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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                ----------------
                                   FORM 10-KSB
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               |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
             OF THE SECURITIES EXCHNAGE ACT OF 1934 [FEE REQUIRED]

                  For the fiscal year ended September 30, 2003

                                       or

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

         For the transition period from _____________ to _______________

                         Commission file number 1-12312

                                 CAMINOSOFT CORP
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

      California                                          95-3880130
------------------------                    ------------------------------------
(State of incorporation)                    (I.R.S. Employer Identification No.)

        600 Hampshire Road, Suite 105, Westlake Village, California 91361
                    (Address of principal executive offices)

                    Issuer's telephone number: (805) 370-3100

      Securities registered under Section 12(b) of the Exchange Act: None

      Securities registered under Section 12(8) of the Exchange Act: Common
Stock no par value.

      Check mark indicates whether the issuer (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 |_|

      Check mark indicates that the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after
distribution of securities under a plan confirmed by a court.

                                  YES X  NO |_|

      Check mark indicates that the disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |X|

      Issuer's revenues for its most recent fiscal year were $790,156.

      The aggregate market value of the voting stock held by non-affiliates of
the registrant as of December 22, 2003 was approximately $1,650,000.

      Number of shares outstanding of each of the issuer's classes of common
stock as of December 22, 2003: 13,122,614 shares of common stock, no par value.

      The following documents are incorporated by reference into this report:
None.

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FORWARD-LOOKING STATEMENTS

      In addition to historical information, this Annual Report contains
forward-looking statements. The forward-looking statements contained herein are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those reflected in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in the section entitled "Management's Discussion and Analysis
and Plan of Operation." Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's analysis only as of
the date hereof. CaminoSoft Corp undertakes no obligation to publicly revise
these forward-looking statements to reflect events or circumstances that arise
after the date hereof. Readers should carefully review the risks described in
other documents the Company files from time to time with the Securities and
Exchange Commission, including the Quarterly Reports on Form 10-QSB and any
Current Reports on Form 8-K.

                                     PART I

Item 1. DESCRIPTION OF BUSINESS.

OVERVIEW

      CaminoSoft Corp. (the "Company" or "CaminoSoft") was organized in 1983 as
Interscience Computer Services, Inc. to be a third-party provider of maintenance
services for computer hardware and related peripheral equipment. On September
17, 1999, the Company acquired certain assets (the "Camino Assets") from Camino
Software Systems, Inc. ("Camino") for 468,000 shares of the Company's common
stock and the assumption of $315,172 of certain Camino liabilities. The Camino
Assets consisted of the name, Camino Software Systems, Inc., the Highway Server
hierarchical data storage management ("HSM") software, certain business
contracts and intangible personal property. On April 17, 2000, the Company
changed its name to CaminoSoft Corp. to reflect the change to a software sales
and development firm. The Company's present business is the development and sale
of storage solutions based on the HSM and High Availability technology.

      In November 2001, the Company entered into a non exclusive licensing and
distribution agreement with Novell, Inc., which allowed Novell and its
distribution channel partners to sell CaminoSoft's suite of software solutions.
In January 2002, the Company's "managed server and storage server" products for
Novell NetWare operating systems were included for distribution on the Novell
price list of products. As of June 30, 2003, the products were removed at the
Company's request from the Novell price list and a new agreement allowing Novell
sales personnel to sell the Company's products on a commission basis is now in
place. The Company will now ship and invoice all orders for sales of its
products through Novell and its distribution channel directly. The Company will
no longer be required to consign inventory to Novell for distribution.

      In July 2002, The Company's products were certified as "ca smart" which is
the Computer Associates' certification for compatibility with its BrightStor
enterprise software and its ARCServe line of data back up solutions. The Company
also became a Computer Associates "partner", which opens up additional
distribution channels for the Company's products in conjunction with Computer
Associates enterprise software.

      Also in July 2002, the Company's Managed Server for Windows 2000 operating
systems received certification for compatibility from Microsoft. The Company is
also a member of the Microsoft certified partner program, which will allow for
certified Microsoft distribution partners to sell and distribute the Company's
Windows 2000 products. This certification is in line with the Company's plan for
compatibility with multiple distribution partners and software platforms to
allow for the opportunity of significant increases in the potential market size
and to help create acceptance of the data storage and management solutions
provided by CaminoSoft.


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<PAGE>

      In February 2003, the Company entered into a licensing and distribution
agreement with Legato Systems, Inc. for marketing, distribution, future
development and customer service of certain Legato high availability products
for Novell NetWare operating systems. The high availability products specified
are "Standby Server(TM)" for NetWare, "SnapShotServer(R)" for NetWare, and
"OFFSite Archive(TM)" for NetWare. Legato has transitioned all customer service
to the Company as of February 2003. The Company now has a broad base of products
and solutions for the Novell NetWare storage market, which include, failover,
fault tolerance, mirroring, offsite archiving and improved disaster recovery.
The acquisition of the high availability products has also given access to the
distribution channel used by Legato for these products which expands the market
awareness for our traditional HSM technologies for both NetWare and Windows
2000. The Company has also hired key development and customer service personnel
to continue development and service for the high availability products. In
conjunction with this expansion, in February 2003, the Company opened an office
in Orem, Utah to house development and service personnel which now totals 5
employees.

      In March 2003, the Company entered into a distribution agreement with
Ingram Micro Inc., the largest global wholesale provider of technology products
and supply chain management services. Ingram Micro will distribute storage
management products for NetWare and Windows 2000 and the high availability
products for NetWare in North America. The addition of the distribution
agreement with Ingram Micro will extend the channel of distribution capabilities
for the Company to include the extensive base of integrators and resellers who
purchase through Ingram Micro.

      In June 2003, the Company announced the introduction of MEDISTAR(TM), the
Company's Medical Enterprise Document and Image Storage, Archiving, and
Retrieval system. The system offers healthcare providers a high-performance,
cost-effective digital solution that works in concert with existing resources.
The system integrates with most existing and newly acquired PACS ("Picture
Archival Systems") systems, as well as operating seamlessly in PACS-less,
film-based environments directly with digital modalities to capture, store and
archive image data. The system automatically manages the documents and images
through their lifecycles based on HIPAA data retention requirements. Currently,
the Company has a MEDISTAR(TM) system installed at Mission Community Hospital, a
newly built 150 bed acute care facility in Panorama City, California.

      In June 2003, the Company announced the release of OFFSite Archive(TM) for
NetWare. This product was acquired as a result of a license and distribution
agreement between the Company and Legato Systems, Inc. OFFSite Archive 3.0 is
the first of a suite of high availability products to be enhanced and released
under the CaminoSoft name. The upgraded product provides a solution for offsite
disaster-recovery for Novell server based networks by maintaining asynchronous
replicas of mission-critical enterprise data in a secure, offsite location
keeping the information protected and available. OFFSite Archive for NetWare is
by Legato and licensed to CaminoSoft Corp.

      The Company's principal executive offices are located at 600 Hampshire
Road, #105, Westlake Village, California 91361.

INDUSTRY BACKGROUND

Data Storage Growth

      The growth of more data intensive computing, including e-commerce, email,
multimedia applications and the conversion from paper to electronic storage of
data has fueled rapid growth of the amount of data stored within an enterprise.
International Data Corporation "IDC", an independent information technology
research firm, projects that the number of email messages sent per day worldwide
will grow from approximately 9.7 billion in 2000 to 35 billion in 2005. This
storage growth has resulted in an increased demand for more efficient methods to
store and retrieve data. IDC estimates new hard disk drive shipments are adding
over 1.75 million terabytes of storage capacity annually, with the annual


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increment expected to reach 26.3 million terabytes by 2004. A byte is the amount
of computer memory required to store one number, letter or symbol; a terabyte is
equal to one trillion bytes.

      The dramatic growth in data storage is driving the demand for many types
of storage technology, such as new storage devices, networking hardware and
software. Many enterprises are struggling to manage larger amounts of data,
creating a demand for software that can automate this task. Industry analysts
predict that demand for data storage management software in particular will grow
significantly. Gartner Group, an independent information technology research
firm, estimates that the data storage management software market will grow from
$6.5 billion in 2002 to 9 billion in 2005.

Traditional Data Storage and Back up

      Users traditionally have stored data on hard disks or other storage
devices connected to their personal computers or computer networks, a
configuration referred to as primary storage or direct attached storage (DAS).
In addition to primary storage, enterprises have widely adopted back-up
processes to insure against the loss of data by creating and storing duplicates
of existing data files. The traditional back-up process moves large volumes of
data to alternative storage devices not directly accessible by users and
applications. Typically, under traditional back-up and data storage
methodologies, an enterprise will perform a full back-up of all data once a week
and incremental back-ups on each of the other six days of the week. An
incremental back-up operation copies only those files that have changed since
the last full back-up. There are several significant problems with traditional
data storage and back-up methods.

      o     Expensive primary storage capacity is consumed rapidly. Hard drives
            and other storage devices used for primary storage are more
            expensive than remote and back-up storage devices and have a limited
            capacity. This capacity is often quickly exhausted, and the user or
            the enterprise must then either purchase additional capacity or
            delete data. An enterprise incurs additional expense not only for
            the purchase of additional storage devices, but also for the
            administrative time required to install, allocate and manage this
            additional primary storage capacity.

      o     Repetitive back-up consumes network transmission capacity. As the
            amount of data increases, repeatedly backing up the same data
            consumes increasing amounts of network transmission capacity, or
            bandwidth. Computer networks have a limited amount of bandwidth, and
            most of this capacity is consumed during business hours by the
            demands of the network's users. As a result, networks lack the
            capacity to transmit data to storage devices for back-up during
            business hours. In addition, as enterprises expand their operations
            internationally, and the Internet makes networks more accessible the
            workday becomes longer, the number of hours available each day for
            back-up is shrinking. As a result, network administrators have
            smaller windows of time in which they can back-up increasing amounts
            of data without impairing the performance or accessibility of the
            network.

      o     Failure to manage data results in an inefficient back-up process.
            Most files on a typical file server are infrequently accessed 30
            days after they are created. Repeatedly backing up the same
            unchanged data consumes more back-up storage capacity unnecessarily,
            and requires an enterprise to expand its storage capacity with each
            subsequent back-up. In addition, because network administrators
            cannot determine which files are important, they often either save
            most files or randomly delete them.

      o     Access to stored data is limited. Infrequently accessed data is
            typically migrated from primary storage devices to secondary storage
            devices, RAID storage, tape libraries, magnetic optical disks, CD
            and DVD libraries, NAS and SAN devices. Once this process has
            occurred, the time and effort necessary to retrieve a migrated file
            is significant. A user will need to know information such as the
            file name, the original storage location and


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            the date of the back-up. When this information has been determined,
            the network administrator will then use this information to retrieve
            the file manually. This process is inefficient for the user, who
            must wait for the needed file, and for the network administrator,
            who must act as an intermediary and retrieve the file. In addition,
            files that have been deleted from primary storage and only reside on
            secondary storage devices are not easily and readily accessible to
            end users and/or software applications that may need the data
            contained in the file.

      o     Data is stored randomly at diverse locations. The distribution of
            data and applications on multiple personal computers and servers
            throughout the network, complicates the process and increases manual
            intervention for data back-up. Distributed storage management on
            expensive primary storage devices throughout a network results in
            inadequate storage management, increased administrative time and
            expense and inefficient use of storage devices.

Total cost of ownership

      Surging demand for storage capacity and greater access for data is driving
up the total cost of ownership for business information.

      Organizations are buying more storage than necessary. While the cost of
storing a megabyte has gone down, overall hardware and software expenditures
continue to grow. According to a joint study by McKinsey & Company and Merrill
Lynch, eighty percent of today's storage is still directly attached to the
server, resulting in under utilized and over utilized capacity for both servers
and storage. In this environment there is always a point when new servers and
disk space must be purchased to support that additional storage. In addition,
most corporations re-evaluate and replace portions of their storage
architectures every three years.

      Labor costs are one of the largest indirect costs associated with
increased storage capacity. Inefficient data storage management can handcuff
entire organizations. For example, keeping everyone waiting too long for network
backups. End users cannot do their jobs without asking Information Technology
administrators to retrieve archived data. Top information technology ("IT")
administrators are pulled away from higher value work and are duplicating effort
as they maintain multiple archive islands. Traditional storage management tools
allow one administrator to effectively manage less than 1 terabyte ("TB") of
storage on DAS or 4 TB on networked storage (according to the research firm
Enterprise Storage Group) but experts estimate that average site capacity will
have grown to 53 TB by 2005 (according to research firm Strategic Research
Corporation). If better solutions are not implemented, the number of
administrators needed to manage storage will soon become untenable.

      The cost associated with risk, including the cost of network downtime,
inadequate disaster preparedness and inappropriate utilization of storage, can
often be substantial. Organizations must be able to access/recover all business
critical data, no matter how complex, in a timely manner. Depending on the type
of data, and how critical it is to business operations, companies may incur
downtime related costs of more than $250,000/hour, according to the research
firm Contingency Planning Research. In addition, the business value of the data
itself may be compromised if users/applications cannot get the answers they need
when they need them. Companies must also be sure that their data storage
infrastructure is flexible and scalable enough to meet future growth needs.

The emergence of networked storage

      In response to the limitations of traditional data storage and back-up
methods, networked storage has emerged. This encompasses storage area networks
(SAN's) and networked attached storage (NAS) topologies, and comprises
approximately 20% of storage implementations today according to the McKinsey and
Merrill Lynch study. A storage area network is a network of servers and data
storage devices that are interconnected at high speeds, typically using fiber
channel transport technology, which allows network


                                       5
<PAGE>

resources to be located at remote and diverse locations. Enterprises are
beginning to deploy storage area networks in an effort to move data storage
operations off of their local area networks to a separate network dedicated to
data storage. Moving these operations to storage area networks frees up
bandwidth on the local area network for more efficient operation of enterprise
software applications and communications.

      Another alternative to direct attached storage is network attached
storage, the fastest growing market segment of networked storage, with an
estimated $2.84 billion market size in 2002 and a 97% growth rate according to
IDC. NAS offers the benefit of adding capacity to the network itself rather than
to an individual server, while presenting data at a file-level similar to direct
attached storage. Like SANs, NAS enables organizations to realize a lower cost
of storage than DAS. However, unlike SAN, NAS architectures offer a lower price
point and "plug and play" functionality without any additional network
components.

      Despite the greater capacity and speed, and the reduced cost offered by
networked storage, these emerging storage topologies do not address the need to
make management and access of data more efficient. Like DAS configurations,
networked storage configurations fail to determine which data should be stored,
do not provide efficient and automated migration of data to the storage media,
fail to integrate with front-end applications, do not enable immediate access to
data and cannot provide an effective index of stored data.

The need for data management software

      In order to address the problems of traditional storage and back-up
methods, and to take advantage of the power of networked storage, a data
management solution must enable better utilization of storage assets (both
people and hardware), provide automated migration of data and deliver better
access to stored data. Specifically, to be effective and efficient a solution
must:

      o     automatically apply policies that determine whether, or for how
            long, data should be stored, while enabling these policies to be
            easily set by organizations/customers;
      o     provide efficient transfer of data to and from storage devices
            throughout networks, including local area networks, networked
            attached storage devices and storage area networks;
      o     maximize the effective capacity of existing storage devices;
      o     automatically consolidate data that is distributed on servers across
            the network and provide centralized storage management for that
            data;
      o     provide a detailed index of stored data so users can perform
            specific searches;
      o     enable rapid and easy retrieval of stored data selected by users and
            software applications regardless of where and how that data is
            stored;
      o     seamlessly integrate access to stored data with existing business
            applications;
      o     provide secure network access;
      o     work on file systems and email systems, and across multiple
            operating systems including Windows, NetWare and Linux; and
      o     provide automated migrated file conversion for
            organizations/customers who change production operating systems
            after migration of files under the old operating system.

The need for email management and storage software

      Email is an integral part of business communications. As a result of the
increased use of email both as a messaging system and an information delivery
system, system administrators need to manage and store large volumes of email
messages and attachments without compromising the reliability of the system or
restricting message or attachment size. System administrators are also
confronted with the challenge of protecting and restoring email communications,
including protection and restoration during and after computer virus attacks. In
addition, as email becomes increasingly more important, the lack of
administrative control threatens an enterprise's record management procedures
and its ability to comply with applicable regulatory and legal requirements. In
order to address the problems of email management


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<PAGE>

and storage, and to enable an enterprise to take full advantage of the speed and
convenience of email, an email management and storage solution must:

      o     automatically apply policies that determine whether, and for how
            long, data should be stored, while enabling these policies to be
            easily set by organizations/customers;
      o     reduce messaging system back-up time and enhance performance while
            reducing costs;
      o     eliminate the need for administrative restrictions on message or
            attachment size;
      o     facilitate management of message stores and guard against the loss
            of information following virus attacks, enabling recovery within
            hours rather than days;
      o     ensure adherence to formal email policies that correspond to an
            enterprise's traditional record management policies and
            requirements; and
      o     provide fast and efficient search capability and access to stored
            email messages and attachments.

CAMINOSOFT

      CaminoSoft markets products that enable multi-tiered hierarchical storage
management, (HSM) and high availability with local failover and replication
using standby server and remote replication for disaster recovery with offsite
archiving on PC server based computer networks. By using CaminoSoft's products,
network administrators can increase efficiency on production servers (Tier 1),
by moving infrequently used data to networked central storage pool devices (Tier
2) and data archive systems (Tier 3). CaminoSoft also provides tier 1 failover
and replication for production server failure and for improved disaster
recovery, tier 2 storage can be replicated remotely using offsite archive and
snap shot technology which provides vastly improved disaster recovery processes.
CaminoSoft's products bring the basic tools for information life cycle
management to customers networked storage environments by establishing:

            Intelligent Data Storage
            Intelligent Data Retrieval
            Intelligent Data Replication
            Improved Data Recovery
            Enhanced Data Protection

      The Company's products provide increased efficiencies in the customer's
data storage and network infrastructure. The use of CaminoSoft's products
reduces customer costs by extending the life span of existing storage systems
and by bringing added efficiency to new systems.

      CaminoSoft's products are developed in an environment that allows for
rapid enhancement to meet the challenges of the changing storage infrastructure
landscape. CaminoSoft's products leverage both established and emerging
operating environments, providing a broad opportunity for increased revenues.

      A company's production servers are not meant to be the front line of the
storage explosion. They are the front line for the productivity of the
organization. This is where users, business units and executive teams achieve
their goals. Organizational productivity is either enhanced or encumbered at
every server in the network. This is where the data that is needed for business
continuity, planning and execution resides. These servers are the heart and soul
of the information age organization. Today, technology companies are competing
to bring efficiencies to network environments. More scalable servers, high
availability, redundant storage appliances and devices, dedicated storage area
networks using advanced fibre switching and their own dedicated repositories are
all choices for evolving the storage infrastructure. How one manages the data
within any network environment is the challenge that CaminoSoft's suite of
solutions solve.


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<PAGE>

PRODUCTS

      CaminoSoft's Managed Server HSM software provides a unique solution for
addressing the increasing need for sophisticated management of data. Designed to
meet the data storage management requirements for local area networks (LAN),
wide area networks (WAN), and intranet environments, Managed Server HSM offers
its users the ability to more efficiently manage available storage within a
multi-server environment where mass storage devices are used to increase storage
capacity. As more and more companies move away from mid and main frame computers
to networked systems to meet their computing requirements, the need for more
sophisticated software to emulate the flexibility and power of mid and main
frames has become more acute. This sophisticated hierarchical storage management
(HSM) is the domain of Managed Server HSM. With the exponential growth of
information, data storage requirements have also grown exponentially. The result
has been that network managers have to deal with the recurring "out of disk
space" problem on their companies networks. Though hardware cost for storage
continues to come down, the cost of managing the data being stored has not.
Human intervention is still required on the part of network managers to
determine which data files on the system need to be "on-line", "near-line", or
are used sufficiently infrequently to be relegated to "off-line" storage.

      Developed in conjunction with Novell's NetWare 4.X, (now supporting
NetWare 5.X and 6.X) the Managed Server is able to work in a multi-server and
multi-platform environment, enabling the customer to better utilize the storage
capacity available throughout the network. Based upon administrator defined
parameters, the software will automatically migrate minimally used files to
designated storage devices, hard drives, RAID, magnetic optical, tape, and most
other types of mass storage devices. This migration is seamless and transparent
to the user. As the server's file system begins to fill up, Managed Server HSM
automatically transfers or migrates old, seldom accessed files. The directory
entry is modified which enables the system to quickly locate and retrieve the
file when needed. The user is unaware that the file has been migrated and is no
longer resident at the original site. Generally, this migration is desired to
free up space in the more expensive storage medium, moving the data to less
expensive medium, such as removable optical drives. The uniqueness of the
program is that it enables the user to designate under what conditions the files
should be migrated and where the files should be migrated, (i.e., all financial
files to one location, correspondence files to another, etc). In the case of
mass storage devices using removable optical media, this is particularly
important. Whereas other HSM programs manage multi-disk hardware as one large
repository, scattering data throughout the system, CaminoSoft data migration
products enable the user to designate what data goes to which disk. This allows
related data to be organized and stored on a specific disk rather than be
scattered throughout the storage device. A disk can then be removed to off-line
storage and more easily indexed, making retrieval considerably more efficient.

      Managed Server HSM can accommodate virtually unlimited volumes of
information. Efficient management of data has and will continue to be one of the
foremost problems associated with the "information age". The Company believes
CaminoSoft Managed Server HSM represents the most efficient solution to data
management in the networked environment.

      "Data Differentiation" may be the most important term to know in
conjunction with the Company's managed server software. With the ability to
differentiate data, users are able to define the real storage needs for an
organization. Data differentiation is the foundation from which the lower cost,
more effective, more available, and continuously protected networks of the
future will grow. Data differentiation is at the core of the Company's mission:
to bring Information Life Cycle Management to networks. Managed server HSM
allows clients to develop 24 hour 7 day per week rules-based policy
administration for their network storage infrastructure. All data is not created
equal and, over time, all data ages. Managed Server HSM gives clients the tools
needed to identify the "production data" (data currently in use) and
differentiate it from all the infrequently or unused data in their network.
Every organization needs the ability to implement multiple tiers of storage.
Storage tiers are a cost-effective way of storing and retrieving inactive data.
Data differentiation allows clients to create data lifecycles for different
types of data in the organization. With new regulations being implemented for
the amount of time data has to remain available, the ability to create a data
life cycle, in advance, to automate the movement of that data through multiple
tiers of storage is a critical component of current and future network data
storage infrastructures.


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<PAGE>

      The Company has continued development of its suite of products and
solutions since the acquisition in September of 1999 of the managed server for
NetWare 4x product. The current suite includes Managed Server HSM certified for
Novell NetWare 4x, 5x, 6x and 6 NSS and is currently being certified for NetWare
6.5 on the Novell operating system platform. During the current year, the
Company has also certified Managed Server HSM for Microsoft Windows 2000 and
Windows XP which includes a Microsoft development and marketing partnership. The
Company has also become a Computer Associates "smart" partner. Our products are
certified on the Computer Associates "BrightStor Portal" and "ARCServe" backup
products. The Company has also developed a storage analysis tool which allows
users to analyze the data contained in a production server. It reports on
possible policy scenarios as if the data were differentiated and moved to other
tiers of storage. Clients can see what the benefits will be, in advance,
including estimated data growth rate and the correlating time savings for
production data backup and restoration. Another newly developed product is a
conversion tool that allows clients who utilize our HSM solution to convert the
migrated data from one operating system to another if the client changes the
operating system of the production environment. The client, therefore, does not
have to de-migrate the files in order to convert to the new operating system.
The transition to the new system can be simplified to include only the current
production data, with simple "pointers" to the already migrated files. The
migrated files can be automatically recalled, when needed into the new operating
system. The Company has developed a custom version of our product integrated
with The Messaging Architects' GWArchive product, GroupWise email system storage
management software for users of Novell GroupWise email systems. In July 2003,
The Messaging Architects released the new GWArchive product and will market and
sell the product directly into the GroupWise email user client base. These
products and associated partnerships are the building blocks for the Company's
O.E.M. partner and channel distribution strategy.

      In January 2003, the Company entered into a licensing and distribution
agreement with Legato Systems, Inc., for the future development, customer
service, marketing and distribution of certain Legato high availability products
for Novell NetWare operating systems. The products acquired were
"StandbyServer(TM)" for NetWare, "SnapShotServer(R)" for NetWare, and "OFFSite
Archive(TM)" for NetWare. During February 2003, Legato transitioned the service
contracts and associated support responsibilities to the Company along with all
sales and marketing of the licensed products.

      The StandbyServer program is a high-availability, server mirroring
solution that connects one or more primary servers to a standby server. If a
primary server fails, due to hardware or software failure, the standby server
automatically takes over making the mirrored data and network services available
to users in just a few moments. Data is mirrored between the servers using a
dedicated high-speed link, creating a fully redundant system that protects your
users against both hardware and software failures. The StandbyServer
configuration consists of three main elements, a primary server, a standby
server and the communications path that connects them. The disk devices in the
standby server are treated as external disk systems to the primary server. Using
NetWare mirroring, all reads and writes are performed on both disk devices in
real time. The standby server software constantly monitors the communication
between the primary server and the standby server, while mirroring, to ensure
the primary server is accessible. If the primary server becomes unavailable, and
the standby server can no longer communicate with it, the standby server
fails-over and assumes the primary role. Standby server also works in a
many-to-one configuration, which allows multiple primary servers to utilize one
standby server for mirroring and fail-over. The many-to-one configuration
consists of the same main elements as the regular two-server configuration,
except that it contains more than one primary server and an additional disk
device in the standby server for each additional primary server. The many-to-one
configuration works the same as the regular standby server configuration, except
that in the many-to-one configuration you have more than one primary server
being monitored and mirrored by a single standby server. If a primary server
becomes unavailable and the standby server can no longer communicate with it,
the standby server fails-over and assumes its primary role.

      OFFSIte Archive for NetWare is an electronic data vaulting and disaster
recovery product that allows you to protect your data in the event of a disaster
by electronically transferring a stable point-in-time image of your data to an
offsite location. OFFSite Archive for NetWare automatically transfers data to be
protected from a source server to a target server using the IPX or IP protocol
over a LAN, WAN, or


                                       9
<PAGE>

Internet connection. The latest version of OFFSite Archive allows multiple
source servers to mirror data to a single target server remotely located.
OFFSite Archive for NetWare uses SnapShotServer for NetWare (discussed below)
technology to create snapshots of protected volumes of data. Each snapshot
contains all of the data, or a pointer to the data, on the source servers
protected volume at the instant the snapshot was taken. This snapshot is then
transferred from the source server to the target server. Through an initial
synchronization all of the data on the source server is mirrored to the target
server. Then, after the initial synchronization, only the delta changes are sent
to the target server. Since OFFSite Archive does not mirror data in real-time,
you do not need to use a high speed communications link. Any standard WAN, LAN,
or Internet link can be used to connect the source server to the target server.

      SnapShotServer for NetWare program gives a user more control of the back
up process. By capturing live data at any time with the SnapShotServer program,
you can back up open files or "live" databases at your convenience. The program
creates "snapshot" images of your "live" data volumes at user-defined intervals.
These snapshots can then be mounted as regular NetWare volumes and backed up by
any NetWare approved back up utility. The SnapShotServer program is a NetWare
Loadable Module (NLM). When taking a snapshot of a volume, the SnapShotServer
program creates a virtual image of the volume, there is no actual duplication of
the entire volume. If changes are made to the original data after taking the
snapshot, the program makes a copy of the original data before it is changed and
stores that copy in its buffer. This buffer and the unchanged portions of the
disk make up the snapshot volume, which gives you a virtual image of the volume
as it was at the time the snapshot was taken. SnapShotServer works with both
StandbyServer and OFFSite Archive.

MARKET

      CaminoSoft products are designed to meet the storage management needs of
small, medium and large companies. This includes departmental deployment within
the Fortune 2000 and other companies with over 250 employees. Both private and
public sector organizations are targeted, based on vertical market segments and
industries that produce and utilize large amounts of data. Financial Services,
Health Care, Legal Services, Engineering and Architectural Services, Government
and Education are among these targets. The value of CaminoSoft products include,
automated policies for compliance with new laws and regulations for data
retention, allowing organizations to set up data lifecycles for different types
of information in the production environment. Our core value propositions apply
to all business sizes and industries. These include but are not limited to:
extend production hardware utility; reducing production back-up time; reducing
restoration time for the production data in the case of a disaster; and reducing
or eliminating manual intervention to manage data storage.

      According to IDC research, worldwide storage systems hardware, software
and services revenue will grow to over $70 billion by the year 2004. Storage
software as a component of that total will grow from $6.5 billion in 2002 to $9
billion in 2004. Storage related spending is one of the fastest growing segments
in the technology market. It has also been estimated that for every $1 spent on
storage, $8 are spent on management of storage. CaminoSoft solutions provide
automated management, which help to control and reduce a major portion of these
storage management costs.

      The Company's expanded product line for Windows 2000 and Novell NetWare
operating systems have enhanced the market opportunity for its solutions. The
recent completion of an integrated version of our Managed Server certified for
Computer Associates BrightStor Portal and ARCServe back-up products, which work
in conjunction with Netware and Windows 2000 operating systems, further the goal
of expanding our market reach. These certified products and business
partnerships are the basis for sales expansion and were targeted goals for the
current fiscal year. This allows our partners sales forces and distribution
channels to now promote and implement our products as part of an overall storage
management solution. Data differentiation and policy-based management are key
components of current and future network data storage infrastructures. Because
CaminoSoft's products embody these features, this positions our partners to
leverage these state-of-the-art storage management solutions.


                                       10
<PAGE>

      CaminoSoft has sold its software into the public sector at the state,
county, and municipal level, as well as to the higher education market. Both the
government and education sectors provide opportunities that are consistent with
the Company's product positioning. Government agencies and education customers
tend to operate and maintain their systems longer than private sector companies.
With the exception of modifications associated with Year 2000, government and
education IT spending is growing at or near the rate of inflation. CaminoSoft's
solutions have great appeal in this regard since our products extend the useful
life of existing network infrastructures and systems.

      While not specifically positioned for disaster recovery, CaminoSoft's
products increase efficiencies. Planned enhancements to CaminoSoft's software in
copying data, deleting data and the addition of a broader set of available
export media devices will give the products increased disaster recovery
capabilities. The potential to integrate remote storage capabilities, likely
done through a Storage Service Provider (SSP) partner, can further enhance the
appeal of CaminoSoft products in an overall disaster recovery strategy.

THE CAMINOSOFT STRATEGY

      Today IT departments face a variety of challenges with some of the most
critical relating to data storage and management. Two of these challenges are
(1) reducing the total cost of ownership of data storage by better leveraging IT
resources, both hardware and people, and (2) increasing productivity by enabling
better access to information, thereby making quicker and faster decisions. Our
software virtualizes pools of stored data both to the end-user transparently and
to the IT administrator while integrating with most operating systems and
applications. CaminoSoft can reduce the back-up window, lower the overall cost
of storage and enhance the value of information across the organization. Our
strategy is built on the benefits our technology brings, our expanding
distribution channel, and our ability to execute. As part of our current
strategy:

      o     We intend to continue to expand and leverage our base of partners
            (OEMs, distributors, and value-added resellers, or VAR's) to sell
            additional products to our end users. We intend to enhance our
            international presence and partner base as we internationalize,
            localize and bring to market existing and new products. We intend to
            focus on systems integrators and other strategic partners to open
            new avenues of distribution for our products and solutions.
      o     We intend to focus and expand on our core strengths in today's soft
            economic environment. IT spending is tight and customers require
            products and solutions with attractive price points and demonstrable
            value. We can leverage success in one department or work group to
            demonstrate the value of our storage management solution, then use
            the success in that area to expand to other departments, workgroups
            or the enterprise. We believe our cost effective data management
            solutions can then be repeated in other areas of the organization
            for other types of information and compliance requirements.
      o     We intend to leverage our position as a provider of email storage
            and management solutions to grow in the messaging market. With our
            integrated Managed Server for The Messaging Architects GWArchive
            (GWArchive provides extended storage functions for Novell, GroupWise
            email systems) product, we have taken the first step to capitalize
            on this growing market for automated data storage management for
            Novell GroupWise email systems. Using the O.E.M. partner approach,
            we have partnered with The Messaging Architects to take advantage of
            their focus on GroupWise email systems allowing them to leverage our
            storage management solution as an integrated component for users of
            their Novell GroupWise line of email extension products. We intend
            to utilize this same approach with other partners focused on
            providing automated data management for users of other email
            messaging systems such as Microsoft Exchange and Lotus Notes. We
            believe this vertical partner approach will broaden the adoption of
            our solutions in the


                                       11
<PAGE>

            electronic collaboration market, allowing our partners to remain
            focused on their core strengths in the markets they serve.
      o     Europe, the Middle East, Africa, Japan and Asia represent active
            markets for expansion, with Europe representing an estimated $2
            billion data storage management market in 2001 according to Gartner.
            We intend to continue to internationalize and localize our products
            and solutions to penetrate this marketplace. Our recent addition of
            Paul Phillips in the UK as director of operations for EMEA region
            will help increase the number of value added reseller and integrator
            partners in the UK and Europe and will provide the interface for
            technical, sales and integration capabilities for future expansion
            into these markets.

EMPLOYEES

      The Company currently employs eighteen people full time and four full time
consultants.

COMPETITION

      The competitive landscape in the storage systems market consists of a vast
array of hardware and software companies. CaminoSoft's products compete in the
data management and high availability software segments. The cost barriers to
these markets are relatively low, which means our competitors range from small
companies with limited resources to large, more established companies. Some
competitors, regardless of size, have substantially greater financial,
technical, marketing, distribution, personnel and other resources. The large
number of manufacturers in the storage infrastructure market provides fertile
ground for cultivating alliances and partnerships.

      Among CaminoSoft's direct competitors, we believe only one offers a
stand-alone HSM application. CaminoSoft's products have feature related
advantages relative to this competitor in ad-hoc migration and de-migration,
that allows the administrator to perform ad-hoc migration or de-migration
(selecting specific files or directories to be moved off, or returned to, a
server hard drive). Additionally, CaminoSoft offers re-migration rules, through
which migrated files that are accessed (returned to primary server from
secondary or tertiary storage) can therefore follow the normal migration rules
or administrator defined retention times that override normal migration rules.
CaminoSoft also offers "include and exclude" rules at the file and directory
level, as well as the ability to filter by file extension.

      Relative to the other competitors CaminoSoft has select feature advantages
over each competitor. Moreover, CaminoSoft, as a specialized HSM tool maintains
an advantage compared to these other competitors, all of whom imbed HSM
functions into broader enterprise network management applications. CaminoSoft's
positioning will allow it to more effectively address the mid-size and small
business market where management believes enterprise systems may be too
cumbersome or too expensive. CaminoSoft retains the ability to participate in
the large company and enterprise markets as a department level and workgroup
application. Because CaminoSoft can be used alongside the enterprise solution
from its closest competitors, it allows the enterprise IT manager to use the
full features of the Company's HSM tools while using competitive products for
such mundane applications as backup systems. Despite what management believes to
be its technological advantages many competitors have greater resources than the
Company and may be in a position to obtain a market advantage because of these
resources. Therefore integration of our solutions with partner platforms such as
Computer Associates, BrightStor Portal and ARCServe back-up will allow us to
compete with these large competitors who have integrated enterprise solutions.

SALES AND MARKETING TEAM STRATEGY

      The mandate of the CaminoSoft sales and marketing teams is to increase
awareness and interest within select industries to deliver qualified prospects
and close sales of the Company's products. The first step and a key element of
the sales and marketing strategy was the partnership with Novell. This
partnership makes available to the Company the marketing and sales resources of
Novell. Recent corporate


                                       12
<PAGE>

developments at Novell, including its acquisition of Cambridge Technology
Partners provide a technology, sales, and marketing path that is consistent with
the Company's O.E.M. strategy as a software development company integrating our
products with other hardware and software products for sale through their
distribution channels. Novell's recent announcement regarding the acquisition of
SUSE a Linux systems company has confirmed the Company's development road map
which includes HSM and High Availability products for the Linux platform. The
certification of the Company's Windows 2000 product and partnership with
Microsoft was another milestone in the strategic plan for multi platform
distribution of our solutions. Whereas in the past the Company's growth has been
impeded by lack of a large sales staff, the partner relationships in place and
planned by the Company will add significant distribution capabilities. The
certification from Computer Associates for compatibility with the BrightStor
Portal and ARCServe and Enterprise back up products will enhance the Company's
ability to sell solutions to users of both NetWare and Windows 2000 because the
Computer Associates solutions are operating system agnostic. They have clients
who utilize both operating system platforms, which can now be managed through
the BrightStor Portal and integrated with ARCServe back up for either NetWare,
Windows 2000 or both. As of the date of this filing the Company has signed an
integration and distribution agreement with Pegasus Disk Technologies to
distribute InveStor archive management software for optical, DVD and Tape
library management. The Company has also completed integration of the HSM for
NetWare and Windows 2000 software with EMC Centera. This will allow users to
utilize EMC Centera storage devices in conjunction with the Company's storage
management and high availability software.

      The Company recently added to its executive ranks, hiring Anoop Elgonda as
Director of Sales. Mr. Elgonda brings over 15 years of technology industry
experience to the Company. Mr. Elgonda most recently was a Vice President in the
western region for Computer Associates. With an experienced management team,
innovative products, and significant sales and marketing resources resulting
from product integration and distribution partnerships management believes that
the Company is positioned to take advantage of the need for Information Life
Cycle Management in the networked storage environments of today and the future.

Item 2. DESCRIPTION OF PROPERTY

      As of December 1, 2003, the Company leases one office facility in Westlake
Village, California for the Company's executive offices pursuant to a lease
extension expiring June 30, 2006, at a rental rate of $9,368 per month. As of
December 1, 2003 the Company leases a development and customer service office in
Orem, Utah pursuant to a lease expiring on January 31, 2004, at a rental rate of
$1,700 per month. The lease is extendable pursuant to two one year lease
extensions.

Item 3. LEGAL PROCEEDINGS

      The Company has no ongoing legal proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of the security holders.

                                     PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      The Common Stock is currently traded in the OTC Electronic Bulletin Board
under the symbol "CMSF". The following table sets forth the high and low sales
prices for the Common Stock during the two


                                       13
<PAGE>

most recent fiscal years. The prices reflect inter-dealer prices without retail
mark-ups, mark-downs or commission and may not represent actual transactions.

                                                    Common Stock Sales Prices
                                                    -------------------------
      Symbol "CMSF"                                     High          Low
      -------------                                     ----          ---

      October 1, 2001 - December 31, 2001               $1.75        $1.25

      January 2, 2002 - March 31, 2002                  $1.60        $1.20

      April 1, 2002 - June 30, 2002                     $1.31        $0.48

      July 1, 2002 - September 30, 2002                 $1.25        $0.34

      October 1, 2002 - December 31, 2002               $1.01        $0.55

      January 2, 2003 - March 31, 2003                  $0.90        $0.33

      April 1, 2003 - June 30, 2003                     $0.60        $0.33

      July 1, 2003 - September 30, 2003                 $0.53        $0.32

      October 1, 2003 - November 30, 2003               $0.45        $0.36

      To date, the Company has not declared or paid any cash dividends with
respect to its Common Stock, and the current policy of the Board of Directors is
to retain earnings, if any, to provide for the growth of the Company.
Consequently, no cash dividends are expected to be paid on the Common Stock in
the foreseeable future.

Recent Sales of Unregistered Securities

      During the fiscal year ended September 30, 2003, the Company issued 6,200
shares of common stock with a value of $5,952 for consulting services rendered
during the year, this amount was recorded as an expense on the Company financial
statements.

      During the year ended September 30, 2003, the Company issued four year
warrants to purchase 80,000 shares for $0.51 per share with a value of $14,126
for services rendered, this amount was recorded as an expense on the Company
financial statements.

      During the year ended September 30, 2003, the Company issued 1,238,000
options to purchase the Company's common stock at prices ranging from $0.44 to
$1.30 per share to employees, consultants and directors under the year 2000
employee stock option plan.

      During December 2002, the Company issued a 6% convertible debenture for up
to $1,000,000. Interest of 6% per annum will be paid in monthly installments for
three years based on the unpaid principal balance. The debenture matures on
November 27, 2005, at which time the unpaid principal amount and all accrued and
unpaid interest will become due and payable in full. The debenture is
convertible into shares of the Company's common stock, with the initial
conversion price of $1.00 per share. However if the five day average closing
price for the Company's common stock immediately prior to a disbursement is
below the $1.00 initial conversion price, the average closing price for such
period shall become the conversion price.

      During July 2003, the Company issued a 6% convertible debenture for
$750,000. Interest at the rate of 6% per annum is payable in monthly
installments for 26 months based on the unpaid principal


                                       14
<PAGE>

balance. The debenture matures on November 27, 2005, at which time the unpaid
principal amount and all accrued and unpaid interest will become due and payable
in full. The debenture is convertible, at the option of the holder, into shares
of the Company's common stock, with an initial conversion price of $0.50 per
share. However, if the five day average closing price for the Common Stock
immediately prior to each Disbursement is below the $0.50 initial conversion
price, the average closing price for such period shall become the conversion
price.

      All of the foregoing securities were issued pursuant to an exemption from
the registration requirements of the Securities Act of 1933, as amended,
pursuant to Section 4(2) thereof and Regulation D promulgated thereunder. No
commissions were paid.

      As of December 2003 the Company issued in a private placement 3,243,243
shares of common stock and 5 year warrants to purchase 3,243,243 shares with 50%
of the warrants at an exercise price of $0.74 and 50% at an exercise price of
$1.11 for $1,200,000. The funds will be used to support business expansion and
operations.

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

      The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in this Annual
Report.

OVERVIEW

      On September 17, 1999, the Company acquired the assets of Camino Software
Systems, Inc. The Camino Assets consisted of the name, the data storage
management software, certain business contracts and intangible personal
property. The Company's products currently provide a systematic managed solution
to the ever increasing data storage problem at a substantially reduced
management cost. Managed server software is available for Novell NetWare 4.x,
5.x 6.x, 6 NSS and Windows 2000 operating systems. During the past fiscal year
the Company changed its approach to focus on software development while
utilizing the Company's OEM partners and their distribution channels for the
selling of the software developed. During the past fiscal year the Company's
efforts focused on expansion of the product line and adding features and
enhancements to the software suite of products. In January 2003, the Company
announced a licensing and distribution agreement with Legato Systems, Inc. for
the future development, customer service, marketing and distribution for the
high availability products for NetWare. This allowed the Company to increase
revenue through annual service agreements and the sale of the high availability
products. The Company also gained access to the distribution channel in place
with Legato for distribution of the high availability products and the Company's
core HSM products. At the same time the sales and marketing departments have
evolved to support the efforts of our partners distribution channels with
marketing, training and sales support for the sales forces and Value Added
Resellers of the products. During the fiscal year, the Company also added 2 new
inside sales people working out of the corporate headquarters and one outside
sales person located in North Carolina. The Company has also added experienced
executives to the team.

RISK FACTORS

We have a limited operating history, which includes a history of losses.

      Our Company has been in business since 1983 and has been a publicly traded
company since September 1993. In September 1999, we acquired the assets of
Camino Software Systems, Inc., which resulted in our entering into a new line of
business. All of our prior business divisions (high speed printer sales and
service and consumable sales) have been sold or discontinued. Although we
currently have some limited revenues from the acquired assets, we are involved
with a new business in a highly technical and competitive market, with new risks
for investors and shareholders. Our products have not yet been accepted in the
marketplace, resulting in operating losses of approximately $2,170,000 and
$2,500,000 for the years


                                       15
<PAGE>

ended September 30, 2003 and September 30, 2002, respectively. The weak economy
and slowdown in demand for software technology have affected the revenues of the
Company.

Our future operating results are unpredictable.

      With the acquisition of the software products of Camino Software Systems,
Inc. and the sale and discontinuance of the historical business of the Company,
our operating results will depend on the enhancement of the Company's existing
products and the ability to market and sell the products. Any future success
that the Company may achieve will depend upon many factors including factors
which may be beyond the control of CaminoSoft or which cannot be predicted at
this time. Uncertainties and factors which could cause actual results or events
to differ materially from those set forth or implied include:

      o     Inability to acquire new customers
      o     Inability to complete successful implementation of our software
            applications in a manner that is scalable
      o     Inability to offer new services that complement our existing
            offerings
      o     Inability to increase awareness of our brand

      To address these risks, we must, among other things, implement and
successfully execute our business strategy, continue to develop and upgrade our
technology, provide superior customer service, respond to competitive
developments, and attract, retain and motivate qualified personnel. There can be
no assurance that we will be successful in addressing such risks or that our
business strategy will be successful and the failure to do so could have a
material adverse effect on our business, prospects, financial condition and
results of operations.

We need additional financing.

      Our Company will require additional financing in order to expand our
business. Our working capital requirements in the foreseeable future will depend
on a variety of factors including our ability to implement our sales and
marketing plan. There can be no assurance that we will be able to successfully
negotiate or obtain additional financing. Our ability to obtain additional
capital will be dependent on market conditions, the national economy and other
factors outside our control. If adequate funds are not available or are not
available at acceptable terms, our ability to finance our expansion, develop or
enhance services or products or respond to competitive pressures would be
significantly limited. The failure to secure necessary financing will have a
material adverse effect on our business, prospects, financial condition and
results of operations. As of the date of this filing the Company has made a
private placement of common stock for $1.2 million to support business expansion
and operations for the fiscal 2004.

      If we are unable to adapt our products to rapidly changing technology, our
reputation and our ability to grow our revenues could be harmed.

      The markets we serve are characterized by rapidly changing technology,
evolving industry standards, emerging competition and the frequent introduction
of new software. There is no assurance that we will be able to enhance existing
or develop new products that meet changing customer needs in a timely and
cost-effective manner. Prolonged delays resulting from our efforts to adapt to
rapid technological change, even if ultimately successful, could harm our
reputation within our industry and our ability to grow our revenues.

      We face significant competition from other providers of computer software.
The Novell agreement may not work to increase sales.

      The markets for our computer software and the market for Novell NetWare
and Windows 2000 operating systems software are characterized by intense
competition and an increasing number of new market entrants who have developed
or are developing potentially competitive products. Further, the cost


                                       16
<PAGE>

barriers to these markets are relatively low, which means our competitors range
from small companies with limited resources to large, more established
companies. Some competitors, regardless of size, have substantially greater
financial, technical, marketing, distribution, personnel and other resources.
For example, current and future competitors with greater financial resources
than us may be able to undertake more extensive marketing campaigns and adopt
more aggressive pricing policies. It is possible that we may not have the
resources to withstand these and other competitive forces.

      Our earnings growth is dependent upon acceptance of our products and our
ability to increase demand for data storage and management software products.

      Our ability to generate profits depends primarily upon market acceptance
of our data storage and management software products and the continued upgrade
and sale of our high availability software products. Our products may not be
able to be successfully marketed or achieve customer acceptance, and we may be
unable to increase demand for our product. Our strategy to increase our customer
base includes investment in programs designed to heighten consumer awareness of
our product and services.

      If we do not successfully develop new products that keep pace with
technology, our competitive position will be weakened.

      The market for our products is new and emerging, and is characterized by
rapid technological advances, changing customer needs and evolving industry
standards. Accordingly, our ability to realize our expectations will depend on
our:

      -     Ability to timely develop new software products that keep pace with
            developments in technology;
      -     Ability to meet evolving customer requirements which are often
            difficult to predict; and
      -     Success at enhancing our current product offerings and delivering
            those products through appropriate distribution channels.

      We may not be successful in developing and marketing, on a timely and
cost-effective basis, enhancements to our software products or new products
which respond to technological advances and satisfy increasingly sophisticated
customer needs. If we fail to introduce new products, or if new industry
standards emerge that we do not anticipate or adapt to, our software products
could be rendered obsolete and our competitive position will be weakened.

      Our business will suffer if our software development is delayed.

      Any failure to release new products and upgrades on time may result in:

      -     customer dissatisfaction;
      -     cancellation of orders;
      -     negative publicity;
      -     loss of revenue; or
      -     slower market acceptance.

      We operate in a developing market with increasing participants.

      The market for computer software is rapidly evolving and is characterized
by an increasing number of market entrants who have introduced or developed
products and services. It is possible that a single supplier may dominate one or
more market segments. Additionally, there may be insufficient market acceptance
of our products because the market for computer software changes rapidly.


                                       17
<PAGE>

      We rely on key management personnel.

      Our performance is substantially dependent on the continued services and
the performance of our senior management and other key personnel. Our
performance also depends on our ability to retain and motivate our other
officers and key employees. The loss of the services of any of our executive
officers or other key employees could have a material adverse effect on our
business, prospects, financial condition and results of operations. Our future
success also depends on our ability to identify, attract, hire, train, retain
and motivate other highly skilled technical, managerial and marketing personnel.
Competition for such personnel is intense, and there can be no assurance that we
can attract and retain the necessary technical, managerial and marketing
personnel could have a material adverse effect on our business, prospects,
financial condition and results of operations.

      Our business substantially depends upon the continued growth of the data
storage and management software market.

      Our future revenue and profits, if any, substantially depend upon the
continued growth and development of the data storage and management software
market.

      We could incur substantial costs defending our intellectual property from
claims of infringement.

      The software industry is characterized by frequent litigation regarding
copyright, patent, trademark and other intellectual property rights. We may be
subject to future litigation based on claims that our own intellectual property
rights are invalid. We expect that software product developers will increasingly
be subject to infringement claims as the number of products and competitors in
our industry segment grows and the functionality of products overlaps. Claims of
infringement could require us to re-engineer or rename our products or seek to
obtain licenses from third parties in order to continue offering our products.
These claims could also result in significant expense to us and the diversion of
our management and technical resources, even if we ultimately prevail. Licensing
or royalty agreements, if required, may not be available on terms acceptable to
us or at all.

      We may face interruption of production and services due to increased
security measures in response to terrorism.

      Our business depends on the free flow of products and services through the
channels of commerce. Recently, in response to terrorists' activities and
threats aimed at the United States, transportation, mail, financial and other
services have been slowed or stopped altogether. Further delays or stoppages in
transportation, mail, financial or other services could have a material adverse
effect on our business, results of operations and financial condition.
Furthermore, we may experience an increase in operating costs, such as costs for
transportation, insurance and security as a result of the activities and
potential activities. We may also experience delays in receiving payments from
payers that have been affected by the terrorist activities and potential
activities. The U.S. economy in general is being adversely affected by the
terrorist activities and potential activities and any economic downturn could
adversely impact our results of operations, impair our ability to raise capital
or other wise adversely affect our ability to grow our business.

Critical Accounting Policies and Estimates

      We have identified the following critical accounting policies and
estimates that affect our more significant judgments and estimates used in the
preparation of our financial statements. The preparation of our financial
statements in conformity with accounting principles generally accepted in the
United States of America requires that we make estimates and judgments that
affect the reported amounts of assets and liabilities. We evaluate those
estimates on an ongoing basis, including those related to asset impairment,
contingencies and litigation. These estimates are based on the information that
is currently available to us and on various other assumptions that we believe to
be reasonable under the circumstances. Actual results could vary from those
estimates under different assumptions or conditions. We believe that the
following critical accounting policies affect significant judgments and
estimates used in the preparation of our financial statements.


                                       18
<PAGE>

      o     Software capitalization is stated at cost. Amortization is computed
            on the straight-line and accelerated methods based upon the
            estimated useful life of the asset, primarily seven years.
      o     We periodically review our long-lived assets, which include property
            and equipment and capitalized software, for possible impairment
            whenever events or changes in circumstances indicate that the
            carrying value of an asset may not be recoverable. If the estimated
            future cash flows (undiscounted and without interest charges) from
            the use of an asset are less than its carrying value, we record a
            write-down to reduce that asset to its estimated fair value. The
            fair value is determined based on discounted cash flows or appraised
            values depending on the nature of the asset.
      o     Research and development costs, which consist primarily of software
            development costs, are expensed as incurred. Statement of Financial
            Accounting Standards No. 86, "Accounting for the Cost of Computer
            Software to be Sold, Leased, or Otherwise Marketed" ("SFAS 86"),
            provides for the capitalization of certain software development
            costs incurred after technological feasibility of the software is
            established. During fiscal year ended September 30, 2002, the
            Company capitalized approximately $270,292 of such software
            development costs. During fiscal year ended September 30, 2003 the
            Company did not capitalize any software development costs.
      o     Revenue is recognized when earned. The Company's revenue recognition
            policies are in compliance with all applicable accounting
            regulations, including, Staff Accounting Bulletin No. 101 ("SAB
            101"), Revenue Recognition in Financial Statements. American
            Institute of Certified Public Accountants (AICPA), Statement of
            Position (SOP) 97-2, Software Revenue Recognition, and (SOP) 98-9,
            Modification of SOP 97-2, with Respect to Certain Transactions.
            Revenue from sale of product is recognized upon shipment or
            installation to the customer. If the Company is contracted to
            provide implementation services for the products purchased revenue
            is booked upon completion of the implementation. Annual maintenance
            service revenue is recognized ratably over the contract period.

RESULTS OF OPERATIONS

           FISCAL YEARS ENDED SEPTEMER 30, 2003 AND SEPTEMBER 30, 2002

      During the current fiscal year, the Company continued to focus on
development of features and upgrades on products, while expanding its
functionalities to other operating platforms including Windows 2000. The Company
has changed its sales and marketing strategy to focus on development and support
for its data storage and management solutions and high availability solutions,
while utilizing its partners' sales, marketing and distribution channels.
Revenues for the current fiscal year increased by approximately 377% from
$166,000 in fiscal year 2002 to $790,000 for the current fiscal year. Sales for
the Company's software products were approximately $604,000 or 76% of the total
revenue for the current fiscal year; annual service contracts constituted
approximately 24% or the other $186,000 of the total revenue for the fiscal
year. The high availability products acquired during the fiscal year accounted
for approximately 65% of the total revenue, with the Company's core HSM
technology representing the other 35% of the total revenue for the current
fiscal year. Billings for annual service contracts increased with the increase
in product sales resulting in a 527% increase in deferred revenue for annual
service contracts billed during the current fiscal year, from approximately
$42,000 in fiscal year ended September 30, 2002 to approximately $264,000 in
fiscal year ended September 30, 2003. Cost of sales increased from approximately
$101,000 in the last fiscal year to approximately $221,000 in the current fiscal
year representing an increase of approximately 121% reflecting increased
revenues. Cost of sales as a percentage of revenue decreased from approximately
61% in fiscal year ended September 30, 2002 to approximately 28% during the
current fiscal year. Gross profit increased by approximately 773% or $503,000
from $65,121 in year 2002 to $568,521 in fiscal year 2003 resulting from the
Company's increased revenue from product sales and service during the current
fiscal year.


                                       19
<PAGE>

      Selling and administrative expenses for the current year were
approximately $2,309,000, a decrease of approximately $147,000 or 6% as compared
to fiscal year 2002. The decrease was a result of the Company's continued effort
to minimize overhead expense while changing to a support focused sales and
marketing strategy, utilizing OEM partners and value added resellers for
integration and sales of our solutions. The Company continued its advertising
and marketing program expansion throughout the year to help create continued
product awareness in the end user and value added reseller channel. The change
from a direct sales approach to one of a support role for the Company's OEM
partners sales forces continued during the fiscal year, which reduced wage
expense related to direct selling, while increasing the expense related to
marketing and sales support for our OEM partners distribution channels. The
Company will continue to expand the sales and marketing support areas to train
both technical support teams and sales forces for the Company's distribution
partners into the future.

      Depreciation and amortization expense for the fiscal year of $7,682 was a
decrease of approximately 27% or $2,800 as compared to fiscal year ended
September 30, 2002 for the disposal of fully depreciated assets during the
current year.

      Research and development expense for the current year was approximately
$332,000 as compared to approximately $121,000 for fiscal year 2002. This
increase is part of the ongoing plan to expand the product line, while adding
features and upgrades to the original software products. During the current
fiscal year, the Company completed and certified its Windows 2000 software and
released an upgraded version of the OFFSite Archive high availability solution,
the first high availability product released under the CaminoSoft name. The
Company began new research and development projects during the current year and
plans to continue the research and development program at an increased rate
during the coming year. As projects complete and become viable the Company
expects to capitalize portions of the development expense during the upcoming
fiscal year.

      There was no other income during the current fiscal year as compared to
approximately $6,000 for fiscal year 2002. The current fiscal year included
approximately $84,000 of interest expense related to borrowing against the
convertible debentures. Approximately $44,000 of the total fiscal year interest
expense was non cash pre-paid interest which is expensed over the three year
term of the debentures.

LIQUIDITY AND CAPITAL RESOURCES

      During fiscal year 2003, the Company's cash position decreased by
approximately $139,000, from approximately $576,000 on September 30, 2002 to
$437,000 on September 30, 2003. The Company increased revenues during the fiscal
year yet is still not at a break even point operationally resulting in the
decrease in cash.

      In October and November 2001, the Company received $150,000 in cash from
the exercise of warrants. In December 2001, the Company received $1,500,000 from
the sale of 1,250,000 shares of restricted common stock at $1.20 per share as
part of a private placement. During the quarter ended March 31, 2002, the
Company completed the private placement of an additional 222,500 shares to five
individual investors at $1.20 per share bringing the total value of the
placement to $1,767,000 for 1,472,500 shares of restricted common stock. During
the fiscal year ended September 30, 2002, the Company received $19,800 from the
exercise of options and warrants of 39,375 shares of common stock.

      In December 2002, the Company issued a 6% convertible debenture for up to
$1,000,000. The Company made monthly draws based on cash flow to replenish
operating funds. Interest of 6% per annum will be paid in monthly installments
for three years based on the unpaid principal balance. The debenture matures on
November 27, 2005, at which time the unpaid principal amount and all accrued and
unpaid interest will become due and payable in full.

      During July 2003, the Company issued a 6% convertible debenture for
$750,000. Interest at the rate of 6% per annum is payable in monthly
installments for 26 months based on the unpaid principal


                                       20
<PAGE>

balance. The debenture matures on November 27, 2005, at which time the unpaid
principal amount and all accrued and unpaid interest will become due and payable
in full. The debenture is convertible, at the option of the holder, into shares
of the Company's common stock, with an initial conversion price of $0.50 per
share. However, if the five day average closing price for the Common Stock
immediately prior to each Disbursement is below the $0.50 initial conversion
price, the average closing price for such period shall become the conversion
price.

      The Company's revenue projections bring profitability on a monthly basis
during the third quarter of fiscal year 2004. If revenue projections are not
met, the operating plan calls for additional expense reductions in all non
technical and sales related functions. With out a continued ramp of revenues
during the first half of fiscal year 2004 the Company will reduce expenses to
compensate for lack of continued revenue growth. No assurances can be given that
the Company will continue to achieve increased revenues or achieve profitability
in 2004. Further, no assurances can be given that the Company's current
financing will be sufficient to support the Company's planned level of
operations.

      As of December 2003 the Company issued in a private placement 3,243,243
shares of common stock and 5 year warrants to purchase 3,243,243 shares with 50%
of the warrants at an exercise price of $0.74 and 50% at an exercise price of
$1.11 for $1,200,000. The funds will be used to support business expansion and
operations.

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

      The following summarizes our contractual obligations at September 30, 2003
and the effects such obligations are expected to have on liquidity and cash flow
in future periods:

<TABLE>
<CAPTION>
                                                Payments due by Period
                                    ----------------------------------------------
                                    Less than          1-3         4-5      After
                        Total         1-year          Years       Years    5 Years
                     -------------------------------------------------------------
<S>                  <C>            <C>            <C>            <C>       <C>
Notes payable        $1,750,000     $1,750,000     $       --
Operating leases        330,696        127,974        202,722        --        --
                     -------------------------------------------------------------
                     $2,080,696     $  127,974     $1,952,722     $  --     $  --
                     =============================================================
</TABLE>

      Except for the operating leases above, the Company has no off-balance
sheet arrangements that have or are reasonably likely to have a current or
future effect on the Company's financial condition, changes in financial
condition, revenues, expenses, results of operations, liquidity, capital
expenditures or capital resources.

NEW ACCOUNTING PRONOUNCEMENTS

      In May 2002, the FASB issued SFAS 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections,
SFAS 145 eliminates Statement 4 (and Statement 64, as it amends Statement 4),
which requires gains and losses from extinguishments of debt to be aggregated
and, if material, classified as an extraordinary item, and thus, also the
exception to applying Opinion 30 is eliminated as well. This statement is
effective for years beginning after May 2002 for the provisions related to the
rescission of Statements 4 and 64, and for all transactions entered into
beginning May 2002 for the provision related to the amendment of Statement 13.
The Company believes that the adoption of FAS 145 will have no impact on its
operations or financial position.

      In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, which addresses accounting for
restructuring and similar costs. SFAS No. 146 supersedes previous accounting
guidance, principally Emerging Issues Task Force (EITF) Issue No. 94-3. The
Company will adopt the provisions of SFAS No. 146 for restructuring activities
initiated after December 31, 2002. SFAS No. 146 requires that the liability for
costs associated with an exit or disposal


                                       21
<PAGE>

activity be recognized when the liability is incurred. Under EITF No. 94-3, a
liability for an exit cost was recognized at the date of a companys commitment
to an exit plan. SFAS No. 146 also establishes that the liability should
initially be measured and recorded at fair value. Accordingly, SFAS No. 146 may
affect the timing of recognizing future restructuring costs as well as the
amount recognized.

      In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure" ("FAS 148"), which amends Statement of Financial Accounting
Standards 123, "Accounting for Stock-Based Compensation" ("FAS 123"). FAS 148
provides alternative methods of transition for voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, FAS 148 amends the disclosure requirements of FAS 123 to require more
prominent and more frequent disclosures in financial statements of the effects
of stock-based compensation. The transition guidance and annual disclosure
provisions of FAS 148 are effective for fiscal years ending after December 15,
2002. The adoption of FAS 148 did not have a material impact on the Company's
balance sheet or results of operations. The Company has provided the interim and
year-end disclosures required by FAS 148.

      In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities" ("SFAS 149"). SFAS 149 amends
and clarifies the accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities
under SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities". SFAS 149 is generally effective for contracts entered into or
modified after June 30, 2003 and for hedging relationships designated after June
30, 2003. The adoption of SFAS 149 did not have a material effect on the
Company's financial position, results of operations, or cash flows.

      In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Instruments with Characteristics of Both Liabilities and Equity," ("SFAS 150")
which establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. SFAS
150 requires that an issuer classify a financial instrument that is within its
scope, which may have previously been reported as equity, as a liability (or an
asset in some circumstances). This statement is effective for financial
instruments entered into or modified after May 31, 2003 for public companies.
The adoption of SFAS 150 did not have a significant impact on our financial
statements.

      In November 2002, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others ("FIN 45").
FIN 45 requires a guarantor to recognize a liability, at the inception of the
guarantee and also include more detailed disclosures with respect to guarantees,
including additional disclosures relating to product warranty liabilities. The
initial recognition and measurement provisions of FIN 45 are applicable on a
prospective basis to guarantees issued or modified after December 31, 2002. The
following is a summary of the Company's agreements that the Company has
determined is within the scope of FIN 45.

      Under its bylaws, the Company has agreed to indemnify its officers and
directors for certain events or occurrences arising as a result of the officer
or director's serving in such capacity. The maximum potential amount of future
payments the Company could be required to make under these indemnification
agreements is unlimited. However, the Company has a directors and officers
liability insurance policy that limits its exposure and enables it to recover a
portion of any future amounts paid. As a result of its insurance policy
coverage, the Company believes the estimated fair value of these indemnification
agreements is minimal and has no liability recorded for these agreements as of
September 30, 2003.

      The Company enters into indemnification provisions under its agreements
with other companies in its ordinary course of business, typically business
partners, contractors, customers, landlords and its agreements with investors.
Under these provisions the Company generally indemnifies and hold harmless the
indemnified party for losses suffered or incurred by the indemnified party as a
result of the Company's activities or, in some cases, as a result of the
indemnified party's activities under the agreement. These indemnification
provisions often include indemnifications relating to representations made by
the Company


                                       22
<PAGE>

with regard to intellectual property rights. These indemnification provisions
generally survive the termination of the underlying agreement. The maximum
potential amount of future payments the Company could be required to make under
these indemnifications provisions is unlimited. The Company has not incurred
material costs to defend lawsuits or settle claims related to these
indemnification provisions. As a result, the Company believes the estimated fair
value of these provisions is minimal. Accordingly, the Company has no
liabilities recorded for these agreements as of September 30, 2003.

      In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation
of Variable Interest Entities, an interpretation of Accounting Research
bulletins ("ARB") No. 51, Consolidated Financial Statements ("FIN 46"). FIN 46
clarifies the application of ARB No. 51 to certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. The
adoption of FIN 46 did not have a material impact on our financial position and
results of operations.

Item 7. FINANCIAL STATEMENTS

      The following is a list of financial statements filed herewith:

      Consolidated Balance Sheets as of September 30, 2003 and September 30,
      2002

      Consolidated Statements of Operations for the years ended September 30,
      2003 and 2002

      Consolidated Statements of Shareholders' Equity (deficit) for the years
      ended September 30, 2003 and 2002

      Consolidated Statements of Cash Flows for the years ended September 30,
      2003 and 2002

      Notes to Consolidated Financial Statements

Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

      There were no changes in accountants or disagreements during the fiscal
year covered by this report.

Item 8 A. CONTROLS AND PROCEDURES

      (a) Evaluation of Disclosure Controls and Procedures

      Disclosure Controls and procedures are designed to ensure that information
      required to be disclosed in the reports filed or submitted under the
      Exchange Act is recorded, processed, summarized and reported, within the
      time periods specified in the SEC's rules and forms. Disclosure controls
      and procedures include, without limitation, controls and procedures
      designed to ensure that information required to be disclosed in the
      reports filed under the Exchange Act is accumulated and communicated to
      management, including the Chief Executive Officer and Chief Financial
      Officer, as appropriate, to allow timely decisions regarding required
      disclosures.

      Within the 90 days prior to this report, the Company carried out an
      evaluation, under the supervision and with the participation of the
      Company's management,


                                       23
<PAGE>

      including the Company's Chief Executive Officer and Chief Financial
      Officer, of the effectiveness of the design and operation of the Company's
      disclosure controls and procedures. Based upon and as of the date of that
      evaluation, the Chief Executive Officer and Chief Financial Officer
      concluded that the Company's disclosure controls and procedures are
      effective to ensure that the information required to be disclosed in the
      reports the Company files and submits under the exchange act is recorded,
      processed, summarized, and reported as and when required.

      (b) Changes in Internal Controls

      There were no changes in the Company's internal controls or in other
      factors that could have significantly affected those controls subsequent
      to the date of the Company's most recent evaluation.


                                       24
<PAGE>

                                    PART III

Item 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      As of December 15, 2003, the directors and executive officers of the
Company are as follows:

     Name                       Age         Position
     ----                       ---         --------
Robert Pearson                  68          Director

Steven Spector                  57          Chairman of the Board

Robert Degan                    64          Director

Walter Kornbluh                 72          Director

Stephen Crosson                 44          Chief Executive Officer,
                                            Chief Financial Officer,
                                            Secretary & Director

      Robert Pearson, Mr. Pearson, who became a director in 1997, has been
associated with Renaissance Capital Group ("RCG") since April 1994. RCG is the
investment advisor of the largest shareholders of the Company. Presently, Mr.
Pearson serves as a Senior Vice President and Director of Corporate Finance of
RCG. He served as Executive Vice President of the Thomas Group from May 1990 to
March 1994. For 25 years, Mr. Pearson held various senior management positions
at Texas Instruments, including Vice President of Finance from October 1983 to
June 1985. Mr. Pearson holds directorships in the following companies: Poore
Brothers, which manufacture and distribute snack food products, Advanced Power
Technology, Inc., a power semiconductor manufacturer, eOriginal, Inc., a
developer of technology and software for creation of electronic contracts,
Laserscope, Inc., a marketer and manufacturer of lasers for medial use, and
Simtek Corporation, a fables semiconductor company that designs and markets
non-volatile static random access memories.

      Steven Spector, Mr. Spector became a director in February 2000. Since
1971, Mr. Spector has practiced finance, banking and corporate reorganization
law, most recently as a partner in the Los Angeles Office of Jeffer, Mangels,
Butler and Marmaro, LLP. In addition to practicing law, Mr. Spector is a partner
in the investment group of LBS Investments, LLC, and a trustee of The Joseph B.
Gould Charitable Foundation. Mr. Spector has lectured and taught extensively in
his legal specialties of finance, banking and corporate reorganization. In
September 2003, Mr. Spector was elected as Chairman of the Board of Directors.

      Robert Degan, Mr. Degan became a director in January 2001. From 1989 to
1996, Mr. Degan was President and Chief Executive Officer of Tylink Corporation,
a private company, which designs, manufactures and markets digital access
products. From 1997 to 1998, Mr. Degan was Chairman, President and Chief
Executive Officer of Summa Four Inc., a public company, which is a leading
provider of switching platforms. In 1998 Summa Four, Inc. was acquired by Cisco
Systems, Inc. and from 1998 through 1999 Mr. Degan was General Manger of the
Enhanced Services and Migration business unit of Cisco Systems, Inc. From 2000
to the present Mr. Degan has been a private investor.

      Walter Kornbluh, Mr. Kornbluh joined the Company in May 1997 and became a
director in April 1998. Mr. Kornbluh is a licensed Certified Public Accountant
in the States of California and New York. For the past 10 years he has been the
President and majority owner of Workout Specialist Inc., a firm that specializes
in assisting companies with financial problems. He spent 17 years as President
of Marathon Office Supply, Inc., a public company whose stock was listed on the
American Stock Exchange.


                                       25
<PAGE>

      Stephen Crosson joined the Company in March 1985 and was manager of
accounting and government contracts and logistics. In September 1989, Mr.
Crosson became a financial analysis officer with First Interstate Banks
Controller's office. In March 1992, Mr. Crosson returned to the Company as
Director of Operations. In April 1995, he became Vice President of Operations.
In January of 1997, Mr. Crosson became Corporate Secretary and in April 1998 he
became Chief Operating Officer and Treasurer. In January 2003, Mr. Crosson
became the Chief Executive Officer, and in August 2003, Mr. Crosson was elected
a director.

DIRECTOR COMPENSATION

      Directors do not receive any annual compensation. Directors receive $1,000
each for each meeting attended and reimbursement for out-of-pocket expenses for
attending meetings. Mr. Pearson has waived the meeting fees.

COMPLIANCE WITH SECTION 16(a) -

      Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities to file with the
Securities and Exchange Commission initial statements of beneficial ownership,
reports of changes in ownership and annual reports concerning their ownership of
common stock and other equity securities of the Company, on Forms 3, 4 and 5
respectively. Executive officers, directors and greater than 10% shareholders
are required by Commission regulations to furnish the Company with copies of all
Section 16(a) reports they file. To the best of the Company's knowledge (based
solely upon a review of the Form 3, 4 and 5 filed), no officer, director or 10%
beneficial shareholder failed to file on a timely basis any reports required by
Section 16(a) of the Securities Exchange Act of 1934, as amended.

Item 10. EXECUTIVE COMPENSATION

      The following table sets forth the compensation paid by the Company for
its fiscal years ended September 30, 2003, 2002 and 2001 to its Chief Executive
Officer and Chief Financial Officer (the "Named Executive Officers"). No other
executive officer received compensation which exceeded $100,000 for the fiscal
year ended September 30, 2003.

<TABLE>
<CAPTION>
                                                                                Long Term
                                                                               Compensation
                                           ANNUAL COMPENSATION                    Awards
                            --------------------------------------------------  Securities
                            FISCAL YEAR                               ALL       Underlying
NAME AND                       ENDED                                 OTHER       Options
PRINCIPAL POSITION          SEPTEMBER 30,    SALARY       BONUS   COMPENSATION     SARs
------------------          -------------    ------       -----   ------------  ----------
<S>                             <C>         <C>            <C>         <C>       <C>
Stephen Crosson,                2003        $137,500       --          --        200,000
Chief Executive Officer,        2002        $133,125       --          --         50,000
Chief Financial Officer,        2001        $120,000       --          --        120,000
Corporate Secretary
</TABLE>

                              OPTION GRANTS IN 2002

      The following table sets forth certain information regarding option grants
to the Named Executive Officer during the fiscal year ended September 30, 2003.

                         Number of      Percentage of
                         Securities     Total Options   Average
                         Underlying     Granted to      Exercise
                         Options        Employees       Price         Expiration
NAME                     Granted (1)    In 2002         Per Share     Date
----                     -----------    -------------   ---------     ----------
Stephen Crosson ........  200,000         16.32%         $0.53        12/08/2009

----------
(1)   Options were granted under the year 2000 Employee Stock Option Plan.


                                       26
<PAGE>

                   OPTION EXERCISES AND FISCAL YEAR-END VALUES

<TABLE>
<CAPTION>
                                             Number of Securities               Value of
                                            Underlying Unexercised       Unexercised in the Money
                    Shares                   Options at Year-End            Options at Year-End
                   Acquired     Value     ---------------------------   ---------------------------
Name             On Exercise   Realized   Exercisable   Unexercisable   Exercisable   Unexercisable
----             -----------   --------   -----------   -------------   -----------   -------------
<S>                  <C>          <C>         <C>            <C>             <C>            <C>
Stephen Crosson ..   --           --          --             --              --             --
</TABLE>

      There were no options exercised by the named executive officer during
fiscal year 2003.

      The Company has adopted a code of ethics that applies to the Company's
principal executive officer, principal financial officer and principal
accounting officer.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

      The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 1, 2003 by (I)
each person who is known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock; (ii) each of the Company's directors; (iii)
the named Executive Officers; and (iv) executive officers and directors of the
Company as a group:

                                                COMMON STOCK (1)
                                        ---------------------------------
                                        NUMBER OF          PERCENTAGE OF
     NAME AND ADDRESS (2)                SHARES            OUTSTANDING (3)
     --------------------               ---------          --------------

Frank J. LaChapelle(4) ...............   635,000                6.43

Robert Pearson(5) ....................        --                  --

Robert Degan .........................   248,000(6)               --

Steven Spector .......................   352,600(7)               --

Walter Kornbluh ......................   925,880(8)             8.72

Stephen Crosson ......................   730,320(9)             6.97

Renaissance Capital Growth &
Income Fund III, Inc. ................ 3,193,333(10)           30.08
     8080 N. Central Expressway
     Suite 210
     Dallas, Texas 75206


                                       27
<PAGE>

Renaissance US Growth &
Income Trust PLC ..................... 2,458,567               24.89
     8080 N. Central Expressway
     Suite 210
     Dallas, Texas 75206

BFSUS Special Opportunities
Trust PLC ............................ 3,435,763(11)           25.80
     8080 N. Central Expressway
     Suite 210
     Dallas, Texas 75206

All executive officers and
     directors as a group
     (5 persons) ..................... 2,256,800               19.26

----------
(1)   As used herein, the term beneficial ownership is defined by Rule 13d-3
      under the Securities Exchange Act of 1934 as consisting of sole or shared
      voting power and/or sole or shared investment power subject to community
      property laws where applicable.
(2)   Except as indicated, the address of each person is c/o the Company at 600
      Hampshire Road, #105, Westlake Village, California 91361.
(3)   Based on 9,879,371 shares of Common Stock outstanding, as of December 15,
      2003.
(4)   All shares are held in the LaChapelle Family Trust with respect to which
      Mr. LaChapelle exercises voting and investment power.
(5)   Does not include any shares owned by the Renaissance funds. Mr. Pearson is
      an executive officer of RCG and the Renaissance funds.
(6)   Includes four year non-qualified options from the Company to purchase
      65,000 shares at $3.63 per share and four year non-qualified options from
      the Company to purchase 50,000 shares at $.95 per share, 35,000 shares
      from the Company at $.61 per share and 85,000 shares from the Company at
      $.44 per share.
(7)   Includes four year non-qualified stock options from the Company for 65,000
      shares at $3.63 per share and four year non-qualified options from the
      Company to purchase 50,000 shares at $.95 per share, 35,000 shares from
      the Company at $.61 per share, 85,000 from the Company at $.44 per share
      and a three year warrant from the Company to purchase 30,000 shares at
      $1.55 per share.
(8)   Includes currently exercisable options to purchase 92,000 shares from the
      Company at $.56 per share, 180,000 shares from the Company at $3.87 per
      share, 90,000 shares from the Company at $5.00 per share, 180,000 shares
      from the Company at $1.55 per share, 50,000 shares from the Company at
      $.95 per share, 100,000 shares from the Company at $.61 per share and
      50,000 shares from the Company at $.44 per share.
(9)   Includes currently exercisable options to purchase 48,000 shares from the
      Company at $.56 per share, 120,000 shares from the Company at $3.87 per
      share, 60,000 shares from the Company at $5.00 per share, 120,000 shares
      from the Company at $1.55 per share, 50,000 shares from the Company at
      $.95 per share, 100,000 shares from the Company at $.61 per share and
      100,000 shares from the Company at $.44 per share.
(10)  According to Schedule 13D, dated September 13, 1994, filed with the
      Commission, RCG is the investment advisor of Renaissance Capital Growth &
      Income Fund III, Inc. (the "Fund"). The Fund owns 2,458,333 shares of the
      Company's Common Stock and has three year warrants to purchase 500,000
      shares of Common Stock at $1.00 per share, four year options to purchase
      65,000 shares at $3.63 per share, four year options from the Company to
      purchase 50,000 shares at $.95 per share, 35,000 shares from the Company
      at $.61 per share and 85,000 shares from the Company at $.44 per share.
(11)  Includes $1,750,000 of convertible debt, which is convertible into
      3,435,763 shares of common stock based on conversion prices ranging from
      $0.41 to $0.90 per share.


                                       28
<PAGE>

Equity Compensation Plan Information

      The following table sets forth certain information regarding the Company's
2000 Stock Option Plan. All information set forth below is as of September 30,
2003, pursuant to applicable regulations.

<TABLE>
<CAPTION>
                                                           Number of securities remaining
                              ------------------------------------------------------------------------------------------------
                              Number of Securities to      Weighted-average            available for future issuance under
                              Be issued upon exercise      exercise price of           equity compensation plans (excluding
                              Of outstanding options,      outstanding options,        securities warrants and rights warrants
                              Warrants and rights          warrants and rights         and rights reflected in (a)) (a) (b)
                                      (a)                          (b)                                  (c)
                              -------------------          -------------------         ---------------------------------------
<S>                                 <C>                             <C>                             <C>
Equity compensation
Plans approved by                   3,665,000                       $1.71                           727,000
Security holders

Equity compensation
Plans not approved by                      --                          --                                --
Holders

        TOTAL                       3,665,000                       $1.71                           727,000

</TABLE>

Shareholder Approved Plans:

The 2000 Stock Option Plan

      The Company's shareholders approved the 2000 Stock Option Plan as amended
(the "Plan") in April 2001. Currently, the Plan authorizes the grant of options
to purchase up to 3,500,000 shares of the Company's Common Stock, of which
options to purchase 727,000 shares were outstanding and available for future
issuance as of December 15, 2003.

Non-Shareholder-Approved Plans:

      There are no Non-Shareholder Approved Plans as of December 15, 2003.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      During fiscal year ended September 30, 2002, the Company issued a three
year warrant to Mr. Steven Spector (director), to purchase 30,000 shares at
$1.55 per share.

      During the fiscal year ended September 30, 2003, the Company signed a two
consulting agreement with Mr. Walter Kornbluh (director), to provide consulting
services to the Company reporting to the Chairman of the Board of Directors and
the Chief Executive Officer. The contract is for two years beginning August 1,
2003, at a rate of $2,500 per month.

      During the fiscal year ended September 30, 2003, the Company signed a two
year employment agreement with Mr. Stephen Crosson to be the Chief Executive
Officer of the Company reporting to the Chairman of the Board of Directors. The
contract is for two years beginning August 1, 2003, with an annual salary of
$150,000 per year and the possibility of bonuses at the discretion of the Board
of Directors.

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits

            Exhibit 14 Code of Ethics

            Exhibit 22 Subsidiaries

            Exhibit 31 Certification Pursuant to Section 302 of the
                       Sarbanes-Oxley Act of 2002

            Exhibit 32 Certification Pursuant to Section 906 of the
                       Sarbanes-Oxley Act of 2003

      (b)   Reports on Form 8-K. None


                                       29
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15 (d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                        CAMINOSOFT CORP

                                        By /s/ STEPHEN CROSSON
                                          --------------------------------------
                                          Chief Executive Officer

      In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
        Signature                       Capacity                     Date
        ---------                       --------                     ----
<S>                                     <C>                          <C>
/s/ STEVEN SPECTOR                      Chairman of the Board        December 20, 2003
-----------------------------------
Steven Spector

/s/ WALTER KORNBLUH                     Director                     December 20, 2003
-----------------------------------
Walter Kornbluh

/s/ STEPHEN CROSSON                     Chief Executive Officer,     December 20, 2003
-----------------------------------     Secretary and Treasurer
Stephen Crosson                         and Principal Financial
                                        and Accounting Officer
                                        and Director

/s/ ROBERT PEARSON                      Director                     December 20, 2003
-----------------------------------
Robert Pearson

/s/ ROBERT DEGAN                        Director                     December 20, 2003
-----------------------------------
Robert Degan
</TABLE>


                                       30
<PAGE>

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT

To the Board of Directors and Shareholders
CaminoSoft Corp.

We have audited the accompanying consolidated balance sheets of CaminoSoft Corp.
and subsidiary as of September 30, 2003 and 2002 and the related consolidated
statements of operations, shareholders' equity (deficit) and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CaminoSoft Corp. as
of September 30, 2003 and 2002 and the results of their operations and their
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.


/s/ BDO Seidman, LLP

Los Angeles, California
December 18, 2003


                                      F-1
<PAGE>

                                CAMINOSOFT CORP.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                       September 30,
                                                                ----------------------------
ASSETS                                                              2003            2002
                                                                ------------    ------------
<S>                                                             <C>             <C>
Current assets:
   Cash and cash equivalents                                    $    436,782    $    576,421
   Accounts receivable, net of allowance of $5,687 and $5,687        251,037          61,415
   Prepaid expenses                                                    6,000           9,592
   Deferred fiancing costs (Note's 4 and 5)                           58,741          58,741
                                                                ------------    ------------

Total current assets                                                 752,560         706,169
                                                                ------------    ------------

Property and Equipment, net of accumulated depreciation of            21,130           5,468
     $21,986 and $26,164 (Note 2)

Software, net of accumulated amortization of,                        466,773         584,981
     $360,617 and $242,409 (Note 3)

Deposits                                                              11,792           9,581

Deferred financing costs (Note's 4 and 5)                             73,428         117,483
                                                                ------------    ------------

Total assets                                                    $  1,325,683    $  1,423,682
                                                                ============    ============

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Trade accounts payable                                       $    125,753    $     43,651
   Accrued Liabilities                                               144,948         153,307
   Deferred revenues                                                 264,555          42,176
                                                                ------------    ------------

Total current liabilities                                            535,256         239,134

Notes Payable (Note 4)                                             1,750,000              --
                                                                ------------    ------------

Total liabilities                                                  2,285,256         239,134

   Common stock, no par value; authorized 100,000,000 shares;
     issued and outstanding 9,879,371 and 9,873,171 shares        15,951,333      15,931,255

   Accumulated deficit                                           (16,910,906)    (14,746,707)
                                                                ------------    ------------

Total shareholders' equity (deficit)                                (959,573)      1,184,548
                                                                ------------    ------------

Total liabilities and shareholders' equity (deficit)            $  1,325,683    $  1,423,682
                                                                ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                      F-2
<PAGE>

                                CAMINOSOFT CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                              YEARS ENDED
                                                              SEPTEMBER 30,
                                                        --------------------------
                                                            2003           2002
                                                        -----------    -----------
<S>                                                     <C>            <C>
SALES                                                   $   790,156    $   165,691

COST OF SALES                                               221,635        100,570
                                                        -----------    -----------

GROSS PROFIT                                                568,521         65,121

OPERATING EXPENSES
     Sales and administrative                             2,308,747      2,456,419
     Depreciation and amortization                            7,682         10,548
     Research & Development                                 332,323        120,563
                                                        -----------    -----------

Total operating expenses                                  2,648,752      2,587,530
                                                        -----------    -----------

Loss from operations                                     (2,080,231)    (2,522,409)

OTHER INCOME (EXPENSE)
     Interest expense                                       (84,592)            --
     Interest income                                            624          6,097
                                                        -----------    -----------

Total other income (expense)                                (83,968)         6,097
                                                        -----------    -----------

Net loss applicable to common stock                      (2,164,199)    (2,516,312)
                                                        ===========    ===========

Weighted average number of common shares outstanding:
     (basic and diluted):                                 9,879,371      9,508,583
                                                        ===========    ===========

Net loss per common share:
   (basic and diluted)                                  ($     0.22)   ($     0.26)
                                                        ===========    ===========
</TABLE>

           See accompanying notes to Consolidated Financial Statements


                                      F-3
<PAGE>

                                 CAMNOSOFT CORP
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

<TABLE>
<CAPTION>
                                                             Common Stock
                                                       -----------------------
                                                                                Accumulated
                                                        Shares        Amount       Deficit          Total
                                                       ---------   -----------   ------------    -----------
<S>                                                    <C>         <C>           <C>             <C>
BALANCE, at September 30, 2001                         8,334,556   $13,900,381   ($12,230,395)   $ 1,669,986

Common stock issued for services                          26,740        34,762                        34,762

Common stock issued for private placement              1,472,500     1,767,000                     1,767,000

Common stock issued for exercise of options/warrants      39,375        19,800                        19,800

Warrant Extension Renaissance Financing                                176,224                       176,224

Warrant to purchase common stock issued for services                    33,088                        33,088

Net loss                                                                           (2,516,312)    (2,516,312)
                                                       ---------   -----------   ------------    -----------

BALANCE, at September 30, 2002                         9,873,171   $15,931,255   ($14,746,707)   $ 1,184,548

Common stock issued for services                           6,200         5,952                         5,952

Warrant to purchase common stock issued for services                    14,126                        14,126

Net loss                                                                           (2,164,199)    (2,164,199)
                                                       ---------   -----------   ------------    -----------
Balance, at September 30, 2003                         9,879,371   $15,951,333   ($16,910,906)   ($  959,573)
                                                       =========   ===========   ============    ===========
</TABLE>

           See accompanying notes to Consolidated Financial Statements


                                      F-4
<PAGE>

                                 CAMINOSOFT CORP
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                               YEARS ENDED
                                                                              SEPTEMBER 30,
                                                                       --------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                          2003           2002
                                                                       -----------    -----------
<S>                                                                    <C>            <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss from continuing operations                                 ($2,164,199)   ($2,516,312)
     Adjustments to reconcile net loss from continuing operations
       to net cash used in operating activities:
          Depreciation and amortization                                    125,891        109,417
          Common stock and common stock warrants issued for services        20,078         67,850
     Changes in operating assets and liabilities:
          Accounts receivable                                             (189,623)       (27,757)
          Other receivables                                                      0        150,000
          Prepaid expense                                                   47,647         (9,592)
          Deposits and other                                                (2,211)         5,200
          Accounts payable and accrued expenses                             73,743        (20,215)
          Deferred revenue                                                 222,379         17,644
                                                                       -----------    -----------
Net cash used in operating activities                                   (1,866,295)    (2,223,765)

CASH FLOWS FROM INVESTING ACTIVITIES
     Investment in fixed assets                                            (23,344)            --
     Investment in software technology                                          --       (270,292)
                                                                       -----------    -----------

Net cash used in investing activities                                      (23,344)      (270,292)

CASH FLOWS FROM FINANCING ACTIVITIES
     Borrowing note payable                                              1,750,000              0
     Issuance of common stock                                                   --      1,786,800
                                                                       -----------    -----------

Net cash provided by financing activities                                1,750,000      1,786,800
                                                                       -----------    -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                 (139,639)      (707,257)

CASH AND CASH EQUIVALENTS, beginning of year                               576,421      1,283,678
                                                                       -----------    -----------

CASH AND CASH EQUIVALENTS, end of year                                 $   436,782    $   576,421
                                                                       ===========    ===========
</TABLE>

Supplemental non-cash financing and investing activities

      During the year ended September 30, 2003, the Company issued a 6%
      convertible debenture in two parts for a total of $1,750,000. The
      debenture matures on November 27, 2005, at which time the unpaid principal
      amount and all accrued and unpaid interest will become due and payable in
      full. Interest of 6% per annum is paid in monthly installments for the
      term of the debenture based on the unpaid principal balance.

      During the year ended September 30, 2002, warrants to purchase 500,000
      shares of common stock were extended three years in connection with
      additional financing. The value of the warrant, $176,224 was recorded as
      deferred financing costs.

           See accompanying notes to Consolidated Financial Statements


                                      F-5
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

CaminoSoft Corp. (the "Company") previously known as Interscience Computer
Corporation, was incorporated under the laws of the State of California on
October 14, 1983, to be a third party provider of maintenance services for
computer hardware and related peripheral equipment. On September 17, 1999, the
Company acquired the assets (the "Camino Assets") of Camino Software Systems,
Inc. ("Camino"), a data storage company, for 468,000 shares of the Company's
common stock and assumed $315,172 of certain Camino liabilities. The Camino
assets consisted of the name, Camino Software Systems, Inc., the data storage
management software, certain business contracts and intangible personal
property. The Company allocated all amounts paid and assumed in the amount of
$502,372 to the cost of software.

During the year ended September 30, 2000, the Company changed its name to
CaminoSoft Corp. to reflect the focus on the data management software business.
The Company is now distributing and developing data management software
purchased from Camino, which will work with Windows 2000 and Novell operating
systems and with Computer Associates, Veritas, and other enterprise software.

In July 2003, the Company incorporated a subsidiary CM Medical Systems, Inc.,
under the General Corporation Law of California. Currently the subsidiary has no
employees has not issued stock and has not begun operations.

The Company plans to continue to focus on the integration of its products and
solutions with O.E.M. partner products for sales and distribution. This includes
selling products through the distribution channels of the partners. The Company
has new arrangements, which it believes will generate higher levels of revenue
in fiscal 2004. Management has developed additional contingency plans to ensure
expenses can be reduced and brought in line with revenues achieved during 2003,
allowing the Company to extend the operating capital. The Company currently
expects that the new financing will provide sufficient cash to fund its
projected operations for the immediately foreseeable future and believes
additional financing will be available if and when needed. If the Company is
unable to achieve projected operating results and/or obtain such additional
financing if and when needed, management will be required to curtail growth
plans and scale back development activities. No assurances can be given that the
Company will achieve increased revenues or achieve profitability in 2004.
Further, no assurances can be given that the Company's current financing will be
sufficient to support the Company's planned level of operations.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary. All significant intercompany balances
and transactions have been eliminated in consolidation.


                                      F-6
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of
three months or less when purchased to be cash equivalents. Such cash
equivalents, at times, may exceed federally insured limits. The Company
maintains its accounts with financial institutions with high credit ratings.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, prepaid assets,
"Disclosures About Fair Value of Financial Instruments," requires disclosure of
the fair value of certain financial instruments. Accounts receivable, other
receivables, accounts payable, accrued liabilities and deferred revenues as
reflected in the financial statements approximate fair value because of the
short-term maturity of these instruments.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation is computed on the
straight-line and accelerated methods based upon the estimated useful life of
the asset, primarily five years.

SOFTWARE

Software capitalization is stated at cost. Amortization is computed on the
straight-line and accelerated methods based upon the estimated useful life of
the asset, primarily seven years. Statement of Financial Accounting Standards
No. 86, "Accounting for the Cost of Computer Software to be Sold, Leased, or
Otherwise Marketed" ("SFAS 86"), provides for the capitalization of certain
software development costs incurred after technological feasibility of the
software is established. The Company capitalized no development cost during the
year ended September 30, 2003 and $270,292 of software development costs during
the year ended September 30, 2002. The Company evaluates the net realizable
value of the capitalized software based on estimated future undiscounted cash
flows.

REVENUE RECOGNITION

Revenue from sale of product is recognized upon shipment or installation to the
customer. Maintenance revenue is recognized ratably over the contract period.
The Company's revenue recognition policies are in compliance with all applicable
accounting regulations, including Staff Accounting Bulleton No. 101 (SAB 101),
Revenue


                                      F-7
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recognition in Financial Statements, American Institute of Certified Public
Accountants (AICPA), Statement of Position (SOP) 97-2, Software Revenue
Recognition, SOP 98-9, Modification of SOP 97-2, with Respect to Certain
Transactions and Emerging Issues Task Force Issue 00-21, Revenue Arrangements
with Multiple Deliverables.

RESEARCH AND DEVELOPMENT

Research and development costs, which consist primarily of software development
costs, are expensed as incurred and amounted to $332,323 and $120,563 for the
years ended September 30, 2003 and 2002 respectively.

ADVERTISING

Advertising costs are charged to expense as incurred and such costs were $23,500
and $61,026 for the years ended September 30, 2003 and 2002, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company periodically assesses the recoverability of the carrying amounts of
long-lived assets, including intangible assets. A loss is recognized when
expected undiscounted future cash flows are less than the carrying amount of the
asset. The impairment loss is the difference by which the carrying amount of the
asset exceeds its fair value.

STOCK-BASED COMPENSATION

The Company accounts for employee stock options or similar equity instruments in
accordance with Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation" (SFAS No. 123) and Interpretation No.
44, "Accounting for Certain Transactions Involving Stock Compensation, in
Interpretation of APB 25" (FIN 44). SFAS No. 123 defines a fair-value-based
method of accounting for employee stock options or similar equity instruments.
This statement gives entities a choice to recognize related compensation expense
by adopting the new fair-value method or to measure compensation using the
intrinsic value method under Accounting Principles Board (APB) Opinion No. 25
"Accounting for Stock Issued to Employees", the former standard. If the former
standard for measurement is elected, SFAS No. 123 requires supplemental
disclosure to show the effect of using the new measurement criteria. The Company
currently uses the disclosure standards of SFAS 123 but accounts for stock based
compensation using APB 25.

All stock options issued to employees have an exercise price not less than the
fair market value of the Company's common stock on the date of the grant, and in
accordance with accounting for such options utilizing the intrinsic value method
there is no related compensation expense recorded in the Company's financial
statements. Had compensation cost for stock-based compensation been determined
based on the fair value of the grant dates consistent with the method of SFAS
123, the Company's net loss and


                                      F-8
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

loss per share for the years ended September 30, 2003 and 2002 would have been
increased to the pro forma amounts presented:

                                                      2003            2002
                                                      ----            ----

Net loss, as reported                             $(2,164,199)    $(2,516,312)
Add: Stock-based employee compensation
included in reported net loss, net of related
tax effects
Deduct: Total stock-based
employee compensation expense determined
under fair value based method for all awards,
net of related tax effects                           (276,547)       (174,903)

Net loss, pro forma                               $(2,440,746)    $(2,691,215)

Basic and diluted net loss per common share,
as reported                                       $      (.22)    $      (.26)
pro forma                                         $      (.25)    $      (.28)

The fair value of option grants is estimated on the date of grant utilizing the
Black-Scholes option-pricing model with the following weighted average
assumptions for grants in 2003 and 2002, expected life of options were between 3
years and 8 years, expected volatility ranged from 9.3% to 91.76%, respectively,
risk-free interest rate of 1.95% to 2.51% in 2003 and 3.41% to 5.07% in 2002,
and a 0% dividend yield. The weighted average fair value on the date of grants
for options and warrants granted during 2003 was $0.57 per unit. The fair value
of the options and warrants granted in 2002 were $0.51 per unit.

EARNINGS (LOSS) PER SHARE

The Company computes earnings (loss) per common share under Statement of
Financial Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128),
which requires presentation of Basic and Diluted earnings (loss) per share.
Basic earnings (loss) per share includes no dilution and is computed by dividing
income (loss) available to common shareholders by the weighted average number of
common shares outstanding for the period. Diluted earnings (loss) per share
reflects the potential dilution of securities that could share in the earnings
of an entity, such as stock options, warrants or convertible debentures, unless
antidilutive. At September 30, 2003 and 2002, options and warrants to purchase
3,665,000 and 2,530,000 shares, respectively were outstanding, but were not
included in the computation of diluted (loss) per common share as the effect
would be antidilutive.


                                      F-9
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INCOME TAXES

The Company uses the asset and liability method of accounting for income taxes.
Deferred income taxes are recognized based on the differences between financial
statement and income tax valuations of assets and liabilities using applicable
tax rates for the year in which the differences are expected to reverse.
Valuation allowances are established, when necessary, to reduce deferred tax
asset amounts to the amount expected to be realized. The provision for income
taxes represents the tax payable (or benefit) for the period and the change in
deferred tax assets and liabilities during the year.

NEW ACCOUNTING PRONOUNCEMENTS

In May 2002, the FASB issued SFAS 145, Rescission of FASB Statements No. 4, 44,
and 64, Amendment of FASB Statement No. 13, and Technical Corrections. SFAS 145
eliminates Statement 4 (and Statement 64, as it amends Statement 4), which
requires gains and losses from extinguishments of debt to be aggregated and, if
material, classified as an extraordinary item, and thus, also the exception to
applying Opinion 30 is eliminated as well. This statement is effective for years
beginning after May 2002 for the provisions related to the rescission of
Statements 4 and 64, and for all transactions entered into beginning May 2002
for the provision related to the amendment of Statement 13. The Company believes
that the adoption of FAS 145 will have no impact on its operations or financial
position.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities, which addresses accounting for restructuring and
similar costs. SFAS No. 146 supersedes previous accounting guidance, principally
Emerging Issues Task Force (EITF) Issue No. 94-3. The Company will adopt the
provisions of SFAS No. 146 for restructuring activities initiated after December
31, 2002. SFAS No. 146 requires that the liability for costs associated with an
exit or disposal activity be recognized when the liability is incurred. Under
EITF No. 94-3, a liability for an exit cost was recognized at the date of a
companys commitment to an exit plan. SFAS No. 146 also establishes that the
liability should initially be measured and recorded at fair value. Accordingly,
SFAS No. 146 may affect the timing of recognizing future restructuring costs as
well as the amount recognized.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure"
("FAS 148"), which amends Statement of Financial Accounting Standards 123,
"Accounting for Stock-Based Compensation" ("FAS 123"). FAS 148 provides
alternative methods of transition for voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, FAS 148
amends the disclosure requirements of FAS 123 to require more prominent and more
frequent disclosures in financial statements of the effects of stock-based
compensation. The transition guidance and annual disclosure provisions of FAS
148 are effective for fiscal years ending after December 15, 2002. The adoption
of FAS 148 did not have a material impact on the


                                      F-10
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company's balance sheet or results of operations. The Company has provided the
interim and year end disclosures required by FAS 148.

         In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities" ("SFAS 149"). SFAS 149
amends and clarifies the accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities under SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities". SFAS 149 is generally effective for contracts entered into
or modified after June 30, 2003 and for hedging relationships designated after
June 30, 2003. The adoption of SFAS 149 did not have a material effect on the
Company's financial position, results of operations, or cash flows.

         In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Instruments with Characteristics of Both Liabilities and Equity," ("SFAS 150")
which establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. SFAS
150 requires that an issuer classify a financial instrument that is within its
scope, which may have previously been reported as equity, as a liability (or an
asset in some circumstances). This statement is effective for financial
instruments entered into or modified after May 31, 2003 for public companies.
The adoption of SFAS 150 did not have a material effect on the Company's
financial statements.

         In November 2002, the Financial Accounting Standards Board ("FASB")
issued Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others ("FIN
45"). FIN 45 requires a guarantor to recognize a liability, at the inception of
the guarantee and also include more detailed disclosures with respect to
guarantees, including additional disclosures relating to product warranty
liabilities. The initial recognition and measurement provisions of FIN 45 are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The following is a summary of the Company's agreements that
the Company has determined is within the scope of FIN 45.

         Under its bylaws, the Company has agreed to indemnify its officers and
directors for certain events or occurrences arising as a result of the officer
or director's serving in such capacity. The maximum potential amount of future
payments the Company could be required to make under these indemnification
agreements is unlimited. However, the Company has a directors and officers
liability insurance policy that limits its exposure and enables it to recover a
portion of any future amounts paid. As a result of its insurance policy
coverage, the Company believes the estimated fair value of these indemnification
agreements is minimal and has no liability recorded for these agreements as of
September 30, 2003.

         The Company enters into indemnification provisions under its agreements
with other companies in its ordinary course of business, typically business
partners, contractors, customers, landlords and its agreements with investors.
Under these provisions the Company generally indemnifies and hold harmless the
indemnified party


                                      F-11
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

for losses suffered or incurred by the indemnified party as a result of the
Company's activities or, in some cases, as a result of the indemnified party's
activities under the agreement. These indemnification provisions often include
indemnifications relating to representations made by the Company with regard to
intellectual property rights. These indemnification provisions generally survive
the termination of the underlying agreement. The maximum potential amount of
future payments the Company could be required to make under these
indemnifications provisions is unlimited. The Company has not incurred material
costs to defend lawsuits or settle claims related to these indemnification
provisions. As a result, the Company believes the estimated fair value of these
provisions is minimal. Accordingly, the Company has no liabilities recorded for
these agreements as of September 30, 2003.

      In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation
of Variable Interest Entities, an interpretation of Accounting Research
bulletins ("ARB") No. 51, Consolidated Financial Statements ("FIN 46"). FIN 46
clarifies the application of ARB No. 51 to certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. The
adoption of FIN 46 did not have a material impact on the Company's financial
position and results of operations.

NOTE 2 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

                                                         September 30,
                                                  -----------------------------
                                                   2003                   2002
                                                   ----                   ----

Furniture and fixtures                            $13,084                $ 5,745
Test and training equipment                        30,032                 25,887

                                                   43,116                 31,632
Less accumulated depreciation                      21,986                 26,164

                                                  $21,130                $ 5,468

Property and equipment are depreciated on a straight-line basis with an average
useful life of five years.

NOTE 3 - SOFTWARE

On September 17 1999, the Company acquired the assets (the "Camino Assets") of
Camino Software Systems, Inc. ("Camino") for 468,000 shares of the Company's
common stock valued at $187,200 and assumed $315,172 of certain Camino
liabilities. The Camino Assets consisted of the name, Camino Software Systems,
Inc., the data


                                      F-12
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

storage management software, certain business contracts and intangible personal
property. The Company has allocated all amounts paid and assumed in the amount
of $502,372 to the cost of software. The software is being amortized over seven
years. Net book value of software at September 30, 2003 and 2002 is $215,089 and
$287,061, respectively.

During the year ended September 30, 2002, an additional $270,292 has been
capitalized relating to the Windows 2000 version of the product. During the year
ended September 30, 2003 there was no development cost capitalized. The software
is being amortized over seven years. The net book value for software at
September 30, 2003 is $466,773, which includes the original software purchase of
the Camino Assets plus the additional capitalization.

                                                            September 30,
                                                     ---------------------------
                                                       2003              2002
                                                       ----              ----

Software                                              $827,390          $827,390

Less accumulated amortization                          360,617           242,409

                                                      $466,773          $584,981

Software is amortized on a straight-line basis with an average useful life of 7
years.

NOTE 4 - NOTES PAYABLE

During the year ended September 30, 2002, a warrant to purchase 500,000 shares
of common stock was extended three years in conjunction with additional
financing for the Company (see below). The estimated value of the warrant
($176,224) was recorded as deferred financing on the Company's financial
statements and is being amortized over the term of the debenture.

In December 2002, the Company issued a 6% convertible debenture for up to
$1,000,000. The Company made monthly draws based on cash flow to replenish
operating funds. The full amount was drawn during the current fiscal year.
Interest of 6% per annum will be paid in monthly installments for three years
based on the unpaid principal balance. The debenture matures on November 27,
2005, at which time the unpaid principal amount and all accrued and unpaid
interest will become due and payable in full. The debenture is convertible into
shares of the Company's common stock, with the initial conversion price of $1.00
per share. However if the five day average closing price for the Company's
common stock immediately prior to a disbursement is below the $1.00 initial
conversion price, the average closing price for such period shall become the
conversion price. The funds were used to help fund operations and accelerate the
business plan. As of September 30, 2003, the Company had a note payable
principal balance of $1,000,000 in


                                      F-13
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

connection with this convertible debenture and no further funds available to
borrow on this debenture.

During July 2003, the Company issued a 6% convertible debenture for up to
$750,000. The Company made a single draw for the full amount of the debenture to
replenish operating funds. Interest at a rate of 6% per annum is payable in
monthly installments for 26 months based on the unpaid principal balance. The
debenture matures on November 27, 2005, at which time the unpaid principal
amount and all accrued and unpaid interest will become due and payable in full.
The debenture is convertible, at the option of the holder, into shares of the
Company's common stock, with an initial conversion price of $0.50 per share.
However, if the five day average closing price for the Common Stock immediately
prior to each Disbursement is below the $0.50 initial conversion price, the
average closing price for such period shall become the conversion price. As of
the date of this filing the Company had borrowed $750,000 the entire amount
available.

Annual principal payments for fiscal years 2004 through 2006 are as follows:

     Year ending September 30,
              2004                                              $       --
              2005                                                      --
              2006                                               1,750,000
                                                                ----------
Total                                                           $1,750,000
                                                                ==========

NOTE 5 - SHAREHOLDER'S EQUITY

During fiscal year ended September 30, 2002 the Company issued 26,740 shares of
common stock with a value of $34,762 for executive search services rendered
during the year, this amount was recorded as an expense on the Company financial
statements.

During the year ended September 30, 2002 the Company issued 1,472,500 shares of
common stock for $1.20 per share in a private placement for a total of
$1,767,000.

During the year ended September 30, 2002, 39,375 warrants and options were
exercised into 39,375 shares of common stock and the Company received $19,800.

During the year ended September 30, 2002, the Company issued three year warrants
to purchase 30,000 shares for $1.55 per share, with a value of $33,088 for
services rendered, this amount was recorded as an expense on the Company
financial statements.

During the year ended September 30, 2002, warrants to purchase 500,000 shares of
common stock were extended three years in conjunction with additional financing
for the Company (Note 4), the value of the warrant was $176,224 this amount was
recorded as deferred financing on the Company's financial statements.


                                      F-14
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended September 30, 2002, the Company issued 418,375 options to
purchase the Company's common stock at prices ranging from $0.95 to $1.30 to
employees and directors under the year 2000 employee stock option plan.

During the year ended September 30, 2003, the Company issued 6,200 shares of
common stock with a value of $5,952 for consulting services rendered during the
year, this amount was recorded as an expense on the Company financial
statements.

During the year ended September 30, 2003, the Company issued four year warrants
to purchase 80,000 shares for $0.51 per share with a value of $14,126 for
services rendered, this amount was recorded on the Company financial statements.

During the year ended September 30, 2003, the Company issued 1,218,000 options
to purchase the Company's common stock at prices ranging from $0.44 to $1.30 to
employees and directors under the year 2000 employee stock option plan.

The warrant and stock option summary and changes during the year are presented
below:
                                                                       Weighted
                                                                       Average
                                                        Number of      Exercise
                                                         Shares         Price
                                                        ---------      --------
Warrants and options outstanding
       At September 30, 2001                            2,677,000       $2.94

Warrants granted                                           85,000       $1.15
Options granted                                           418,375        0.98
Warrants exercised                                        (37,500)       0.50
Options exercised                                          (1,875)       0.56
Warrants options expired                                 (611,000)       4.61

Warrants and options outstanding
       At September 30, 2002                            2,530,000       $2.24

Warrants granted                                           80,000        0.51
Options granted                                         1,218,000        0.57
Warrants expired                                          (60,000)       0.51
Options expired                                          (103,000)       0.90

Warrants and options outstanding
     At September 30, 2003                              3,665,000       $1.71

Warrants and options exercisable
       At September 30, 2003                            2,787,750       $2.04

The following table summarizes information about warrants and employee's stock
options outstanding at September 30, 2003.


                                      F-15
<PAGE>

                                CAMINOSOFT CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   Outstanding                             Exercisable
                Weighted Average                        Weighted Average
               --------------------                  -----------------------
Exercise                       Life       Exercise                  Exercise
 Price         Options       (Months)      Price     Options         Price
--------       -------       --------     --------   -------        --------
$0.44          595,000          74         $0.44     150,000         $0.44
 0.51           20,000          45          0.51       20,00          0.51
 0.52           85,000          74          0.52          --            --
 0.56          148,000          74          0.56     148,000          0.56
 0.61          340,000          74          0.61     200,000          0.61
 0.73            5,000          21          0.73       5,000          0.73
 0.90           95,000          74          0.90          --            --
 0.95          376,500          74          0.95     356,625          0.95
 0.97           50,000          74          0.97      12,500          0.97
 1.00          500,000          23          1.00     500,000          1.00
 1.04            2,000          74          1.04         500          1.04
 1.25           25,000          74          1.25       6,250          1.25
 1.30           20,000          74          1.30       5,000          1.30
 1.55          330,000          74          1.55     330,000          1.55
 2.00           42,000          19          2.00      42,000          2.00
 3.38            2,000          74          3.38       1,000          3.38
 3.56          301,000          74          3.56     287,000          3.56
 3.63          260,000          74          3.63     260,000          3.63
 3.87          318,500          74          3.87     313,875          3.87
 5.00          150,000          74          5.00     150,000          5.00
$0.44-$5.00  3,665,000                     $1.71   2,787,750         $2.04

NOTE 6 - RELATED PARTY TRANSACTION

During fiscal year ended September 30, 2002, the Company issued a three year
warrant to Mr. Steven Spector (director), to purchase 30,000 shares at $1.55 per
share for legal services provided to the Company by Mr. Spector.

During the fiscal year ended September 30, 2003, the Company signed a two
consulting agreement with Mr. Walter Kornbluh (director), to provide consulting
services to the Company reporting to the Chairman of the Board of Directors and
the Chief Executive Officer. The contract is for two years beginning August 1,
2003, at a rate of $2,500 per month.

During the fiscal year ended September 30, 2003, the Company signed a two year
employment agreement with Mr. Stephen Crosson to be the Chief Executive Officer
of the Company reporting to the Chairman of the Board of Directors. The contract
is for two years beginning August 1, 2003, with an annual salary of $150,000 per
year and the possibility of bonuses at the discretion of the Board of Directors.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company leases its facilities under noncancelable operating leases expiring
at various dates through 2006. Future minimum rental payments required under
noncancelable operating leases at September 30, 2003 are as follows:


                                      F-16
<PAGE>

Year Ending September 30,                                    Amount
-------------------------                                    ------

      2004                                                  $127,974
      2005                                                   120,037
      2006                                                    82,685

                                                          $  330,696

Total rent expense for the years ended September 30, 2003 and 2002 amounted to
$130,958 and $147,686.

NOTE 8 - INCOME TAXES

The effective tax rate on loss before income taxes differed from the federal
statutory tax rate. The following summary reconciles income taxes at the federal
statutory tax rate with the actual taxes and the effective tax rate:

                                                                September 30,
                                                             ------------------
                                                             2003          2002
                                                             ----          ----
Federal statutory tax rate                                   (34%)         (34%)
State tax, net of federal benefit                             (6%)          (6%)
Permanent differences                                         --            --

Change in valuation allowance                                 40%           40%
Effective tax rate                                            --%           --%

At September 30, 2003, the Company has available net operating loss
carry-forwards of approximately $14,000,000 for federal income tax purposes and
$8,000,000 for state income tax purposes which expire in varying amounts through
2023.

Deferred tax assets, before valuation allowance, as of September 30, 2003 were
$5,316,446 and primarily arise from the Company's net operating loss carry
forwards. A valuation allowance of $5,316,446 was provided because management
believes that the deferred tax assets are more likely than not to be unrealized.

NOTE 9 - SUBSEQUENT EVENT

On December 18, 2003 the Company issued in a private placement 3,243,243 shares
of common stock and 5 year warrants to purchase 3,243,243 shares with 50% of the
warrants at an exercise price of $0.74 and 50% at an exercise price of $1.11 for
$1,200,000. The funds will be used to support business expansion and operations.


                                      F-17