/
Michael Ellis
|
|
Chief
Operating Officer
|
|
May
11, 2007
|
MICHAEL
ELLIS
|
|
|
|
|
|
|
|
|
|
/s/
Jane Olmstead, CPA
|
|
Director
|
|
May
11, 2007
|
JANE
OLMSTEAD, CPA
|
|
|
|
|
|
|
|
|
|
/s/
Rounsevelle Schaum
|
|
Director
|
|
May
11, 2007
|
ROUNSEVELLE
SCHAUM
|
|
|
|
|