SECURITIES AND EXCHANGE
                      COMMISSION Washington,
                      D. C. 20549
                             FORM 10-K
          Annual Report Pursuant to Section 13
                or 15(d) of the Securities
                Exchange Act of 1934
For  the fiscal year ended April 30, 1997
Commission File No. 0-8299
                    CAMELOT CORPORATION
    (Exact Name of Company as specified in its charter)
                             
          Colorado                           84-0691531
      (State  or other jurisdiction of
(I.R.S. Employer
       incorporation or organization)
Identification No.)

          Camelot   Place,   17770   Preston   Road,
Dallas,   Texas
75252
                 (Address     of    principal    executive
office)
(Zip Code)

Company's telephone number, including area code:    (972)
733-3005

Securities registered pursuant to Section 12(g) of the
Act:

                                      Name of each
exchange on
      Title of each class               which registered

     $0.01 par Value Common Stock                 NASDAQ

Indicate  by check mark whether the Company (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
Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.
                   Yes  X       No ____
                             
Indicate by check mark if disclosure of delinquent filers
pursuant  to Item  405 of Regulation S-K is not contained
herein, and will  not  be contained, to the best of
Company's knowledge, in definitive proxy  or information
statements incorporated by reference in Part III  of  this
Form 10-K or any amendment to this Form 10-K.

Based  on the price of $3.6875, at July 28,1997, the
aggregate  market
value  of  the voting stock held by nonaffiliates of the
Company  was
$4,754,463.

The  number of shares outstanding of the Company's common

stock, $0.01 par value, was 1,472,672 at July 28, 1997.

            DOCUMENTS INCORPORATED BY REFERENCE

Form 8-K dated May 20, 1997 with amendments.





                          PART 1
                             
                             
                             
                             
Item 1.   Business

      Camelot Corporation ("Registrant" or "the Company")
is a holding
company with subsidiaries in technology and
telecommunications.
      The  Company was incorporated in Colorado on
September 5,  1975, and  completed a $500,000 public
offering of its common stock in March 1976.   The Company
has made several acquisitions and divestment's  of
businesses  unrelated to its present activities (see
Acquisition  and Divestment  History) and during the years
ended April 1994  and  April 1995, undertook a
restructuring which involved the sale or closure  of all
subsidiaries operating in prior financial periods.
      The  Company's  activities are conducted  through
subsidiaries. Third  Planet  Publishing,  Inc.,  (`Third
Planet")  (established  in January 1995) is a research and
development company developing leading edge technology in
both hardware and software solutions for audio  and video
conferencing   over   the   Internet.    mrcdrom.com,             inc.
("mrcdrom.com"),  (established  in March 1997) is a
Internet  catalog retailer  of  software.    Camelot
Internet  Access  Services,   Inc. ("CIAS"), (established
in June 1996) is a provider of Internet  access services.
Alexander  Mark  Investments  (USA),  Inc.  ("AMI")   (80%
acquired in May 1997) is a U.S. public holding company
whose 57% owned subsidiary, Meteor Technology plc
("Meteor") is a U.K. public company. Meteor's  two
primary  subsidiaries are DigiPhone  International  Ltd
which  is  the  worldwide distributor of all  the
products  of  Third Planet,  and  Meteor Payphones Ltd an
operator of approximately  2,000 payphones.

Third Planet Publishing

       Third  Planet  is  an  innovative  technological
research  and development  company focusing on hardware
and software  solutions  for audio and video
communications over the Internet.  Third Planet is  at the
culmination of a 30 month development program for Internet
video conferencing and telephony and has made its new
products available for licensing to major Personal
Computer ("PC") manufacturers.
      Third  Planet released its first product, DigiPhone,
in  October 1995.   The  product represented a
telecommunications breakthrough  by permitting  the full-
duplexing of voice over the Internet making  real time
worldwide voice communications possible for PC users at
the cost of  a  monthly  Internet connection fee.  The
current version  of  the product,  called  DigiPhone
Deluxe includes modern telephone  features such  as  speed
dialing, voice messaging, caller ID, call  record  and
play  back,  conference  calling, amongst  others.
Conversations  are encrypted  and  completely  private
unlike  the  commonly  used   IRC connections or Internet
chat rooms in competing software.
      In  April 1996, Third Planet commenced a development
program for DigiPhone         2.0, the latest
version of DigiPhone which included  multi-
protocol frameworks enabling DigiPhone to communicate with
any  other standards based Internet telephony software.
The frameworks are based on  component  technology  that
will allow  the  development  of  new functionality  for
the  DigiPhone communications  engine.   This  new
approach  will  allow DigiPhone to evolve more quickly  in
a  rapidly maturing   Internet telephony market.
DigiPhone 2.0 will be available in approximately the last
quarter of 1997.

      In May 1996, Third Planet announced a development
program for an Internet  telephony handset specifically
designed to  enable  superior voice  communications over
the Internet.  Proficia is an audio handset which connects
to a multimedia PC, eliminating the need for a headset,
microphone  or  speakers.   It  provides quality  sound
for  Internet telephony,  computer  telephony and multi-
media applications,  and  is available for licensing.

      The  principle focus of Third Planet's research and
development department  has  been  on  the  development
of  VideoTalk,  a                                                video
conferencing system for the Internet.  Third Planet has
applied for  a patent for VideoTalk, which is a complete
hardware and software system which,  when  connected to a
multimedia PC, enables full duplex  video conferencing
over the Internet and over local and wide area  networks.
Uniquely,   VideoTalk  will  operate  in  the  background
while not
detracting  from  the  PC's  ability to run  other
software  programs simultaneously.  It uses a PCI plug-and-
play card that  provides  high quality audio and video
while achieving extremely low processor  load. VideoTalk
does not require a sound card or a video capture card,
and allows  communications over the Internet with only a
28.8 kbps  modem. The  VideoTalk  unit  includes a NTSC or
PAL  color  video  camera,  a special  version  of  the
Proficia telephony  handset  and  both  the VideoTalk
and   DigiPhone   2.0  software.   Discussions   with   PC
manufacturers regarding the licensing of VideoTalk for
inclusion  with forthcoming platforms have commenced.

      VideoTalk  is  capable of video conferencing at  15
frames  per second  over a 28.8 modem.  This is a major
breakthrough, as competing technologies  currently
struggle to achieve 2 or 3 frames  per  second over  the
Internet. VideoTalk offloads almost all of  the  audio
and video  processing  onto its own processors.  This
frees  the  personal computer  for other tasks, such as
application sharing, while ensuring the  video  comes
through at a frame rate that software-only solutions
simply cannot match.
     VideoTalk features a modular framework, simplifying
upgrades  and expansions.   This  flexibility will allow
third party  developers  to utilize VideoTalk and its
powerful processors as the engine for  their own programs.
VideoTalk's technical features include:
    Multi-point conferencing
    High frame rate
    Low processor load
    Expandable system
    CIF, QCIF, and SQCIF formats
    Dual NTSC or PAL video input
    Echo cancellation
    Full duplex audio/video
    Outstanding speech quality
    H.323 compliant
    Open architecture
    Firmware upgradeable
    Scaleable hardware and software
    MIPS-based accelerated video processing
    Built-in frame grabber and audio amplifier

     VideoTalk is available for licensing to major PC
                      manufacturers.
                             
      In  June  1997, a successful demonstration of all
the three  new products  was  held in Atlanta at
COMDEX/Spring 97'.   These  products were enthusiastically
received with VideoTalk being featured on COMDEX TV as a
show highlight.
      Through a series of transactions in July 1996,
November 1996 and May  1997 the worldwide marketing rights
for all Third Planet products are  exclusively  with
DigiPhone International Ltd., a  subsidiary  of Meteor
Technology plc a public company affiliated with
Registrant.
Meteor Technology plc
      Subsequent  to the financial year end, Registrant,
through  its acquisition  of 80% of AMI obtained control
of Meteor, a  U.K.  listed public company (see Acquisition
and Divestment History).  Meteor's two operational
subsidiaries, are DigiPhone International Ltd. and  Meteor
Payphones  Ltd.  DigiPhone International is the worldwide
distributor for  all  products developed by Third Planet.
Meteor  Payphones  owns and/or  operates approximately
2,000 payphones in the United  Kingdom, which business it
is intended to expand both by internal growth and by
acquisitions.
mrcdrom.com, inc.
           In April 1997, Registrant announced a new
Internet shopping company  called  mrcdrom.com, a
subsidiary, which will  sell  software titles over its
World Wide Web Site.  It also announced the filing  of a
registration statement to raise up to $12,000,000 through
an initial public  offering  ("IPO")  over the Internet,
offering  up  to  three million  shares, at $4.00 per
share. The Company will be offering  its shares
exclusively over the Internet with no underwriter and
with  a minimum subscription of $200 for 50 shares.
Following the offering if all  shares  offered are sold
the Company will have  9,000,000  shares outstanding.
Camelot, who will retain a 60% shareholding  subsequent to
the  IPO,  transferred  to mrcdrom.com approximately
$511,428  of inventory,   cash,  trademarks  and  other
assets.   The  mrcdrom.com Internet catalogue is currently
being test marketed via its World Wide Web site at
http://www.mrcdrom.com.
      This  new  business grew out of the experience and
resources  of Registrant's previous software retail chain
called Mr. CD-ROM  Stores, Inc., which was closed during
the financial period.  The Company  took a  charge  in
the amount of $745,521 related to the  closing  of  the
stores.  The Company believes that in the long run this
action will be good  for  the  Company  as it restructures
the  operations  into  an Internet catalogue.The Company
will offer a wide selection of one-stop computer  software
shopping through a secure site  on  the  Internet.
Customers  are  offered  a  large  selection  of  titles
as  well  as competitive pricing and can run searches in
various categories,  check order  status, and click on a
button to add software to their  virtual shopping
baskets.  To execute orders customers click on a button
and are prompted to supply shipping and payment details.
      A  registration statement relating to these
securities has  been filed  with  the Securities and
Exchange Commission but  has  not  yet become effective.
These securities may not be sold nor may offers  to buy
be  accepted prior to the time the registration statement
becomes effective.  This document shall not constitute an
offer to sell or the solicitation of an offer to buy nor
shall there be any sale  of  these securities  in  any
State in which such offer, solicitation  or  sale would
be  unlawful prior to registration or qualification  under
the securities laws of any such State.

Camelot Internet Access Services, Inc.

      An  Internet services provider formed in January
1996 using  the UUNet  backbone,  this  subsidiary's
principle  activities  are                                         the
provision  of  support services for Registrant and  the
provision  of Internet access to users of DigiPhone who
would otherwise be unable to access  the  Internet.  Due
to the intense competition experienced  by the  Internet
access industry, Registrant has no plans to  expand  the
current limited activities of this company.

PCAMS

      In February 1997, Registrant acquired from Meteor
the U.S.A. and Canadian  rights to PCAMS software, a
payphone contract and management system  originally
developed for Meteor's payphone  subsidiary.   This
reflects  the  intention  of  Management  to  broaden  the
scope     of
Registrant's   involvement   in   the   telecommunication
industry. Management believes that the passage of the
Telecommunications Act  of 1996 followed by the release of
new payphone compensation rules by the Federal Communications
Commission  in  response  to  the  Act          has
significantly  improved the outlook for this industry,
and  that  the acquisition  of  PCAMS  software enables
Registrant  to  improve  the capabilities of independent
payphone providers.  Management will  seek to   utilize
PCAMS  software  both  by  offering  such  software   to
independent   providers  and  by  seeking  acquisitions
of   payphone businesses.
Competition
       The   technology  and  telecommunications  industry
is  highly
competitive.   The  Company's competitors include other
national  and regional companies many which have
substantially greater financial and other   resources
than  the  Company  which  may  give  them  certain
competitive  advantages.   There  are  many  companies
entering     the
technological  and telecommunications markets with  new
products  and this  trend  is  expected to continue.  The
ability of  Registrant  to effectively  compete  in the
future depends on  a  number  of  factors including its
ability to create and/or acquire products that customers
will  accept  and  respond to and comply with the changing
nature  of regulations  in  the manner which they are
interpreted. Registrant's
businesses may be effected by a variety of factors,
including but  not limited   to   general  economic
trends,  additional   and   existing competition,
marketing  programs,  special  or  unusual  events,  and
acquisitions made by  the Company.




Trademarks and Trade Names

      "Mr. CD-ROM", "DigiPhone", "VideoTalk", "Proficia",
"People  are Talking", "Call Anywhere.  Talk Forever.
Never Pay Long Distance" and "Kids  University"  are
registered or have been  applied  for  in  the United
States patent and trademark office and where appropriate
with foreign  regulatory  bodies  as service marks  or
trademarks  of  the Company.   The  Company believes the
strength of  its  trademarks  and service  marks  benefits
its businesses and intends  to  continue  to protect  and
promote its registered common law trademarks and  service
marks.

Acquisition and Divestment History

      On  September  16,  1988,  the Company acquired
Stock  Transfer Company  of America, Inc. ("STCA"), a
transfer agent, for 6,666  newly issued  common  shares
of  the  Company  (post  reverse  split).   In connection
with  this transaction, Daniel Wettreich was  appointed  a
Director, Chairman and Chief Executive Officer and
Jeanette Fitzgerald was appointed a Director.   On April
11, 1994, following a decision by the  Directors  of  the
Company  to  discontinue  financial  services activities,
STCA was sold to a company affiliated with Mr.  Wettreich
for  book  value,  $13,276. (See Item 13.  Certain
Relationships  and Related Transactions).

      On March 2, 1990, the Company's subsidiary, Beecher
Energy, Ltd. ("Beecher") was listed on the Vancouver Stock
Exchange in  an  initial public offering.  The Company
sold its 69% shareholdings in Beecher on July 6, 1994 for
C$400,000, (US $288,293).

      In  January 1991, the Company acquired for $200,000
cash an  80% majority  interest in Forme Capital, Inc.
("Forme") a publicly  traded real  estate  company  from
the wife of Mr. Wettreich.   In  September 1993, the
Company sold to Forme for $466,571 two office properties
and then sold all its investment in Forme for cash
(approximately $40,000) to   Mrs.   Wettreich.  These
transactions  were  approved   by
the
shareholders of the Company at the Annual Meeting held on
February 15, 1994.

     Other acquisitions were as follows:
           Date                         Name
Business Cost
       March   1991           Vesta  Land  Title  Company
Titles $120,000
       July  1991       Business  Investigations
Investigations 312,231
        July    1992        McKee-Blanchard
Appraisals 32,203
      September  1992  First Appraisal  Group
Appraisals 15,000
        June    1994        Maxmedia   Distributing
Software Distribution     168,500

      These  companies ceased doing business in July 1994,
July  1994, November 1993, November 1993, and May 1995,
respectively.


      In  July,  1993, Registrant acquired approximately
40%  of  the issued      share capital of Goldstar Video
Corporation ("GVC"),  a  video
marketing company for a net price of $92,432.  Registrant
also made  a $150,000  secured loan to GVC.  Further,
Goldstar Entertainment,  Inc. ("GEI") a subsidiary of
Registrant acquired certain licenses and other assets
from  GVC  for  $375,000.  Thereafter Registrant's
subsidiary
Camelot  Entertainment, Inc. commenced business as a
video  marketing company.  On October 20, 1993, GVC filed
for protection from creditors under Chapter 11 of the
Bankruptcy Code which was converted to Chapter 7  on
February 4, 1994.  Registrant was not a controlling
shareholder
of  GVC.   The Company's subsidiary Camelot Entertainment,
Inc.  filed
under Chapter 7 of the US Bankruptcy laws in January 1995.

      In  November 1995, Registrant appointed Firecrest
Group  plc  a public          company, as exclusive
distributor for DigiPhone in the  United
Kingdom and Ireland in consideration for $1,950,575
payable by  shares equal      to approximately 10% of
Firecrest.  In March 1996 all relations
with  Firecrest were terminated and Registrant sold all
its shares  in Firecrest  in market transactions.
Subsequently, Firecrest  sold  its DigiPhone  rights  to
Meteor.   In July  1996,  Registrant  sold  the European
rights to distribute DigiPhone to DigiPhone Europe Ltd
which became        a  subsidiary of Meteor.  The
consideration was 5,000,000 pounds  of
loan  stock  which was subsequently converted into Meteor
shares.   In November  1996 Registrant sold the
international DigiPhone  rights  to Meteor        for
1,000,000 pounds of loan stock which subsequently was converted
into  Meteor  shares.  In May 1997, DigiPhone
International  a  Meteor subsidiary became the exclusive
marketing company for all Third Planet products on a
worldwide basis.

      In  May 1997, Registrant acquired approximately 80%
of AMI whose principle  asset  is approximately 57% of
Meteor.   The  consideration (post reverse split) payable
to the seller, Adina, Inc. ("Adina")  was 892,015
Preferred Shares, Series J of Registrant and 453,080
Preferred Shares, Series J in deferred consideration.
Following the transaction Adina         has  49%  of  the
voting rights attributable to  the  currently
issued and outstanding common and preferred shares of
Registrant.  Mr. Wettreich  is  a  director of Adina and
did  not  participate  in  any directors' votes in
relation to this transaction.

Discontinued Activities  -    See Item 7.    Management
Discussion and Analysis of Financial
Conditions and Results of Operations

Employees

      As of July 1, 1997, the Company employs 39 people on
a full time basis.  The Company believes that it has good
employee relations.
Item 2.   Properties
Real Estate
      Company  leases,  pursuant to a ten (10) year
lease,  a  10,000 square feet office building in Dallas,
Texas which it occupies as  its corporate  headquarters
from a company affiliated with the  President. The  annual
lease payment equates to $80,000.   Company  also  leases
pursuant  to  a  five (5) year lease, 19,950 square  feet
office  and warehouse   building  in  Dallas,  Texas
which  it  occupies   as   a distribution  center  for
mrcdrom.com, Camelot  Distributing  and  as programming
and  publishing facilities for Third  Planet  Publishing.
The annual lease payment varies each year and for the last
fiscal year equates  to  $65,431.  The Company considers
all office and  warehouse space  leased  adequate  for its
needs.  Mr. CD-ROM  Stores  currently leases  four  retail
units in Dallas, Texas which  they  are  in  the process
of  negotiating  with landlords in  order  to  terminate
the leases.
Item 3.   Legal Proceedings
      No material legal proceedings to which the Company
is a party is subject or pending and no such proceedings
are known by the Company to be  contemplated. In the
normal course of business,  the  Company  has been  sued
as  detailed below.  The Company   believes  there  is  no
validity to these suits, and has denied plaintiff's
allegations.
     The Company has been sued by a creditor of a previous
subsidiary. The  Plaintiffs  alleges that the Company is
the  alter  ego  of  the previous  subsidiary  and  is
therefore liable  for  its  debts.                                 The
Company  believes  the  allegations  are  groundless  and
intends  to vigorously defend itself in litigation.

     The  Company  has been sued for breach of lease of a
retail  unit previously occupied by Mr. CD-ROM Stores,
Inc.  The Company intends to show failure on the part of
the landlord to relet the space.

      There  are  no  proceedings to which any  director,
officer  or affiliate  of the Company, or any owner of
record (or beneficiary)  of more  than  5% of any class of
voting securities of the Company  is  a party adverse to
the Company.

Item 4.   Submission of Matters to a Vote of Security
Holders

      A  special  shareholder's meeting was  held  on
July  14,  1997 approving  a  one  for forty reverse stock
split  of  all  outstanding common shares and outstanding
Preferred Shares, Series J.

Item  5.    Market for Company's Common Equity and Related
Stockholder Matters

      The Company's common stock trades on the NASDAQ
Small-Cap Market under  the  symbol CAMLD (such symbol to
change to CAML on August  15, 1997).   The  following
table sets forth the quarterly  high  and  low prices  of
the common stock for the period from May 1,  1995  through
April  30, 1997 (post reverse split).  Real-time price
information  is provided from quotations take from monthly
reporting by NASDAQ.   They reflect  inter-dealer  prices,
without retail  mark-up,  mark-down  or commission, and
may not necessarily represent actual transactions. <PAGE>

                         Real Time
                             
                                   High      Low
     1996
          First          July  31, 1995      $ 97.50
$60.00
          Second         October 31, 1995     281.25
77.50
          Third          January 31, 1996     196.25
92.50
          Fourth         April 30, 1996       127.50
68.75

     1997

          First          July 31, 1996       102.50         37.50
          Second         October 31, 1996      60.00        43.75
          Third          January 31, 1997      35.00        23.75
          Fourth         April 30, 1997        15.00
3.75

      As of July 18, 1997, the Company had 9,664
shareholders of which there were 1,191 shareholders on
record of Company's common stock  and 8,473  additional
beneficial owners.  On July 14, 1997  the  Company's
shareholders approved a one for forty reverse stock split
on  all  the outstanding  common  and  preferred  shares,
Series  J  resulting  in 1,472,672  common  shares       and 1,345,295 preferred
shares,  Series  J
outstanding.   As  the number of shares outstanding are
limited,  the Company's  shares  trade continuously with
some heavy  volume  trading days.

      On September 30, 1997, the Company issued a news
release stating that  NASDAQ  had  halted trading in the
company's  common  shares  on September  26, 1997 while
NASDAQ reviewed requested information  about the Company's
activities.              The company promptly provided all
requested
information  and  NASDAQ  permitted the resumption  of
the  Company's shares on October 6, 1997.  There was no
impact on Company operations.

Item 6.   Selected Financial Data

      A  comparison  of  various  financial  data
pertaining  to  the Company's operations over the past
five fiscal years is as follows:

                      1997      1996      1995      1994      1993
Net sales           $1,887,6         $         $         $         $
                          17  3,002,04  1,184,46         -         -
                                     9         9
Income (loss) from
        continuing  (12,996,  (4,314,7  (2,335,9  (1,567,3
(256,320 operations     369)       88)       77)       12)         )
Income (loss) from
      discontinued         -  (250,925  (1,182,9  (402,981
(435,772
operations                           )       27)         )         )
Income (loss)  per
share from           (20.45)   (12.54)    (9.17)    (8.30)    (3.79)
        continuing
operations
Total assets        6,772,07  16,701,8  2,098,97  3,309,13
3,337,49
                           6        63         4         2         4
Long-term debt             -         -         -         -
633,528


      Company's  software  subsidiaries  commenced
operations  during
fiscal 1995 (See Item 1.  Business).

      On  January 30, 1995, Company's subsidiary Camelot
Entertainment filed under Chapter 7 of the US Bankruptcy
Code.

      On  April 11, 1994, Company disposed of its
subsidiary STCA, and on  July  8,  1994 discontinued Vesta
Land Title Company and  Business
Investigations its remaining financial service
subsidiaries (See  Item 1.  Business).
     On July  6, 1994, Company disposed of its 69%
interest in Beecher Energy,  Ltd.,  a  company  trading on
the  Vancouver  Stock  Exchange representing its energy
interests (See Item 1.  Business).
      On September 11, 1993, the Company disposed of its
investment in Forme Capital, a real estate holding company
(See Item 1.  Business).
Item  7.    Management Discussion and Analysis of
Financial  Condition and Results of Operations
      Certain information within this Item 7 and
throughout this  Form 10-K contain forward looking
statements.  These statements are subject to  certain
risks and uncertainties that could cause actual results to
differ  materially from those set forth including but not
limited  to Camelot's  dependence  upon  outside
suppliers,  upon  the  continued ability  to create and/or
acquire products that customers will accept; the  impact
of competition and the changing competitors; the  changing
nature  of  regulations and the manner in which they are
interpreted; and pricing pressures in addition to normal
economic and world factors beyond  the control of the
Company;  the Company's ability  to  create competitive
products; changes in technology and the ability to  obtain
patents and trademarks.
1997
     Although the Company's historical financial results
for the  year ended  April 30, 1997 were not good,
Management believes that this  is very  typical  for  a
company  primarily  involved  in  research  and
development.    Management   believes  that   Registrant's
principal subsidiary  Third  Planet  is now at the
culmination  of  a  30  month software   and   hardware
development  program  for  Internet   video conferencing
and telephony which will yield positive results  for  the
Company in the future.
     The  Company's revenue for the year was $1,887,617
compared  with $3,002,049 in 1996.  Net loss for the
period was $12,996,369  compared with  $4,565,713  the
previous year.  These  results  are  due  to  a
combination  of  limited revenues from DigiPhone, the
closure  of  the retail  software stores and continuing
research and development  costs which  were  largely
expensed.  Further, other expenses of  $4,675,189 relating
to losses on disposition of assets, investment in
affiliate, marketable  securities  and a note receivable
allowance  impacted  the results.   Revenues  consisted
of sales  of  licensing  rights,  paid primarily  with
the  issuance of free trading  stock  by  the  entity
acquiring  the  licensing  rights;  minimal  sales  of
the  Digiphone product,  and  sales during the time the
stores were  operating.                                            The
expenses consisted of the store operating expenses,  the
marketing and distribution expenses for the Digiphone and
primarily the research and development  costs  for  the
VideoTalk, Digiphone  2.0  and  Proficia. These high
research and development costs allowed the Company to be
on the  cutting  edge  of  the known technology in the
videoconferencing field  thereby putting it in position to
offer a product, Video  Talk, that  will be well received.
Due to the closing of the stores  during the  year any
depreciation and amortization attributable to the assets
in  the  stores  were  immediately  expenses  thereby
increasing  the depreciation and amortization line item.
The Other Expense line in the Statement  of  Operations
includes a loss on the  disposition  of  the assets
relating  to the closing of the stores, and a note
receivable allowance which reflects a decrease in the
value of the collateral  of the loan to an officer.  The
loss on investment in affiliate resulted from
management's decision to change the method whereby the
stock  of Meteor  was  classified to the equity method
due  to  the  amount  of control  the  Company has over
Meteor Technology.   There  are  common
directors  and the Chairman is the same for both companies
along  with Camelot  owning  approximately 15% of Meteor.
This  resulted  in  an adjustment  to  the value of the
Meteor stock to reflect  the  current market value.
     The Consolidated Balance Sheets for the period show
stockholders' equity of $6,078,509 compared with
$15,680,168 for the previous  year. Total                          assets were
$6,772,076 compared with $16,701,863 in 1996.                 The
decrease in stockholders' equity and total assets was due
to losses.

     The  Consolidated Statements of Cash Flows reflects,
in  addition to  the  items noted above, cash received
from the sale of  marketable securities  in the amount of
$1,027,612, a loan to an officer  in  the amount  of
$1,814,000 and 3,410,500 in proceeds  from  the  sale  of
preferred stock to help finance the research and
development  efforts. The  items  noted above along with
the expenses from the research  and development efforts
resulted in the Company having  a net decrease  in cash..

     During  the year, substantial financial
(approximately $2,375,000 compared  to  $1,319,000, and
$163,000 for the years ended  April  30, 1996,and 1995
respectively)  and managerial resources were  expended
in   the  continuing  research  and  development  of
Internet   video
conferencing  and  Internet telephony, and  Management
believes  that significant progress was made in this
regard.  Through its  affiliated company,  DigiPhone
International, Registrant has made  available  for
licensing  Third  Planet's three new products which
products  are  to being offered to the major PC
manufacturers.

During  the  financial year, Registrant's activities
resulted  in  the following.

     Completion and shipping through retail distribution
channels of
       DigiPhone Deluxe
    A development program for multi-protocol framework for
DigiPhone
2.0
    The filing of a worldwide patent for VideoTalk
    A thirty-day version of DigiPhone for downloading over the
Internet
    The launch of Camelot Internet Access Services
    An agreement with Lucent Technologies to license
Lucent's voice
       codec for future versions of DigiPhone
    Completed DigiPhone for Mac
   Completed arrangements for worldwide distribution of
Third Planet
       products with DigiPhone International, an affiliate of
the Company
    Listed Registrant's securities on the Frankfurt
Stock Exchange
    Acquired PCAMS Software
    Filed an initial registration statement for
mrcdrom.com, inc.
    Acquired a controlling interest in AMI
    Demonstrated its new technology at COMDEX/Spring in
Atlanta

      The Company's subsidiary Mr. CD-ROM Stores, Inc.
closed its  six retail locations during the period and
transferred the majority of its assets to a fellow
subsidiary mrcdrom.com (See Item 1.  Business).

      The  Company  took a charge against revenues for
$745,521  as  a result  of  the  closing of these stores.
The  Company  has  actively worked  with  the landlords of
the sites of the stores to  reduce  its exposure pursuant to
the leases.  Further, the Company has limited its losses due
to its transfer of assets to mrcdrom.com.

     Management  believes its future profitability and
revenues  will result  from  licensing  its VideoTalk,
DigiPhone  2.0,  and  Proficia technology to PC
manufacturers and (subject to a successful conclusion of
the  initial  public offering of mrcdrom.com), from  the
sale  of software  and  ancillary products over the
Internet.  Management  also
intends  to expand its interests in the payphone industry
both through its affiliate Meteor Payphones and through
developing and/or acquiring payphone interests in the
United States and Canada.
1996
      The   Company made substantial progress during the
year  ending April                                               30,  1996.  The
Company's revenue for the year  was  $3,002,049
compared  with $1,184,469 in 1995, an increase of 153%.
Net loss  for the  period was $4,565,713 compared with a
loss for the previous  year of $3,518,904.  These results
are due to a combination of revenue from DigiPhone,
license fees received from European distribution rights
for DigiPhone,  revenue from the five newly opened Mr. CD-
ROM Stores,  and increased  general and administrative
costs related to the development and marketing of
DigiPhone.

     The consolidated balance sheets for the period show
stockholders' equity  of $15,680,168 compared with
($87,049) for the financial  year ended  April  30, 1995.
Total assets were $16,701,863  compared  with
$2,098,874  in  April 1995.  The substantial increase in
stockholders' equity  and  total  assets  was  due  to
the  completion  of  private placements.

      During  the  April 1996 period, the Company's
subsidiary  Third Planet  completed shipments of its
preliminary orders for the  Windows 3.1  version  of
DigiPhone.  This software achieved widespread  retail
distribution, and by the end of the third quarter the
first production run  had  sold  out.   Subsequent  retail
reorders  were  limited  in anticipation  of  the Windows
95 version of DigiPhone which  commenced shipment  in  May
1996 along with DigiPhone Deluxe.  DigiPhone  Deluxe has         enhanced
telephone  features  including   conference                    calling
capability, voice mail, speed dialing, voice sound
effects, conversion recording and playback, and macro
command capabilities.  It comes with a  full  suite  of
Internet  tools including  an  e-mail  program,  a
newsreader, an FTP program, and a telnet program.  In
addition, a free Windows  95  upgrade for the existing
DigiPhone software is available. Both  DigiPhone and
DigiPhone Deluxe have two licenses in each  retail box.       Effectively,
this provides two Windows 95 compatible  licenses
for  DigiPhone or DigiPhone Deluxe for the price of one,
and  enables consumers to immediately start Internet
telephone conversations with a family member or a friend
without any extra cost.

       During  the  April  1996  period,  the  Company
announced  the acquisition of e-Phone, formerly known as
NetPhone, the only Macintosh compatible computer software
that enables voice communication over the Internet. The
purchase price was $593,000 payable $350,000 in  Camelot
restricted  common shares valued at $207.50 per share and
the  balance in  cash.  In addition, New Paradigm will
also receive for a five year period  $1  per unit and 10%
of OEM revenue derived from the software. The  technology
of e-Phone was incorporated by Third  Planet  into  a
Macintosh compatible version of DigiPhone called
"DigiPhone For  Mac". The cost of acquisition was written
off in the 1997 financial period.

      The  appointment of Firecrest Group PLC as exclusive
distributor for  DigiPhone in the United Kingdom and
Ireland, occurred during  the period under review.  The
consideration for the granting of the UK and Ireland
exclusive  rights  was  $1,950,575  payable  by  issuance
by Firecrest of 1,856,453 ordinary shares equal to
approximately  10%  of the  increased share capital of
Firecrest.  Firecrest is a  media  and marketing company
in the United Kingdom.

      The  rights  for  Scandinavia were  conditionally
purchased  in January 1996 by Telepartner Holdings A/S, a
Copenhagen, Denmark  based company,  which is the leading
telephone database services company  in Scandinavia.  The
consideration for the exclusive distribution  rights was
$1,000,000  payable  by the issuance  to  Camelot  of
shares  in
Telepartner equal to 2.7% of the share capital of
Telepartner.  Due to the non-receipt of consideration, the
Company terminated the agreement in May 1996.
      In  July,  1996,  after  the financial  year  end,
the  Company concluded  an  agreement  with  DigiPhone
Europe,  Ltd.,  whereby  it appointed   DigiPhone  Europe,
Ltd.  as  exclusive  distributor                              for
DigiPhone and DigiPhone Deluxe in Europe, excluding the
United Kingdom and  Ireland.  The consideration for the
rights was 5,000,000 pounds 6% loan stock (approximately
$7,500,000).  DigiPhone Europe, Ltd. is a London, England
based European software marketing company which  merged
with Telecom  Credit Europe, PLC ("TCE"), a public company
listed  on  the Alternative Investment Market of the
London Stock Exchange.  Following the  merger,  Camelot
owns approximately 16% of  TCE.   The  majority
stockholder  of  TCE,  Danny Wettreich, is  also  Chairman
and  Chief Executive  Officer of Camelot.  Mr. Wettreich
did not  participate  in any Directors' vote in relation
to this transaction.

      During  the period the Company opened five Mr. CD-
ROM Stores  in the  Dallas, Texas area.  The retail stores
range in size  from  1,000 square  feet  to 3,000 square
feet, and specialize in CD-ROM  software with  up to 2,000
titles in stock.  These Mr. CD-ROM corporate  stores were
intended to be the first of a previously announced target
of  100 corporate  and  franchise  stores to  be  opened
by  Christmas  1996. However, results from the stores led
Management to the conclusion that the retail concept was
not viable, and the stores were closed in 1997.

      On January 26, 1996, the Company announced that it
has concluded an  agreement  with  UUNet. Technologies,
Inc.  whereby  it  will  use UUNet's  Internet backbone
for the Company's newly formed  subsidiary, Camelot
Internet Access Services, Inc. ("Camelot Internet").  The
use of  UUNet's  exclusive alternate Internet backbone
facilities  enables Camelot Internet to instantly
establish itself as a nationwide quality Internet  service
provider.  Camelot Internet was officially  launched in
June 1996 at which time its nationwide services commenced.
Camelot Internet  is  offered as part of Camelot's
DigiPhone  Deluxe  software package.

      At  the  world's  first Internet Telephony
conference,  held  in London,  England  on April 18-19 and
called "Dialing The  Net",  Danny Wettreich, Chairman and
Chief Executive Officer of Camelot,  disclosed a
development  program  for the DigiPhone Multi-Protocol
Frameworks. These  frameworks will enable DigiPhone to
communicate with any  other standards-based Internet
Telephony software.

      A  30  day  free  trial of DigiPhone Version  1.03
software  is available  through the Company's web site on
the Internet.  To  access this  free  offer, users
download the software from the Company's  web page,
http://www.digiphone.com.   The  only  system  requirement
for potential  users are a multimedia PC, Internet access
and web  browser software.  At the end of the 30 day
trial, users can purchase  a  full version  of DigiPhone
or DigiPhone Deluxe software by calling a  tollfree
number.   Users will also be provided with a list  of
retailers that carry DigiPhone Deluxe software.  To gain
additional exposure for DigiPhone  software, Camelot will,
in the future, offer  this  30  day trial  version bundled
with various third party hardware products  and through
Internet access provider services.

     Subsequent to the period under review, the Company
announced that it  has  applied  for  a  patent for
VideoTalkT,  a  video  and  audio communications  system
for the Internet.   VideoTalk  is  a  complete hardware
and software system which, when connected to a multimedia
PC, enables  full  duplex video and audio conferencing
over the  Internet. It will provide significant advantages
to users as VideoTalk  does not require a soundcard or a
video capture card. VideoTalk will come  with a  new
version  of  DigiPhone 2.0 which  will  include  the
recently
announced  Multi-Protocol Framework allowing voice
communication  with other                                        Internet
telephony software. VideoTalk's features are  designed
to incorporate new leading edge audio and video
compression technology to                                    enable  connections
over  devices  such  as  28.8  kbps  modems.
VideoTalk  is  designed  with an expansion peripheral
interface  that enables  attachments to be added to the
VideoTalk unit.  Third  Planet will  provide  API
specifications so that other developers  can  take
advantage of the features and processing power of
VideoTalk  in  their applications.

      The  Company also announced the Proficia, an
Internet  telephony handset  which  is  specifically
designed  to  enable  superior  voice communications over
the Internet.  The handset attaches to the side of a
computer  monitor  and functions in a similar way  to  a
telephone handset,  thus  eliminating the necessity for a
headset or  microphone and speakers when Internet voice
communication software is used.

      Management expects its principal revenue and
profitability  will emanate  from DigiPhone derivative
software products and from  license fees,                        and  intends to
concentrate the majority of its management  and
financial  resources  on the development and successful
marketing  of Internet related products produced by its
subsidiary Third Planet.

1995

       During  the  year  ended  April  1995,  Company
completed  its restructuring  which involved the sale or
closure  of  all  previously owned   subsidiaries and
established three new operating  subsidiaries,
namely  Third Planet Publishing, Inc., (established in
January  1995), Mr.  CD-ROM  Stores, Inc. (established in
December 1994)  and  Camelot Distributing, Inc.
(established in April 1995).   Camelot Distributing
acquired  the  inventory  and customer list of  Maxmedia
Distributing which was  acquired by the Company in July
1994 and  has  now  ceased
trading.    Due  to  the  fact  that  trading  operations
for   these subsidiaries commenced various times during
the financial year, and to the  fact  that no prior
history exists for the ongoing operations  of Company,
Company is of the belief that the financial results  for
the year  ended  April 1995, and a comparison with prior
period  financial statements is not indicative of the
future results of Company.

      The results of operations of the discontinued
operations and the assets sold or to be sold are presented
in the financial statements as discontinued  operations.
Prior year statements  of  operations  have been  restated
for comparative purposes with the result that no  sales or
related  financial information is shown due to the fact
that  the Company's CD-ROM software subsidiaries commenced
operations during the fiscal  year and did not generate
any revenues during previous  fiscal years.

     Company's continuing operations had sales of
$1,184,469 in fiscal 1995  compared with $-0- for 1994.
Company had a loss from  operations of  $2,348,155
compared with a loss from operations in fiscal 1994  of
$1,138,387.   Net loss for fiscal 1995 was $3,518,904
which  includes loss from discontinued operations of
$1,182,927 which compares with  a loss from discontinued
operations for fiscal 1994 of $402,981.
      The primary reasons for the loss from continuing
operations  was due  to  the  start  up costs relating to
the commencement  of  CD-ROM software operations in its
newly formed subsidiaries, and the decision to
discontinue Company's other businesses.   In addition to
start  up costs                                                  for  its  new
subsidiary, its subsidiary  Maxmedia  which  was
located  in  Orlando  was closed, and the Company incurred
relocation costs                                                 of personnel,
inventory, fixtures and equipment to Dallas which
is  a  non-recurring one time costs.  Mr. CD-ROM Stores
incurred costs
outside the normal course of business due to the testing
and retesting of  various  retail concept in its Orlando
retail  unit  in  order  to establish  a  permanent  long
term Mr. CD-ROM retail  trading  format.
Further,  Third  Planet  Publishing  incurred  programming
and   data processing  costs  relating to the creation of
the CD-ROM  interactive catalog  and in relation to
DigiPhone which management has decided  to expense.
      The  consolidated  balance sheets for 1995  shows
stockholders' equity  of ($87,049) compared with
$1,408,498 for fiscal 1994.   Total assets  were
$2,098,874 compared with $3,309,132.   The  decrease  in
stockholder's  equity  is  due  to a  combination  of  the
loss  from operations  and the loss from discontinued
operations.  Subsequent  to the year end substantial
increases in stockholders equity occurred due to private
placements of restricted common and preferred stock and
the conversion  to  common  stock of debt owing to  an
affiliate  of  the President  of Company, all of which
resulted in an increase in  equity of $1,875,000 during
the three month period ending July                      1995.
      Company  began its CD-ROM software operations by the
acquisition of  Maxmedia  Distributing,  a  Florida based
distributor  of  CD-ROM software  in  July 1994.  The
customer base of Maxmedia is  now  being serviced  by
Camelot  Distributing, a  CD-ROM  distributor  supplying
independent retailers from distribution facilities in
Dallas, Texas.
      Mr.  CD-ROM  Stores was established in December
1994  with  the opening  of  a retail concept store in
Orlando, Florida.  This  store, which was on a six month
lease, provided an opportunity to refine  Mr. CD-ROM's
retail   concept  during  which   time   retail              franchise
documentation and approvals were obtained from the
majority of  states in  the USA.  A company owned store
was opened in Dallas in July  1995 and  an  additional
four retail units opened by December 1995  in  the Dallas
area.

      Third Planet Publishing commenced operations in
January 1995 and shortly  thereafter  acquired  the
worldwide  distribution  rights  to DigiPhone, the world's
first full duplex Internet phone system.  Third Planet
expanded  the  number of software programmers  developing
the DigiPhone  technology and arranged for quality retail
distribution  as well  as  establishing marketing and
advertising plans  for  launching DigiPhone.

      Subsequent to the period ended April 1995, the
Company completed a  private placement of restricted
common and preferred shares raising $1,200,000  for  the
Company.  The investors are an  investment  fund managed
by Suisse Finance Corporation and have agreed not to
dispose of  their common shares for a minimum of twelve
months.  The preferred shares  can  convert into common
shares over a nine  month  period  in equal monthly
installments.


Discontinued Activities

     During the year Company's directors determined to
discontinue its remaining  non CD-ROM software activity
and accordingly its subsidiary Camelot  Entertainment,
Inc.,  a  video  distribution  company  filed Chapter  7
liquidation under the US Bankruptcy laws in January  1995.
Company's  only continuing material liability in relation
to  Camelot Entertainment  is  a  corporate guarantee in
the  original  amount  of $200,000  to  a  creditor  of
Camelot Entertainment.   Such  corporate guarantee has
been  fully  allowed  for  in  Company's financial
statements.  (See  Item 3.  Legal Proceedings).  Revenues
of  Camelot Entertainment which are not shown in the
financial statements as  they are  discontinued
operations were $694,666 for fiscal  1995  compared with
$2,597,366  for  the previous year.  Loss  from
Operations  for fiscal 1995 was $406,057 compared with
$1,563,174.

       As   reported  in  the  1994  financial
statements,  Company's
controlling 69% interest in Beecher Energy, Ltd. was sold
on  May  31,
1994.   The  transaction  was  closed in  late  July
1994.   Also  as disclosed  in  the  1994  financial
statements,  Company's  subsidiary Business
Investigations  which  provided  investigation  services
to financial  institutions  and Vesta Land Title Company
which  provided title insurance services both discontinued
operations on July 8, 1994.
Liquidity and Capital Resources
1997
     Net  cash  used  by operating activities for 1997 was
$5,555,018 compared  with  $6,740,073  in  1996.   Net
cash  used  by  investing activities                        in  1997 was
$4,587,734 compared with  net  cash  used  by
investing activities of $1,889,146 in 1996.  This was
primarily due to the  net  loss  of  $12,996,369 in 1997
compared with  $4,565,713  the previous  year.   Net  cash
provided  by  financing  activities                    was
$3,302,152  compared  with $18,350,289 the previous  year.   Sales  of
common  and  preferred stock were $3,410,500 compared with
$22,330,214 in 1996.

     Registrant's  requirement  for  additional  financial   resources
primarily  results from the continuing research and
development  costs of  its subsidiary Third Planet.
Registrant believes that its current development  program
will  shortly be concluded,  but  believes  that continued
research  and development will be required  to  maintain
a technological  lead  which  management  believes  that
Third   Planet currently  has.   Accordingly, management
is aware  of  the  need  for additional                     cash  resources  to
be obtained  for  the  continuance  of
research and development and anticipates that such
financial resources will  primarily come from the private
placement of Registrants' common and  preferred stock.
Management believes that license fees  received from
Third  Planet's products will generate revenues  and  cash
flow towards  the  end of the current financial period.
The activities  of Registrant's  subsidiary,  mrcdrom.com
are dependent  on  its  initial public offering (See Item
1.  Business).  Registrant has no plans  for significant
capital  expenditures  during  the  next  twelve  months.
Management  believes  that cash provided by financing
activities  and
licensing  fees  as  well as revenue from sale of
software  over  the Internet  together with the present
level of cash resources  available to  the  Registrant
will be sufficient for its needs  over  the  next twelve
months.   Management believes that should the Company
require additional cash resources it can incur borrowing
as Registrant has  no long-term  corporate  debt.   There
are  no  known  trends   demands, commitments  or  events
that would result in or  that  is  reasonably likely to
result in the Company's equity increasing or decreasing in
a material  way  other  than the potential use  of  cash
resources  for investment                                   in  the  Company's
subsidiaries in the  normal  course  of
business or additional fund raising.

1996

      Net  cash  used by operating activities for 1996 was
$6,740,073 compared  with  $2,207,683  in  1995.   Net
cash  used  by  investing activities                        was $1,889,146
compared with net cash received of  $28,482
in  1995.   This was primarily due to product development
and software
costs  of  $608,800 compared with $40,000 in 1995, to the
purchase  of minority interests of $264,044 ($0 in 1995),
to the issuance of a note receivable in the amount of
$312,400 ($0 in 1995) and to purchases  of property and
equipment of $1,087,658 ($195,589 in 1995).

      Net  cash  provided  by  financing  activities  was
$18,350,289 compared with $2,290,941 the previous year.
Sales of common stock and preferred  stock  were
$22,330,214 compared with $1,623,847  in  1995. These
transactions substantially improved the liquidity of the
Company and helped raise stockholders' equity by
$15,767,262 in        1996.
      The  Company's plans for capital expenditures relate
principally to capital costs likely to be incurred in
opening of additional retail units.   Management  does
not anticipate any liquidity  problems  and believes  that
the  anticipated level of  revenue  generated  by  the
Company together with the present level of cash resources
available to the  Company  will  be sufficient for its
needs.  Management  believes that  should  the  Company
require additional cash resources,  it  can raise  additional cash
resources from the sale of common and preferred
stock  and/or  by incurring borrowing.  Management is
aware  that  the
Company has no long term corporate debt.  Management
believes that                                                     it
is well positioned to make arrangements for additional
debt should the need  arise.   There  are  no known
trends, demands,  commitments,                                    or
events that would result in or that is reasonably likely
to result                                                         in
the  Company's  liquidity increasing or decreasing in a
material  way other                                               than the
potential use of cash resources for investment in  the
Company's subsidiaries and the normal course of business.

      Management  continued  to demonstrate  its  ability
to  attract private investment during the nine months
ended January 31, 1996.  The Company raised $22,330,214 in
private placements of restricted  common and  convertible
preferred stock.  The preferred stock  yields  range from
9% to 12% and can be converted into common shares of the
Company in  limited  amounts during agreed time frames
subsequent to  issuance and in unlimited amounts
thereafter.  The conversion rate is equal                         to
an  agreed upon discount on the prevailing market price of
the Company shares at the time of the conversion.
<PAGE>

1995

      Net  cash  used by operating activities was
$2,207,683  in  1995 compared with $2,145,545 in 1994.
This was primarily due to the  net loss   of  $3,518,904
compared  to  $1,970,293  in  1994.         The  most
significant  adjustments  to reconcile  net  loss  to  net
cash  from operating activities were a write off of
discontinued subsidiaries           of
$560,577.   Net  cash  provided  by investing  activities
of  $28,482 compares with cash used of $160,239 for the
previous year.

     Net cash provided by financing activities was
$2,290,941 compared with  net cash provided during the
previous year of $1,067,171.  Sales of common stock of
$1,623,847 compares with $517,322 in fiscal 1994.

       Subsequent  to  the  period  under  review,
Company  completed $1,425,000 Private Placements and
converted $450,000 debt owing to                                  an
affiliate  of  the  President  of  Company  to  common
stock.   These transaction substantially improve the
liquidity of Company, and raised stockholder's equity by
$1,875,000 in the quarter ended July 31, 1995.

      Management  does  not  anticipate  any  liquidity
problems  and believes  that the anticipated level of
revenue generated  by  Company together with the present
level of cash resources available to Company will  be
sufficient for its needs.  Management believes however
that should sales of DigiPhone and or revenues generated
from retail  units be  less  than anticipated that it will
experience liquidity problems. Management  believes  that
should  Company  require  additional  cash resources, it
can raise such additional cash resources from  the  sale
of  common stock and/or by incurring borrowings from its
directors                                                         or
entities  affiliated  with  directors  and  from
unrelated  financial institutions.  Management is aware
that other than indebtedness  owing to  an  entity
affiliated with its President, Company has no corporate
debt.   Management  believes  that  it  is  well
positioned  to  make
arrangements for additional debt should the need arise.
There are                                                         no
known  trends, demands, commitments or events that would
result in                                                         or
that  are  reasonably  likely  to result in  the
Company's  liquidity increasing or decreasing in any
material way other than the  potential use  of cash
resources for investment in Company's subsidiaries in the
normal course of business.

Item 8.        Financial Statement and

Supplementary Data Index to Consolidated

Financial Statements   Page

Report of Independent Auditors - 1997             F-1

Consolidated Financial Statements
     Balance Sheets - April 30, 1997 and 1996     F-2 and
                                                  F-3 Statements of
     Operations for the years
         ended April 30, 1997, 1996 and 1995      F-4

 Statements of Stockholders' Equity for the
         years ended April 30, 1997, 1996 and 1995         F-5 through
                                   F-7
     Statements of Cash Flows for the years ended
         April 30, 1997, 1996 and 1995            F-8 and
                                   F-9
             F-11 Notes to
     Consolidated Financial Statements            F-10 through
                                  F-25
                                    
Consolidated Schedule                             F-26

      The information itemized above are included in Part IV, Item  14
as Exhibit (a) (1) and begins at F-1 following page 29.

      Also included is the unaudited information regarding proven  oil
and gas reserves.

Item 9.        Disagreements on Accounting and Financial Disclosure

      Lane  Gorman Trubitt, L.L.P., were the auditors for  the  fiscal
year  ended April 30, 1997 and have performed the audit for every past
fiscal  year  since  1994.   There were no disagreements
between  the Company and the auditors regarding a policy
or disclosure.

PART III

Item 10. Directors and Executive Officers of the Company

     The  following  persons serve as directors and/or
                     officers  of  the
Company as of July 2, 1996:

Name               Age    Position           Period
Served       Term
Expires

Daniel  Wettreich  45     Chairman and      September  16,
1988  Next Annual
                       Chief Executive Officer,             Meeting
                       President,
                       Director

Jeanette  P. Fitzgerald 36                Vice President
and September 16, 1988         Next Annual
                       General Counsel,                    Meeting
                       Secretary,
                       Director

Allan S. Wolfe   65    Director          May 24, 1993      Next Annual
                                                           Meeting Bruce
Baldwin    64          Director          June 28, 1997     Next Annual
                                                           Meeting

Robert  B.  Gregory      45                Vice President     July  1,
1996             N/A
                       of Finance

David  D.  McCurley      31                Vice President
June  10,
1996             N/A
                 & Chief Technical Officer
                             
                             
Daniel Wettreich

      Daniel  Wettreich  is  Chairman  and  Chief
Executive  Officer, President  and Director of the Company
since September  1988.   He  is also  a Director and
Officer of all its subsidiaries(1).  Since  1981, he  has
been  the  President  and  Director  of  Wettreich
Financial Consultants, Inc., a financial consulting
company.  Since  July  1996, he  has been Director and
Chief Executive Officer of Meteor Technology plc,  a
United  Kingdom  based  public  company.   Additionally,           he
currently holds directors positions in the following
public companies: Forme  Capital, Inc., a real estate
company, Adina, Inc. and Alexander Mark  Investments
(USA), Inc. which are public holding companies,  and
Malex,  Inc.,  and  Tussik, Inc. which are dormant
companies  seeking merger  opportunities.   In July 1993,
he was  appointed  Director  of Goldstar  Video
Corporation(2) following an investment by the Company.
From  January  1985  to  February 1988 he was a founding
director  of Phoenix  Network, Inc.,  a telecommunications
company  listed  on  the American  Stock  Exchange.   Mr.
Wettreich was an executive  with  two London, England
merchant banks in the mid 1970's.  Subsequently he was
owner/manager of a private distribution company, and
thereafter  Chief Financial Officer of a $60 million
retailer listed on the London Stock Exchange.    Mr.
Wettreich  has  a  Bachelor  of  Arts  in                     Business
Administration from the University of Westminster, London,
England.

Jeanette P. Fitzgerald

      Jeanette  Fitzgerald  is  Vice President  and
General  Counsel, Corporate  Secretary  and  a Director of
the Company  since  September 1988.    She                    is   a   director
and  secretary  of   the   Company's
subsidiaries(1).  She is a member of the State Bar of
Texas  and  the Business  Law  section.  Since July 1996,
she has been a  Director  of Meteor  Technology  plc.
She  is also the  Corporate  Secretary  and Director of
Wettreich Financial Consultants, Inc., and of Malex, Inc.,
Tussik,  Inc.  and Alexander Mark Investments (USA), Inc.,
which  are public  companies.   In  July  1993, she  was
appointed  Director  of Goldstar  Video Corporation(2)
following an investment by the Company. Previous to these
positions, from 1987 to 1988 she worked as  a  staff
attorney  and  in  the compliance department at  H.D.
Vest,  Inc.,  a holding  company  with  subsidiaries
including a securities  brokerage firm.   She  graduated
from  Texas  Tech  University  School  of  Law receiving
both a Doctorate of Jurisprudence and a Masters of
Business Administration in May 1986, and from the
University of Michigan with a Bachelors of Business
Administration in December 1982.
<PAGE>
Allan S. Wolfe

      Allan  S.  Wolfe has been a Director of the Company
since  May, 1993.  He is Chairman and President of
Database Technologies, Inc.,  a public  company providing
database software to the insurance  industry from May 1986
to the present.  He is also, since 1984, a director  and
Chief  Executive Officer of Pathfinder Data Group ("PDG"),
a  database company.   A  subsidiary  of PDG, Pathfinder
Data,  Inc.,  filed  for protection  from  creditors
under  Chapter  11  and  has  since  been converted to
Chapter 7.

Bruce Baldwin

      Bruce Baldwin has been a Director of the Company
since May 1997. He  is  the  principal of the Law Office
of Bruce Baldwin since  1992. Previous to that he was a
principal of Bruce Baldwin & Associates from 1988  to
1992.   He graduated from Georgia Institute  of
Technology, graduating  with  a B.S. in chemistry and
obtained a Bachelor  of  Law Degree from Mercer University
in 1961.
Robert B. Gregory
      Robert  Gregory is the Vice President of Finance for
the Company since July 1996.  He is a director of Adina,
Inc.  since January 1997,
and of Alexander Mark Investments (USA), Inc. since
December 1996 both of  which are public companies.  He was
previously Director of Finance of  Jenkens  & Gilchrist,
one of Texas's largest law firms,  prior  to which  he
was controller of Memorex Telex Corporation, a
manufacturer of computer equipment.  Previously, from 1985
he was controller of the communications  division of
Electronic Data Systems, an  international provider  of
information technology.  In addition to being a Certified
Public Accountant, he has an MBA from Creighton University
and a BS in Accounting from the University of Nebraska.

David D. McCurley

      David McCurley is Vice President and Chief Technical
Officer  of the  Company  since  June 1996.  He was
previously Vice  President  of Programming of Third Planet
Publishing, Inc., since   1994.  Previously,
from 1989, he was Systems Coordinator for South Trust
Bank.

(1)  A  subsidiary,  Camelot  Entertainment,  Inc.,  filed
Chapter  7 liquidation in January 1995.

(2)  Goldstar  Video filed for protection from creditors
pursuant  to Chapter  11  in  October  1993, and has
converted  to  a  liquidation proceeding.

Item 11. Executive Compensation

    The following table lists all cash compensation
exceeding $100,000 paid  to  Company's executive officers
for services  rendered  in  all capacities  during the
fiscal year ended April 30, 1997.   No  bonuses were
granted to any officer, nor was any compensation deferred.
<PAGE>

                      SUMMARY COMPENSATION TABLE
                       Annual Compensation     Long-
Term
                     Compensation
                           
                                         Award  Payouts
                                         s

                                         Restr
Name and Pri                    Other    icted  Optio
LTI    All
ncipal         Yea  Sala  Bonu  Annual   Stock   ns/    P    Other
  Position     r    ry    s     Compen   Award  SARs
Pay  Compens
                                sation    (s)
out   ation
                                                        s

Daniel         199   -     -       -       -    25,00   -   $
Wettreich      5    $208   -       -       -      0     -   (1)
Chairman and   199  ,333   -       -       -    25,00   -   $
CEO (1)        6    $250                          0         (1)
               199  ,000
175,0          $
               7                                 00         (1)
Jeanette P.    199   -     -       -       -
43,75 -        $
Fitzgerald     5    N/A    -       -       -      0     -   (1)
Vice           199  N/A    -       -       -
N/A    -   $
President,     6
875   (1)
General        199                                          $
Counsel and    7                                            (1)
Secretary (1)

(1)   Daniel Wettreich and Jeanette Fitzgerald, Directors
and Officers
of Company, were employees of a company affiliated with
Mr. Wettreich, which company provided the Company with
management services until July 1995  and  was paid $-0-,
$44,000, and  $286,000 for the  years  ended April  30,
1997,  1996  and 1995 respectively.   In  July  1995,  Mr.
Wettreich  and  Ms.  Fitzgerald became employees of
Company  and  Mr. Wettreich entered into an employment
contract with Company.

      Directors of the Company are reimbursed for
reasonable  expenses incurred  in attending meetings of
the Board of Directors.  Mr.  Bruce Baldwin receives
$500.00 per month.

      Company  has no compensatory plans or arrangements
whereby  any executive officer would receive payments from
the Company or  a  third party  upon  his resignation,
retirement or termination of employment, or  from  a
change in control of Company or a change in the officer's
responsibilities  following  a  change  in  control  other
than Mr.
Wettreich.

     On July 1, 1995, Company entered into an employment
contract with Mr.  Wettreich  whereby he was employed as
Chairman,  Chief  Executive Officer and President of the
Company for a period of ten years  at  an annual  salary
of  $250,000 and a cash  bonus  equal  to  5%  of  the
Company's  annual  profits  before taxation.   In  the
event  of  Mr. Wettreich's death during the term of the
agreement, Company  will  pay annual  death  benefits of
$250,000 for a period of four  years.
Mr.
Wettreich  may terminate his employment after the date of
a change  in control of the Company.  A change in control
is defined as any  person other  than  Mr. Wettreich or
his family interests becomes  beneficial owner,   directly
or  indirectly  of  common  stock  of  the  Company
representing  30%  or  more of the Company's  issued  and
outstanding common  stock  or  if  the  Incumbent  Board
as  defined,  ceases  to constitute  a  majority of the
board of directors.  If  Mr.  Wettreich terminates his
employment after a change of control in the company, he
shall be paid (i) the base salary and any bonuses payable
to him under the  agreement  or (ii) an amount equal to
the product of  the  annual base  salary and bonus paid to
Mr. Wettreich during the year preceding the  termination
date multiplied by five whichever of (i) or  (ii)  is
more.   In  the  circumstances whereby Mr.  Wettreich
terminates  his employment  for good reason, as defined,
he will receive  payments  in accordance  with the
payments received if termination occurs  after  a change
of control of the Company

Item  12.   Security  Ownership  of  Certain  Beneficial
Owners     and
Management

      The  following table sets forth as of July 18, 1997
information known  to  the  management  of the Company
concerning  the  beneficial ownership  of  Common Stock by
(a) each person who  is  known  by  the Company  to be the
beneficial owner of more than five percent  of  the shares
of Common Stock outstanding, (b) each director at that
time, of the  Company  (including principal directors of
subsidiaries)  owning Common  Stock,  and  (c)  all
directors and officers  of  the  Company (including
principal  directors  of  subsidiaries)  as  a  group       (8
persons).

Name     and     Address    of         Amount    and
Nature      of
Percent
Beneficial  Owner         Beneficial  Ownership                     of
Class

Daniel Wettreich          1,728,621     (1)(2)(8)
57.3% 17770 Preston Road
Dallas, Texas 75252

Jeanette       P.      Fitzgerald                153,210
(3) 5.3%
17770 Preston Road
Dallas, Texas 75252

Allan Wolfe                    6,625      (4)
* 390 South River Road
Suite 5
Bedford, NH  03110

Bruce Baldwin            2,000       (5)
*
8150 Central Expressway
Suite 100
Dallas, Texas 75206

David McCurley         21,500        (6)
* 17770 Preston Road
Dallas, Texas  75252

Robert Gregory           1,437,505 (7)(8)
50.8% 17770 Preston Road
Dallas, Texas  75252

All Officers and Directors    1,822,996 (1)(2)(3)(4)(5)(6)
58.6% as a group (6 persons)                  (7)(8)

* Under 0.1%

Adina, Inc.                     1,345,295    (8)
47.7% 17770 Preston Road
Dallas, Texas  75252

   (1)  60,366 of these shares are owned by AM Investments Ltd.
      a U.K. company ("AM") of which Mr. Wettreich is a director
      and officer. 25,000 of these shares are owned by Wettreich
      Financial Consultants, Inc. ("WFC"), a Texas company of
      which Mr. Wettreich is a director and officer.  16,250 of
      these shares are owned by Forme Capital, Inc., ("Forme"),
      a Delaware company of which Mr. Wettreich is a director
      and officer.   81,710 of these shares are owned by Meteor
      Technology plc ("Meteor"), a UK company of which Mr.
      Wettreich is a director and officer.  1,345,295 of these
      are Preferred Stock owned by Adina, Inc.,("Adina") a
      Delaware corporation of which, Mr. Wettreich is a director
      and officer.  Mr. Wettreich has disclaimed  any beneficial
      interest in the shares owned by AM, WFC, Forme, Meteor and
      Adina.
      
  (2)   Includes options to purchase 200,000 shares granted to
                             Daniel
      Wettreich, which options are not exercised.
   (3)  Includes options to purchase 53,750 shares granted to
      Jeanette Fitzgerald, which options are not exercised.
      16,250 of these shares are owned by Forme of which Ms.
      Fitzgerald is an officer and director. 81,710 of these
      shares are owned by Meteor of which Ms. Fitzgerald is an
      officer and director.  Ms. Fitzgerald has disclaimed any
      beneficial interest in the shares owned by Meteor and
      Forme.
  (4)   Includes an option to purchase 6,625 shares granted to
                              Allan
      Wolfe, which option is not exercised.

  (5)   Includes an option to purchase 2,000 shares granted to
                              Bruce
      Baldwin, which option is not exercised.

  (6)   Includes an option to purchase 21,500 shares granted to
                              David
      McCurley, which option is not exercised.
   (7)   Includes options to purchase 10,500 shares granted to
      Robert Gregory,  which  options are not exercised.
      Includes  1,345,295 Preferred Shares owned by Adina of
      which Mr. Gregory is an officer and director.  Includes
      81,710 shares owned by Meteor a company which is majority
      owned by Alexander Mark Investments (USA), Inc. of which
      Mr. Gregory is a director.  Mr. Gregory has disclaimed any
      beneficial interest in the shares owned by Adina and
      Meteor.
   (8)   Includes 1,345,295 Preferred Shares, Series J of the
                            Company.
      These shares are owned by Adina, Inc. of which Mr.
      Wettreich and Mr. Gregory  are  directors and officers.
      They have disclaimed  all beneficial  ownership  in the
      shares.  (See  Item  13.   Certain Relationships and
      Related Transactions).
      
Item 13.  Certain Relationships and Related Transactions

On  May  20, 1997 Registrant subscribed (post reverse) 1,345,295
restricted  Preferred Shares, Series J Camelot Corporation
("Camelot")
with payment by the transfer of 6,029,921 restricted
common shares  of Alexander  Mark  Investments (USA), Inc.
to Camelot.  892,215  of  the Preferred  Shares  were
issued upon execution  of  the  Agreement  and 453,080  are  issuable  as
deferred  consideration.   The   deferred
consideration  will  be  issued as new common shares  of
Camelot  are issued  in  such a manner so that the
additional Preferred Shares  are issued  at  the same time
and in the same quantity as any  new  common shares.   The Preferred Shares
have one vote per share and  vote  with
the   common  shares,  are  non  convertible,  non-
yielding  and                                                      are
subordinate  to  outstanding preferred shares but have  a
liquidation preference over common shares.

      The Company paid management fees of $44,000 in 1996
to Wettreich Financial  Consultants, Inc. ("WFC"), a
company  affiliated  with  the President of the Company.
These management services consisted of  the provision of
the services of the President and Corporate Secretary  of
Company.    The amount was determined by the time, effort,
and  skill required  to provide these services.  The
President and the  Corporate Secretary of Company were
employees of WFC and during the fiscal  year ended April
1995, received no compensation from Company.

      Stock  Transfer  Company of America, Inc., a company
affiliated with  the  President of the Company provided
services during the  year ended April 1997 and 1996, as a
securities transfer agent.  A total of $35,158 and $16,598
were paid by Company for these services.   In  the opinion
of the Board of Directors, the terms of these transactions
was as  fair  to  the company as could have been made with
an unaffiliated party.

      The  Company  leases 10,000 square feet of  offices
from  Forme Capital, Inc., a company affiliated with the
President of the Company. The lease is for a term of 5
years commencing September 1993 at $8 per square foot.
Total rent paid during fiscal 1997 and 1996 was $80,000,
respectively.   The lease agreement and transactions
related  thereto were approved by a vote of Company's
shareholders.

     The Company received loans from Forme totaling
$406,000 in fiscal 1995.   Payments  of $236,000 and
$190,000 were made in  fiscal  years 1996 and 1995,
respectively.  Forme converted the remaining balance of
$450,000  to  common  stock during fiscal 1996.  Total
interest  paid during fiscal 1996 was $11,615 and 1995 was
$35,961.

      During  fiscal 1997 and 1996, Company received
dividend payments from  Forme Capital, Inc., Preferred
Shares Series C in the amount  of $46,657 for 1997 and
$46,657 for 1996.

      On  January  17,  1996,  the Company's
disinterested  directors approved  a secured loan to the
Corporate Secretary  in the amount  of $75,156.  This loan
bears interest at a rate 6% per annum.
      On   August  1,  1996,  the  Company's
disinterested  directors
approved  a secured loan to the Corporate Secretary in the
amount  of $14,000.  This loan bears interest at a rate of
6% per annum  and  has been repaid as of January 31, 1997.

      On  September  25,  1996  the Company's
disinterested  directors approved a secured loan to the
President of the Company in the  amount of $1,800,000.
This loan bears interest at a rate of 6% per annum.

     On March 4, 1997, the Company acquired the US and
Canadian rights to  PCAMS  software a payphone contract
and management system software from Meteor Technology, plc
payable by the cancellation of  2,000,000 pounds of  loan  stock
owed to the Company by Meteor and 500,000 pounds by
the
issuance by the Company to Meteor of 80,960 restricted
common  shares. Mr.
Wettreich and Ms. Fitzgerald who are directors of both
companies
did  not  participate  in  any directors votes  in
relation  to  this transaction.

      On  May  20, 1997, the Company's subsidiary Third
Planet amended the  terms  of  its  existing distribution
agreement  with  DigiPhone International  a  subsidiary
of  Meteor.   Mr.  Wettreich
and  Ms.
Fitzgerald who are directors of these companies did not
participate in any directors votes in relation to this
transaction.

      In  May, 1997, the Company accepted a Preferred
Share, Series  J stock  subscription  by Adina, Inc., a
public  company  of  which  Mr. Wettreich  and Mr. Gregory
are directors and officers.  Mr.  Wettreich did  not
participate  in  any  directors  vote  in  respect  to
this transaction.   The  consideration for the issuance
of  the  Preferred Shares  was  the  transfer of eighty
(80%) percent  of  AMI  a  public company  whose  major
asset  is  fifty-seven  (57%)  percent  of  the
outstanding ordinary shares of Meteor.  The Preferred
Shares, Series J have  one  vote  per  share  voting with
the  common  shares,  have  a liquidation  preference over
the common shares but are subordinate  to the  outstanding
Preferred Shares, are not  convertible  and  pay  no
dividend.  They also are subject to a forward or reverse
split in  any instances  for  which the common shares are
subject to  a  forward  or reverse split on the exact same
basis.

      On  May  30, 1997, the Company subscribed for
500,000 pounds 1997-2007 10%  unsecured redeemable loan stock of
Meteor by paying  cash.
Mr.
Wettreich  and Ms. Fitzgerald who are directors of both
companies  did not
participate  in  any  directors  votes  in  relation    to
this
transaction.

     The Company has no compensatory plans or arrangements
whereby any executive officer would receive payments from
the Company or  a  third party  upon  his resignation,
retirement or termination of employment, or  from  a
change  in control of the Company  or  a  change  in  the
officer's  responsibilities following a change in control
other  than Mr.  Wettreich.   Under  the  1996 Stock
Option  Plan  or  under  the Company's  1991  Outside
Directors Stock Option Plan  options  granted under  these
plans contain provisions pursuant to which the  unvested
portions  of  outstanding options become immediately
exercisable  and fully  vested  upon  a  merger of the
Company in which  the  Company's stockholders  do  not
retain, directly  or  indirectly,  at  least  a majority
of the beneficial interest in the voting stock of the
Company or  its  successor, if the successor corporation
fails to  assume  the outstanding   options  or
substitute  options   for   the
successor
corporation's   stock  to  replace  the  outstanding
options.  The
outstanding  options  will  terminate  to  the  extent
they  are  not
exercised  as of consummation of the merger, or assumed or
substituted for by the successor corporation.
                          PART IV
Item 14.          Exhibits, Financial Statement Schedules,
and Reports
on Form 8-K

(a)  (1)  The following financial statements are included
herein  for
fiscal year ended April 30, 1997.

Index to Consolidated Financial Statements        Page
Report of Independent Auditors - 1997             F-1
Consolidated Financial Statements
        Balance Sheets - April 30, 1997 and 1996  F-2 and
                                                  F-3
        Statements of Operations for the years
          ended April 30, 1997, 1996 and 1995     F-4

        Statements of Stockholders' Equity for the
          years ended April 30, 1997, 1996 and 1995    F-5
through
                                                  F-7
        Statements of Cash Flows for the years ended
          April 30, 1997, 1996 and 1995           F-8 and
                                                  F-9

        Notes to Consolidated Financial Statements     F-
                                                  10
                                                  through
                                                  F-25
                                                  
(a) (2) Consolidated Schedule                     F-26
(a) (3) Exhibits included herein:
    3(a) Articles of Incorporation  Incorporated by
reference to  Form 10
                                    Registration
Statement  filed  on June 23, 1976.

     3(b)  Bylaws                      Incorporated  by
Reference  as
immediately above.

    10  (b) 1991 Outside Directors' Stock
          Option Plan               Incorporated by
reference  to  the
Proxy Statement for
April  13,
1992       Annual       Meeting       of
Shareholders        and
the     Proxy     Statement    for    January    3,
1997     Annual
Meeting of Shareholders.

         1996 Employee Stock Option Plan Incorporated by
reference  to the          Proxy  Statement for
January
3,1997 Annual Meeting of Shareholders

   22(a)  Subsidiaries
   (7)  Reports on Form 8-K:
         Report  filed  May  20, 1997 reporting  Item  2
and  7  with amendments.

<PAGE>
                       EXHIBIT 22(a)
                       SUBSIDIARIES
                    AS OF JULY 5, 1997
                             
                             
                             
Third Planet Publishing, Inc.          100%
Mr. CD-ROM Stores, Inc.                100%
Camelot Distributing, Inc.             100%
Kids University, Inc.                  100%
Maxmedia Distributing, Inc.            100%
Camelot Internet Access
Services, Inc. 100% Camelot
Business Investigations, Inc.
100% Camelot Energy, Inc.              100%
Software @ Cost + 10%, Inc.            100%
mrcdrom.com, inc.                      100%
Alexander Mark Investments
(USA), Inc.  80% Atlantic
Media, Inc.                            100%
Camelot Creative Design, Inc.          100%

SIGNATURES
      Pursuant  to  the requirements of Section 13 or
15(d)  of  the Securities  Exchange Act of 1934, the
Company has  duly  caused  this report to be signed on
its behalf by the undersigned, thereunto  duly
authorized.
CAMELOT CORPORATION
(Company)

By:   /s/Daniel Wettreich
      President

Date:     November 20, 1997

      Pursuant to the requirements of the Securities
Exchange Act  of 1934,  this report has been signed below
by the following persons  on behalf  of  the  Company
and  in the capacities  and  on  the  dates indicated.


By:  /s/Daniel Wettreich
     Director; President and CEO
     (principal executive
      officer and
      principal financial
      officer)
      
Date:   November 20, 1997


By:  /s/Jeanette
Fitzgerald
     Director; Secretary;
                                   Vice President and
General Counsel
Date: November 20, 1997
By:   /s/Robert Gregory
  Vice President Finance (principal accounting officer)
                            
                            
Date:   November 20, 1997

By:  /s/Allan Wolfe
     Director

Date:    November 20, 1997

By:        /s/ Bruce Baldwin
     Director

Date:   November 20, 1997


                                  30


         REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS

Board of Directors and
Stockholders Camelot
Corporation and
Subsidiaries

     We have audited the accompanying consolidated
balance sheets of  Camelot Corporation and
Subsidiaries as of April 30, 1997 and 1996  and  the
related  consolidated statements  of  operations,
stockholders' equity, and cash flows for each of the
three  years in  the  period ended April 30, 1997.
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  generally accepted  auditing standards.  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 our audits provide a
reasonable basis for our opinion.

      In  our opinion, the financial statements
referred to above present  fairly,  in  all  material
respects,  the  consolidated financial position of
Camelot Corporation and Subsidiaries as  of April
30, 1997 and 1996, and the consolidated results  of
their operations  and  their consolidated cash flows
for  each  of  the three  years  in the period ended
April 30, 1997,  in  conformity with generally
accepted accounting principles.

      We have also audited Schedule II of Camelot
Corporation and Subsidiaries  for  each of the three
years in  the  period  ended April  30, 1997.  In our
opinion, this schedule presents  fairly, in  all
material respects, the information required  to  be
set forth therein.



Lane, Gorman & Trubitt, LLP
Dallas, Texas
July 7, 1997




                                 F-1
<PAGE>
                CAMELOT CORPORATION AND SUBSIDIARIES
                     Consolidated Balance Sheets
                              April 30,

                                                       1997  1996 ASSETS

CURRENT ASSETS
 Cash and cash equivalents                $  3,029,999
$  9,870,599
 Trading securities                                  -
1,341,508
 Securities available for sale                    8,268     945,777
 Accounts receivable, net of allowance for
   doubtful accounts of $19,947 and $11,415
   at April 30, 1997 and 1996, respectively    162,592
241,837
 Prepaid expenses                              167,769
215,073
 Inventories, net of allowance for
   obsolescence of $494,744 and $198,000 at
    April  30,  1997  and  1996,  respectively
530,926
1,272,973
     Total current assets                     3,899,554
13,887,767
PROPERTY AND EQUIPMENT - AT COST
 Office equipment and fixtures                1,534,173
1,363,484
 Leasehold improvements                          64,154
222,124

1,598,327   1 ,585,608
    Less accumulated depreciation            (669,535)
(453,450)
    and amortization
                                                928,792
1,132,158

INVESTMENT IN AFFILIATE                              -
-

OTHER ASSETS
 Note receivable - officer, net of allowance    968,189
-
    of $889,000
 Preferred stock-related party                  530,917
530,917
 Licenses, trademarks and product
             development, net of accumulated
   amortization of $31,000 and $151,979
at April 30, 1997 and 1996, respectively        421,510
1,141,021
 Other                                           23,114        10,000
     Total other assets                       1,943,730

1,681,938

                                            $ 6,772,076

$16,701,863 See accompanying notes to consolidated

financial statements





























                           F-2
                   CAMELOT CORPORATION AND SUBSIDIARIES
                  Consolidated Balance Sheets -
Continued
                                 April 30,


1997    1996
                   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Accounts payable                          $    470,577
$    777,181
 Accrued expenses                               222,990
194,329
 Net current liabilities of
   discontinued operations                            -
50,185
     Total current liabilities                  693,567
1,021,695
STOCKHOLDERS' EQUITY
 Common stock, $.01 par value, 50,000,000 shares
  authorized, 881,763 and 486,305 shares
 issued at April 30, 1997 and 1996, respectively  8,818
                          4,863
 Preferred stock, $.01 par value, 100,000,000 shares
  authorized, 2,438,056 and 10,143,389 shares issued
and outstanding at April 30, 1997 and 1996, respectively    24,381
                              101,434
 Additional paid-in capital                  34,021,361
30,600,613
 Accumulated deficit                       (25,182,832)
(12,186,463)
 Less net unrealized loss on available-for-sale securities      -
                             (50,548)
 Less treasury stock, at cost, 28,745
  shares at April 30, 1997 and 1996         (2,714,575)
(2,714,575)
 Less note receivable from officer related to
   purchase of common stock                    (78,644)
(75,156)
     Total stockholders' equity              6,078,509
15,680,168

                                           $ 6,772,076
$16,701,863

See accompanying notes to consolidated financial
statements






F-3<PAGE>
                   CAMELOT CORPORATION AND
                   SUBSIDIARIES Consolidated
                   Statements of Operations
                     Years Ended April 30,
                               
                               
                               
                             1997                   1996
1995

  REVENUES                       $  1,887,617                $
3,002,049$
  1,184,469

  COSTS  AND EXPENSES
    Cost of sales                  1,559,189         645,127
905,330
    General and administrative     7,164,354       6,233,501
    2,511,108 Provision for inventory obsolescence495,942
    198,000          Depreciation and amortization
    1,462,459       354,419      116,186
    
     Total costs and expenses                10,681,944
7,431,047   3,5
  32,624

  LOSS FROM OPERATIONS            (8,794,327)    (4,428,998)
(2,348,155)

  OTHER INCOME (EXPENSE)
    Interest and miscellaneous       426,490         152,278
    1,370 Dividend income - related party      46,657 46,657
    46,657
    Loss on disposition of assets   (509,292)      (126,931)
    Loss on investment in affiliate(2,693,087)           -
    Note receivable allowance       (889,000)            -
     Realized loss on sale of marketable securities (583,810)
     -
  -
    Unrealized gain on marketable securities               -
  53,821 -
     Interest expense - related party                 -
(11,615)
(35,849)
    Total  other income (expense)              (4,202,042)       114,210
12,178

LOSS FROM CONTINUING OPERATIONS(12,996,369)    (4,314,788)   (2,335,977)

DISCONTINUED OPERATIONS
  Loss from operations                 -               -       (622,350)
  Loss on disposals                    -         (250,925)     (560,577)
   Loss from discontinued operations                  -     (250,925)  (
1,182,927)

   NET LOSS                    (12,996,369)    (4,565,713)   (3,518,904)
DIVIDENDS   ON  PREFERRED  STOCK               (  95,234)      (575,414)
(19,200)

NET LOSS ATTRIBUTABLE TO
    COMMON STOCKHOLDERS       $(13,091,603)  $ (5,141,127) $ (3,538,104)

LOSS PER SHARE:
  LOSS FROM CONTINUING OPERATIONS   (20.45)        (12.54)        (9.17)
  LOSS FROM DISCONTINUED OPERATIONS   (.00)          (.73)        (4.64)
   DIVIDENDS  ON  PREFERRED  STOCK              (.15)             (1.67)
(.08)
    NET   LOSS  PER   COMMON  SHARE$         (20.60)$           (14.94)$
(13.89)

WEIGHTED AVERAGE NUMBER OF
   COMMON STOCK AND COMMON STOCK
     EQUIVALENT   SHARES  OUTSTANDING         635,467            344,119
254,651

See accompanying notes to consolidated financial statements






                                   F-4
                    CAMELOT CORPORATION AND SUBSIDIARIES
               Consolidated Statements of Stockholders' Equity
           For the Period from May 1, 1994 through April 30, 1997


  Common  Common  Prefer Prefer  Additi  Accumu  Unreal  Treasu  Stock    Total
 Stock   Stock    red     red    onal    lated   ized     ry    Subscr
                Stockhol
 Shares  Amount  Stock   Stock   Paid   Defici  Losses  Stock   iption   ders'
              Shares Amount    in       t      on            Receiv
                                Equity
                              Capita          Availa           able
(Deficit
                                l             ble                       )
                                                                For
                                                                Sale
                                                               Securi
                                                                ties
Balance at     $               $       $       $      $       $       $    $
April 30,   215,79 2,158 239,19  2,392  5,882,  (4,101      -  (170,4  (206,2
1,408,49
 1994         0               0             486   ,846)            42)     50)
8

Conversion of  250       3  (50,00 (500) 497  -      -       -       -         -
Series C                        0)
preferred
 stock to
common stock
Preferred
stock cash         - - -    -  (19,20       -               -   -  -  (19,200)
dividends                          0)
related party

Payment of
common stock   3,145 31 - -    (31)  -      -       -  206,25   206,250
subscribed at                                              0
April 30,
1994

Sale of        63,084     631- -  1,623,    -       -   -  1,623,84
common stock                        216                       7
for cash

Purchase of
Maxmedia        5,125      51 - -  143,44   -           -   -   -   143,500
Distributing,                        9
Inc.
Compensation    3,327      33- -  120,48    -           -   -   -   120,513
for services                         0
Change in net
unrealized   -     -        -       -       - - (51,55  -   -  (51,553)
losses on                                            3)
available-for-
sale
securities
Net loss   --      -        -       -       -  (3,518       -   -  -  (3,518,9
                                            ,904)                          04)
Balance at             $               $       $  $(7,62      $       $       $
$
April 30,  290,72   2,907  189,19   1,892  7,750,  0,750) (51,55  (170,4       -
(87,049)
1995                1               0             897             3)     42)

See accompanying notes to consolidated financial statements





















                                       F-5

                      CAMELOT CORPORATION AND SUBSIDIARIES
           Consolidated Statements of Stockholders' Equity - continued
             For the Period from May 1, 1994 through April 30, 1997

  Common  Common Preferre  Prefer  Addition  Accumul  Unrealize  Treasu   Stock
Total Stock       Stock   d Stock    red    al Paid       ated       d Losses
   ry     Subscr  Stockhol
   Shares  Amount  Shares    Stock     in     Deficit      on      Stock  iption
ders'
                         Amount   Capital           Available          Receiv
Equity
                                                        For Sale           able
(Deficit
                                          Securitie                      )
                                                                       s

Balance at 290,72 $2,907 189,190 $1,892 $7,750,8 $(7,620 $(51,553)$(170,       $
$(87,049
April30,  1                       97    ,750)               442)       -
)
1995
Conversion of
preferred
stock to     86  (888,000  (8,880     8,794        -          -       -       -
-
common stock: 8,608  569    )   )    52,764        -          -       -       -
-
Series BB  56,844  537 (5,333,3 (53,33 34,713     -          -       -       -
-
  Series G     53,709               33)      3)
  Series H                     (3,525,0  (35,25
                                    00)      0)

Sale of        54,844     548         -       -  3,281,00
common stock      1        -          -       -       -
3,281,54
for cash
9
Sale of             -       -  19,766,6  197,66  18,850,9
preferred               66       6        99        -          -       -       -
19,048,6
stock for
65
cash

Common stock
issued for    5,079  51   -     -   737,341        -          -       -       -
737,392
services
Common stock
issued to       1,500      15         -       -    75,141
officers for                            -          -       -  (75,15
-
note                                                         6)
receivable
Change in net
unrealized   -     -     -       -         -        -      1,005       -       -
1,005
losses on
available-for-
sale
securities

Retirement of
Series D        -    -  (66,134) (661)  (65,473)    -          -       -       -
(66,134)
preferred
stock
Common stock
issued to pay  15,000 150  -    -   449,850        -          -       -       -
450,000
note payable
to related
party
Purchase of         -       -         -       -         -
treasury                                    -          -  (2,544       -
(2,544,1
stock                                                               ,133)
33)
Preferred
stock        -    -      -       -  (19,200)        -          -       -       -
(19,200)
dividends to:-    -     -       -  (556,214        -          -       -       -
(556,214
  Related                                               )
)
parties
  Other
parties
Net loss       -    -     -    -         -  (4,565,          -       -       -
(4,565,7
                                               713)
13)
Balance at
April 30, $4,863          $101,4  $30,600,  (12,186          $  $(2,71       $
$15,680,
1996     486,30 10,143,3      34       613    ,463)   (50,548)  4,575)  (75,15
168
           5          89                                                    6)

 See accompanying notes to consolidated financial statements





                                       F-6

<PAGE>
                      CAMELOT CORPORATION AND SUBSIDIARIES
           Consolidated Statements of Stockholders' Equity - Continued For the
             Period from May 1, 1994 through April 30, 1997

Common Common  Prefer  Prefer  Additi  Accumu  Cumulat  Unreal  Treasu  Stock
Total
Stock   Stock    red     red    onal    lated    ive     ized     ry    Subscr
Stockh
Shares Amount   Stock   Stock   Paid   Defici  Foreign  Losses  Stock   iption
olders
               Shares  Amount    in       t    Currenc    on            Receiv
                               Capita             y     Availa           able
Equity
                                  l            Transla   ble
                                                                tion    For
                                                              Adjustm   Sale
                                                                ent    Securi
                                                                        ties

Balance at  486,30  $        $       $  $(12,1        $      $       $       $
$15,68
April 30,   5   4,863  10,143  101,43  30,600  86,463   - (50,54  (2,714  (75,15
0,168
1996             ,389       4    ,613       )              8)   ,575)      6)

Conversion of
preferred
stock to   1,922   19  (112,0  (1,120   1,101  -       -      -       -       -
-
common stock:  165,92   1,659     00)       )  97,424  -    -     -    -       -
-
  Series BB         0   1,447  (9,908  (99,08  11,153  -   -   -       -       -
-
  Series H     144,68           ,333)      3)
  Series I          8          (1,260  (12,60
                                ,000)      0)

Sale of    -   -  3,590,  35,900  3,374,       -        -      -       -       -
3,410,
preferred                         000             600
500
stock for
cash

Common stock
issued for    1,968    20    -    - (20)     -        -      -       -       -
-
services

Common stock   80,960  810   -    -  31,574   -        -      -       -       -
32,384
issued for
software
acquisitions

Accrued
interest on     -     -     -    -    -       -        -      -       -  (3,488
(3,488
stock                                                                         )
)
subscription
receivable

Change in net
unrealized   -   -    -       -       -       -        - 50,548       -       -
50,548
losses on
available-for-
sale
securities

Retirement of
Series F    -       -  (15,00   (150)   150    -        -      -       -       -
-
Preferred                          0)
stock

Preferred
stock         -   -   -       -  (19,20       -        -      -       -       -
(19,20
dividends to: -  -    -       -      0)       -        -      -       -       -
0)
  Related                                      (76,03
(76,03
parties                                            4)
4)
  Other
parties

Net loss   -   -   -       -       -  (12,99        -      -       -       -
(12,99
                                                       6,369)
6,369)
Balance at $  2,438,       $       $  (25,18        $      $       $       $
$6,078
April 30, 881,76   8,818  056  24,381  34,021  2,832)  -      -  (2,714  (78,64
,509
1997                3                            ,361            ,575)      4)

See accompanying notes to consolidated financial statements



                                       F-7



                   CAMELOT CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                            Years Ended April 30,
                                      
                                           1997                        1996
  1995

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                    $ (12,996,369)$       (4,565
,713)                  $          (3,518,904)
  Adjustments to reconcile net loss
     to net cash used in operating activities:
  Non cash transactions for services                 387,391      120,513
   Accrued  interest addition to related party note receivable     (60,677)
-    -
  Securities received as revenue     (64,000)    (1,950,575)            -
  Depreciation and amortization      1,462,459       354,419      116,186
   Undistributed  loss in minority interest in subsidiaries  -            -
(1,336)
  Loss on disposal of assets         509,292         191,918       22,535
  Loss on sale of trading securities313,896                -            -
   Loss on sale of available for sale securities   269,914                -
-
  Write up of securities to market value -          (53,821)            -
   Provision for uncollectible accounts receivable      8,532        10,887
41,500
  Provision for inventory obsolescence495,942        198,000            -
  Note receivable allowance          889,000               -            -
  Loss on investment in affiliate  2,693,087               -            -
  Proceeds from trading securities 1,027,612               -            -
   Loss on disposal of discontinued operations              -             -
560,577
  Change in assets and liabilities, net of effect from
     purchase of subsidiaries:
     Accounts receivable             (68,987)      (212,107)       797,005
     Prepaid expenses               47,304         (183,449)      (16,188)
     Inventories                   246,105         (864,908)      (23,865)
     Other assets                          -             -         (5,366)
          Accounts      payable      and     accrued      expenses(277,943)
88,151                              (300,340)
       Obligations   -  discontinued  operations                   (50,185)
(140,266)                                -
           Net cash used in operating activities  (5,555,018)      (6,740,0
73)     (2,207,683)

CASH FLOW FROM INVESTING ACTIVITIES:
  Purchases of property and equipment(636,364)    (1,087,68)     (195,589)
  Investment in affiliate         (2,457,003)           -             -
  Collections received on notes receivable14,000           -       67,028
   Proceeds from sale of property and equipment             -        11,500
31,500
   Proceeds from available for sales securities       718,143        93,447
-
  Proceeds from return of deposits         -          14,765        6,000
   License, trademarks and product development      (412,510)     (608,800)
(40,000)
  Purchase of subsidiary                 -              -         (25,000)
  Proceeds from sale of subsidiary         -               -      184,543
    Issuance   of   note   receivable  -   related   party      (1,814,000)
-                               -
    Issuance   of  note  receivable                   -           (312,400)
-
      Net  cash  provided by (used in) investing activities     (4,587,734)
(1,889,146)                         28,482

CASH FLOWS FROM FINANCING ACTIVITIES:
   Sales of common stock                   -     3,281,549      1,623,847
   Payments received on common stock subscribed             -             -
206,250
  Sale of preferred stock          3,410,500    19,048,665              -
  Sale of subsidiary preferred stock       -               -      264,044
  Redemption of preferred stock          -          (66,134)            -
  Deferred offering costs            (13,114)           -             -
  Dividends paid                     (95,234)      (575,414)      (19,200)
  Purchase of treasury stock             -       (2,544,133)            -
  Payments on debt                         -       (294,200)     (190,000)
   Proceeds (payment) - notes payable - related parties  -               (2
36,000)                               406,000
   Redemptions of subsidiary preferred stock                 -         (264
,044)                                     -
      Net cash provided by financing activities     3,302,152    18,350,289

2,290,941

NET INCREASE (DECREASE) IN CASH  (6,840,600)       9,721,070    111,740 CASH

AT BEGINNING OF YEAR               9,870,599         149,529         37,789

CASH AT END OF YEAR             $  3,029,999  $    9,870,599$     149,529

See accompanying notes to consolidated financial statements

                                     F-8
                   CAMELOT CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                            Years Ended April 30,
                                      
                                      
                                   1997           1996         1995
     Supplemental information:
       Cash paid for interest$      -          $   11,615$     38,681

        Cash  paid for income taxes$      -           $              -     $
     -

     NONCASH INVESTING AND FINANCING ACTIVITIES

     As  discussed in Note 11, in fiscal 1997, the Company's Preferred Stock
     was converted to the Company's restricted common stock as follows:
     
          112,000 Series BB Preferred for 1,922 shares of restricted common
           9,908,333  Series  H Preferred for 165,920 shares  of  restricted
     common
           1,260,000  Series  I Preferred for 144,688 shares  of  restricted
     common
     
     In  fiscal  1997,  the Company received securities  in  the  amount  of
     $139,700 in satisfaction of a trade account receivable.
     In  fiscal 1997, the Company issued 80,960 shares of restricted  common
     stock for software acquisition.
     As  discussed  in  Note 9, in fiscal 1996, the Company  issued  15,000
     shares  of  restricted  common  stock in  settlement  of  $450,000  of
     promissory notes to a related party, Forme Capital, Inc.
     In  fiscal 1996, the Company issued 1,687 shares of restricted  common
     stock, with an agreed value of $350,000, for acquisition of software.
     As discussed in Note 11, in fiscal 1996, the Company's Preferred Stock
     was converted to the Company's restricted common stock as follows:
        888,000 Series BB Preferred for 8,608 shares of restricted common
        5,333,333 Series G Preferred for 56,844 shares of restricted common
        3,525,000 Series H Preferred for 53,709 shares of restricted common
     As  discussed  in Note 14, in fiscal 1996, an officer of  the  Company
     executed a 6% interest bearing note in the principal amount of $75,156
     to exercise stock options.
     In  fiscal 1996, the Company exercised its option to purchase  400,000
     shares  of  stock  in  another  company  in  satisfaction  of  a  note
     receivable in the amount of $312,400.
      In  fiscal  1996, the Company issued notes payable in the  amount  of
$294,200 for acquisitions of software.
     As  discussed in Note 2, in fiscal 1995, the Company acquired  100%  of
     the   common  stock  of  Maxmedia  Distributing,  Inc.,  and   Maxmedia
     Publishing, Inc., in exchange for $25,000 in cash plus 5,125 shares  of
     the Company's restricted common stock valued at $143,500.
     As  discussed  in  Note  11, in fiscal 1995, the outstanding  Series  C
     Preferred Stock was converted to 250 shares of the Company's restricted
     common stock.
     During  fiscal  1997,  1996 and 1995 there was a $50,548,  $1,005,  and
     $51,553   change   in   net  unrealized  losses  on  available-for-sale
     securities.
     
     
     See accompanying notes to consolidated financial statements


                                     F-9
                                      
                                      
1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Business Activity and Principles of Consolidation

     The  consolidated financial statements include Camelot Corporation and
     its  majority-owned  subsidiaries (collectively the  "Company").   The
     Company  is  primarily  engaged  in the  retailing,  distribution  and
     publishing of computer software.  The Company sells software  products
     through  national  distributors  and  through  an  Internet  web  page
     catalog.   During  1997,  the  Company  ceased  selling  its  software
     products  through Mr. CD-ROM and Software @ Cost + 10%  retail  stores
     which  were  located  in the Dallas Metroplex.  The  Company  is  also
     engaged as an Internet service provider.   Discontinued operations  of
     certain   subsidiaries   were  involved   in   video   marketing   and
     distribution, financial services, real estate rentals, and oil and gas
     exploration  and development.  Significant intercompany  accounts  and
     transactions have been eliminated.
     Cash and Cash Equivalents
     The  Company  considers  all highly liquid investments  with  original
     maturities  of  three  months or less to  be  cash  equivalents.   The
     company  and  its  subsidiaries  maintain  cash  balances  at  several
     financial  institutions and a brokerage firm in Dallas,  Texas.   Cash
     equivalents  were composed primarily of investments in a money  market
     account.   The  Company believes it is not exposed to any  significant
     credit risk on cash and cash equivalents.
     
     Inventories

     Inventories  of computer software held for resale, are stated  at  the
     lower of cost or market using the weighted average cost method.  Other
     inventories,  were  stated at the lower of cost or  market  using  the
     first  in, first out (FIFO) method, until their disposition in  fiscal
     1995.   An  allowance  for  inventory obsolescence  is  maintained  to
     provide  for  an  estimate of inventory items that  have  declined  in
     value.
     
     Property and Equipment

     Property   and  equipment  are  carried  at  cost,  less   accumulated
     depreciation.   Major additions and betterments are capitalized  while
     replacements and maintenance and repairs that do not improve or extend
     the   life   of   the  respective  assets  are  expensed.    Leasehold
     improvements are amortized over the lesser of the term of the  related
     lease  or the estimated useful lives of the assets.  When property  is
     retired  or  otherwise disposed of, the related costs and  accumulated
     depreciation  are removed from the accounts and any gain  or  loss  is
     reflected in operations.
     
     Depreciation and amortization of property and equipment is provided on
     the straight-line method over the following estimated useful lives:
     
          Office furniture and fixtures           7 years
          Computer and office equipment           5 years Computer software
          5 years
           Leasehold Improvements                  Length of lease  ranging
to 5 years
     Software Development
     Certain   software   development  costs  are  capitalized   upon   the
     establishment of technological feasibility for each product or process
     and  capitalization ceases when the product is available  for  general
     release  to  customers or is put into service.  The  establishment  of
     technological feasibility and the ongoing assessment of recoverability
     of   capitalized  software  development  costs  require   considerable
     judgment  by  management  with respect to  certain  external  factors,
     including, but not limited to, anticipated future revenues,  estimated
     economic  life  and  changes  in  software  and  hardware  technology.
     Research  and  development costs related to software development  that
     has not reached technological feasibility are expensed as incurred.
     
                                    F-10
                                      
                                      
1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     Software  development costs are amortized utilizing the  straight-line
     method  over the estimated economic lives of the related products  not
     to  exceed two years.  Amortization of capitalized software costs  for
     April  30,  1997,  1996  and  1995 was $1,105,021,  $138,979  and  $0,
     respectively,   which  included a write down of $646,408  in  1997  to
     reflect  an impairment of net realizable value.  Capitalized  software
     development costs were $302,510 and $1,014,021 at April 30,  1997  and
     1996,  respectively,  net  of  accumulated  amortization  of  $0   and
     $138,979,  respectively.
     Total   research  and  development  costs  charged  to   general   and
     administrative expenses were approximately $2,375,000, $1,319,000  and
     $163,000 for the years ended April 30, 1997, 1996 and 1995.
     
     Trademark and Licenses

    Trademarks  and  licenses  are  stated  at  cost,  net  of  accumulated
     amortization, which is provided using the straight-line method over  5
     to 10 years.
     
     Store Preopening Costs

      Store  preopening  costs are capitalized and  amortized  over  twelve
months.
     Loss Per Share
     Loss per common share is computed on the basis of the weighted average
     number  of  common  shares outstanding during the respective  periods.
     Outstanding stock warrants, options and preferred shares are  excluded
     from the computations as their effect would be anti-dilutive.
     During  1997,  312,530 common shares were issued  upon  conversion  of
     preferred shares.  Had this conversion of preferred stock occurred  on
     May  1,  1996,  net loss per common share would have been  $16.71  for
     1997.
     During  1996,  119,161 common shares were issued  upon  conversion  of
     preferred shares and 15,000 common shares were issued to retire  debt.
     Had  this  conversion of preferred stock and the retirement  of   debt
     occurred  on  May 1, 1995, net loss per common share would  have  been
     $11.20 for 1996.
     Software Revenue Recognition
     Revenue  from sales of software is generally recognized upon  delivery
     of  the  software provided that no significant obligations remain  and
     collection of the resulting receivable is deemed probable.
     Advertising Costs
     Advertising  costs,  included in general and administrative  expenses,
     are  charged to operations when the advertising first takes place  and
     were  $989,248,  $1,648,071 and $129,436  for  1997,  1996  and  1995,
     respectively.
     Income Taxes
     Deferred income taxes are determined using the liability method  under

     which  deferred tax assets and liabilities are determined  based  upon

     differences between financial and tax basis of assets and liabilities.

     

                                    F-11

                                      

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     Reclassifications
     Certain  reclassifications have been made to the financial  statements
     to conform to the 1997 presentation.
     Fair Value of Financial Instruments
     Fair  value of financial instruments are estimated to approximate  the
     related  book  value,  unless  otherwise indicated,  based  on  market
     information available to the Company.
     Impairment of Long-Lived Assets
     Impairment  losses  are  recorded on  long-lived  assets  and  certain
     identifiable  intangible assets held and used in  operations  whenever
     events  or changes in circumstances indicate that the carrying  amount
     of an asset may not be recoverable.
     Use of Estimates
     In   preparing  financial  statements  in  conformity  with  generally
     accepted  accounting  principles,  management  is  required  to   make
     estimates  and assumptions that affect the reported amounts of  assets
     and  liabilities, the disclosure of contingent assets and  liabilities
     at  the date of the financial statements, and the reported amounts  of
     revenues  and  expenses during the reporting period.   Actual  results
     could differ from those estimates.
2.   ACQUISITIONS
     On  March  31,  1997,  a wholly-owned subsidiary of  the  Company  was
     formed.  The Company acquired 100% of the common stock of mrcdrom.com,
     inc., in exchange for $100,000 in cash, $511,428 of inventory, $30,464
     of  equipment  and  $26,000  of other assets.   mrcdrom.com,  inc.  is
     engaged  in  selling software products through an  Internet  web  page
     catalog.  In March 1997, the Board of Directors approved the filing of
     a  registration  statement under the Securities Act  of  1933,  for  a
     public offering of 3,000,000 shares of mrcdrom.com, inc. common stock.
     On  June  17, 1994, the Company acquired 100% of the common stock,  of
     Maxmedia  Distributing,  Inc.,  and  Maxmedia  Publishing,  Inc.,   in
     exchange  for  $25,000  in  cash plus 5,125 shares  of  the  Company's
     restricted  common  stock valued at $143,500.  The acquired  companies
     are  engaged  in  the distribution and publishing of CD-ROM  software.
     The   acquisition  was  accounted  for  by  the  purchase  method   of
     accounting, and the purchase price exceeded the estimated  fair  value
     of  net  assets  acquired  by $201,421.  Amortization  of  the  excess
     purchase  price  was amortized over a fifteen year  period  until  the
     unamortized balance was written off in fiscal year 1996.
     
     On March 2, 1994, the Company entered into an agreement with Americomm
     Properties,  Inc. ("Americomm") to assign unencumbered,  interests  in
     certain  licenses  to the wireless cable system in Manhattan,  Kansas.
     The  licenses  require Federal Communications Commission  approval  to
     provide  assignability and transferability.  Licenses  and the related
     acquisition costs of $73,465 were written off in fiscal year 1996.
     
3.   ACCOUNTS RECEIVABLE AND CREDIT RISK

     The  Company's  trade receivables at April 30, 1997 are primarily  due
     from major computer software distributors.  The Company believes it is
     not exposed to significant credit risk.
     
     
     
     
                                    F-12
<PAGE>


4.   INVENTORIES
     Included in the accompanying April 30, 1997 balance sheet is inventory

     of computer software at a carrying value of $530,926, which represents

     management's  estimate  of  its net realizable  value.   The  computer

     software  industry is characterized by rapid technological advancement

     and  change.   Should  demand  prove to  be  significantly  less  than

     anticipated,  the  ultimate realizable value  of  such  products  will

     probably be less than the amount shown in the balance sheet.

     Major classes of inventories consist of the following at April 30,:

                                         1997              1996

     Software                           $1,025,670          $1,470,973

      Less:  Allowance  for  slow  moving  and  obsolescence        494,744
198,000


     NET                           $    530,926        $1,272,973


5.   MARKETABLE SECURITIES


     The  Company  adopted, effective for the year ended  April  30,  1995,
     Statement  of  Financial Accounting Standards No. 115 "Accounting  for
     Certain  Investments  in  Debt  and Equity  Securities".   Under  this
     statement,  investments in available-for-sale securities are  measured
     at fair value with net unrealized gains and losses reported in equity.
     Investments  that are bought are held principally for the  purpose  of
     selling  them in the near future are classified as trading securities.
     Trading securities are measured at fair value with net realized  gains
     and losses reported in the statement of operations.  The fair value of
     marketable securities is determined based on quoted market prices  for
     those  securities.   The  net  unrealized holding  loss  decreased  by
     $50,548  and  $1,005 during the years ended April 30, 1997  and  1996,
     respectively.  The cost, unrealized gains and losses, and fair  values
     of  the Company's available-for-sale securities and trading securities
     at April 30, 1997 and 1996 are summarized as follows:
     
     
                Cost      Gross       Gross     Estimated
                        Unrealized  Unrealized    Fair
                          Gains       Losses      Value
                          
1997

Available-
for-sale

Securities
                     $           $           $          $
Common stock     8,268           -           -      8,268


1996

Available-
for-sale

Securities
                     $           $           $          $
Common stock   996,325           -      50,548    945,777
     Trading
Securities
                            53,820           -  1,341,508
Common stock  1,287,68
                     8

                     $           $           $          $
              2,284,01      53,820      50,548  2,287,285
                     3


F-13<PAGE>

5.   MARKETABLE SECURITIES - Continued

     Sales proceeds and gross related gains and losses on securities are as
     follows:
     
     
     
     
                   1997     1996    1995
     Cost basis         $       $       $
                 2,329,56  134,48       -
                        5       0
     Proceeds    1,745,75  93,447       -
                        5
     Realized           -       -       -
     gains
     Realized     583,810  41,033       -
     losses

     The  Company uses the specific identification method to determine  the
     cost of securities sold.
     
     Results of operations for 1997, 1996 and 1995 include a charge of $ -0
     $53,821, and $-0- for unrealized gains on trading securities.
     
     Stockholders' equity includes an unrealized loss of $0,  $50,548,  and
     $51,553 at April 30, 1997, 1996 and 1995,  respectively.
     
6.   NOTE RECEIVABLE - OFFICER

     During  fiscal  1997,  the  Company loaned  the  President  and  Chief
     Executive Officer of the Company $1,800,000.  The loan is evidenced by a
     nonrecourse note, which bears interest at 6%, with all principal and
     accrued interest due November 14, 2006.  The note is collateralized by
     approximately 33,500 shares of common stock of the Company which had a
     market value of $1,800,000 on September 25, 1996 and is not subject to
     additional calls for security regardless of any changes in  the  value
     of  the stock.  At April 30, 1997, these shares had a market value  of
     approximately  $209,000.  The allowance of $889,000  is  primarily  to
     provide  for  impairment  of  the  collateral  as  a  result  of   the
     fluctuation in the value of the collateral.  The allowance,  which  is
     adjusted  on a annual basis, is computed from a formula which utilizes
     the  average price of the Company's common stock using a twelve  month
     period.
     
7.   INVESTMENT IN AFFILIATE

     The   Company  holds  a  15.2%  interest  in  Meteor  Technology   PLC
     ("Meteor"),  a  public  telecommunications  company  traded   on   the
     Alternative  Investment  Market of the  London  Stock  Exchange.   The
     investment  is  accounted  for under the  equity  method  because  the
     Company  exercises significant influence over Meteor's  operating  and
     financial  activities.   Due  to  certain  factors,  the  Company  has
     determined  that  the  carrying value of its  investment  exceeds  the
     estimated recovery value.  Accordingly, a provision of $2,693,087  has

     been  charged  to  operations in 1997 reducing its carrying  value  of

     Meteor  to zero and suspended the equity method of accounting for  its

     investment in Meteor.

8.   ACCRUED EXPENSES

     The following is a summary of accrued expenses at April 30,:

1997                                    1996

     Taxes                 $      26,811      $       56,550
     General and administrative    2,452              35,244
     Fees                         34,000              36,000
     Compensation                 41,503              32,864
     Lease obligations           115,099                   -
     Other                         3,125              33,671

                               $   222,990        $    194,329

                                    F-14

9.   NOTES PAYABLE - RELATED PARTY

     In  fiscal 1996, the remaining balance of the notes payable  to  Forme
     Capital, Inc. (Forme), a corporation majority-owned by the wife of the
     President of the Company was settled by payment of $236,000  cash  and
     issuance  of  15,000 shares of the Company's restricted  common  stock
     valued  at $450,000.  The weighted average interest rate on the short
     term borrowings was 8% for fiscal 1996 and 1995.
     
     
10.  INCOME TAXES


     The  Company files a consolidated Federal tax return.  The Company had
     no  current State or Federal income tax expense for each of the  years
     ended April 30, 1997, 1996 and 1995.
     
     
     Deferred  tax  assets  and  liabilities are determined  based  on  the
     difference  between financial statement and tax basis  of  assets  and
     liabilities as measured by the currently enacted tax rates.   Deferred
     tax  expense  or benefit is the result of the changes in deferred  tax
     assets and liabilities.
     
     
     Deferred income taxes arise principally from the temporary differences
     between  financial statement and income tax recognition  of  allowance
     for doubtful accounts, note receivable allowance, investment valuation
     adjustments, inventory reserve and from net operating losses.
     
     
     The  components  of  deferred taxes at April 30, in  the  accompanying
     balance sheets are summarized below:
     
     
                                              1997    1996
      Allowance  for  doubtful  accounts     $       6,782    $       1,880
Inventories                                168,213     66,795
                  Other                                               3,958
3,570
     Note receivable allowance               302,260        -
                  Investment              valuation              adjustment
915,650                                    (1,113)
     Capital loss carryforward             117,817                  117,817
     Net operating loss carryforward      6,862,390           3,846,783
                                         8,377,070  4,035,732

           Less       valuation      allowance                  (8,377,070)
(4,035,732)

                  Deferred    tax    asset-net            $               -
$        -

     At April 30, 1997, the Company has approximately $20,184,000 of unused
     Federal  net operating loss carryforwards, which expire in  the  years
     2003 through 2012.
     
     Approximately $640,000 of the net operating loss carryforwards for tax
     purposes  are  limited due to statutory changes  in  the  tax  law  in
     connection  with the change in more than 50% ownership of the  Company
     in  1988.  Because of statutory requirements in the law, that  portion
     of  the net operating loss carryforward applicable to the period prior
     to the ownership change is limited to use of approximately $35,800 per
     year  until  it  expires.  As the net operating losses  expire,  at  a
     minimum,  approximately  $425,000  of  the  tax  net  operating   loss
     carryforward will not be available for the Company's future use.
     
     
     
     
                                    F-15
<PAGE>

11.  STOCKHOLDERS' EQUITY

     Common Stock

     The  brother  of  the  President of the Company purchased  13,750  and
     20,833  shares of the Company's restricted common stock  for  $470,312
     and  $497,375  in various transactions during fiscal  1996  and  1995,
     respectively.
     
     Unrelated  third  parties purchased 16,094 and 42,251  shares  of  the
     Company's  restricted  common stock for  $795,612  and  $1,126,472  in
     various transactions during fiscal 1996 and 1995, respectively.
     
     During  fiscal 1996, a company affiliated with the President purchased
     13,750 shares of the Company's restricted common stock for $1,108,594.
     
      During  fiscal  1996, the President purchased 11,250  shares  of  the
Company's restricted common shares for $907,031.

     Preferred Stock

     The  Company  has  100,000,000 authorized shares  of  $.01  par  value
     preferred stock with rights and preferences as designated by the board
     of  directors at the time of issuance.  The Company has the  following
     series of preferred stock issued and outstanding at April 30, 1997:
     
                              Number of Shares
                                      
                                      
     Series of           Originally
      Preferred Stock     AuthorizedIssued    Outstanding         Value
                                      
          A         2,000     2,000              -       -
          B        75,000    75,000              -       -
          C        50,000    50,000              -       -
          D        66,134    66,134              -       -
          E       108,056   108,056
108,056   1,081
          F        15,000    15,000              -       -
          BB     1,000,0001,000,000              -       -
          G     5,333,333 5,333,333              -          -
          H    17,000,00013,433,333              -       -
          I    10,000,000 3,590,000      2,330,000  23,300

     TOTAL     33,649,52323,672,856      2,438,056$ 24,381
     During  fiscal  1997, 112,000 shares of Series BB  were  converted  to
     1,922 shares of the Company's restricted common stock.
     During  fiscal  1997, 9,908,333 shares of Series H were  converted  to
     165,920 shares of the Company's restricted common stock.
     During  fiscal  1997, 1,260,000 shares of Series I were  converted  to
     144,688 shares of the Company's restricted common stock.
     During fiscal 1997, 15,000 shares of Series F were retired.
                                    F-16

                                      

                                      

11.  STOCKHOLDERS' EQUITY - Continued

     During fiscal 1996, the Series G shares outstanding were converted  to
     56,844 shares of the Company's restricted common stock.
     
     
     During  fiscal  1996, 888,000 shares of Series BB  were  converted  to
     8,608  shares of the Company's restricted common stock.  During fiscal
     1996, 3,525,000 shares of Series H were converted to 53,709 shares  of
     the Company's restricted common stock.
     
     
     During  fiscal 1996, the outstanding shares of Series D, owned by  the
     wife of the President, were redeemed for $66,134.
     
     
      During  fiscal 1995, the outstanding Series C were converted  to  250
shares of the Company's restricted common stock.
     Series  E  preferred  shares  owned by a  trust  affiliated  with  the
     President of the Company are entitled to receive a cumulative dividend
     equivalent  to $1,600 per month.  Dividends in the amount  of  $19,200
     were  declared and paid each of the years ended April 30,  1997,  1996
     and 1995.
     Series  BB  preferred shares ("Series BB") are entitled to  receive  a
     dividend  of 12% payable quarterly.  The Series BB are convertible  to
     common  shares at thirty percent off the closing price of  the  common
     shares.   Dividends in the amount of $70,040 were paid in 1996.
     Series  G  preferred  shares ("Series G") are entitled  to  receive  a
     dividend  of  9%  payable quarterly.  The Series G are convertible  to
     common  shares at twenty percent off the closing price of  the  common
     shares.  All shares will automatically be converted into common shares
     two  years  after issuance.  Dividends in the amount of $139,151  were
     paid in 1996.
     Series  H  preferred  shares ("Series H") are entitled  to  receive  a
     dividend  of  9%  payable quarterly.  The Series H are convertible  to
     common  shares at twenty percent off the closing price of  the  common
     shares.   Dividends in the amount of $76,034 and $225,055 were paid in
     1997 and 1996, respectively.
     Series  I  preferred  shares ("Series I") are entitled  to  receive  a
     cumulative  dividend of 7%, payable in common shares of  the  Company.
     The  Series  I are convertible to common shares at twenty percent  off
     the closing price of the common shares.  All shares will automatically
     be converted into common shares two years after issuance.

     Any  split  or  combination of common shares requires  a  simultaneous
     split  or  combination  of each series of preferred  shares  and  visa
     versa.   Upon  liquidation or dissolution of the Company,  holders  of
     each series of preferred shares are entitled to receive, to the extent
     of  their  par  value, pro rata with other preferred shareholders  and
     before  holders  of  common shares, all assets legally  available  for
     distribution to stockholders.  Each series of preferred shares  issued
     as of fiscal year-end  is non-voting.
     
12.  STOCK OPTIONS

     Camelot Corporation
     The Company adopted the 1991 Employee Stock Option Plan (the Plan)  in
     April  1992, reserving 3,750 shares of the Company's common stock  for
     issuance  upon  the exercise of options granted under  the  Plan.   On
     April  30,  1993, the board amended and the shareholders  approved  to
     increase  the number of common shares to 16,250 available for issuance
     under  this  plan.   The options may be purchased as  Incentive  Stock
     Options  at  100%  of  fair market value of the  common  stock  or  as
     supplemental  stock options at not less than 85% of  the  fair  market
     value of the common stock at the date of grant.
     
     
     
     
                                    F-17
                                      
                                      
                                      
                                      
12.  STOCK OPTIONS - Continued

     The  terms of the options under the Plan may not exceed 10 years.   No
     options  may be granted under the Plan after April, 2002.  The Company
     has  determined to use the 1991 Employee Stock Option  Plan  for  non
     employee  directors  and has amended the Plan  to  specifically  cover
     directors.   Other  than  a name change to the 1991  Outside  Director
     Stock  Option Plan and as set out above, the Plan will otherwise  stay
     the same.
     
     In  October 1996 the Company adopted the 1996 Stock Option  Plan.   At
     that  time the Company canceled all outstanding options from the  1991
     plan and granted the equal number of options from the 1996 plan.   The
     plan  reserves  200,000  shares of the  Company's  common  stock  upon
     exercise  of  the options granted under the plan.  The exercise  price
     for  the  options  is equal to the Fair Market Value  of  a  share  of
     Common  Stock on the Grant Date.  The per share exercise price of  any
     option  granted  to  a  person who at the time  of  grant  owns  stock
     possessing  more than 10% of the total combined voting  power  of  all
     classes   of  stock  of  the  Company  or  any  parent  or  subsidiary
     corporation  of the Company must be at least 110% of the  fair  market
     value  of a share of the Company's common stock on the date of  grant,
     and the term of such option cannot exceed five years.
     
     The  term of the options under the 1996 plan may not exceed 10  years.
     No  options may be granted under the Plan after October 2006.   During
     1997,  the  exercise price of the options granted under the  1991  and
     1996 plans was changed to $5.00 per share.
     
     Under the 1996 plan, 175,000 options were granted to the President  of
     the  Company, however he was not eligible for options under  the  1991
     plan.   An  additional 3,500 options were granted to  officers  during
     fiscal 1997.
     
      Outstanding stock options outside the Plan were 86,250 and 87,500  at
April 30, 1997 and 1996, respectively.
     The following schedule summarizes the changes in the Plans:
                           1997       1996       1995
Options outstanding  at     94,600     95,825     94,375
beginning at year
   Granted                 185,538      7,194      6,325
   Exercised                     -  (  4,637)          -
   Canceled               ( 4,750)  (  3,782)  (  4,875)
Options outstanding  at                94,600     95,825
end of year                275,388


Options exercisable  at    275,388     94,600     95,825
end of year

Average    price     of
options:
   Granted during year    $ 49.348    $98.324    $48.928
     Exercised   during          -     62.208          -
year
   Canceled during year     52.160     80.140     47.692
    Outstanding at  end     12.160     31.828     29.932
of year




                                   F-18


12.  STOCK OPTIONS - Continued

     mrcdrom.com, inc.

     mrcdrom.com,  inc.   has  approved two  stock  option  plans,  a  1997
     Incentive  Stock Option Plan (the "Incentive Stock Option  Plan")  and
     the  1997  Directors' Stock Option Plan (the "Director's Stock  Option
     Plan")  in  March 1997, reserving 500,000 shares of common  stock  for
     issuance  upon the exercise of options granted under the  Plans.   The
     Incentive  Stock  Option  Plan  is  available  to  all  employees   of
     mrcdrom.com,  inc. (including officers and employee  directors).   The
     Director's   Stock  Option  Plan  is  available  for  all  nonemployee
     directors of mrcdrom.com, inc.  The option exercise price is equal  to
     the  fair  market value of a share of common stock on the  grant  date
     unless the optionee is granted more than 10% of the maximum number  of
     shares  available  for  issuance under the Plans  in  which  case  the
     exercise price is equal to 110% of the fair market value of a share of
     common stock on the date of grant.  The term of the options under  the
     Plans may not exceed 10 years.
     
     The following schedule summarized the changes in the Plans:

     Incentive Stock Option Plan

                                                1996
                                 1997                    1995

Options    outstanding    at
beginning of year
     Granted                       408,8           -           -
                                      00
     Exercised                         -           -           -
     Canceled
                                       -           -           -
Options outstanding  at  end
of year                            408,8           -           -
                                      00

Options exercisable  at  end
of year                            408,8           -           -
                                      00

Average price of options
     Granted during year               $           $           $
                                    4.00           -           -
     Exercised during year             -           -           -
     Canceled during year              -           -           -
      Outstanding at end  of        4.00           -           -
year


     Director's Stock Option Plan

                                             1996        1995
                                 1997
                                 
Options    outstanding    at
beginning of year
     Granted                       15,00           -           -
                                       0
     Exercised                         -           -           -
     Canceled
                                       -           -           -
Options outstanding  at  end
of year                            15,00           -           -
                                       0

Options exercisable  at  end
of year                            15,00           -           -
                                       0

Average price of options
     Granted during year               $           $           $
                                    4.00           -           -
     Exercised during year             -           -           -
     Canceled during year              -           -           -
      Outstanding at end  of        4.00           -           -
year



                                   F-19



12.  STOCK OPTIONS - Continued

     The  Company  granted  stock  options to purchase  423,800  shares  of
     mrcdrom.com  common  stock to officers and directors  of  mrcdrom.com,
     inc.
     
     
     The  Company  recognized and measures compensation  costs  related  to
     stock  option  plans  utilizing  the  intrinsic  value  based  method.

     Accordingly, no compensation cost has been recorded.  Had compensation

     expense been determined on the fair value of awards granted, net  loss

     and loss per share would have been as follows:

                              1997

                    As Reported         Pro forma

     Net loss            $ (12,996,369)      $ (13,441,659)

     Loss per share      $         (20.45)        $         (21.15)


                              1996

                    As Reported         Pro forma

     Net loss            $ ( 4,565,713)      $ ( 4,928,278)

     Loss per share      $         (12.54)        $         (14.32)




     The  fair  value  of each option is estimated using the  Black-Scholes
     option-pricing model with the following assumptions used for grants in
     1997  and 1996: risk free interest rate 4.5%; expected life 10  years;
     expected volatility 30%; dividend yield 0%.  The fair values generated
     by  the  Black-Scholes  model  may not be  indicative  of  the  future
     benefit, if any, that may be received by the option holder.
     
13.  MINORITY INTEREST

     During  the  year ended April 30, 1995, a subsidiary  of  the  Company
     authorized  15,000,000  shares  of $.01  par  value  preferred  stock.
     Proceeds  from the sale of issued shares, net of expenses of  $39,456,
     was $264,044.  During fiscal 1996, the Company purchased 60,700 shares
     of   the  10%  Convertible  Preferred  Shares,  Series  A.   The   10%
     Convertible Preferred Shares, Series A, have one vote per  share,  and
     no  preemptive rights.  The dividend is cumulative and  must  be  paid
     before  any  dividends  can be paid to the common  shareholders.   The
     Preferred  shares have a preference upon liquidation over  the  Common
     shares.   The  Preferred  shares are convertible  at  a  rate  of  one
     Preferred share for each Common share.  The Company has the  right  to
     redeem the Preferred shares within twelve months of issuance at  $6.00
     per share and the second twelve months for $6.60 per share.  Dividends
     in the amount of $121,968 were paid in 1996.  All shares were redeemed
     in fiscal year 1996.
     
14.  RELATED PARTY TRANSACTIONS

     During  fiscal  1997, the Company made a loan to  an  officer  in  the
     amount of $14,000 bearing interest at 6% which has been repaid  as  of
     April 30, 1997.
     
     
                                    F-20
                                      
                                      
                                      
                                      
14.  RELATED PARTY TRANSACTIONS - Continued

     During  fiscal  1997,  the Company concluded  agreements  with  Meteor
     Technology   plc   ("Meteor"),  appointing  them  as   the   exclusive
     international   distributor  for  DigiPhone  and   DigiPhone   Deluxe,
     excluding the United States of America, Canada, the United Kingdom and
     Ireland. The consideration for the DigiPhone rights was 6,000,000 pounds,
     (approximately $9,312,000) and an additional 1,000,000 poundsin loan  stock
     was  subscribed to, (approximately $1,685,000).  During  fiscal  1997,
     the Company acquired the U.S.A. and Canadian rights to PCAMS software,
     which  is  a  payphone  contract and management system  software  from
     Meteor.   The  consideration for the PCAMS  software  rights  was  the
     cancellation of 2,000,000 pounds of loan stock (approximately  $3,370,000)
     and  the issuance of 80,960 shares of the Company's restricted  common
     shares.   The remaining loan stock was converted into ordinary  shares
     of  Meteor,  with  the Company owning approximately 15.2%  of  Meteor.
     Because of the significant influence the Company has over Meteor,  the
     Company  has accounted for these transactions as an equity  investment
     in  Meteor.   See  footnote 7 discussing the Company's  investment  in
     Meteor.
     In  fiscal  year  1996, the Company made a loan to  DigiPhone  Europe,
     Ltd.,  a  subsidiary  of Meteor for $30,000.  The Chairman  and  Chief
     Executive  Officer of Camelot is a majority stockholder of  Meteor  at
     April  30,  1997.  Sales of software products to Meteor were  $141,905
     during fiscal 1997.
     The  Company received management fees of $72,000, $24,000 and  $0  for
     the  years  1997,  1996  and  1995, respectively,  from  a  securities
     transfer agent company affiliated with the President of the Company.
     During  fiscal  1996,  an  officer  of  the  Company  was  given   the
     opportunity to execute a 6% interest bearing note in principal  amount
     of  $75,156 to exercise stock options.  The note receivable, which  is
     collaterized  by  the pledge of 1,500 shares of common  stock  of  the
     Company is due on January 18, 1998.
     
     The  Company  received loans from Forme Capital totaling  $406,000  in
     fiscal  year  1995.  Payments of $236,000 and $190,000  were  made  in
     fiscal  years  1996  and  1995,  respectively.   Forme  converted  the
     outstanding balance of $450,000 to common stock during fiscal 1996.
     
     During  fiscal  1995, the Company issued 375 common shares  valued  at
     $22,500  to  a  company affiliated with the President of  one  of  the
     Company's subsidiaries for a customer mailing list.
     
     The  Company owns 21,495 shares of Forme Capital's  Series A, 10% Non
     cumulative  Preferred  Stock, 50,000 shares  of  Series  B,  10%  Non
     cumulative  Preferred Stock and 466,571 shares of Series C,  10%  Non
     cumulative  Preferred  Stock.  The preferred  shares  have  no  voting
     rights, pay dividends at the discretion of Forme's board of directors,
     and  have priority for payment upon dissolution of Forme over  Forme's
     common  stock.  The Company received dividends of $46,657  from  Forme
     Capital each of the fiscal years 1997, 1996 and 1995.
     
     During  fiscal  years  1996 and 1995, a company  affiliated  with  the
     President  of  the  Company provided the Company with  management  and
     other  services valued at $44,000 and  $286,000, respectively.  During
     fiscal  year  1996, the President and the Corporate  Secretary  became
     employees  of the Company.  Prior to this they were employees  of  the
     affiliate and received no compensation from the Company.
     
15.  COMMITMENTS AND CONTINGENCIES

     Leases

     The  Company  rents  office space for its corporate headquarters  from
     Forme  under  a  September 1993 agreement expiring in September  1998.
     Rent  expense incurred with Forme for fiscal 1997, 1996 and  1995  was
     approximately  $80,000  each year.  The lease included  the  following
     terms and conditions:
     
                                    F-21
15.       COMMITMENTS AND CONTINGENCIES - Continued
          1.    Forme  has  an  option to buy the Company's  furniture  and
          equipment  located  on the premises at the Company's  book  value
          during the term of the lease.
          2.    The  Company granted a ten year option to Forme to purchase
          50,000 shares of restricted common stock at an exercise price  of
          $25.00 which includes piggy back rights.
          3.   Rental payments automatically increase to 150% of prevailing
          market rates at the time the President ceases to be a director of
          the Company.
     In  addition,  the Company rents office and  warehouse  space  in  the
     Dallas, Texas area for its subsidiaries.
     Total  rent  expense,  all of which were minimum rentals,  for  fiscal
     1997, 1996 and 1995 was approximately $587,478, $268,615 and $106,700,
     respectively.
     In  addition  to  minimum  lease payments, a  retail  lease  agreement
     provides  for contingent rentals if certain sales levels are  reached.
     The  future  minimum lease payments under operating leases for  office
     and warehouse space that have remaining non-cancelable lease terms  in
     excess of one year at April 30, 1997, are as follows:
             Year EndingRelated Party      Other          Total
          April 30,

          1998      $   80,000      $ 148,050     $  228,050
          1999          26,667        141,243        167,910
          2000               -        139,763        139,763
          2001               -         95,000         95,000
          2002               -              -              -
          Thereafter         -               -                -
                     $ 106,667      $ 524,056     $  630,723

     The  Company has negotiated or is in the process of negotiating  early
     termination  of its retail lease obligations.  An accrual of  $115,099
     for  the settlement of the leases, is included in accrued expenses  at
     April  30, 1997.  If the negotiations are not successful, the ultimate
     loss will probably be greater than the accrued amount.
     
     Litigation

     During  the  ordinary course of business, the Company is  involved  in
     legal  proceedings and regulatory inquiries which management does  not
     expect  to  have  a material effect on the financial position  of  the
     Company.
     
     Liquidity and Capital Resources

     The  consolidated statement of operations presented in  the  financial
     statements  reflects net losses for the years ended  April  30,  1997,
     1996  and  1995.  However, the Company has been able to  improve  it's
     financial position through stock offerings and has been able to  raise
     $3,410,500 in 1997 and $22,330,214 in 1996 through private placements.
     As  indicated  at Note 17, the Company has discontinued  all  but  one
     segment to concentrate its efforts toward the retailing, distribution,
     and publishing of CD-ROM software.
     
     


                                    F-22

                                      

                                      

15.  COMMITMENTS AND CONTINGENCIES - Continued

     Management believes that the Company's future success will be achieved
     through  sales of CD-ROM software and license fees.  The Company  owns
     DigiPhone,  a  software product which permits the  full  duplexing  of
     voice over the Internet.
     
     
     While  management believes the Company is well positioned  for  future
     profitability, there can be no assurance of future success.
     
     
     Management  is aware of the need for additional cash resources  to  be
     obtained   for  the  continuance  of  research  and  development   and
     anticipates  that  such financial resources will primarily  come  from
     private placement of Camelot's common and preferred stock.  Management
     believes  that license fees received from Third Plant's products  will
     generate  revenues  and  cash flow towards  the  end  of  the  current
     financial period.  Management believes that cash provided by financing
     activities and licensing fees as well as revenue from sale of software
     over  the  Internet together with the present level of cash  resources
     available will be sufficient for its need over the next twelve months.
     Management  also  believes that should the Company require  additional
     cash  resources  it can incur borrowing as Camelot  has  no  long-term
     debt.
     
     
16.  SALE OF SUBSIDIARIES


     On  July  6,  1994, the Company sold its 69% controlling  interest  in
     Beecher Energy, Ltd., for $184,543 resulting in a loss of $82,644.
     
     
17.  DISCONTINUED OPERATIONS


     On  January  31, 1995, the Company's video marketing and  distribution
     subsidiary Camelot Entertainment filed Chapter 7 bankruptcy  with  the
     U.S. Bankruptcy Court.  Revenues for this segment for fiscal 1995 were
     $694,666.  Loss from operations and disposals for fiscal 1996 and 1995
     were $250,925 and $406,057, respectively.
     
     
     Oil  and gas revenues for fiscal 1995 were $16,964.  Loss from oil and
     gas operations for fiscal 1995 were $3,009.
     
     
     The  results  of  operations  of  the  above  subsidiaries  have  been
     presented  in  the  financial statements as  discontinued  operations.
     Current  assets of the discontinued operations consisted primarily  of
     cash and accounts receivable.  Current liabilities of the discontinued
     operations  primarily consist of subsidiary trade payables  guaranteed
     by Camelot Corporation.
     
     
18.  INDUSTRY SEGMENT


     The Company and its subsidiaries are operating in one industry segment
     and   are  vertically  integrated  in  retailing,  distribution,   and
     publishing of CD-ROM software.
     
     
19.  SUBSEQUENT EVENTS


     In  July 1997, the Board of Directors approved a one for forty reverse
     stock split of common stock and outstanding preferred shares, Series J
     to  stockholders  of  record  on  July  15,  1997.   The  consolidated
     financial statements, including all references to the number of shares
     of  common stock and all per-share information, have been adjusted  to
     reflect the split on a retroactive basis.
     On   May  29,  1997,  the  Company  advanced 500,000 pounds (approximately
     $828,250)  to Meteor Technology plc ("Meteor") for 10% unsecured  loan
     stock.
     In  May  1997,  the Board of Directors authorized the  creation  of  a
     series of preferred stock, Series J with 60,000,000 shares authorized.
     Series  J  has a par value of $.01 per share, does not pay  dividends,
     are   entitled  to  vote  on  matters  submitted  to  a  vote  of  the
     stockholders  of the Company, and rank junior to all other  series  of
     preferred stock.
                                    F-23
19.  SUBSEQUENT EVENTS - Continued
     During  May  of 1997, Camelot Corporation completed a preferred  stock
     transaction  with Adina, Inc. an affiliated company.  As a  result  of
     this  transaction, Camelot is now a majority owner of  Meteor  through
     Camelot's  ownership of Alexander Mark Investments  (USA),  Inc.   The
     specific transfers that occurred are as follows:
     On  May  9,  1997,  Alexander Mark Investments  (USA),  Inc.  acquired
     40,727,988 ordinary shares (57% of the outstanding shares)  in  Meteor
     from  Daniel  Wettreich  in exchange for 6,787,998  restricted  common
     shares in Alexander Mark Investments (USA), Inc.
     On  May 15, 1997, Adina, Inc. accepted the subscription for 42,450,000
     restricted  common  shares  of  Adina, Inc.  by  Daniel  Wettreich  in
     exchange  for  6,029,921 restricted common shares  of  Alexander  Mark
     Investments  (USA),  Inc.("AMI").  AMI owns  57%  of  the  outstanding
     shares  of  Meteor.   Meteor  has two active  subsidiaries,  DigiPhone
     International, Ltd. and Meteor Payphones, Ltd.

     On May 20, 1997 Adina, Inc. the majority shareholder of Alexander Mark
     Investments  (USA), Inc. transferred 6,029,921 (80% of the outstanding
     shares) to Camelot Corporation as payment for subscription.
     
     On  May 20, 1997 Adina, Inc. subscribed 1,345,295 restricted Preferred
     Shares, Series J Camelot Corporation, ("Camelot") with payment by  the
     transfer  of  6,029,921  restricted common shares  of  Alexander  Mark
     Investments  (USA), Inc. to Camelot. 892,215 of the  Preferred  Shares
     were  issued  upon execution of the agreement and 453,080  are  to  be
     issued as new common shares of Camelot are issued in such a manner  so
     that  the additional Preferred Shares are issued at the same time  and
     in the same quantity as any newly issued common shares.  The Preferred
     Shares  have  one vote per share and vote with the common shares,  are
     non-convertible,  non-yielding  and  are  subordinate  to  outstanding
     preferred shares but have a liquidation preference over common shares.
     
20.  SUPPLEMENTARY OIL AND GAS INFORMATION (UNAUDITED)

     All  of  the  Company's  oil and gas properties  are  located  in  the
     continental  United States.  The following tables reflect  information
     relating to the Company's oil and gas producing activities.
     
     Results of Operations for Producing Activities

                           1997         1996          1995
     Sales of oil  and    $   -         $     -      $  16,964
     gas
     Production costs          -               -
                                                  (10,967)
     Provision     for         -               -
     depletion
     depreciation              -               -
                                                  (3,250)
                          $   -         $     -      $
                                                  2,747

     No   costs  were  incurred  in  oil  and  gas  property  acquisitions,
     exploration, development activities and exploration in the three  year
     period ended April 30, 1997.
     
     Capitalized  costs relating to oil and gas producing  activities  were
     zero for the three year period ended April 30, 1997.
     Oil  and gas reserves were zero for three year period ended April  30,
     1997.
     Proved  developed reserves were zero for the three year  period  ended
     April 30, 1997.
     
     
     
                                    F-24
                                      
                                      
20.  SUPPLEMENTARY OIL AND GAS INFORMATION (UNAUDITED) - Continued

     Standards measure of discounted future net cash flows

     The  standardized measure of discounted future net cash flows at April
     30, 1997, 1996 and 1995 relating to provided oil and gas reserves were
     zero.
     
     Future  net cash flows were computed using year-end prices and  costs,
     and  year-end statutory tax rates (adjusted for permanent differences)
     that relate to existing proved oil and gas reserves at year-end.   The
     following  are  the  principle sources of change in  the  standardized
     measure  of discounted future net cash flows for each of the years  in
     the three-year period ended April 30, 1997.
     
     
                                  1997     1996     1995

     Beginning of year           $     -  $     -        $
                                                   422,000
     Changes resulting from
     sales   of oil and gas
     produced,                                     (17,000
     net of production costs                             )
     Net  changes in prices and                          -
     production costs
     Revisions   of    previous                          -
     quantity estimates
     Accretion of discount                               -
     Net   changes  in   income                          -
     taxes
     Disposition  of  oil   and
     gas segment                       -
-  (405,00
                                                        0) End of year
     $        $                        $
                                       -
-                                  -



21.  FOURTH QUARTER ADJUSTMENTS (UNAUDITED)

     During  the  first  three quarters of 1997, the Company  reported  its
     investment in Meteor Technology plc ("Meteor") at fair value (SFAS No.
     115), therefore revenue for the license agreements with Meteor and the
     loss  on  the  market  value  of Meteor stock  was  reflected  in  the
     statement  of  operations.  During the fourth  quarter  of  1997,  the
     Company reviewed its accounting treatment of its investment in Meteor.
     In  accordance  with  Accounting Principles  Bulletin  Number  18  the
     investment in Meteor is properly accounted for using the equity method
     of  accounting.   The  aggregate effect  of  this  adjustment  was  an
     approximate $1,263,000 loss recorded on its investment in Meteor.
     The  Company  also  reviewed its inventory  and  receivable  valuation
     allowances  which  resulted in a decrease in assets  of  approximately
     $496,000 for inventory and $889,000 for receivables.
     
     
     
     
                                    F-25
<PAGE>

                   CAMELOT CORPORATION AND SUBSIDIARIES

              SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                 Years Ended April 30, 1997, 1996 and 1995

                 

                 

     Description

     Allowance deducted
     from assets to which
     it applies:

                                 Additions
      Accounts   Balance   Charged  Charged           Balance
     Receivable     at       to        to                at
          s      Beginni    Costs    Other   Deducti   End of
     Year Ended   ng of      and    Account    ons     Period
                     Period   Expense     s
                                s
      April 30,         $        $         -        $        $
        1997       11,415    8,532                  -   19,947

      April 30,    36,419   10,887         -  35,891(   11,415
        1996                                       a)

      April 30,   365,448   41,500         -  370,529    36,419
        1995                                      (a)

        Notes
     Receivable
     Year Ended

      April 30,         $        $         $        $        $
        1997            -  889,000         -        -  889,000

 April 30,         -        -         -        -
   1996                                                 -
 April 30,    75,000    7,972         -  82,972(        -
   1995                                       a)

Inventorie
     s
Year Ended

 April 30,         $        $         $        $        $
   1997      198,000  495,942         -  199,198  494,744

 April 30,            198,000         -        -  198,000
   1996            -

 April 30,                  -                           -
   1995            -                  -        -






 (a) Uncollected receivables written off, net of recoveries
                              
                              
                              F-26