We receive a lot of questions regarding the stock price.

First, it is important to understand than when someone buys a share of stock in the marketplace, through their broker or online trading firm, such as Ameritrade or Etrade, the money goes directly to the person selling the shares, not to the company (unless it is an IPO or Secondary Offering, in which case there would be a prospectus and various SEC filings). Therefore, to repeat, when you buy a share of stock, most of the time the money goes directly to the person selling the stock, not to the company.

Second, the company has no direct control over the price of the stock. When there are more buyers than sellers, the price goes up. When there are more sellers than buyers, the price goes down.

As with anything, there is always people and entities that try to shortcut the system, and with stocks the term most frequently associated with this type of activity is called a "pump and dump", where the company or some other party that owns stock releases false financial statements or other unbelievable information that drives the price of the stock way up (the "pump"), and then once it peaks in price, the stockholder dumps large amounts of stock on the market, reaping enormous profits (the "dump").

This is one of the major problems with the chat rooms. A lot of information, good and bad, is passed around by mostly anonymous contributors, most of the time with no facts other than their own respective opinions based on rumors and other unfounded suppositions. If they want the stock to go up, they love the company. If they want it to go down, or keep it down so they can buy cheaper shares, they hate the company. There are some well meaning participants in the chat rooms who do their own research and try to provide accurate and helpful insight into a particular stock. But they are few in number and sometimes difficult to separate from the others. Investing in stocks is a risky business. Things change sometimes minute to minute. Especially in these volatile times.

Of course, there are many other facets to the stock price question. At Camelot, we try to make sure that when we issue a press release, it is accurate, timely and reflects updates that are current at the time the release is issued. Things do change. Sometimes, the items in a release may have changed the same day the release came out. If that happens, we do our best to try and keep everything updated as soon as possible. Standard press releases can range anywhere from $250 to $1,000 each time they are released. The expense can add up quickly. There have been many times where we could have issued a release about funding deals and other financial transactions, but did not because we wanted to make sure they were completed or that they had a good chance of being completed. Even with that conservative approach, there are still times where something looks solid only to change over a period of time. This is especially true of acquisitions, which take a long time to negotiate and when other elements enter into the process that alone can eventually derail even a rock solid transaction. In other words, the deal is not done until the deal is done. However, stockholders and others want to be informed about what progress is being made, and as a result the company is continuously balancing the need of getting information out and making sure that transactions have a chance to be completed.

All of the above can have a direct and indirect impact on the price of the stock. Sometimes none of the above will have an effect.

Case in point, at one time we had approximately 150,000,000 shares in the float. We had positive news over a long period of time, and yet our stock was trading exactly where it is now, and now we have substantially more shares in the float. We have a good idea how and why our stock price continued to decline, but once it reached the bottom, it just continued to sit. There have been days where we have traded 1.5 billion shares, and the price just stays the same. There have been days where we have traded 20 million shares and the price has gone up or come down. There have been days when we have had good news, and the stock sits or goes down. And on no news days the stock has gone up for no apparent reason.

Everyone seems to have their own idea as to why. From what we have been able to determine, it is probably a combination of many of the items discussed above and other factors as well, including market maker pricing strategies, etc. But in the end, it may just as simple as there are more sellers than buyers, and until the buyers kick in, the downward pressure on the stock will keep it where it is. Remember, investing involves risk. Investing in penny stocks is really risky. The rewards can be great. But one can never look away from the market. Even for a moment.

The low stock price has affected us directly in that transactions now cost us a lot more stock. For example, under current market conditions, a $5,000 transaction would take anywhere from 50,000,000 to 100,000,000 shares or more to complete. Those numbers begin to add up quickly. And we have transactions that date back years that are tied to the price of the stock. Many of those who received shares, such as our management, continue to hold on to them, resulting in management having a sizeable stake in the stock. It is in evryone's interest, including mangment and the stockholders, for the stock price to increase. But as we have stated, we have no control over where the market goes. Unfortunatley, the current market dictates what we do when it comes to financial transactions, and that is bad for everyone.

As a company, we have to continue marching forward, looking for solutions and hopefully making the right decisions that will lead us to profitability. It is a long and tedious process. And when we achieve profitability, we would expect our stock price would accurately reflect our progress. But it may not. Nobody knows. I wish we had a crystal ball. It would make things a lot easier.