S-4 1 v092308_s4.htm Unassociated Document
As filed with the Securities and Exchange Commission on November ___, 2007
Registration No. 333-     


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM S-4

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
 

 
CAMINOSOFT CORP.
(Exact name of registrant as specified in its charter)
 
California
7372
95-3880130
(State or other jurisdiction
of incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)

600 HAMPSHIRE ROAD, SUITE 105
WESTLAKE VILLAGE, CALIFORNIA 91361
(805) 370-3100
(Address, including zip code, and telephone
number, including area code, of registrant’s
principal executive offices)

STEPHEN CROSSON
CHIEF FINANCIAL OFFICER
600 HAMPSHIRE ROAD, SUITE 105
WESTLAKE VILLAGE, CALIFORNIA 91361
 
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
 
Copies to:

DAVID L. FICKSMAN, ESQ.
EKONG I. UDOEKWERE, ESQ.
TROY & GOULD PROFESSIONAL CORPORATION
1801 CENTURY PARK EAST, 16TH FLOOR
LOS ANGELES, CA. 90067
(310) 789-1290
 
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this Registration Statement and upon completion of the merger described in the enclosed proxy statement/prospectus.
 
If the securities being registered on this form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the registration statement for the same offering. o
 



 
CALCULATION OF REGISTRATION FEE
 
Title of Each Class of 
Securities to be 
Registered
 
Amount to 
be 
Registered
 
Proposed 
Maximum 
Offering
Price Per Share
 
Proposed 
Aggregate
Offering Price
 
Amount of
Registration Fee
 
Common Stock
   
25,809,861
 
$
0.10 (1
)
$
2,580,986
  $ 79.24  
Common Stock Issuable
under Convertible
Preferred Stock
   
5,697,393
 
$
0.10 (2
)
$
569,739
 
$
 
17.49
 
Common Stock Issuable
under Convertible Notes
   
1,548,205
 
$
0.10 (3
)
$
154,821
  $  
4.75
 
Common Stock Issuable
under Warrants
   
5,441,803
 
$
0.10 (4
)
$
544,180
  $  
16.71
 
Aggregate
     38,497,262   $  0.10        $ 3,849,726   $  118.19  

(1) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(c) under the Securities Act of 1933, as amended (the “Securities Act”).
(2) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(g) under the Securities Act.
(3) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(g) under the Securities Act.
(4) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(g) under the Securities Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 
 



 
The information in this proxy statement -prospectus is not complete and may be changed. CaminoSoft may not sell these securities until the registration statement filed with the Securities and Exchange Commission, of which this document is a part, is declared effective. This proxy statement-prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer, solicitation or sale is not permitted or would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction.

CAMINOSOFT CORP.
600 Hampshire Road, Suite 105
Westlake Village, California 91361
(805) 370-3100

November __, 2007
 
MERGER PROPOSED – YOUR VOTE IS VERY IMPORTANT
 
The board of directors of CaminoSoft Corp. (“CaminoSoft”) has approved a merger agreement in which CaminoSoft will acquire all of the issued and outstanding capital stock of Shea Development Corp. (“Shea”) by way of CC Merger Corp., a wholly owned subsidiary of CaminoSoft, merging with and into Shea.
 
If the merger agreement is approved and the merger is subsequently completed, each outstanding share of Shea common stock will be converted into the right to receive a pro rata share of the number of shares of CaminoSoft common stock, no par value per share, equal to 95.01% of CaminoSoft common stock outstanding immediately prior to the consummation of the merger less any shares of CaminoSoft common stock issuable upon the exercise or conversion of any securities issued in connection with the merger. In addition, each issued and outstanding share of Shea’s Series A Preferred Stock, par value $0.001 per share, shall be converted into the right to receive a pro rata share of 2,800,000 shares of CaminoSoft’s Series A Preferred Stock, and each issued and outstanding share of Shea’s Series B Preferred Stock, par value $0.001 per share, shall be converted into the right to receive a pro rata share of 3,600,000 shares of CaminoSoft’s Series B Preferred Stock.
 
Upon consummation of the merger, and (i) assuming the exercise and conversion of all securities issued in connection with the merger, and (ii) after giving effect to any capital stock issued, or deemed to be issued, in connection with any equity financing undertaken by CaminoSoft or Shea pursuant to which CaminoSoft or Shea, as applicable, shall raise at least $6,000,000 in proceeds at a per share price of not less than $0.50, existing CaminoSoft shareholders shall collectively hold 4.99% of the fully diluted capital stock of CaminoSoft, and shareholders of Shea shall collectively hold 95.01% of the fully diluted capital stock of CaminoSoft.
 
Shares of CaminoSoft common stock are traded on the OTC Bulletin Board under the symbol “CMSF”.  On November __, 2007, the last practicable trading date before the printing of this proxy statement-prospectus, the closing share price of CaminoSoft common stock was $___. The merger cannot be completed unless the shareholders of CaminoSoft approve the merger agreement.
 
Based on the reasons for the merger described in the accompanying document, the independent members of CaminoSoft’s board of directors unanimously believe that the merger and related transactions to be undertaken in connection with the merger are fair to you and in your best interests. Accordingly, the independent members of CaminoSoft’s board of directors unanimously recommend that you vote “FOR” approval of the merger agreement and related proposals.



The accompanying proxy statement-prospectus gives you detailed information about CaminoSoft, Shea, the proposed merger and related matters, and other items being voted upon at the CaminoSoft special meeting of shareholders. You may obtain other information about CaminoSoft and Shea from documents filed with the Securities and Exchange Commission. We urge you to read this entire document carefully, including the considerations discussed under “RISK FACTORS,” beginning on page 12 and the appendices thereto, which include the merger agreement.
 
Your vote is very important. Whether or not you plan to attend the CaminoSoft shareholders’ meeting, please take the time to vote by completing and mailing the enclosed proxy card.
 
Sincerely,
 
Michael Skelton
Chief Executive Officer
 
 Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the merger or determined if this proxy statement-prospectus is accurate or complete.  Any representation to the contrary is a criminal offense.
 
This proxy statement-prospectus is dated November ___, 2007 and was first mailed to shareholders of CaminoSoft on or about _____, 2007.



CAMINOSOFT CORP.
 
Notice of Special Meeting of Shareholders
 
______, 2007
 
To:  The Shareholders of CaminoSoft Corp.,
 
Notice is hereby given that, under the terms of its bylaws and the call of its board of directors, the special meeting of shareholders of CaminoSoft Corp. will be held at ________, located at ___________, on _______, 2007, at ______ p.m. (local time), for the purpose of considering and voting upon the following matters:
 
1. Approval of the Merger Agreement.  To approve the Agreement and Plan of Merger dated as of September 4, 2007, attached as Appendix A to the proxy statement-prospectus (“Merger Agreement”) and the merger of CC Merger Corp., a wholly owned subsidiary of CaminoSoft Corp., with and into Shea Development Corp. (“Merger”).
 
2. Approval of Reverse Split. In connection with the Merger, to approve a 1:10 reverse split of all of the common stock of CaminoSoft Corp. issued and outstanding immediately prior to the effective time of the Merger.
 
3. Approval of Increase in Authorized Capital Stock. In connection with the Merger and the shares of common and preferred stock of CaminoSoft Corp. to be issued thereunder, to approve an amendment to the Articles of Incorporation of CaminoSoft Corp. to increase the authorized number of shares of common stock from 100,000,000 to 800,000,000, and to increase the authorized number of shares of preferred stock from 1,000,000 to 15,000,000.
 
4.  Approval of Name Change. In connection with the Merger and the subsequent operations of CaminoSoft Corp., to approve an amendment to the Articles of Incorporation of CaminoSoft Corp. to effect a name change to “Riptide Software Solutions, Inc.”
 
5. Transaction of Other Business.  To transact such other business as may properly come before the special meeting or any adjournment thereof. Management is not aware of any such other business.
 
The Merger Agreement sets forth the terms of the Merger of CC Merger Corp. with and into Shea Development Corp.  As a result of the Merger, all shareholders of Shea Development Corp. will receive a pro rata share of newly issued shares of CaminoSoft Corp. common stock in exchange for their shares of Shea Development Corp. common stock.  The Merger is more fully described in the enclosed proxy statement-prospectus and in Appendix A.
 
The board of directors has fixed the close of business on ______, 2007, as the record date for determination of shareholders entitled to notice of, and the right to vote at, the special meeting of shareholders. Because the affirmative vote of a majority of shares represented and voting at a duly held meeting at which a quorum is present is required to approve the Merger Agreement, the Merger and related proposals, it is essential that all shareholders vote.  You are urged to vote in favor of the proposal by signing and returning the enclosed proxy as promptly as possible, whether or not you plan to attend the special meeting of shareholders in person.  If you do attend the meeting you may then withdraw your proxy.  The proxy may be revoked at any time prior to its exercise.



In connection with the proposed merger, CaminoSoft Corp. shareholders will be given the opportunity to exercise dissenters’ rights in accordance with certain procedures specified in the California Corporations Code, Section 1300, 1301, 1302, 1303 and 1304, which sections are attached hereto as Appendix B and incorporated herein by reference. If shareholders follow all of the procedures required by law, a shareholder may receive cash in the amount equal to the fair market value, as determined by CaminoSoft Corp., or, if required, by a court of law, of their shares of CaminoSoft Corp. common stock as of September 4, 2007, the business day immediately preceding the announcement of the Merger. For additional details about dissenters’ rights, please refer to “PROPOSAL I - THE MERGER —Dissenters’ Rights of CaminoSoft Corp.’s Shareholders” and Appendix B in the accompanying proxy statement-prospectus.
 
By Order of the Board of Directors,
 
Michael Skelton
CaminoSoft Corp., Chief Executive Officer

______, 2007



ADDITIONAL INFORMATION
 
This proxy statement/prospectus “incorporates by reference” important financial information about CaminoSoft Corp. (“CaminoSoft”) and Shea Development Corp. (“Shea”) from documents that are not included in or delivered with this proxy statement/prospectus. For a more detailed description of the information incorporated by reference in this proxy statement/prospectus and how you may obtain it, see the section entitled “Where You Can Find More Information” on page 103.
 
You may also obtain any of the documents incorporated by reference from the appropriate company, the Securities and Exchange Commission, which we refer to as the SEC, or the SEC’s Internet web site at http://www.sec.gov. Documents incorporated by reference in this proxy statement/prospectus are available from the appropriate company without charge, excluding all exhibits unless specifically incorporated by reference in such documents. Shareholders may obtain documents incorporated by reference in this proxy statement/prospectus by requesting them in writing or by telephone from the companies at the following addresses:
 
CaminoSoft Corp.
Attn: Stephen Crosson
600 Hampshire Road, Suite 105
Westlake Village, California 91361
(805) 370-3100
E-mail: steve.crosson@caminosoft.com
Website: www.caminosoft.com

Shea Development Corp.
Attn: Francis E. Wilde
3452 Lake Lynda Drive, Suite 350
Orlando, Florida 32817
(407) 282-3545
E-mail: fwilde@bravera.com
Website: www.bravera.com

If you would like to request documents, please do so by _________, 2007, which is five business days before the special meeting, to receive them before the special meeting. If you request any information that is incorporated by reference into this proxy statement/prospectus, the appropriate company will respond to your request within one business day of receipt of your request, and send the requested documents to you by first class mail, or other equally prompt means.

i


TABLE OF CONTENTS
 
   
Page
 
ADDITIONAL INFORMATION
   
i
 
QUESTIONS AND ANSWERS ABOUT THE PROXY STATEMENT/PROSPECTUS
   
1
 
QUESTIONS AND ANSWERS ABOUT THE MERGER
   
3
 
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
   
7
 
FORWARD-LOOKING INFORMATION
   
13
 
RISK FACTORS
   
13
 
MARKET FOR COMMON EQUITY AND RELATED MATTERS
   
30
 
SELECTED HISTORICAL FINANCIAL DATA OF SHEA
   
33
 
SELECTED PRO FORMA FINANCIAL DATA
   
34
 
COMPARATIVE PER SHARE DATA
   
34
 
THE CAMINOSOFT CORP. SPECIAL MEETING
   
35
 
General
   
35
 
Record Date; Stock Entitled to Vote; Quorum
   
.35
 
Number of Votes
   
35
 
Vote Required
   
36
 
Voting of Proxies
   
36
 
Other Matters
   
37
 
Solicitation of Proxies
   
37
 
CaminoSoft Board Recommendation
   
37
 
PROPOSAL NO. I – THE MERGER
   
38
 
Background of and Reasons for the Merger
   
38
 
Material United States Federal Income Tax Consequences
   
40
 
Regulatory Approvals
   
42
 
Certain Effects of the Merger
   
42
 
Dissenters’ Rights of CaminoSoft Shareholders
   
42
 
Accounting Treatment
   
44
 
CaminoSoft's Management and Operations After the Merger
   
44
 
Interest in the Merger of Directors of CaminoSoft
   
45
 
The Merger Agreement
   
45
 
DESCRIPTION OF CAMINOSOFT
   
52
 
DESCRIPTION OF SHEA
   
76
 
PROPOSAL NO. II – REVERSE SPLIT OF CAMINOSOFT COMMON STOCK
   
96
 
Overview
   
96
 
Reasons for the Reverse Stock Split
   
96
 
Effects of the Reverse Stock Split
   
96
 
Effective Date
   
98
 
Rounding of Fractional Shares
   
98
 
Exchange of Stock Certificates Date
   
98
 
Accounting Consequences
   
98
 
No Dissenters' Rights
   
99
 
Material Federal U.S. Income Tax Consequences of the Reverse Stock Split 
    99  
PROPOSAL NO. III – INCREASES IN AUTHORIZED CAPITAL STOCK
   
100
 
Overview
   
100
 
Reasons for the Amendment
   
100
 
No Rights of Appraisal
   
102
 
Federal Income Tax Consequences
   
102
 
PROPOSAL NO. IV – NAME CHANGE
   
102
 
Overview
   
102
 
Reasons for the Amendment
   
102
 
 
 
ii

 
   
103
 
EXPERTS
   
103
 
WHERE YOU CAN FIND MORE INFORMATION
   
103
 
EXHIBITS     110  
UNAUDITED PRO FORMA FINANCIAL INFORMATION
   
113
 
   
118
 
SHEA DEVELOPMENT CORP. AUDITED FINANCIAL STATEMENTS.
   
F-1
 

LIST OF APPENDICES

ANNEX A - AGREEMENT AND PLAN OF MERGER
ANNEX B - CALIFORNIA CORPORATIONS CODE (SECTIONS 1300-1304)
ANNEX C - TEXT OF AMENDMENT TO CAMINOSOFT CORP. ARTICLES OF INCORPORATION

iii


QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT- PROSPECTUS MATERIALS
 
Q:           Why have I received these materials?
 
A:            This proxy statement-prospectus and the enclosed proxy card were sent to you because the Board of Directors of CaminoSoft Corp. (“CaminoSoft”) is soliciting your proxy to vote at its special meeting of shareholders to be held on _____, 2007. You are cordially invited to attend the special meeting and are requested to vote on the proposals described in this proxy statement-prospectus. We intend to mail this proxy statement-prospectus and accompanying proxy card on or about ______, 2007 to all CaminoSoft shareholders entitled to vote at the special meeting.
 
Q:           Who is entitled to vote at the Special Meetings?
 
A:            Shareholders of record as of the close of business on ____, 2007 will be entitled to vote at the special meeting of CaminoSoft shareholders.
 
Q:           When and where will the special meetings take place?
 
A:           The special meeting of CaminoSoft shareholders will be held at ________, located at ___________, on _______, 2007, at ______ p.m. (local time).
 
Q:           What am I voting on?
 
A:            You are being asked to vote to:
 
 
·
approve the Merger and the Merger Agreement;
 
 
·
approve, in connection with the Merger, a 1:10 reverse split of all of the common stock of CaminoSoft issued and outstanding immediately prior to the effective time of the Merger;
 
 
·
approve, in connection with the Merger and the shares of common and preferred stock of CaminoSoft to be issued thereunder, an amendment to the Articles of Incorporation of CaminoSoft to increase the authorized number of shares of common stock from 100,000,000 to 800,000,000, and to increase the authorized number of shares of preferred stock from 1,000,000 to 15,000,000; and
 
 
·
in connection with the Merger and the subsequent operations of CaminoSoft., to approve an amendment to the Articles of Incorporation of CaminoSoft to effect a name change to “Riptide Software Solutions, Inc.”
 
Q:           How do I vote?
 
A:           You may vote “FOR” or “AGAINST” or abstain from voting on the proposals to be voted on.
 
If you are a shareholder of record, you may vote in person at the special meeting, or you may vote by proxy using the enclosed proxy card. Whether or not you plan to attend the special meeting, you are urged to vote by proxy to ensure your vote is counted. You may still attend the special meeting and vote in person if you have already voted by proxy. To vote in person, come to the special meeting and you will be given a ballot when you arrive. To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the special meeting, we will vote your shares as you direct.
 
1

 
If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from CaminoSoft. In order to vote, complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker or bank. To vote in person at the special meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.
 
Q:           How many votes do I have?
 
A:            Each share of common stock of CaminoSoft is entitled to one vote with respect to each matter to be voted on at the special meetings. 
 
Q:           What constitutes a quorum for purposes of the special meetings?
 
A:            A quorum of shareholders is necessary to hold a valid meeting. The presence at the special meeting in person or by proxy of the holders of a majority of the voting power of all outstanding shares of common stock entitled to vote shall constitute a quorum for the transaction of business. Proxies marked as abstaining (including proxies containing broker non-votes) on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast on such matters. If there is no quorum, a majority of the votes present at the meeting may adjourn the meeting to another date.
 
Q:           Who is paying for this proxy solicitation?
 
A:            CaminoSoft is paying for this proxy solicitation.

2


QUESTIONS AND ANSWERS ABOUT THE MERGER
 
This question and answer summary highlights selected information contained in other sections of this proxy statement-prospectus.  To understand the merger more fully, you should carefully read this entire proxy statement-prospectus, including all appendices and financial statements.
 
Q:           What am I being asked to vote on?
 
A:            You are being asked to vote on a merger agreement, which if approved, will result in CC Merger Corp., a subsidiary of CaminoSoft Corp. (“CaminoSoft”), being merged with and into Shea Development Corp. (“Shea”).
 
Q:           Why is CC Merger Corp. merging with and into Shea?
 
A:            CaminoSoft’s Board of Directors has determined that CaminoSoft is too small to successfully operate as a public company. As a consequence, CaminoSoft has in the past had difficulty accessing capital markets in order to finance its operations and growth. Given Shea’s relative size, CaminoSoft’s Board of Directors anticipate that the merger of CC Merger Corp., a wholly owned subsidiary of CaminoSoft with and into Shea, with the result that following the Merger, and assuming the exercise and conversion of all securities issued in connection with the Merger, Shea shareholders will control 95.01% of the fully diluted capital stock of CaminoSoft post- Merger. CaminoSoft’s board of directors anticipate that the Merger will alleviate some of the burdens that the company has experienced in operating as a public company, including easier access to capital markets. A committee of CaminoSoft’s Board of Directors comprising independent directors Lee Pryor and Robert Degan approved the merger.
 
Q:           If the merger is approved what is the Merger consideration to Shea shareholders?
 
A:            If they do not exercise dissenters’ rights, shareholders of Shea will receive a pro rata portion of newly issued shares of CaminoSoft common stock and preferred stock in exchange for their respective shares of Shea capital stock.  In addition, holders of options and warrants to acquire Shea common stock will have such options and warrants assumed by CaminoSoft, and in exchange CaminoSoft shall issue to such holders options and warrants to acquire CaminoSoft common stock. Assuming the exercise and conversion of all CaminoSoft preferred stock, warrants and options issued in connection with the Merger, Shea shareholders will control 95.01% of the fully diluted capital stock of CaminoSoft post- Merger, and existing CaminoSoft shareholders will collectively hold 4.99% of the fully diluted capital stock of CaminoSoft. For a discussion of how Shea’s existing options and warrants will be affected by the merger, see the discussions below under “How will Shea Options be affected by the Merger” and “How will Shea Warrants be affected by the Merger.”
 
Q:           What will happen if CaminoSoft shareholders approve the Merger and related proposals?
 
A:            If CaminoSoft and Shea shareholders approve the Merger and the related proposals, CC Merger Corp., a wholly owned subsidiary of CaminoSoft formed solely for purposes of the merger, will merge with and into Shea, and CC Merger Corp. will cease to exist.  The outstanding and issued shares of common stock and preferred stock of Shea shall be converted into shares of CaminoSoft common stock and preferred stock, and the outstanding options and warrants of Shea shall be assumed by CaminoSoft in exchange for options and warrants to acquire shares of CaminoSoft common stock with the result that, following the Merger, and assuming the exercise and conversion of all CaminoSoft preferred stock, warrants and options issued in connection with the Merger, Shea shareholders will control 95.01% of the fully diluted capital stock of CaminoSoft post-merger, and existing CaminoSoft shareholders will collectively hold 4.99% of the fully diluted capital stock of CaminoSoft.

3


Q:           How will Shea Options be affected by the Merger?
 
A:            Each outstanding option to purchase Shea common stock granted under Shea’s 2007 Stock Option and Performance Awards Plan will be assumed by CaminoSoft. Each such assumed Shea option shall entitle the holder thereof to receive options to purchase the number of shares of CaminoSoft common stock obtained by multiplying (x) the number of shares of Shea common stock issuable under such assumed option by (y) the exchange ratio. The exercise for the new CaminoSoft options will be equal to the exercise price of the assumed Shea option divided by the exchange ratio.
 
 Q:           How will Shea Warrants be affected by the Merger?
 
A:            Each outstanding warrant to purchase Shea common stock, will be assumed by CaminoSoft subject to adjustment by the Exchange Ratio.
 
Q:           What is the Exchange Ratio?
 
A:            Pursuant to the merger agreement, each share of Shea common stock issued and outstanding (or issuable under convertible preferred stock, warrants and options) shall be exchanged for 0.30964086 share of CaminoSoft common stock. For additional details, please refer to “PROPOSAL I - THE MERGER—The Merger Agreement - The Exchange Ratio.”
 
Q:           Will existing CaminoSoft shareholders be issued any securities in connection with the Merger?
 
A:            Yes. Existing holders of CaminoSoft common stock will be entitled to receive in respect of each share of CaminoSoft common stock, five-year warrants to purchase, following the consummation of the Merger, 0.333 shares of CaminoSoft common stock at an exercise price of 110% per share of the shares of Shea capital stock issued under a private placement of Shea most recently completed prior to the closing of the Merger.
 
Q:           What will be the name and trading symbol of the company after the Merger?
 
A:            In connection with the merger, CaminoSoft will change its name to “Riptide Software Solutions, Inc.” and will continue to have its common stock traded on the OTC Bulletin Board under the trading symbol [RIPTIDE]. In addition, Shea common stock will be delisted from the OTC Bulletin Board and there will be no further market for Shea common stock.
 
Q:           Why is CaminoSoft effecting a 1:10 reverse stock split of its issued and outstanding common stock?
 
A:            The reverse stock split is a closing condition of the Merger. By reducing the number of outstanding shares of CaminoSoft common stock via a reverse stock split prior to effecting the merger, the parties will have a more manageable and less unwieldy number of shares of issued and outstanding common stock.

4


Q:           Why is CaminoSoft amending its Articles of Incorporation to increase its authorized capital stock and effect a name change?
 
A:            In addition to ensuring CaminoSoft has sufficient shares of common and preferred stock in connection with consummating the Merger, the additional authorized capital stock will be used for future acquisitions and equity funding. The change of name will take advantage of the “Riptide” branding and name recognition as it relates to the business intelligence software and solution services market. The name change is a closing condition to the Merger. In the event the Merger Agreement is terminated or the Merger is not otherwise consummated, CaminoSoft’s Board does not intend to proceed with the name change.
 
Q:           Do CaminoSoft shareholders have dissenters’ rights in the merger?
 
A:            Yes.  Holders of CaminoSoft common stock who do not vote in favor of the merger and who have fully complied with all applicable provisions of California Corporations Code, Section 1300, 1301, 1302, 1303 and 1304, which sections are attached hereto as Appendix B and incorporated herein by reference, may receive cash in the amount equal to the fair market value, as determined by CaminoSoft, or, if required, by a court of law, of their shares of CaminoSoft common stock as of September 4, 2007, the business day immediately preceding the announcement of the merger. To the extent shareholders of Camino and Shea exercise dissenters’ rights in connection with the merger, the exchange ratio as calculated under the Merger Agreement will be appropriately adjusted. For additional details about dissenters’ rights, please refer to “PROPOSAL I - THE MERGER—Dissenters’ Rights of CaminoSoft’s Shareholders” and Appendix B in the accompanying proxy statement-prospectus.
 
Q:           Should I send in my stock certificates now?
 
A:            No.  You should not send your CaminoSoft stock certificates in the envelope provided for use in returning your proxy.  You will be sent written instructions for exchanging your stock certificates pursuant to the reverse split only if the Merger is approved and completed.
 
Q:           What happens if I do not return my proxy card?
 
A:            If you fail to execute and return your proxy card, it will have the same effect as voting against the merger, except for purposes of asserting dissenters rights, discussed above.
 
Q:           What risks should I consider before I vote on the Merger?
 
A:            The risks that you should consider in deciding how to vote on the Merger are explained in the section of this proxy statement-prospectus entitled “RISK FACTORS.”  You are urged to read this section, as well as the rest of this proxy statement-prospectus, before deciding how to vote.
 
Q:           How do I vote?
 
A:            Just indicate on your proxy card how you want to vote.  Sign and mail your proxy card in the enclosed envelope as soon as possible so that your shares will be represented at the CaminoSoft special shareholders’ meeting. Alternatively, you may attend the meeting and vote in person.
 
If you sign and send in your proxy card and do not indicate how you want to vote, your proxy will be voted in favor of the merger.  If you do not sign and send in your proxy card or you abstain from voting, it will have the effect of voting against the merger.
 
You may attend the meeting and vote your shares in person, rather than voting by proxy.  In addition, you may withdraw your proxy up to and including the day of the applicable shareholders’ meeting by following the directions herein, and either change your vote or attend the meeting and vote in person.

5


Q:           If my shares are held in “street name” by my broker, will my broker vote them for me?
 
A:            No.  Your broker can only vote your shares of CaminoSoft common stock if you provide instructions on how to vote them.  You should, therefore, instruct your broker on how to vote your shares by following the directions your broker provides when forwarding these proxy materials to you.  If you do not provide voting instructions to your broker, your broker will not be able to vote your shares.  This will have the effect of not voting in favor of the merger.
 
Q:           How do CaminoSoft’s directors plan to vote?
 
A:            All of CaminoSoft’s directors have committed to vote their shares in favor of the merger.  CaminoSoft’s directors collectively hold, as of the record date for the special shareholders’ meeting, 277,555 shares, or approximately 2%, of CaminoSoft’s common stock eligible to vote.  The affirmative vote of a majority of CaminoSoft’s issued and outstanding shares of common stock eligible to vote at a duly held meeting at which a quorum is present is needed to approve the Merger.
 
Q:           Who can help answer my other questions?
 
A:            If you want to ask any additional questions about the merger, you should contact:
 
CaminoSoft Corp.
Attn: Stephen Crosson
600 Hampshire Road, Suite 105
Westlake Village, California 91361
(805) 370-3100
E-mail: steve.crosson@caminosoft.com
 
Q: What are the material United States federal income tax consequences of the merger to me?
 
A: It is expected that the merger will constitute a “reorganization” for United States federal income tax purposes within the meaning of Section 368(a) of the Internal Revenue Code. Thus, CaminoSoft shareholders who vote to approve the merger and whose shares of CaminoSoft common stock are thus subject to the proposed reverse split will not recognize gain or loss for U.S. federal income tax purposes in the merger. If a CaminoSoft shareholder receives cash pursuant to the exercise of dissenters’ rights, that shareholder generally will recognize gain or loss measured by the difference between the cash received and the adjusted tax basis in the shareholder’s CaminoSoft common stock.  This gain will be long-term capital gain or loss if the shareholder’s holding period in the CaminoSoft common stock is greater than one year.  
 
Q: When do you expect the Merger to be completed?
 
A: We expect the Merger to be completed by _________. We are working to complete the Merger as quickly as possible but we cannot predict the exact timing because the Merger is subject to a number of closing conditions.  

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SUMMARY
 
This summary highlights selected information from this document and may not contain all information that is important to you. To understand the Merger more fully, you should read carefully this entire document, including its annexes and exhibits. The Merger Agreement is attached as Appendix A to this proxy statement/prospectus. We encourage you to read the Merger Agreement as it, and not this description, is the legal document that governs the Merger.  You should also refer to the sections entitled “DESCRIPTION OF CAMINOSOFT CORP.” and “DESCRIPTION OF SHEA DEVELOPMENT CORP.”
 
General
 
This proxy statement-prospectus relates to the proposed Merger of CC Merger Corp., a subsidiary of CaminoSoft, with and into Shea. CaminoSoft believes that the Merger will create opportunities for business synergies with respect to running a public company as well as provide the newly merged subsidiary with easier access to capital markets to finance operations and growth.
 
Parties to the Merger (pages 53 and 77)
 
CaminoSoft Corp.
600 Hampshire Road, Suite 105
Westlake Village, California 91361
(805) 370-3100
 
CaminoSoft, a California corporation, develops and manufactures software solutions that store, manage and safeguard large quantities of data created in a business and application settings. CaminoSoft’s software for Microsoft Windows 2000 and 2003 and Novell NetWare environments enables organizations to maximize storage resources, reduce backup and recovery time and control file retention and is available worldwide through commercial distributors, value-added resellers, systems integrators and Original Equipment Manufacturers (“O.E.M.”) partners. CC Merger Corp., a Nevada corporation, is a wholly owned subsidiary of CaminoSoft formed solely for purposes of the merger with Shea.
 
Please read the section entitled “DESCRIPTION OF CAMINOSOFT CORP.” for additional information about CaminoSoft and CC Merger Corp.
 
Shea Development Corp.
3452 Lake Lynda Drive, Suite 350
Orlando, Florida 32817
(407) 282-3545
 
Shea develops business process automation (BPA) and business process management (BPM) software to integrate, assemble and optimize available IT assets to drive business process productivity, reliability and security. Shea is in the process of developing an innovative, enterprise class business integration platform that incorporates proven integration technologies with next generation capabilities into a real-time, on-demand solution that delivers a unique combination of efficiency, agility and control. Shea is an emerging leader in this industry and has a commitment to deliver tangible business value to its customers. Shea serves customers in the commercial and utility markets through its subsidiaries Bravera, Inc., Riptide Software, Inc. and its MeterMesh products business with offices in Reston, Virginia, Orlando, Florida and Ft. Worth, Texas.

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Please read the section entitled “DESCRIPTION OF SHEA DEVELOPMENT CORP.” for additional information.
 
Special Shareholders’ Meeting (Page 36)
 
CaminoSoft will hold a special shareholders’ meeting at _______, located at ________, on ______, at _____ a.m. (local time).  At the special shareholders’ meeting you will be asked to consider and vote on the approval of the merger, the merger agreement, a 1:10 reverse split of all issued and outstanding CaminoSoft common stock and amendments to our Articles of Incorporation relating to a name change and an increase in the number of authorized shares of CaminoSoft capital stock, and any other matters that may properly come before the meeting.  You may vote at the CaminoSoft special shareholders’ meeting if you owned shares of CaminoSoft common stock at the close of business on the record date, which is ____, 2007.  On that date, CaminoSoft had 14,258,756 shares of common stock issued and outstanding and entitled to be voted.  Approval of the merger agreement and the Merger requires the affirmative vote of a majority of the shares of CaminoSoft common stock outstanding on the record date. Please read the section entitled “THE CAMINOSOFT CORP. MEETING” for additional information.
 
The Merger (Page 39)
 
The merger will result in CC Merger Corp., a wholly owned subsidiary of CaminoSoft, being merged out of existence and into Shea.  The Merger will not occur without the approval of the shareholders of CaminoSoft.  There are also other customary closing conditions that must be met in order for the merger to be completed.  Please read the sections entitled “PROPOSAL I -THE MERGER - Structure of the Merger” and “Certain Effects of the Merger” for additional information.
 
The Merger Agreement; Consideration to be Paid to Shea Shareholders (Page 46)
 
The merger agreement is the legal document that contains the Merger’s terms and governs CaminoSoft’s, CC Merger Corp.’s and Shea’s merger process, including the issuance of CaminoSoft capital stock and other securities to Shea’s shareholders in the Merger.  Please read the entire merger agreement, which is attached to this proxy statement-prospectus as Appendix A.  Also, please read the section entitled “PROPOSAL I -THE MERGER - The Merger Agreement” for additional information.
 
Shareholders of Shea will receive a pro rata portion of newly issued shares of CaminoSoft common stock and preferred stock in exchange for their respective shares of Shea capital stock.  In addition, holders of options and warrants to acquire Shea common stock will have such options and warrants assumed by CaminoSoft, and in exchange CaminoSoft shall issue to such holders options and warrants to acquire CaminoSoft common stock. Assuming the exercise and conversion of all CaminoSoft preferred stock, warrants and options issued in connection with the Merger, Shea shareholders will control 95.01% of the fully diluted capital stock of CaminoSoft post- Merger, and existing CaminoSoft shareholders will collectively hold 4.99% of the fully diluted capital stock of CaminoSoft.
 
The Exchange Ratio (page 47)
 
Pursuant to the merger agreement, each share of Shea common stock issued and outstanding (or issuable under convertible preferred stock, warrants and options) shall be exchanged for 0.30964086 share of CaminoSoft common stock. The exchange ratio of 0.30964086 is calculated in the Merger Agreement by dividing (x) the number of shares of CaminoSoft common stock issuable pursuant to the Merger by (y) the sum of the number shares of the Shea capital stock issued and outstanding immediately prior to the Merger plus the number of shares of Shea common stock issuable under convertible preferred stock, warrants and options issued and outstanding immediately prior to the Merger.

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Regulatory Approvals (Page 43)
 
There are no regulatory approvals required in connection with consummating the Merger.
 
Votes Required; Securities Held by Insiders (Page 37)
 
The affirmative vote of a majority of shares represented and voting at a duly held meeting at which a quorum is present is required to approve the Merger Agreement, the Merger and related proposals. Your failure to vote in person or by proxy, or your abstention from voting entirely, will have the same effect as voting against the Merger. Directors and executive officers of CaminoSoft own approximately 277,555 of CaminoSoft’s outstanding shares of common stock, representing an aggregate of 2% of the issued and outstanding shares of common stock.
 
Recommendation of CaminoSoft’s Board of Directors (Page 38)
 
On September 1, 2007, an independent committee of CaminoSoft’s board of directors unanimously approved the merger agreement and the merger of CC Merger Corp. with and into Shea. Moreover, they unanimously believe that the merger’s terms are fair to you and in your best interests.  Accordingly, they unanimously recommend a vote “FOR” the proposal to approve the merger agreement and the merger. In addition, the independent board of directors also recommends a vote “FOR” the proposals to approve the amendments to CaminoSoft’s Articles of Incorporation and effect the 1:10 reverse split of outstanding CaminoSoft common stock. The conclusions of CaminoSoft’s independent board of directors regarding the merger are based upon a number of factors.  Please read the section entitled “PROPOSAL I -THE MERGER - Reasons for the Merger” for additional information.
 
Conditions to Closing the Merger (Page 51)
 
In addition to shareholder approval, CaminoSoft’s and Shea’s obligations to close the Merger depend on other conditions being met prior to the completion of the Merger.  Please read the section entitled “PROPOSAL I -THE MERGER - The Merger Agreement - Conditions to the Parties’ Obligations” for additional information.
 
Closing of the Merger (Page 47)
 
If shareholder approval is received as planned, and if the conditions to the Merger have either been met or waived, CaminoSoft and Shea anticipate that the Merger will close on or about ______, 2007.  However, CaminoSoft cannot assure you whether or when the Merger will actually close.  Please read the section entitled “PROPOSAL I -THE MERGER - The Merger Agreement - The Closing” for additional information.
 
Termination of the Merger (Page 52)
 
CaminoSoft and Shea can mutually agree to terminate the Merger Agreement.  Either CaminoSoft or Shea can terminate the Merger Agreement in the event of a material breach or the occurrence of certain other events. Please read the section entitled “PROPOSAL I -THE MERGER - The Merger Agreement - Termination” for additional information.

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Stock Options and Warrants (Page 47)
 
Each outstanding option to purchase Shea common stock granted under Shea’s 2007 Stock Option and Performance Awards Plan will be assumed by CaminoSoft. Each such assumed Shea option shall be entitled to receive options to purchase the number of shares of CaminoSoft common stock obtained by multiplying (x) the number of shares of Shea common stock issuable under such assumed option by (y) an exchange ratio of 0.30964086, representing the number of shares of CaminoSoft common stock issuable, pursuant to the Merger, in exchange for each share of Shea common stock. The exercise for the new CaminoSoft options will be equal to the exercise price of such cancelled Shea option divided by the exchange ratio.
 
Each outstanding warrant to purchase Shea common stock, will be assumed by CaminoSoft subject to adjustment by the exchange ratio.
 
Existing holders of CaminoSoft common stock will be entitled to receive in respect of each share of CaminoSoft common stock, five-year warrants to purchase, following the consummation of the Merger, 0.333 shares of CaminoSoft common stock at an exercise price of 110% per share of the shares of Shea capital stock issued under a private placement of Shea most recently completed prior to the closing of the Merger. For further information, see the sections entitled “PROPOSAL I -THE MERGER - The Merger Agreement - Treatment of Stock Options and Warrants.”
 
Risk Factors (Page 14)
 
In evaluating the Merger Agreement, you should read this proxy statement/prospectus carefully and especially consider the factors discussed in the section entitled “Risk Factors.”
 
Covenants; Non-Solicitation (Page 49)
 
CaminoSoft, Shea and CC Merger Corp. have agreed to non-solicitation prohibitions that restrict each party from soliciting, negotiating and discussing acquisition, merger or other business combination proposals with any other third party. For further information regarding these limitations, see the section entitled “PROPOSAL I -THE MERGER - The Merger Agreement – Covenants.”
 
Federal Income Tax Consequences (Page 41)
 
It is expected that the merger will constitute a “reorganization” for United States federal income tax purposes within the meaning of Section 368(a) of the Internal Revenue Code. Thus, CaminoSoft shareholders who vote to approve the merger and whose shares of CaminoSoft common stock are thus subject to the proposed reverse split will not recognize gain or loss for U.S. federal income tax purposes in the merger. If a CaminoSoft shareholder receives cash pursuant to the exercise of dissenters’ rights, that shareholder generally will recognize gain or loss measured by the difference between the cash received and the adjusted tax basis in the shareholder’s CaminoSoft common stock.  This gain will be long-term capital gain or loss if the shareholder’s holding period in the CaminoSoft common stock is greater than one year.
 
For a more complete discussion of the federal income tax consequences of the merger, you should carefully read the discussion in the section entitled “PROPOSAL I -THE MERGER - Material United States Federal Income Tax Consequences” of this proxy statement-prospectus.  Further, you are encouraged to consult your tax advisor because tax matters can be complicated, and the tax consequences of the merger to you will depend upon your own situation.  You should also consult your tax advisor concerning all state, local and foreign tax consequences of the Merger.

10


Accounting Treatment (Page 45)
 
In accordance with United States generally accepted accounting principles, Shea will be deemed to have acquired CaminoSoft and will account for the Merger using the purchase method of accounting for business combinations. Shea will allocate the purchase price to the net tangible and intangible assets acquired based on their respective fair values at the date of the completion of the Merger. Any excess of the purchase price over those fair values will be recorded as goodwill.

CaminoSoft’s Management and Operations After the Merger (Page 45)
 
Pursuant to employment agreements yet to be negotiated it is contemplated that the management and operations of CaminoSoft will remain unchanged initially. During the merger closing process it will be determined which employees will be offered continued employment and which if any employees will be terminated. As with any combination of products and services the best of the CaminoSoft offerings will be integrated where possible with the Shea offerings, while the overall CaminoSoft product and service strategy will be developed and implemented as part of the global Shea business plan.
 
Interests in the Merger of Directors of CaminoSoft (Page 46)
 
Russell Cleveland and Robert Pearson, two directors on CaminoSoft’s board of directors, are affiliated with the following CaminoSoft’s shareholders: Renaissance Capital Growth & Income Fund III, Inc; Renaissance US Growth & Income Trust PLC; and BFSUS Special Opportunities Trust PLC (collectively, the “Renaissance Funds”).
 
Messrs. Cleveland and Pearson are executive officers of Renaissance Capital Group, Inc. (“RCG”), which is the investment advisor to the Renaissance Funds. RCG, through certain of its affiliated funds, also owns shares in Shea. A committee comprising independent directors Lee Pryor and Robert Degan, neither of whom is affiliated with RCG or the Renaissance Funds, approved the merger and Merger Agreement.
 
Dissenters’ Rights (Page 43)
 
In order to perfect dissenters’ rights, a shareholder of CaminoSoft common stock must do the following:
 
·                  make a timely written demand upon CaminoSoft for purchase in cash of his or her shares at their fair market value as of _____, 2007, which demand includes:
 
·                  the number and class of the shares held of record by him or her that he or she demand upon CaminoSoft, and
 
·                  what he or she claims to be the fair market value of his or her shares as of September 4, 2007, the business day immediately preceding the date on which the merger is announced;
 
·                  have his or her demand received by CaminoSoft on or before the date of the CaminoSoft meeting of shareholders;
 
·                  not vote in favor of the principal terms of the Merger Agreement and related proposals;
 
·                  submit certificates representing his or her shares for endorsement in accordance with Section 1302 of the California Corporations Code; and

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·                  comply with such other procedures as are required by the California Corporations Code.
 
If dissenters’ rights are properly perfected, such dissenter has the right to cash in the amount equal to the fair market value, as determined by CaminoSoft, or, if required, by a court of law, of their shares of CaminoSoft common stock as of September 4, 2007, the business day immediately preceding the announcement of the merger.  To the extent shareholders of CaminoSoft or Shea exercise dissenters’ rights in connection with the merger, the exchange ratio as calculated in the Merger Agreement will be appropriately adjusted. Please read the section entitled “PROPOSAL I - THE MERGER - Dissenters’ Rights of CaminoSoft’s Shareholders” and Appendix B for additional information.

    
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FORWARD-LOOKING INFORMATION
 
We caution you that this proxy statement/prospectus contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 regarding, among other things, the proposed Merger of CC Merger Corp. with and into Shea and the anticipated consequences and benefits of such transaction, and other financial, business and operational items relating to CaminoSoft and Shea. The companies claim all safe harbor and other protections provided to them by law for all of their forward-looking statements. Forward-looking statements involve known and unknown risks, assumptions, uncertainties and other factors. Statements made in the future tense, and statements using words such as “may,” “can,” “will,” “could,” “should,” “predict,” “aim’” “potential,” “continue,” “opportunity,” “intend,” “goal,” “estimate,” “expect,” “expectations,” “project,” “projections,” “plans,” “anticipates,” “believe,” “think,” “confident” “scheduled” or similar expressions are intended to identify forward-looking statements. Forward-looking statements are not a guarantee of performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and are beyond the control of CaminoSoft or Shea. These risks and uncertainties could cause actual results to differ materially from those expressed in or implied by the forward-looking statements, and therefore should be carefully considered. We caution you not to place undo reliance on the forward-looking statements which speak only as of the date of this proxy statement-prospectus or the dates of the documents incorporated by reference.
 
RISK FACTORS
 
In addition to the matters addressed under “Forward-Looking Information,” CaminoSoft stockholders should carefully consider the following risks before deciding whether to vote for approval and adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement. CaminoSoft stockholders should also consider the other information in this proxy statement/prospectus and the other documents incorporated by reference into this proxy statement/prospectus.
 
RISK FACTORS RELATING TO THE MERGER
 
The consummation of the Merger is conditioned upon all required consents and approvals being obtained in connection with the transactions contemplated in the Merger Agreement.
 
As a closing condition to the Merger Agreement, CaminoSoft and Shea are required to obtain all necessary consents in connection with consummating the Merger. There is no guarantee that we will obtain all necessary consents and approvals, including consents and approvals of any governmental agencies or authorities. In addition, CaminoSoft and Shea may be required to comply with material restrictions or conditions in order to obtain any such regulatory approvals to complete the merger and any delays in obtaining regulatory approvals may delay and possibly prevent the merger.
 
Each of CaminoSoft and Shea is subject to certain restrictions on the conduct of its business under the terms of the Merger Agreement.
 
Under the terms of the Merger Agreement, each of CaminoSoft and Shea has agreed to certain restrictions on the operations of their respective businesses prior to the consummation of the merger that are customary for transactions similar to the Merger. Each has agreed that it will limit the conduct of its business to those actions undertaken in the ordinary course of business. For further information, see the section entitled “PROPOSAL I - THE MERGER – Covenants Relating to Conduct of Business.” Because of these restrictions, each of CaminoSoft and Shea may be prevented from undertaking certain actions with respect to the conduct of its respective business prior to the consummation of the merger that it might otherwise have taken if not for the Merger Agreement.

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The anticipated benefits of the acquisition may not be realized.
 
CaminoSoft and Shea entered into the Merger Agreement with the expectation that the merger will result in various benefits including, among other things, benefits relating to increased business synergies, higher revenues and profits as well as easier access to capital markets, and operating a more profitable public company. The Merger will present challenges to management, including the integration of the operations, properties and personnel of CaminoSoft and Shea. Achieving the anticipated benefits of the merger is subject to a number of uncertainties, including, but not limited to, whether CaminoSoft and Shea can integrate their respective operations in an efficient and effective manner, the reaction of existing or potential competitors to the transaction, and general competitive factors in the marketplace. Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materially impact CaminoSoft and Shea’s respective business, financial condition and operating results.
 
CaminoSoft may have difficulty integrating its and Shea’s businesses and may incur substantial costs in connection with the integration.
 
Achieving the anticipated benefits of the Merger will depend on the successful integration of CaminoSoft and Shea’s services, operations, personnel, technology and facilities in a timely and efficient manner. Although neither CaminoSoft nor Shea anticipates material difficulties in connection with such integration, the possibility exists that such difficulties could be experienced in connection with the merger. The time and expense associated with converting the businesses of CaminoSoft and Shea to a common platform may exceed the respective parties’ expectations and limit or delay the intended benefits of the transaction. To the extent any of these events occurs, the benefits of the transaction may be reduced.
 
CaminoSoft and Shea may have difficulty integrating their respective systems of internal control over financial reporting.
 
The failure to integrate CaminoSoft and Shea’s respective systems of internal control over financial reporting following the merger could affect adversely their ability to exercise effective internal control over financial reporting of the new combined entity. A failure to exercise effective internal control over financial reporting could result in a material misstatement in CaminoSoft’s annual or interim consolidated financial statements.
 
CaminoSoft depends on key personnel, and the loss of any of these key personnel because of uncertainty regarding the merger, either before or after the merger, could hurt the businesses of CaminoSoft after the merger.
 
CaminoSoft depends on the services of their key personnel. Current and prospective employees of CaminoSoft may, either before or after the Merger, experience uncertainty about their future roles with CaminoSoft after the Merger, which may affect the performance of such personnel adversely and the ability of each company to retain and attract key personnel. The loss of the services of one or more of these key employees or the inability of CaminoSoft to attract, train, and retain qualified employees could result in the loss of customers or otherwise inhibit the ability of CaminoSoft to integrate and grow the combined businesses effectively after the Merger.
 
If the conditions to the merger are not satisfied or waived, the Merger may not occur.
 
Specified conditions set forth in the Merger Agreement must be satisfied or waived to complete the Merger. If the conditions are not satisfied or waived, to the extent waiver is permitted by applicable law, the merger will not occur or will be delayed, and each of CaminoSoft and Shea may lose some or all of the intended benefits of the Merger.

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The Merger Agreement limits the parties’ ability to pursue an alternative transaction proposal to the merger.
 
The Merger Agreement prohibits each of CaminoSoft, Shea and CC Merger Corp. from soliciting, initiating, encouraging or facilitating certain alternative transaction proposals with any third party until the earlier of the termination of the Merger Agreement or the closing of the Merger. These provisions limit CaminoSoft and Shea’s ability to pursue offers from third parties that could result in greater value to their respective shareholders relative to the terms and conditions of the Merger. For further information regarding these limitations, see the section entitled “PROPOSAL I -THE MERGER - The Merger Agreement - Covenants.”
 
RISK FACTORS RELATING TO THE CAMINOSOFT COMMON STOCK
 
The so-called “penny stock rule” could make it cumbersome for brokers and dealers to trade in our common stock, making the market for our common stock less liquid which could cause the price of our stock to decline.
 
Trading of our common stock on the OTCBB may be subject to certain provisions of the Securities Exchange Act of 1934, as amended commonly referred to as the “penny stock” rule. A penny stock is generally defined to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. If our stock is deemed to be a penny stock, trading in our stock will be subject to additional sales practice requirements on broker-dealers. These may require a broker-dealer to:
 
 
·
make a special suitability determination for purchasers of our shares
 
 
·
receive the purchaser's written consent to the transaction prior to the purchase; and/or
 
 
·
deliver to a prospective purchaser of our stock, prior to the first transaction, a risk disclosure document relating to the penny stock market.
 
Consequently, penny stock rules may restrict the ability of broker-dealers to trade and/or maintain a market in our common stock. Also, prospective investors may not want to get involved with the additional administrative requirements, which may have a material adverse effect on the trading of our shares.
 
The sale of shares by the selling shareholders as contemplated by this prospectus may encourage our other shareholders to sell their stock and have an adverse impact on the market price of our common stock.
    
The resale by the selling shareholders of our common stock as contemplated by this prospectus will increase the number of our publicly traded shares, which could depress the market price of our common stock. Moreover, the mere prospect of resales by the selling shareholders as contemplated by this prospectus could depress the market price for our common stock. The sale of a substantial number of shares of our common stock under this offering, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

15


Our common stock has experienced in the past, and is expected to experience in the future, significant price and volume volatility, which substantially increases the risk that you may not be able to sell your shares at or above the price that you paid for the shares.
 
The historical trading of our common stock is not necessarily an indicator of how it will trade in the future and our trading price as of the date of this proxy statement-prospectus is not necessarily an indicator of what the trading price of our common stock might be in the future. Because of the limited trading market for our common stock, and because of the possible price volatility, you may not be able to sell your shares of common stock when you desire to do so. The inability to sell your shares in a rapidly declining market may substantially increase your risk of loss because of such illiquidity and because the price for our common stock may suffer greater declines because of its price volatility.
 
The price of our common stock that will prevail in the market after this offering may be higher or lower than the price you pay. Certain factors, some of which are beyond our control, that may cause our share price to fluctuate significantly include, but are not limited to, the following:
 
 
·
announcement by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
 
 
·
changes in market valuations of similar companies;
 
 
·
variations in our quarterly operating results;
 
 
·
inability to complete or integrate an acquisition;
 
 
·
additions or departures of key personnel; and
 
 
·
fluctuations in stock market price and volume.
 
Additionally, in recent years the stock market in general, and the Over-the-Counter Bulletin Board and technology stocks in particular, have experienced extreme price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price, regardless of our operating performance. In the past, class action litigation has often been brought against companies following periods of volatility in the market price of those companies' common stock. If we become involved in this type of litigation in the future, it could result in substantial costs and diversion of management attention and resources, which could have a further negative effect on your investment in our stock.
 
RISK FACTORS RELATING TO CAMINOSOFT’S BUSINESS
 
We have yet to establish any history of profitable operations.
 
 We have yet to establish any history of profitable operations. We have incurred annual operating losses of $1,943,716 and $507,708, for fiscal years 2004 and 2005, respectively. During the year ended September 30, 2006, we incurred an operating loss of $1,072,383, and have incurred an operating loss of $158,599 for the nine months ended June 30, 2007. As a result, at June 30, 2007, we had an accumulated deficit of $21,947,197. Our revenues have not been sufficient to sustain our operations. Our profitability will require the successful commercialization of products, solutions and services. No assurances can be given as to if or when this will occur or that we will ever be profitable.

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 Our future operating results are unpredictable.
 
Our operating results will depend on the enhancement of our existing products and the ability to market and sell the products. Any future success that we may achieve will depend upon many factors including factors which may be beyond our control or which cannot be predicted at this time. Uncertainties and factors which could cause actual results or events to differ materially from those set forth or implied include:
 
 
·
Inability to acquire new customers;
 
 
·
Inability to complete successful implementation of our software;
 
 
·
Inability to provide applications in a manner that is scalable;
 
 
·
Inability to offer new services that complement our existing offerings; or
 
 
·
Inability to increase awareness of our brand.
 
If we are unable to adapt our products to rapidly changing technology, our reputation and our ability to grow our revenues could be harmed.
 
The markets we serve are characterized by rapidly changing technology, evolving industry standards, emerging competition and the frequent introduction of new software. There is no assurance that we will be able to enhance existing products or develop new products that meet changing customer needs in a timely and cost-effective manner. Prolonged delays resulting from our efforts to adapt to rapid technological change, even if ultimately successful, could harm our reputation within our industry and our ability to grow our revenues.
 
We face significant competition from other providers of computer software.
 
Our competitors in the storage systems market consists of a small group of leading vendors, such as EMC, HP, IBM, Hitachi Data Systems, and Network Appliance, and a cadre of hardware and software companies who OEM, remarket, or aggregate storage products from third parties. Our products compete in the data management and high availability software segments. The cost barriers for entry into these markets are relatively low, which means our competitors range from small companies with limited resources to large, more established companies with substantial resources. However, among all of these competitors (and in some cases technology partners), we believe none offer a cross-platform Windows/NetWare solution to round out their Information Lifecycle Management (“ILM”) solution suites. Some competitors, regardless of size, have substantially greater financial, technical, marketing, distribution, personnel and other resources. It is possible that we may not have the resources to effectively compete with these companies.
 
Our earnings are dependent upon acceptance of our products and our ability to increase demand for data storage and management software products.
 
Our ability to generate profits depends primarily upon market acceptance of our data storage and management software products and the continued upgrade and sale of our high availability software products. Our products may not be successfully marketed or achieve customer acceptance, and we may be unable to increase demand for our products. Our strategy to increase our customer base includes investment in programs designed to heighten consumer awareness of our products and services. If we do not successfully develop new products that keep pace with technology, our competitive position will be weakened.

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The market for our products is new and emerging, and is characterized by rapid technological advances, changing customer needs and evolving industry standards.
 
We may not be successful in developing and marketing, on a timely and cost-effective basis, enhancements to our software products or new products, which respond to technological advances and satisfy increasingly sophisticated customer needs. Our ability to meet our customers’ needs and evolving industry standards will depend on our:
 
 
·
Ability to timely develop new software products that keep pace with developments in technology;
 
 
·
Ability to meet evolving customer requirements which are often changing;
 
 
·
Success at enhancing our current product offerings; and
 
 
·
Delivering those products through appropriate distribution channels.
 
If we fail to introduce new products or if new industry standards emerge that we do not anticipate or adapt to, our software products could be rendered obsolete and our competitive position will be weakened.
 
Our business will suffer if our software development is delayed.
 
Any failure to release new products and upgrades on time may result in:
 
 
·
customer dissatisfaction;
 
 
·
cancellation of orders;
 
 
·
negative publicity;
 
 
·
loss of revenue; and
 
 
·
slower market acceptance.
 
Our performance is substantially dependent on the continued services and the performance of our senior management and other key personnel.
 
Our performance is substantially dependent on the continued services and the performance of our senior management and other key personnel. Our performance also depends on our ability to retain and motivate our other officers and key employees. The loss of the services of any of our executive officers or other key employees could have a material adverse effect on our business, prospects, financial condition, and results of operations. Our future success also depends on our ability to identify, attract, hire, train, retain, and motivate other highly skilled technical, managerial and marketing personnel. Competition for such personnel is intense, and there can be no assurance that we can attract and retain the necessary technical, managerial and marketing personnel and this could have a material adverse effect on our business, prospects, financial condition and results of operations.
 
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We could incur substantial costs defending our intellectual property from claims of infringement.
 
The software industry is characterized by frequent litigation regarding copyright, patent, trademark and other intellectual property rights. We may be subject to future litigation based on claims that our own intellectual property rights are invalid. We expect that software product developers will increasingly be subject to infringement claims as the number of products and competitors in our industry segment grows and the functionality of products overlaps. Claims of infringement could require us to re-engineer or rename our products or seek to obtain licenses from third parties in order to continue offering our products. These claims could also result in significant expense to us and the diversion of our management and technical resources, even if we ultimately prevail. Licensing or royalty agreements, if required, may not be available on terms acceptable to us or at all.
 
We may face interruption of production and services due to increased security measures in response to terrorism.
 
Our business depends on the free flow of products and services through the channels of commerce. Recently, in response to terrorists’ activities and threats aimed at the United States, transportation, mail, financial and other services have been slowed or stopped altogether. Further delays or stoppages in transportation, mail, financial or other services could have a material adverse effect on our business, results of operations and financial condition. Furthermore, we may experience an increase in operating costs, such as costs for transportation, insurance and security as a result of the activities and potential activities. We may also experience delays in receiving payments from payers that have been affected by the terrorist activities and potential activities. The U.S. economy in general is being adversely affected by the terrorist activities and potential activities and any economic downturn could adversely impact our results of operations, impair our ability to raise capital or otherwise adversely affect our ability to grow our business.
 
RISK FACTORS RELATING TO SHEA’S BUSINESS
 
Shea has a limited operating history as a public company that makes it impossible to reliably predict future growth.
 
Since the beginning of 2007, Shea has entered into acquisition or merger agreements with certain entities, including a merger with Information Intellect, Inc. occurred on March 2, 2007, and Shea’s acquisitions of Bravera, Inc. and Riptide Software, Inc. occurred in June 2007. The acquired entities are private companies and their management is new to the requirements of a public company.   Following the merger, the management team of Shea is responsible for the operations of and the reporting of the combined company.  The requirements of operating the newly combined company in a public environment are new to this management team and the employees as a whole.  This may require Shea to obtain outside assistance from legal, accounting, investor relations, or other professionals that could be more costly than planned.  Shea may also be required to hire additional staff to comply with additional SEC reporting requirements and compliance under the Sarbanes-Oxley Act of 2002 not previously required of Information Intellect as a private company prior to its merger with Shea.  Shea’s failure to comply with reporting requirements and other provisions of securities laws could negatively affect Shea’s stock price and adversely affect Shea’s results of operations, cash flow and financial condition.
 
Operating as a small public company also requires Shea to make projections about future operating results and to provide forecast guidance to the public markets.  Shea has limited experience as a management team in the combined company with dealing with the public markets and as a result Shea’s projections may not be made timely or set at expected performance levels and could materially affect the price of Shea’s stock.  Any failure to meet published projections that adversely affect Shea’s stock price could result in losses to investors, shareholder lawsuits or other litigation, sanctions or restrictions issued by the SEC or the stock market upon which the combined company’s stock is traded.

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While Shea believe that Shea currently have adequate internal control over financial reporting, Shea is exposed to risks from recent legislation requiring companies to evaluate internal control over financial reporting.
 
Section 404 of the Sarbanes-Oxley Act of 2002 requires Shea’s management to report on, and for the year ending December 31, 2008 our independent registered public accounting firm will be required to attest to, the effectiveness of Shea’s internal control over financial reporting. Shea must establish an ongoing program to perform the system and process evaluation and testing necessary to comply with these requirements. Shea expects that the cost of this program will require Shea to incur significant expenses and to devote resources to Section 404 compliance on an ongoing basis.
 
Shea is a newly formed public company and recently acquired three private companies that must be combined and integrated under a system of internal control sufficient to provide effective financial reporting.  Shea is implementing new accounting, forecasting and payroll systems to integrate the companies however until these systems have been implemented and the internal control processes fully defined it may be difficult to assess the effectiveness of internal controls over financial reporting.  It is difficult for Shea to predict how long it will take to complete the assessment of the effectiveness of Shea’s internal control over financial reporting for each year and to remediate any deficiencies in Shea’s internal control over financial reporting. As a result, Shea may not be able to complete the assessment and remediation process on a timely basis. In the event that Shea’s Chief Executive Officer, Chief Financial Officer or independent registered public accounting firm determine that Shea’s internal control over financial reporting is not effective as defined under Section 404, Shea cannot predict how regulators will react or how the market prices of our shares will be affected.
 
Shea cannot be certain that its internal control over financial reporting will be effective or sufficient in the future.
 
Shea’s ability to manage its operations and growth requires Shea to maintain effective operations, compliance and management controls, as well as Shea’s internal control over financial reporting. Shea may not be able to implement necessary improvements to its internal control over financial reporting in an efficient and timely manner and may discover deficiencies and weaknesses in existing systems and controls, especially when such systems and controls are tested by an increased rate of growth or the impact of acquisitions. In addition, upgrades or enhancements to Shea’s computer systems could cause internal control weaknesses.
 
It may be difficult to design and implement effective internal control over financial reporting for combined operations as Shea integrates acquired businesses in the future. In addition, differences in existing controls of acquired businesses may result in weaknesses that require remediation when internal controls over financial reporting are combined.
 
If Shea fails to maintain an effective system of internal control or if management or Shea’s independent registered public accounting firm were to discover material weaknesses in Shea’s internal control systems Shea may be unable to produce reliable financial reports or prevent fraud. If Shea is unable to assert that its internal control over financial reporting is effective at any time in the future, or if Shea’s independent registered public accounting firm is unable to attest to the effectiveness of Shea’s internal controls, is unable to deliver a report at all or can deliver only a qualified report, Shea could be subject to regulatory enforcement and may lose investor confidence in Shea’s ability to operate in compliance with existing internal control rules and regulations, either of which could result in a decline in Shea’s stock price.

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Shea is dependent on the utility industry, which has experienced volatility in capital spending.
 
Prior to the acquisition of Riptide and Bravera in July 2007, Shea derived the majority of its revenues from sales of products and services to the utility industry. Purchases of Shea’s products may be deferred as a result of many factors including mergers and acquisitions, regulatory decisions, weather conditions, rising interest rates, utility specific financial situations and general economic downturns. In the future, Shea may experience variability in operating results, on both an annual and a quarterly basis, as a result of these factors.
 
Utility industry sales cycles can be lengthy and unpredictable.
 
Sales cycles with customers in the utility industry are generally long and unpredictable due to political influences, customers’ budgeting, purchasing, and regulatory processes that can take longer that expected to complete. Shea’s utility customers typically issue requests for quotes and proposals, establish evaluation committees, review different technical options with vendors, analyze performance and cost/benefit justifications and perform a regulatory review, in addition to applying the normal budget approval process within a utility.   Delays in completing these processes can cause delays in purchasing and variability to Shea’s financial projections and could adversely affect results of operations.
 
Shea faces competitive pressures from a variety of companies in the markets it serves.
 
Shea is a small company in a highly competitive market.  Some of Shea’s present and potential competitors have, or may have, substantially greater financial, marketing, technical or manufacturing resources, and in some cases, greater name recognition and experience than Shea has. Some competitors may enter markets Shea serves and sell products at low prices in order to obtain market share. Shea’s competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements. They may also be able to devote greater resources to the development, promotion and sale of their products and services than Shea can. Current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of its prospective customers. It is possible that new competitors or alliances among current and new competitors may emerge and rapidly gain significant market share.  Other companies may also produce products that are equal or superior to Shea’s products, which could reduce its market share, reduce its overall sales and require Shea to invest additional funds in new technology development. If Shea cannot compete successfully against current or future competitors, this will have a material adverse effect on its business, financial condition, results of operations and cash flow.
 
Shea’s financial forecasts may not be achieved, including due to the unpredictability of customer buying patterns, which could make our stock price more volatile.
 
Shea does not maintain significant levels of backlog. Revenue in any year or quarter is dependent, in significant part, on contracts entered into or orders booked and shipped in that period.  The risk of quarterly fluctuations in operation results is increased by the fact that a significant portion of Shea’s quarterly net revenue has historically been generated during the last month of each fiscal quarter.  Many customers negotiate contracts near the end of each quarter. Due to these end-of-period buying patterns, forecasts may not be achieved, either because expected sales are delayed or do not occur or because they occur at lower prices or on terms that are less favorable to Shea.

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In addition, fluctuations may be caused by a number of other factors, including:
 
·
the timing and volume of customer orders and customer cancellations;
 
 
·
a change in Shea’s revenue mix of products and services and a resulting change in the gross margins;
 
 
·
the timing and amount of Shea’s expenses;
 
 
·
the introduction of competitive products by existing or new competitors;
 
 
·
reduced demand for any given product;
 
 
·
quarterly seasonality of customer buying patterns due to budget cycles, holidays and vacation patterns; and
 
 
·
the market’s transition to new technologies.
 
Due to these factors, forecasts may not be achieved, either because expected revenues do not occur or because they occur at lower prices, at later times, or on terms that are less favorable to Shea. In addition, these factors increase the chances that Shea’s results could diverge from the expectations of investors and analysts. If so, the market price of Shea’s stock would likely decrease and may result in shareholder lawsuits.
 
Shea faces risks associated with governmental contracting.
 
Shea’s customers include small municipalities, utility co-operatives and utility companies.  These customers are subject to budget cycles often dictated by law or the legislation of the local government agency. Government agencies present Shea with processes that are unique to these organizations including procurement, budgetary constraints and cycles, contract modifications and cancellations, and government audits.
 
Contracting with public sector customers is highly competitive and can be expensive and time-consuming, often requiring that Shea incurs significant upfront time and expense without any assurance that it will win a contract. Public sector customers may also change the way they procure new contracts and may adopt new rules or regulations governing contract procurement, including required competitive bidding or use of “open source” products, where available. Demand and payment for Shea’s products and services are impacted by public sector budgetary cycles and funding availability, with funding reductions or delays adversely impacting public sector demand for Shea’s products and services.
 
Public sector customers often have contractual or other legal rights to terminate current contracts for convenience or due to a default. If a contract is cancelled for convenience, which can occur if the customer’s product needs change, Shea may only be able to collect for products and services delivered prior to termination. If a contract is cancelled because of default, Shea may only be able to collect for products and services delivered, and it may be forced to pay any costs incurred by the customer for procuring alternative products and services.
 
Government agencies routinely investigate and audit government contractors’ administrative processes. They may audit Shea’s performance and pricing and review Shea’s compliance with applicable rules and regulations. If they find that Shea has improperly allocated costs, they may require Shea to refund those costs or may refuse to pay Shea for outstanding balances related to the improper allocation. An unfavorable audit could result in a reduction of revenue, and may result in civil or criminal liability if the audit uncovers improper or illegal activities.

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Shea needs to manage growth in operations to maximize its potential growth and achieve its expected revenues and Shea’s failure to manage growth will cause a disruption of its operations resulting in the failure to generate revenue.
 
In order to maximize potential growth in Shea’s current and potential markets, Shea believes that it must expand its manufacturing, sales and marketing operations.  This expansion will place a significant strain on Shea’s management team and its operational, accounting, and information systems. Shea expects that it will need to continue to improve its financial controls, operating procedures, and management information systems. Shea will also need to effectively hire, train, motivate, and manage its employees. Shea’s failure to properly manage its growth could disrupt its operations and ultimately prevent it from generating the revenues it expects.
 
Shea cannot assure you that its organic growth strategy will be successful which may result in a negative impact on Shea’s growth, financial condition, results of operations and cash flow.
 
One of Shea’s strategies is to grow organically through increasing the distribution and sales of its products to utilities and municipalities within the United States that have a need to automate their data collection and reporting processes.   Shea’s primary targeted customer is the small to medium utility company or municipality.  There are many obstacles to entering such new markets, including, but not limited to, government budget cycles, appropriation of funds, the political climate within the local government agencies and the capital resources available to the local utility company.  These factors may lengthen sales cycles and delay revenue to future periods or not at all.  Longer sales cycles allow competitors that could have greater capital resources available to them to penetrate our targeted markets and limit Shea’s ability to grow revenue as planned. Shea cannot, therefore, assure you that it will be able to successfully overcome such obstacles and establish its products in any additional markets. Shea’s inability to implement this organic growth strategy successfully may have a negative impact on its growth, future financial condition, and results of operations or cash flows.
 
Shea cannot assure you that its acquisition growth strategy will be successful resulting in its failure to meet growth and revenue expectations.
 
In addition to Shea’s organic growth strategy, Shea also expects to grow through strategic acquisitions. Shea intends to pursue opportunities to acquire businesses within its industry and that are complementary or related to current product lines or in businesses that are similarly structured to it. Shea may not be able to locate suitable acquisition candidates at prices that it considers appropriate or to finance acquisitions on terms that are satisfactory to it. If Shea does identify an appropriate acquisition candidate, it may not be able to negotiate successfully the terms of an acquisition, or, if the acquisition occurs, integrate the acquired business into its existing business.
 
Acquisitions of businesses or other material operations may require debt financing or additional equity financing, resulting in leverage or dilution of ownership.  Integration of acquired business operations could disrupt Shea’s business by diverting management away from day-to-day operations.  The difficulties of integration may be increased by the necessity of coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures. Shea also may not be able to maintain key employees or customers of an acquired business or realize cost efficiencies or synergies or other benefits it anticipated when selecting its acquisition candidates.  In addition, Shea may need to record write-downs from future impairments of intangible assets, which could reduce its future reported earnings. At times, acquisition candidates may have liabilities or adverse operating issues that Shea fails to discover through due diligence prior to the acquisition. There can be no assurance that any given proposed acquisition will be able to successfully obtain governmental approvals, which are necessary to consummate such acquisitions, to the extent required. If Shea’s acquisition strategy is unsuccessful, it will not grow our operations and revenues at the rate that we anticipate.

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If Shea is not able to implement our strategies in achieving its business objectives, its business operations and financial performance may be adversely affected.
 
Shea’s business plan is based on circumstances currently prevailing and the bases and assumptions that certain circumstances will or will not occur, as well as the inherent risks and uncertainties involved in various stages of development, including our transition to a business process management company through a strategy of acquiring companies, products and or lines of business in the business process management space. However, there is no assurance that Shea will be successful in implementing its strategies or that its strategies, even if implemented, will lead to the successful achievement of Shea’s objectives. If Shea is not able to successfully implement its strategies, its business operations and financial performance may be adversely affected.
 
If Shea needs additional capital to fund its growing operations, Shea may not be able to obtain sufficient capital and may be forced to limit the scope of its operations.
 
In connection with Shea’s growth strategies, it may experience increased capital needs and accordingly, Shea may not have sufficient capital to fund its future operations without additional capital investments. Shea’s capital needs will depend on numerous factors, including (i) its profitability; (ii) the release of competitive products by its competition; (iii) the level of its investment in research and development; and (iv) the amount of its capital expenditures, including acquisitions. Shea cannot assure you that it will be able to obtain capital in the future to meet its needs.
 
If Shea cannot obtain additional funding, it may be required to: (i) limit its investments in research and development; (ii) limit its marketing efforts; and (iii) decrease or eliminate capital expenditures.  Such reductions could materially adversely affect our business and its ability to compete.
 
Even if Shea does find a source of additional capital, it may not be able to negotiate terms and conditions for receiving the additional capital that are acceptable to Shea.  Any future capital investments could dilute or otherwise materially and adversely affect the holdings or rights of Shea’s existing shareholders. In addition, new equity or convertible debt securities issued by Shea to obtain financing could have rights, preferences and privileges senior to its common stock. Shea cannot give you any assurance that any additional financing will be available to it, or if available, will be on terms favorable to Shea.
 
Shea depends on its ability to develop and release new products from development in a timely and consistent manner.
 
Shea’s radio-based MeterMesh hardware products have only recently been released from development available for sale.  Shea’s MeterMesh software products require additional and continuing development to remain competitive with newer technologies and competitive products.  Information Intellect has made, and as the combined company following the acquisitions of Bravera and Riptide, Shea expects to continue to make, substantial investments in technology development. Shea’s future success will depend, in part, on its ability to continue to design and manufacture new competitive products and to enhance and sustain its existing products. This product development will require continued investment in order to maintain and grow Shea’s market position. Shea may experience unforeseen problems in the development or performance of its technologies or products. In addition, Shea may not meet its product development schedules. Finally, Shea may not achieve market acceptance of its new products and solutions.  These factors could materially affect Shea’s ability to forecast operations and negatively affect its stock price, results of operations, cash flow and financial condition.

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Shea’s Information Intellect subsidiary is affected by availability and regulation of the radio spectrum.
 
Shea’s radio-based products use the radio spectrum and in the United States are subject to regulation by the FCC. Licenses for radio frequencies must be obtained and periodically renewed. Licenses granted to Shea or its customers may not be renewed on acceptable terms, if at all. The FCC may adopt changes to the rules for Shea’s licensed and unlicensed frequency bands that are incompatible with its business. In the past, the FCC has adopted changes to the requirements for equipment using radio spectrum, and it is possible that the FCC or Congress will adopt additional changes.
 
Shea has committed, and will continue to commit, significant resources to the development of products that use particular radio frequencies. Action by the FCC could require modifications to Shea’s products. The inability to modify Shea’s products to meet such requirements, the possible delays in completing such modifications and the cost of such modifications all could have a material adverse effect on Shea’s future financial condition and results of operations.
 
Shea’s radio-based products currently employ both licensed and unlicensed radio frequencies. There must be sufficient radio spectrum allocated by the FCC for our intended uses. As to the licensed frequencies, there is some risk that there may be insufficient available frequencies in some markets to sustain Shea’s planned operations. The unlicensed frequencies are available for a wide variety of uses and are not entitled to protection from interference by other users. The unlicensed frequencies are also often the subject of proposals to the FCC requesting a change in the rules under which such frequencies may be used. If the unlicensed frequencies become unacceptably crowded, restrictive or subject to changed rules governing their use, and no additional frequencies are allocated, our business could be materially adversely affected.
 
Shea may face liability associated with the use of products for which patent ownership or other intellectual property rights are claimed.
 
Shea may be subject to claims or inquiries’ regarding alleged unauthorized use of a third party’s intellectual property. An adverse outcome in any intellectual property litigation could subject Shea to significant liabilities to third parties, require it to license technology or other intellectual property rights from others, require it to comply with injunctions to cease marketing or using certain products or brands, or require it to redesign, re-engineer, or re-brand our products or packaging, any of which could adversely affect Shea’s business, financial condition and results of operations. If Shea is required to seek licenses under patents or other intellectual property rights of others, it may not be able to acquire these licenses on acceptable terms, if at all. In addition, the cost of responding to an intellectual property infringement claim is expensive, in terms of legal fees, expenses and the diversion of management resources, whether or not the claim is valid, and therefore could have a material adverse effect on our business, financial condition and results of operations.
 
If Shea’s products infringe the intellectual property rights of others, Shea may be required to indemnify its customers for any damages they suffer. Shea generally indemnifies its customers with respect to infringement by its products of the proprietary rights of third parties. Third parties my assert infringement claims against Shea’s customers. These claims may require Shea to initiate or defend protracted and costly litigation on behalf of its customers, regardless of the merits of these claims. If any of these claims succeed, Shea may be forced to pay damages on behalf of its customers or may be required to obtain licenses for the products they use. If Shea cannot obtain all necessary licenses on commercially reasonable terms, its customers may be forced to stop using Shea’s products.

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Shea may be unable to adequately protect its intellectual property.
 
While Shea believes that its patent pending technologies and other intellectual property have significant value, it is uncertain that Shea’s intellectual property, or any intellectual property acquired or developed by Shea in the future, will provide meaningful competitive advantages. There can be no assurance that Shea’s pending applications will be approved, not be challenged, invalidated or circumvented by competitors or that rights granted thereunder will provide meaningful proprietary protection. Moreover, competitors may infringe Shea’s patents or successfully avoid them through design innovation. To combat infringement or unauthorized use, Shea may need to commence litigation, which can be expensive, time-consuming and divert management attention from successfully operating the business. In addition, in an infringement proceeding a court may decide that a patent or other intellectual property right of Shea’s is not valid or is unenforceable, or may refuse to stop the other party from using the technology or other intellectual property right at issue on the grounds that it is non-infringing. Policing unauthorized use of Shea’s intellectual property is difficult and expensive, and Shea cannot provide assurance that it will be able to, or have the resources to, prevent misappropriation of its proprietary rights, particularly in countries where the laws may not protect such rights as fully as do the laws of the United States.
 
Shea depends upon third party sources for development services.
 
Shea depends on a third party located in India and the United States to provide development services and delivery in the second quarter of 2007 of a key portion of its radio-based products.  The loss of this third party development provider would require Shea to find an alternative programming services provider or to employ software programmers to complete the development of this key portion of the product, causing delays in the product release.  Any delays in the product release would cause delays in obtaining and delivering product orders, and delays the resulting recognition of revenue as well as an increase in costs and expenses.  In addition, Shea’s relationship with this service provider has been excellent but Shea cannot assure you that it will be successful in maintaining our relationships with this third party resource or that Shea could replace this third party service provider in a timely manner or at similar contract terms and costs.
 
Shea may face warranty exposure that exceeds its recorded liability.
 
In the future, as Shea begins to sell its radio-based products it may be required provide product warranties for varying lengths of time. In anticipation of warranty expenses, Shea will establish allowances for the estimated liability associated with product warranties and product-failure related costs.  However, these warranty and related product-failure allowances may be inadequate due to undetected product defects, unanticipated component failures, as well as changes in various estimates for material, labor and other costs Shea may incur to replace projected product failures.
 
Shea’s software may have defects and errors that could lead to a loss of revenues or product liability claims.
 
Shea’s software products use complex development technologies and may contain defects or errors, especially when first introduced or when new versions or enhancements are released. Despite quality control testing, Shea may not detect errors in our new products or product enhancements until after it has commenced commercial shipments. If defects and errors are discovered after commercial release of either new versions or enhancements of Shea’s products:
 
·
potential customers may delay purchases;
 
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·
customers may react negatively, which could reduce future sales;
 
 
·
Shea’s reputation in the marketplace may be damaged;
 
 
·
Shea may have to defend product liability claims;
 
 
·
Shea may be required to indemnify its customers, distributors, original equipment manufacturers or others;
 
 
·
Shea may incur additional service and warranty costs; and
 
 
·
Shea may have to divert additional development resources to correct the defects and errors, which may result in the delay of new product releases or upgrades.
 
If any or all of the foregoing occur, Shea may lose revenues, incur higher operating expenses and lose market share, any of which could severely harm its financial condition and operating results.
 
Shea’s key manufacturing facilities are concentrated.
 
A substantial portion of Shea’s revenue is planned to come from our radio-based products, which Shea manufactures in our Ft. Worth, Texas facility. In the event of a significant interruption in production at Shea’s sole manufacturing facility, considerable time and effort could be required to establish alternative production lines, which would have a material adverse effect on its business, financial condition and results of operation. Shea does not yet have a written disaster recovery plan to provide for continuation of production in the event of a disaster.  Shea has insurance to cover the loss of property in the event of a disaster but an inability or delay in finding alternative manufacturing capabilities following a fire, tornado or other disaster would cause delivery delays to customers and would have a material adverse effect on Shea’s results of operations, cash flow and financial condition.
 
Shea is subject to regulatory compliance.
 
Shea is subject to various governmental regulations including those related to occupational safety and health, labor and wage practices and regulations regarding the performance of certain engineering services. Failure to comply with current or future regulations could result in the imposition of substantial fines, suspension of production, alteration of our production processes, cessation of operations or other actions, which could materially and adversely affect Shea’s business, financial condition and results of operations.
 
Shea may incur liabilities arising from the use of hazardous materials.
 
Shea’s business and its facilities are subject to a number of federal, state and local laws, regulations and ordinances governing, among other things, the storage, discharge, handling, emission, generation, manufacture, disposal, remediation of, or exposure to toxic or other hazardous substances and certain waste products. Many of these environmental laws and regulations subject current or previous owners or operators of land to liability for the costs of investigation, removal or remediation of hazardous materials. In addition, these laws and regulations typically impose liability regardless of whether the owner or operator knew of, or were responsible for, the presence of any hazardous materials and regardless of whether the actions that led to the presence were conducted in compliance with the law. In the ordinary course of Shea’s business, like that of other companies engaged in similar businesses, Shea uses metals, solvents and similar materials, which are stored on site. The waste created by the use of these materials is transported off site on a regular basis by unaffiliated waste haulers. Many environmental laws and regulations require generators of waste to take remedial actions at the off site disposal location even if the disposal was conducted in compliance with the law. The requirements of these laws and regulations are complex, change frequently and could become more stringent in the future. Failure to comply with current or future environmental regulations could result in the imposition of substantial fines, suspension of production, alteration of our production processes, cessation of operations or other actions, which could materially and adversely affect Shea’s business, financial condition and results of operations. There can be no assurance that a claim, investigation or liability will not arise with respect to these activities, or that the cost of complying with governmental regulations in the future, will not have a material adverse effect on Shea.

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Shea has a history of net losses and may need or decide to seek additional financing to fund operations.
 
Shea has experienced operating losses in the first six months of 2007 and during the years ended December 31, 2006 and 2005 and as a growing technology business it continues to require new investment from existing and new sources of capital. Shea has access to sources of additional funds and during July 2007 raised approximately $12 million to fund the acquisitions of Bravera, Inc. and Riptide Software, Inc.  Funds from new financings and the combined cash flows from Information Intellect and the newly acquired businesses is expected to provide sufficient cash balances to fund operations.  However there can be no assurance that due to continued operating losses or other factors outside of Shea’s control that Shea will continue to have access to sufficient capital resources to continue operations or to execute its strategy to acquire other companies.
 
Shea’s operating results may be adversely affected by the uncertain geopolitical environment and unfavorable factors affecting economic and market conditions.
 
Adverse factors affecting economic conditions worldwide have contributed to a general slowdown in information technology and software spending and may continue to adversely impact Shea’s business, resulting in:
 
 
·
Reduced demand for Shea’s products as a result of a decrease in technology spending by its customers and potential customers;
 
 
·
Increased price competition for Shea’s products; and
 
 
·
Higher overhead costs as a percentage of revenues.
 
Terrorist and military actions may continue to put pressure on economic conditions. Utility companies, one of Shea’s targeted markets are considered a prime target for a terrorist attack.  If such an attack should occur or if the economic and market conditions in the United States deteriorate as a result of a terrorist attack, Shea may experience a material adverse impact on our business, operating results, and financial condition as a consequence of the above factors or otherwise.
 
Economic conditions and conditions affecting the utility industry in particular may have a negative impact on Shea’s revenues and margins.
 
The market for Shea’s products depends on various economic conditions including those affecting the utility industry as a whole and specifically the small to medium size electric, water and as utility companies and co-operatives and the municipalities they serve. Any slowdown in spending or tightening of utility company and government budgets may cause potential customers to delay or cancel projects, or reduce or cancel orders for Shea’s products. Further, if economic conditions deteriorate, customers may experience financial difficulty, cancel projects or fail to budget for the purchase of Shea’s products. This, in turn, may lead to longer sales cycles, price pressures and collection issues, causing us to realize lower revenues and margins. In addition, many parts of the world are experiencing economic instability, and Shea cannot predict how these conditions may affect its customers or business.

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Stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary businesses.
 
Shea expects that future operations and acquisitions may be financed through the issuance of equity securities and stockholders could experience significant dilution.  The equity and debt financing completed in July 2007 was dilutive to Shea’s existing shareholders. In addition, securities issued in connection with future financing activities or potential acquisitions may have rights and preferences senior to the rights and preferences of Shea’s common stock.  Shea has established an incentive stock award plan for management and employees and it expects to grant options to purchase shares of Shea common stock to Shea’s management, directors, employees and consultants and Shea will grant additional options in the future.   The issuance of shares of Shea common stock upon the exercise of these options may result in dilution to Shea’s stockholders.
 
Shea may have difficulty defending its intellectual property rights from infringement resulting in lawsuits requiring Shea to devote financial and management resources that would have a negative impact on its operating results.
 
Shea regards its service marks, trademarks, trade secrets, patents and similar intellectual property as critical to its success. Shea relies on trademark, patent and trade secret law, as well as confidentiality and license agreements with certain of its employees, customers and others to protect its proprietary rights. No assurance can be given that Shea’s patents and licenses will not be challenged, invalidated, infringed or circumvented, or that Shea’s intellectual property rights will provide competitive advantages to it.
 
If Shea loses the services of any of its key personnel, including its chief executive officer or its directors, its business may suffer.
 
Shea is dependent on its key officers, including its Chairman and Chief Executive Officer, Vice Chairman and President, its directors, and key employees in Shea’s technology, finance, sales and marketing operations. Shea’s business could be negatively impacted if it were to lose the services of one or more of these persons.
 
Shea’s executive officers, board of directors and key employees are crucial to its business, and Shea may not be able to recruit, integrate and retain the personnel it needs to succeed.
 
Shea’s success depends upon a number of key management, sales, technical and other critical personnel, including its executive officers, the Board of Directors and key employees. The loss of the services of any key personnel, or Shea’s inability to attract, integrate and retain highly skilled technical, management, sales and marketing personnel could result in significant disruption to its operations, including the timeliness of new product introductions, success of product development and sales efforts, quality of customer service, and successful completion of our initiatives, including growth plans and the results of its operations.  Any failure by Shea to find suitable replacements for its key senior management may be disruptive to its operations. Competition for such personnel in the technology industries is intense, and Shea may be unable to attract, integrate and retain such personnel successfully.

29


MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
CaminoSoft
 
Shares of CaminoSoft common stock are traded on the OTC Bulletin Board® (the “OTCBB”) under the symbol “CMSF”.  On _____, 2007, the last practicable trading date before the printing of this proxy statement-prospectus, the closing share price of CaminoSoft common stock was $___. On September 4, 2007, the last trading day prior to the public announcement of the Merger, the last sale price of our common stock as reported on the OTCBB was $0.13 per share.
 
The following table below sets forth for each quarterly period within the previous two fiscal years and each of the quarters since the end of the last fiscal year the high and low closing prices of the CaminoSoft Common Stock as reported on the OTCBB and at www.OTCBB.com. The prices reflect inter-dealer prices without retail mark-ups, mark-downs or commission and may not represent actual transactions.
 
   
Common Stock Sales Prices
 
   
High
 
Low
 
Fiscal Year Ended September 30, 2005
         
Quarter ended December 31
 
$
0.85
 
$
0.35
 
Quarter ended March 31
 
$
0.75
 
$
0.42
 
Quarter ended June 30
 
$
0.68
 
$
0.35
 
Quarter ended September 30
 
$
1.90
 
$
0.55
 
Fiscal Year Ended September 30, 2006
             
Quarter ended December 31
 
$
1.40
 
$
0.97
 
Quarter ended March 31
 
$
1.14
 
$
0.76
 
Quarter ended June 30
 
$
0.78
 
$
0.40
 
Quarter ended September 30
 
$
0.40
 
$
0.27
 
Fiscal Year Ended September 30, 2007
             
Quarter ended December 31
 
$
0.45
 
$
0.14
 
Quarter ended March 31
 
$
0.46
 
$
0.17
 
Quarter ended June 30
 
$
0.21
 
$
0.09
 
Quarter ended September 30
 
$
0.14
 
$
0.05
 
 
As of December 2003, CaminoSoft issued in a private placement 3,243,243 shares of common stock and 5-year warrants to purchase 3,243,243 shares with 50% of the warrants at an exercise price of $0.74 and 50% at an exercise price of $1.11 for $1,200,000. The funds will be used to support business expansion and operations.
 
During July 2004, CaminoSoft issued 5-year warrants to purchase 1,415,094 shares of common stock at $0.53 per share. The warrants were issued in conjunction with a $750,000 two-year loan. The loan matures on July 19, 2006 at which time the unpaid principal and all accrued and unpaid interest will become due and payable. The note calls for monthly interest payments of 7% of the outstanding principal balance beginning September 1, 2004.

30

 
During the year ended September 30, 2004, CaminoSoft issued 2,476,000 options to purchase CaminoSoft’s common stock at prices ranging from $0.41 to $0.63 per share to employees, consultants and directors under the year 2000 employee stock option plan.
 
During September 2004, CaminoSoft issued 340,136 shares of stock as commitment shares as part of an equity financing. The commitment shares are part of a common stock purchase agreement which will allow CaminoSoft to draw up to $6,000,000 through daily sales of its Common Stock. CaminoSoft has agreed to register 3,680,272 shares, which include the commitment shares to sell during a 30-month period.
 
During October 2005, CaminoSoft negotiated an extension of the two parts or the convertible debenture with a total principal balance of $1,750,000. Pursuant to a Renewal and Modification agreement dated October 28, 2005, the lender agreed to extend the maturity date of the two 6% Convertible Debentures dated November 27, 2002 in the aggregate principal amount of $1,750,000 to May 27, 2007. In consideration of such extension, CaminoSoft agreed to grant to the lender a five-year warrant to purchase 175,000 shares of Company Common Stock at an exercise price of $1.14 per share (subject to adjustment). The estimated value of the warrant ($166,093) was booked on CaminoSoft financial statements as debt discount and is being amortized over the term of the extension.
 
During February 2006, CaminoSoft issued to the Renaissance Capital Group managed funds an aggregate of 150,000 warrants to purchase CaminoSoft’s common stock at $0.86 per share in consideration of an agreement to extend the $750,000 loan payable maturity date for an additional 18 months. The new maturity date for the notes will be January 19, 2008. CaminoSoft will continue to pay 7% interest on a monthly basis based on the current outstanding principal balance of $750,000. The estimated value of the warrants of $77,663 was recorded on CaminoSoft’s financial statements as debt discount and will be amortized over the term of the extension.
 
All of the foregoing securities were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof and Regulation D promulgated thereunder. No commissions were paid.
 
As of _________, 2007, the record date, there were 132 holders of record of CaminoSoft’s common stock. To date, CaminoSoft has not declared or paid any cash dividends with respect to its Common Stock, and the current policy of the Board of Directors is to retain earnings, if any, to provide for the growth of CaminoSoft. Consequently, no cash dividends are expected to be paid on the Common Stock in the foreseeable future.
 
Shea Common Stock.
 
Shea’s common stock, par value $.001 per share, is listed for quotation on the OTCBB under the symbol SDLP; however, only a very limited active trading market has commenced. As of ______, 2007, there were __ holders of record of Shea common stock. On __, 2007, the latest practicable date before the mailing of this information statement, the last sale price of Shea common stock as reported on the OTCBB was $__ per share. On September 4, 2007, the last trading day prior to the public announcement of the Merger, the last sale price of Shea common stock as reported on the OTCBB was $1.05 per share. Shea has not declared any dividends to common shareholders, and it does not plan to declare any dividends to common shareholders in the foreseeable future.

31


EQUITY COMPENSATION PLANS

The 2007 Stock Option and Performance Awards Plan (the “Plan”) was adopted by the board of directors and approved by the stockholders of Shea in June 2007. The Plan authorizes the Board or a committee, which administers the plan, to grant stock options, stock appreciation rights, restricted stock and deferred stock awards to eligible officers, directors, employees and consultants. A total of 9,500,000 shares of common stock were reserved for issuance under the terms of the Plan. In the event of any sale of assets, merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the stock, the Board or committee may make an equitable substitution or adjustment in the aggregate number of shares reserved for issuance under the plan. Since the inception of the plan we have granted no awards under the Plan through October 31, 2007. Options outstanding under a prior stock option plan of Information Intellect and the plan were terminated upon completion of the merger with Shea on March 2, 2007.

The board of directors had also awarded the issuance of restricted stock for services performed to officers, directors, employees and consultants. These restricted stock awards were not covered under a plan approved by the stockholders. Since January 1, 2007, approximately 4,875,000 shares of Shea restricted common stock have been awarded to officers, directors, employees and consultants.

Plan category 
 
(a) 
Number of securities to be
issued upon exercise of
outstanding options, warrants
and rights 
 
Weighted-
average
exercise price
of outstanding options,
warrants and
rights 
 
Number of securities
available for future
issuance under
equity compensation
plans [excluding
securities reflected
in column (a)] 
 
   
 
   
 
   
 
   
 
Equity compensation plans approved by security holders 
   
-(1
)
 
-(1
)
 
-(1
)

(1)
No stock options or other equity awards have been awarded under the Shea Plan.

32


SELECTED HISTORICAL FINANCIAL DATA OF CAMINOSOFT

The following selected financial data of CaminoSoft as of and for each of the two fiscal years in the period ended September 30, 2006 have been derived from CaminoSoft’s audited historical financial statements for the years ended September 30, 2006 and 2005 and from the unaudited historical financial statements of and for the nine months ended June 30, 2006 and 2007. The data below is only a summary and should be read in conjunction with CaminoSoft’s financial statements and accompanying notes, incorporated by reference into this proxy statement prospectus (and which can be found in publicly available documents), as well as managements discussion and analysis of financial condition and results of operations included in this proxy statement prospectus.

Condensed Consolidated Statements of Operations

   
For the
 
For the
 
For the
 
   
Three Months Ended
 
Nine Months Ended
 
Year Ended
 
   
June 30,
 
June 30,
 
September 30,
 
   
(Unaudited)
 
(Unaudited)
         
   
2007
 
2006
 
2007
 
2006
 
2005
 
2006
 
Net Sales
 
$
694,561
 
$
360,463
 
$
1,734,045
 
$
1,350,687
 
$
2,637,201
 
$
1,772,671
 
Cost of Sales
   
95,335
   
42,551
   
156,664
   
113,000
   
213,423
   
156,523
 
                                       
Gross Profit
   
599,226
   
317,912
   
1,577,381
   
1,237,687
   
2,423,778
   
1,616,148
 
                                       
Operating Expenses
                                     
Sales and administrative
   
481,897
   
577,128
   
1,441,244
   
1,619,021
   
2,438,708
   
2,183,558
 
Depreciation
   
3,571
   
4,881
   
11,971
   
16,340
   
18,948
   
20,930
 
Research & development
   
101,250
   
137,903
   
282,765
   
353,082
   
473,830
   
484,043
 
                                       
Total Operating Expneses
   
586,718
   
719,912
   
1,735,980
   
1,988,443
   
2,931,486
   
2,688,531
 
                                       
Income (Loss) from Operations
   
12,508
   
(402,000
)
 
(158,599
)
 
(750,756
)
 
(507,708
)
 
(1,072,383
)
                                       
Other Income & Expense
                                     
Interest expense
   
(79,384
)
 
(84,630
)
 
(250,968
)
 
(292,750
)
 
(262,717
)
 
(377,811
)
Interest income
   
4
   
4
   
13
   
12
   
16
   
16
 
Write off of deferred financing costs
   
  
   
  
   
  
   
  
   
-
   
(262,075
)
                                       
Total Other Expense
   
(79,380
)
 
(84,626
)
 
(250,955
)
 
(292,738
)
 
(262,701
)
 
(639,870
)
                                       
Net Loss
   
($66,872
)
 
($486,626
)
 
($409,554
)
 
($1,043,494
)
 
($770,409
)
 
($1,712,253
)
                                       
Net loss per share (basic and diluted):
   
-
   
($0.03
)
 
($0.03
)
 
($0.08
)
 
($0.06
)
 
($0.12
)
                                       
Weighted average common shares
                                     
Outstanding (basic and diluted):
   
14,258,756
   
14,252,089
   
14,258,756
   
13,886,641
   
13,506,795
   
13,978,763
 

CaminoSoft Corp.
Condensed Consolidated Balance Sheets

   
As of June 30,
 
As of September 30,
 
   
(unaudited)
         
   
2006
 
2007
 
2005
 
2006
 
Cash and cash equivalents
 
$
374,054
 
$
131,272
 
$
220,186
 
$
441,595
 
Current assets
   
884,839
   
584,242
   
1,263,362
   
690,267
 
Total Assets
   
1,321,080
   
677,491
   
1,803,215
   
830,317
 
Current liabilities
   
2,400,186
   
3,639,394
   
2,205,833
   
2,559,942
 
Notes payable
   
2,286,523
   
2,658,740
   
2,355,331
   
2,331,886
 
Total shareholders Deficiency
   
(2,237,850
)
 
(3,144,717
)
 
(2,137,929
)
 
(2,868,551
)

33

SELECTED HISTORICAL FINANCIAL DATA OF SHEA
 
The following selected financial data of Shea as of and for each of the two fiscal years in the period ended December 31, 2006 have been derived from Shea’s audited historical financial statements for the years ended December 31, 2006 and 2005. The following selected financial data of Shea as of and for the six months ended June 30, 2006 and 2007 have been derived from Shea’s unaudited historical financial statements. The data below is only a summary and should be read in conjunction with Shea’s financial statements and accompanying notes, as well as management’s discussion and analysis of financial condition and results of operations, all of which can be found in publicly available documents and in this proxy statement/prospectus.



   
For the year ended December 31,
 
For the Six Months ended June 30,
 
Statement of Operations Data:
 
2005
 
2006
 
2006
 
2007
 
           
(Unaudited)
 
(Unaudited)
 
Revenue  
 
$
2,919,167
 
$
3,259,859
 
$
2,009,022
 
$
1,401,036
 
Cost of revenue  
   
475,628
   
1,039,619
   
708,495
   
453,451
 
Gross profit  
   
2,443,539
   
2,220,240
   
1,300,527
   
947,585
 
Operating expenses  
                         
Operating expenses  
   
2,675,259
   
4,391,082
   
1,947,021
   
5,748,027
 
Depreciation and amortization  
   
258,549
   
1,018,324
   
493,725
   
507,495
 
Total operating expenses  
   
2,933,808
   
5,409,406
   
2,440,746
   
6,255,522
 
Operating loss  
   
(490,269
)
 
(3,189,166
)
 
(1,140,219
)
 
(5,307,937
)
Interest and other expenses, net  
   
(209,497
)
 
(81,517
)
 
(60,703
)
 
(56,793
)
Minority interest in net earnings (loss) of subsidiary
   
-
   
-
   
-
   
-
 
Gain on sale of affiliated company  
   
365,339
   
-
   
-
   
-
 
Loss before income taxes  
   
(334,427
)
 
(3,270,683
)
 
(1,200,922
)
 
(5,364,730
)
Provision for income taxes  
   
-
   
-
   
-
   
-
 
Net loss  
   
(334,427
)
 
(3,270,683
)
 
(1,200,922
)
 
(5,364,730
)
Less preferred dividends  
   
(60,375
)
 
(241,500
)
 
(120,750
)
 
(73,797
)
Net loss to common shraeholders  
 
$
(394,802
)
$
(3,512,183
)
$
(1,321,672
)
$
(5,438,527
)
Net loss per share to common shareholders  
 
$
(0.06
)
$
(0.51
)
$
(0.19
)
$
(0.24
)
Weighted average common shares outstanding  
   
3,786,397
   
6,869,465
   
6,822,890
   
22,544,239
 
 
   
For the year ended December 31,
 
June 30
     
Balance Sheet Data:  
 
2005
 
2006
 
2007
   
           
(Unaudited)
     
Cash and cash equivalents  
 
$
1,545,820
 
$
404,209
 
$
106,608
     
Working capital (deficit)  
   
1,576,637
   
574,720
   
(1,657,427
)
     
Intangible assets, net  
   
3,347,452
   
2,359,909
   
1,874,524
       
Total assets  
   
5,891,746
   
4,351,520
   
3,502,656
       
Total debt  
   
1,428,958
   
1,380,028
   
1,236,686
       
Preferred stock  
   
2,300
   
2,967
   
2,800
       
Total stockholders' equity (deficit)
   
3,832,004
   
1,939,407
   
(481,390
)
     
 

34


SELECTED PRO FORMA FINANCIAL DATA
 
The following table presents unaudited summary selected financial and operating data on a pro forma basis as if CaminoSoft and Shea had been operated as a single combined company during the periods presented. The Unaudited Summary Selected Financial Data presented below has been derived from, and should be read in conjunction with the unaudited Pro Forma Condensed Combined Consolidated Financial Statements beginning on page 109. The Unaudited Summary Selected Pro Forma Financial Data are based upon assumptions and estimates of the effects of operating the companies on a combined basis and do not represent actual results. Because the unaudited Pro Forma Condensed Combined Consolidated Financial Statements beginning on page 109 and the unaudited Summary Selected Financial Data below are based on estimates and assumptions and do not represent actual results, you should not rely on them as being indicative of the results that may be achieved if the related transactions are approved.
 
Pro Forma(1) 
 
 
 
Year Ended December 31,
2006  
 
Six Months
Ended
June 30, 2007
 
Statement of Operations Data:  
         
Revenues  
 
$
18,089
 
$
10,769
 
Loss from operations  
   
(9,178
)
 
(7,800
)
Other income (expense)  
   
(3,442
)
 
(1,600
)
Net (loss)  
   
(12,928
)
 
(9,813
)
Net (loss) to common shareholders
   
(13,170
)
 
(9,887
)
Net (loss) per share to common shareholders - basic and diluted  
   
(0.33
)
 
(0.25
)


Balance Sheet Data:  
 
At June 30,
2007
 
Total assets         
 
$
33,010
 
Total liabilities         
   
23,876
 
Stockholders’ equity         
   
9,134
 
 
COMPARATIVE PER SHARE DATA
 
The following table sets forth for Shea common shares and CaminoSoft common shares certain historical, pro forma and pro forma-equivalent per share financial information. The information is derived from and should be read together with the respective historical consolidated financial statements of Shea and CaminoSoft that are incorporated by reference or appear elsewhere in this prospectus/proxy statement. While helpful in illustrating the financial characteristics of the combined company under one set of assumptions, the pro forma data does not reflect certain anticipated costs and benefits of the merger and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the Merger been consummated at the beginning of the periods presented. The pro forma data gives effect to the Merger and is based on numerous assumptions and estimates. The pro forma combined per share data and CaminoSoft equivalent per share data are prepared assuming 37,835,540 shares of CaminoSoft common stock will be issued based on the exchange ratio of 0.30964086.

35

 
 
 
At or for the Year
Ended December 31, 
2006 
 
At or for the Six 
Months Ended June 30, 
2007 
 
 
         
Basic and diluted loss per common share 
         
Shea
 
$
(0.28
)
$
(0.17
)
CaminoSoft
 
$
(0.12
)
$
(0.01
)
Consolidated pro forma
 
$
(0.33
)
$
(0.25
)
 
 
 
At or for the Six 
Months Ended June 30, 
2007 
 
 
     
Book value per share
     
Shea
 
$
0.36
 
CaminoSoft
 
$
(0.22
)
Consolidated pro forma
 
$
0.24
 
** The foregoing table does not reflect the proposed 1:10 split included as Proposal No. II in this proxy statement-prospectus.

THE CAMINOSOFT CORP. SPECIAL MEETING
 
General
 
CaminoSoft will hold a special shareholders’ meeting on ___, 2007 at ____ a.m. (local time), at the ________.  At the special shareholders’ meeting you will be asked to consider and vote on the approval of the Merger and Merger Agreement, a 1:10 reverse split of all issued and outstanding CaminoSoft common stock, amendments to our Articles of Incorporation relating to a name change and an increase in the number of authorized shares of CaminoSoft capital stock, and any other matters that may properly come before the meeting.
 
Record Date; Stock Entitled to Vote; Quorum
 
Only holders of record of CaminoSoft common stock at the close of business on ___, 2007, the record date for CaminoSoft’s special shareholders’ meeting, are entitled to receive notice of and to vote at the special shareholders’ meeting.  On the record date, CaminoSoft had 14,258,756 shares of its common stock issued, outstanding and eligible to vote at the special shareholders’ meeting.  The presence at the special meeting in person or by proxy of the holders of a majority of the voting power of all outstanding shares of common stock entitled to vote shall constitute a quorum for the transaction of business. In the event that a quorum is not present, the special shareholders’ meeting will be adjourned or postponed to solicit additional proxies.
 
Number of Votes
 
Each shareholder of record as of the record date is entitled to cast one vote for each share of common stock.

36

 
Votes Required
 
Approval of the Merger Agreement, the Merger and related proposals requires the affirmative vote of a majority of shares of CaminoSoft common stock outstanding on the record date.  As of the record date, CaminoSoft’s directors and executive officers owned 277,555 shares, representing approximately 2% of CaminoSoft’s issued and outstanding shares of common stock entitled to vote.
 
Voting of Proxies
 
Submitting Proxies
 
CaminoSoft shareholders may vote their shares in person by attending the special shareholders’ meeting or they may vote their shares by proxy.  In order to vote by proxy, CaminoSoft shareholders must complete the enclosed proxy card, sign and date it and mail it in the enclosed postage pre-paid envelope.
 
If a written proxy card is signed by a shareholder and returned without instructions, the shares represented by the proxy will be voted “FOR” approval of the Merger.  CaminoSoft shareholders whose shares are held in “street name” (i.e., in the name of a broker, bank or other record holder) must either direct the record holder of their shares as to how to vote their shares or obtain a proxy from the record holder to vote at the CaminoSoft special shareholders’ meeting.
 
It is important that you follow the directions provided by your broker regarding instructions on how to vote your shares. Your failure to instruct your broker on how to vote your shares will have the same effect as voting against the proposal to approve the Merger Agreement and the merger.
 
Revoking Proxies
 
CaminoSoft shareholders of record may revoke their proxies at any time before the time their proxies are voted at the CaminoSoft special shareholders’ meeting.  Proxies may be revoked by written notice, including by telegram or telecopy, to the Corporate Secretary of CaminoSoft, by a later-dated proxy signed and returned by mail or by attending the special shareholders’ meeting and voting in person.  Attendance at the special shareholders’ meeting will not, in and of itself, constitute a revocation of a proxy.  Instead, CaminoSoft shareholders who wish to revoke their proxies must inform CaminoSoft’s Corporate Secretary at the special shareholders’ meeting, prior to the vote, that he or she wants to revoke his or her proxy and vote in person.  Written notices of proxy revocations must be sent so that they will be received before the taking of the vote at CaminoSoft’s special shareholders’ meeting as follows:
 
CaminoSoft Corp.
600 Hampshire Road, Suite 105
Westlake Village, California 91361
Attention: Corporate Secretary
Abstentions and Broker Nonvotes
 
The presence at the special meeting in person or by proxy of the holders of a majority of the voting power of all outstanding shares of common stock entitled to vote shall constitute a quorum for the transaction of business.  Abstentions and broker nonvotes will be counted in determining whether a quorum is present. Under the applicable rules of the National Association of Securities Dealers, Inc., brokers or members who hold shares in street name for customers who are the beneficial owners of CaminoSoft common stock are prohibited from giving a proxy to vote those shares regarding approval of the merger and the Merger Agreement, in the absence of specific instructions from beneficial owners.  These are referred to as  “broker nonvotes.”  Abstentions and broker nonvotes will not be counted as a vote “FOR” or “AGAINST” the Merger Agreement and merger at the CaminoSoft special shareholders’ meeting or any other matter presented at that meeting.  However, abstentions and broker nonvotes will have the same effect as a vote “AGAINST” the Merger Agreement, the merger and the related proposals.

37

 
Other Matters
 
In addition to voting for approval of the Merger, Merger Agreement, reverse split and amendments to CaminoSoft’s Articles of Incorporation, any other matters that are properly presented at the special shareholders’ meeting will be acted upon. CaminoSoft’s management does not presently know of any other matters to be presented at the CaminoSoft special shareholders’ meeting other than those set forth in this proxy statement-prospectus. 
 
Solicitation of Proxies
 
CaminoSoft’s Board of Directors is soliciting the proxies for the CaminoSoft special shareholders’ meeting.  CaminoSoft will pay for the cost of solicitation of proxies.  In addition to solicitation by mail, CaminoSoft’s directors, officers and employees may also solicit proxies from shareholders by telephone, facsimile, telegram or in person.  If CaminoSoft’s management deems it advisable, the services of individuals or companies that are not regularly employed by CaminoSoft may be used in connection with the solicitation of proxies.  Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to send the proxy materials to beneficial owners.  CaminoSoft will, upon request, reimburse those brokerage houses and custodians for their reasonable expenses in so doing.
 
Recommendation of the CaminoSoft Board of Directors
 
A committee of CaminoSoft’s Board of Directors comprised solely of independent directors has unanimously approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the reverse split and amendments to CaminoSoft’s Articles of Incorporation. Based on CaminoSoft’s reasons for the merger described in this document, CaminoSoft independent directors believe that the merger is in the best interests of CaminoSoft and its shareholders. Accordingly, the CaminoSoft independent directors unanimously recommend that CaminoSoft shareholders vote “FOR” approval of the Merger Agreement and related proposals.

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PROPOSAL I - THE MERGER
 
This section describes certain aspects of the proposed merger of CC Merger Corp., a wholly owned subsidiary of CaminoSoft with and into Shea (CaminoSoft and CC Merger Corp. are sometimes collectively referred to herein as “CaminoSoft”).  Because this is a summary, it does not contain all the information that may be important to you.  You should read this entire proxy statement-prospectus, including the appendices.  A copy of the Agreement and Plan of Merger dated September 4, 2007 (“Merger Agreement”) is attached as Appendix A to this proxy statement-prospectus and is incorporated by reference herein.  The following discussion, and the discussion under the subsection entitled “The Merger Agreement,” describes important aspects of the merger and the material terms of the Merger Agreement.  These descriptions are qualified by reference to Appendix A.
 
Background of and Reasons for the Merger
 
In determining whether to approve the Merger Agreement, CaminoSoft’s Board of Directors considered a variety of factors that might impact the long-term, as well as short-term interests of CaminoSoft and its stockholders, including whether these interests may be best served by the continued independence of CaminoSoft. As part of the discussion, deliberations and due diligence CaminoSoft’s board of directors took into consideration a number of factors including but not limited to, the historical, current and projected financial condition, results of operations, stock performance, capitalization and operating, strategic and financial risks of CaminoSoft.

In making the determination, CaminoSoft’s Board of Directors consulted with CaminoSoft’s management, legal advisors, accountants and major lien holders and lenders. The Company is also soliciting an outside expert to provide an opinion of fairness prior to the final close of the Merger. CaminoSoft’s board of directors considered a number of factors, including among other things the following principal positive factors (the order does not reflect relative significance):

 
·
Industry Consolidation. As the software industry and specifically the Information Lifecycle Management (“ILM”) software industry segment has undergone significant consolidation in recent years, CaminoSoft’s board of directors believes that it is necessary over the long run to expand its range of product offerings through complementary technology and function within the scope of data management, data movement, data retention and data protection segments of the ILM software industry. CaminoSoft’s board of directors believes the merger with Shea is the best opportunity for CaminoSoft to participate in the industry against much larger competition with consolidated product lines.

 
·
Favorable Future Stock Valuation. CaminoSoft’s board of directors considered the fact that being part of a larger public entity would allow the best opportunity to gain additional investment for growth and increased valuation for the Company’s post merger common stock ownership. With limited operating success and current and historical lack of stock support in the market, the board of directors feel the opportunity to build increased shareholder value will be greatly enhanced by becoming part of a much larger public company.

 
·
Best Strategic Alternative Available. CaminoSoft’s board of directors considered the fact that over the past 24 months the Company explored various strategic alternatives with the assistance of its corporate advisors and partners. Without any significant interest forthcoming, while being forced to re-negotiate debt to extend maturity dates, the board believed that the interest and potential synergy from the Shea merger offered the best opportunity to take advantage of the Company’s historical product development, partnerships with storage industry leaders, distribution channel and future potential in the ILM market space.

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·
Expanded Market Reach. CaminoSoft’s board of directors acknowledged the limited budget for sales, marketing, branding, and the ability to create general market awareness for the Company’s products. With the technology market changing and potential delivery of products changing to include alternative methods such as Software as a Service (“SaaS”), a departure from the current perpetual license sale, CaminoSoft’s board of directors believe that Shea and its evolving Business Process Management (“BPM”) practice is the perfect platform to expand the delivery options of the traditional products and services provided by CaminoSoft.

 
·
Increased Valuation. CaminoSoft’s board considered the change in business to include a much larger stream of revenue in an alternative segment of the technology and business information and services industry a better platform for growth of investment interest and to increase valuation for the current shareholders of CaminoSoft stock.

 
·
Participation of Major Lender. CaminoSoft’s board of directors considered the support of the Company’s major lender and lien holder during its discussions and deliberations. All current outstanding debt will be converted to equity as part of the merger transaction, which may be the single largest factor in the board of directors consideration of the merger. Re-payment and continued service of the current debt would be impossible without major increases in revenue and a third party investment in the Company.

CaminoSoft’s board of directors also considered certain risks and other potentially negative factors, including the following:

 
·
Large Dilution of Current Shareholders. The fact that the Merger Agreement outlines a major change in the ownership in the post merger corporation, which tremendously reduces the total company ownership of the current CaminoSoft shareholders.

 
·
No Shop Covenant. The fact that the Merger Agreement includes a clause preventing CaminoSoft from discussing a deal or negotiating with any other party relating to any acquisition or merger transaction.

 
·
Possibility the Merger will not Close. The risks and costs to the Company if the merger is not effected, including diversion of management and the employee attention and potential employee attrition and the ultimate effect on business and customer relationships.

CaminoSoft’s board of directors believes that, overall, the potential benefits of the merger to CaminoSoft’s stockholders outweigh the risks of the merger and the negative factors described above and that the merger provides the maximum value reasonably available to stockholders.

For reasons set forth above, CaminoSoft independent directors have unanimously approved the Merger Agreement as being in the best interest of CaminoSoft and its shareholders and unanimously recommend that the CaminoSoft shareholders approve the principal terms of the Merger.
 
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The Merger Agreement provides that CC Merger Corp., CaminoSoft’s wholly owned subsidiary will merge with and into Shea.  As a result of the Merger, Shea will be the surviving entity and will operate under the name “Shea Development Corp.”
 
In connection with the Merger, Shea shareholders and other persons will be receiving in shares of CaminoSoft common stock and preferred stock, and options and warrants to acquire CaminoSoft common stock. The Merger contemplates that each outstanding share of Shea common stock will be converted into the right to receive a pro rata share of the number of shares of CaminoSoft common stock equal to 95.01% of CaminoSoft common stock outstanding immediately prior to the consummation of the Merger less any shares of CaminoSoft common stock issuable upon the exercise or conversion of any securities issued in connection with the merger. In addition, each issued and outstanding share of Shea’s Series A Preferred Stock, par value $0.001 per share, shall be converted into the right to receive a pro rata share of 2,800,000 shares of CaminoSoft’s Series A Preferred Stock, and each issued and outstanding share of Shea’s Series B Preferred Stock, par value $0.001 per share, shall be converted into the right to receive a pro rata share of 3,600,000 shares of CaminoSoft’s Series B Preferred Stock, and otherwise on substantially the same terms as Shea’s Series A Preferred Stock and Series B Preferred Stock.
 
CaminoSoft will assume all outstanding options to purchase Shea common stock granted under Shea’s 2007 Stock Option and Performance Awards Plan (the “Shea Option Plan”) subject to adjustment by an exchange ratio of 0.30964086, representing the number of shares of CaminoSoft common stock issuable pursuant to the Merger in exchange for one share of Shea common stock. Each such assumed Shea option shall be entitled to receive options to purchase the number of shares of CaminoSoft common stock obtained by multiplying (x) the number of shares of Shea common stock issuable under such assumed option by (y) the exchange ratio. The exercise price for the assumed options will be equal to the exercise price of such assumed Shea option divided by the exchange ratio. In addition, each outstanding warrant to purchase Shea common stock, will be assumed by CaminoSoft subject to adjustment by the exchange ratio. Further, each share of CaminoSoft’s common stock outstanding immediately prior to the merger will be subject to a 1:10 reverse split, and existing holders of CaminoSoft common stock will be entitled to receive in respect of each share of CaminoSoft common stock, five-year warrants to purchase, following the consummation of the merger, 0.333 shares of CaminoSoft common stock at an exercise price of 110% of the per share issuance price most recently completed private placement of Shea prior to the closing of the merger.
 
Upon consummation of the Merger, and (i) assuming the exercise and conversion, as applicable, of all CaminoSoft preferred stock, options and warrants issued in connection with the Merger, and (ii) after giving effect to any capital stock issued, or deemed to be issued, in connection with any equity financing undertaken by CaminoSoft or Shea pursuant to which CaminoSoft or Shea, as applicable, shall raise at least $6,000,000 in proceeds at a per share price of not less than $0.50, existing CaminoSoft shareholders will collectively hold 4.99% of the fully diluted capital stock of CaminoSoft, and shareholders of Shea will collectively hold 95.01% of the fully diluted capital stock of CaminoSoft.

Please read the sections entitled “PROPOSAL I - THE MERGER” for additional information.
 
Material United States Federal Income Tax Consequences
 
General.  The following discussion is a summary of the material United States federal income tax consequences to CaminoSoft shareholders in connection with the Merger, and in particular with respect to the proposed reverse split of the CaminoSoft common stock. The following discussion is based on the Internal Revenue Code of 1986, as amended, (the “Code”) United States Treasury Regulations promulgated under the Internal Revenue Code, administrative rulings and pronouncements and judicial decisions as of the date hereof, all of which are subject to change, possibly with retroactive effect. Any such change could alter the tax consequences discussed in this proxy statement-prospectus.

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As used in this section, a “CaminoSoft shareholder” is a citizen or resident of the United States; a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized under the laws of the United States or any State or the District of Columbia; an estate the income of which is subject to United States federal income taxation regardless of its source; or a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more United States persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.
 
This discussion does not address the effects of any state, local, or non-United States tax laws. This discussion does not discuss the tax consequences of transactions effectuated prior or subsequent to, or concurrently with, the Merger, whether or not in connection with the Merger. Furthermore, this discussion relates only to CaminoSoft shareholders who hold CaminoSoft common stock as capital assets. The tax treatment of a CaminoSoft shareholder may vary depending upon such shareholder’s particular situation, and certain shareholders may be subject to special rules not discussed below.  Such shareholders would include, for example, insurance companies, tax-exempt organizations, financial institutions, investment companies, broker-dealers, domestic shareholders whose “functional” currency is not the United States dollar, shareholders who hold CaminoSoft common stock as part of a hedge, straddle, constructive sale or conversion transaction, and individuals who receive CaminoSoft stock pursuant to the exercise of employee stock options or otherwise as compensation.
 
You are strongly urged to consult with your tax advisor with respect to the tax consequences to you of the merger in light of your own particular circumstances, including tax consequences under state, local, foreign and other tax laws and the possible effects of changes in United States federal or other tax laws.
 
Tax Consequences of the Merger.  It is expected that the Merger will constitute a “reorganization” for United States federal income tax purposes within the meaning of Section 368(a) of the Code. Such opinion will be subject to certain assumptions, limitations and qualifications and will be based on the truth and accuracy of certain customary factual representations of Shea and CaminoSoft.  Assuming the merger does qualify as a reorganization within the meaning of Section 368(a) of the Code, then, subject to the limitations and qualifications referred to herein, the following material United States federal income tax consequences will result from qualification of the merger as a “reorganization” within the meaning of Section 368(a) of the Code. CaminoSoft shareholders who vote to approve the merger and whose shares of CaminoSoft common stock are thus subject to the proposed reverse split will not recognize gain or loss for U.S. federal income tax purposes in the Merger. The tax basis of the CaminoSoft shares received by you in exchange for your new shares of CaminoSoft common stock following the reverse split will be the same as your tax basis in your Shea common stock. Your holding period in the post reverse-split CaminoSoft shares received by you will include your holding period in your pre reverse-split shares of CaminoSoft common stock.
 
The foregoing discussion is for general information purposes only and is not intended to be a complete analysis or description of all potential federal income tax consequences of the merger. In addition, the discussion does not address tax consequences that may vary with, or are contingent on, your individual circumstances. Moreover, the discussion does not address any non-income tax or any foreign, state or local tax consequences of the merger. Accordingly, you are strongly urged to consult with your tax advisor to determine the particular federal, state, local or foreign income or other tax consequences to you of the merger.

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If a CaminoSoft shareholder receives cash pursuant to the exercise of dissenters’ rights, that shareholder generally will recognize gain or loss measured by the difference between the cash received and the adjusted tax basis in the shareholder’s CaminoSoft common stock.  This gain will be long-term capital gain or loss if the shareholder’s holding period in the CaminoSoft common stock is greater than one year.   Any CaminoSoft shareholder that plans to exercise dissenters’ rights in connection with the Merger is urged to consult a tax advisor to determine the related tax consequences.
 
Treatment of CaminoSoft, CC Merger Corp. and Shea.  No gain or loss will be recognized by CaminoSoft, CC Merger Corp. or Shea as a result of the Merger.  
 
Backup Withholding. Any cash payments to CaminoSoft shareholders in connection with the exercise of dissenters’ rights, may be subject to backup withholding at a rate of 28% on a shareholder’s receipt of cash, unless such shareholder furnishes a correct taxpayer identification number and certifies that he or she is not subject to backup withholding. Any amount withheld under the backup withholding rules will generally be allowed as a refund or credit against the shareholder’s U.S. federal income tax liability, provided the required information is furnished to the Internal Revenue Service.
 
HOLDERS OF SHARES OF CAMINOSOFT COMMON STOCK ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER, AS WELL AS THE EFFECTS OF STATE, LOCAL, AND FOREIGN TAX LAWS.
 
Regulatory Approvals
 
There are no regulatory approvals required in connection with authorizing or approving the Merger.
 
Certain Effects of the Merger
 
The Merger Agreement requires CC Merger Corp. to merge with and into Shea, with Shea as the surviving entity.  After the Merger, Shea will become a wholly owned subsidiary of CaminoSoft, and the directors and officers of Shea shall become the directors and officers of the surviving subsidiary entity.  CaminoSoft will continue to operate with its present directors and executive officers. After the Merger, there will be no more trading in Shea common stock.  CaminoSoft shareholders will receive instructions from CaminoSoft or its respective exchange agents regarding exchanging CaminoSoft stock certificates following the reverse split and in connection with the Merger.
 
Dissenters’ Rights of CaminoSoft Shareholders
 
Under California law, each CaminoSoft shareholder has the right to dissent from the merger and to have the appraised fair market value of their shares of CaminoSoft common stock as of _____, 2007, to the dissenting shareholders paid in cash if:
 
 
·
his or her shares were outstanding immediately prior to the record date;
 
 
·
the Merger is approved by CaminoSoft’s shareholders;  and
 
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·
such shareholder complies with Sections 1300 through 1312 of the California Corporations Code, or “Corporations Code.”
 
Sections 1300 through 1304 of the Corporations Code, which include the procedures required to perfect dissenters’ rights, are attached to this document as Appendix B. The description of dissenters’ rights contained in this document is qualified in its entirety by reference to Chapter 13, commencing with Section 1300, of the Corporations Code.
 
For a CaminoSoft shareholder to exercise dissenters’ rights, he or she must:
 
 
·
make a timely written demand upon CaminoSoft for purchase in cash of his or her shares at their fair market value, which demand includes:
 
 
o
the number and class of the shares held of record by him or her that he or she demands upon CaminoSoft, and
 
 
o
what he or she claims to be the fair market value of his or her shares as of September 4, 2007;
 
 
·
have his or her demand received by CaminoSoft on or before the date of the CaminoSoft meeting of shareholders;
 
 
·
not vote in favor of the principal terms of the Merger Agreement; and
 
 
·
comply with such other procedures as are required by the Corporations Code.
 
Failure to follow the procedures set forth in the Corporations Code will result in a waiver of dissenters’ rights. Further, if a CaminoSoft shareholder returns his or her proxy without instructions, which will result in a vote for the approval of the principal terms of the Merger, he or she will not be entitled to dissenters’ rights. Any demand notices or other documents to be delivered to CaminoSoft may be sent to CaminoSoft Corp., 600 Hampshire Road, Suite 105, Westlake Village, California 91361; Attention: Corporate Secretary.
 
The statement of fair market value by a dissenting CaminoSoft shareholder constitutes an offer to sell his or her shares at the fair market value as of September 4, 2007, the last business day immediately preceding public announcement of the Merger.  The closing price for a share of CaminoSoft common stock on September 4, 2007, was $0.13. A demand may not be withdrawn without the consent of CaminoSoft. A proxy or vote against the approval of the merger proposal does not in and of itself constitute a proper demand.
 
If a CaminoSoft shareholder holds dissenting shares, CaminoSoft will mail a notice of the approval of the Merger by CaminoSoft shareholders within ten days after the date of such approval, accompanied by:
 
 
·
a copy of Sections 1300, 1301, 1302, 1303 and 1304 of Chapter 13 of the Corporations Code;
 
 
·
a statement of the price determined by CaminoSoft to represent the fair market value of the dissenting shares, as of September 4, 2007, the business day immediately preceding announcement of the Merger; and
 
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·
a brief description of the procedure to be followed if he or she desires to exercise his or her dissenters’ rights under such sections.
 
The statement of price constitutes an offer by CaminoSoft to purchase at the price stated for such dissenting shares.
 
A CaminoSoft shareholder who wishes to exercise dissenters’ rights must submit to CaminoSoft at its principal office or at the office of its transfer agent the certificates representing any shares that he or she is demanding that CaminoSoft purchase, for endorsement as dissenting shares, within 30 days after the date on which notice of approval of the Merger by CaminoSoft shareholders was mailed to him or her.
 
If CaminoSoft denies that shares submitted to it as dissenting shares are dissenting shares, or if CaminoSoft and a dissenting shareholder fail to agree on the fair market value of his or her shares, then either the dissenting shareholder or CaminoSoft may file a complaint in the superior court of the proper county in California requesting that the court determine such issue. Such complaint must be filed within six months after the date on which notice of the approval of the merger is mailed to such dissenting shareholder. On trial of the action, the court will first determine if the shares are dissenting shares, and if so determined, the court will either determine the fair market value or appoint one or more impartial appraisers to do so. If both CaminoSoft and a dissenting shareholder fail to file a complaint within six months after the date on which notice of the approval of the merger was mailed to such dissenting shareholder, his or her shares will cease to be dissenting shares. In addition, if a dissenting shareholder transfers his or her shares prior to their submission for the required endorsement, such shares will lose their status as dissenting shares.
 
Failure to take any necessary step will result in a termination or waiver of dissenters’ rights under Chapter 13 of the Corporations Code. A person having a beneficial interest in CaminoSoft common stock that is held of record in the name of another person, such as a trustee or nominee, must act promptly to cause the record holder to follow the requirements of Chapter 13 of the Corporations Code in a timely manner if such person elects to demand payment of the fair market value of such shares. To the extent shareholders of CaminoSoft or Shea exercise dissenters’ rights in connection with the merger, the exchange ratio as calculated under the Merger Agreement will be appropriately adjusted.
 
Accounting Treatment
 
In accordance with United States generally accepted accounting principles, Shea will be deemed to have acquired CaminoSoft and will account for the merger using the purchase method of accounting for business combinations. Shea will allocate the purchase price to the net tangible and intangible assets acquired based on their respective fair values at the date of the completion of the merger. Any excess of the purchase price over those fair values will be recorded as goodwill.

CaminoSoft’s Management and Operations After the Merger
 
Pursuant to employment agreements yet to be negotiated it is contemplated that the management and operations of CaminoSoft will remain unchanged initially. As part of the due diligence and go forward business plan of Shea, current management will remain in place during the initial period post merger (approximately 6 months to 1 year). During the merger closing process it will be determined which employees will be offered continued employment and which if any employees will be terminated. The development and sale of the CaminoSoft software products and services including sales and integration partnerships will continue. Certain functions within CaminoSoft that have an overlap with staffing units already in place with Shea may be consolidated in the future. The timing of the Merger, due diligence, market trends and other factors will ultimately determine the going forward operation of CaminoSoft. The management of both Shea and CaminoSoft believe the data storage management solutions, point products and services have great potential and synergy with the Shea business process management practice and client base. As with any combination of products and services the best of the CaminoSoft offerings will be integrated where possible with the Shea offerings, while the overall CaminoSoft product and service strategy will be developed and implemented as part of the global Shea business plan.
 
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Interest in the Merger of Directors of CaminoSoft
 
Russell Cleveland and Robert Pearson, two directors on CaminoSoft’s board of directors, are affiliated with the following CaminoSoft shareholders: Renaissance Capital Growth & Income Fund III, Inc; Renaissance US Growth & Income Trust PLC; and BFSUS Special Opportunities Trust PLC (collectively, the “Renaissance Funds”). See “Security Ownership of Certain Beneficial Owners and Management” for additional information on CaminoSoft capital stock held by the Renaissance Funds.
 
Messrs. Cleveland and Pearson are executive officers of Renaissance Capital Group, Inc. (“RCG”), which is the investment advisor to the Renaissance Funds. RCG, through certain of its affiliated funds, also owns shares in Shea. A committee comprising independent directors Lee Pryor and Robert Degan, neither of whom is affiliated with RCG or the Renaissance Funds, approved the Merger and Merger Agreement.
 
The Merger Agreement
 
The following describes aspects of the Merger, including material terms of the Merger Agreement. The description of the Merger Agreement is subject to, and qualified in its entirety by reference to, the Merger Agreement, which is attached to this document as Appendix A, and is incorporated by reference in this document. We urge you to carefully read the Merger Agreement.
 
The Merger
 
CaminoSoft, CC Merger Corp. and Shea entered into the Merger Agreement as of September 4, 2007.  Under the Merger Agreement’s terms, CC Merger Corp. will merge with and into Shea.  The separate corporate existence of CC Merger Corp. will cease, and Shea will be the surviving subsidiary entity. 
 
In connection with the Merger, Shea shareholders and other persons will be receiving shares of CaminoSoft common stock and preferred stock, and options and warrants to acquire CaminoSoft common stock. The Merger contemplates that each outstanding share of Shea common stock will be converted into the right to receive a pro rata share of the number of shares of CaminoSoft common stock equal to 95.01% of CaminoSoft common stock outstanding immediately prior to the consummation of the Merger less any shares of CaminoSoft common stock issuable upon the exercise or conversion of any securities issued in connection with the Merger. In addition, each issued and outstanding share of Shea’s Series A Preferred Stock, par value $0.001 per share, shall be converted into the right to receive a pro rata share of 2,800,000 shares of CaminoSoft’s Series A Preferred Stock, and each issued and outstanding share of Shea’s Series B Preferred Stock, par value $0.001 per share, shall be converted into the right to receive a pro rata share of 3,600,000 shares of CaminoSoft’s Series B Preferred Stock, and otherwise on substantially the same terms as the Shea’s Series A Preferred Stock and Series B Preferred Stock.
 
Each outstanding option to purchase Shea common stock granted under Shea’s 2007 Stock Option and Performance Awards Plan will be assumed by CaminoSoft. Each such assumed Shea option shall be entitled to receive options to purchase the number of shares of CaminoSoft common stock obtained by multiplying (x) the number of shares of Shea common stock issuable under such assumed option by (y) an exchange ratio of 0.30964086, representing the number of shares of CaminoSoft common stock issuable pursuant to the Merger in exchange for one share of Shea common stock. The exercise price for the new CaminoSoft options will be equal to the exercise price of such cancelled Shea option divided by the exchange ratio. Similarly, each outstanding warrant to purchase Shea common stock, will be assumed by CaminoSoft subject to adjustment by the exchange ratio. Further, each share of CaminoSoft’s common stock outstanding immediately prior to the merger will be subject to a 1:10 reverse split, and existing holders of CaminoSoft common stock will be entitled to receive in respect of each share of CaminoSoft common stock, five-year warrants to purchase, following the consummation of the merger, 0.333 shares of CaminoSoft common stock at an exercise price of 110% per share of the shares of Shea capital stock issued under a private placement of Shea most recently completed prior to the closing of the merger.
 
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Upon consummation of the Merger, and (i) assuming the exercise and conversion, as applicable, of all CaminoSoft preferred stock, options and warrants issued in connection with the merger, and (ii) after giving effect to any capital stock issued, or deemed to be issued, in connection with any equity financing undertaken by CaminoSoft or Shea pursuant to which CaminoSoft or Shea, as applicable, shall raise at least $6,000,000 in proceeds at a per share price of not less than $0.50, existing CaminoSoft shareholders will collectively hold 4.99% of the fully diluted capital stock of CaminoSoft, and shareholders of Shea will collectively hold 95.01% of the fully diluted capital stock of CaminoSoft. CaminoSoft and Shea have structured the merger to qualify as a tax-free reorganization from their perspectives.  You are urged to read the section entitled “PROPOSAL I - THE MERGER - Material United States Federal Income Tax Consequences” for additional information.
 
The Closing
 
The merger will be effective at the date and time a certificate of merger agreement, and any required related documents, is filed with and approved by the Nevada Secretary of State.  At the closing the parties will exchange various documents, including officers’ certificates, as required by the Merger Agreement.  The Merger Agreement provides that the closing shall occur upon the later of (a) November 15, 2007, or (b) the second business day after the day on which the last of the closing conditions set forth in the Merger Agreement have been satisfied or waived, including approval by CaminoSoft’s and Shea’s respective shareholders, or (c) such other date as CaminoSoft and Shea mutually agree upon in writing.
 
The Exchange Ratio
 
Pursuant to the Merger Agreement, each share of Shea common stock issued and outstanding (or issuable under convertible preferred stock, warrants and options) shall be exchanged for 0.30964086 share of CaminoSoft common stock. The exchange ratio of 0.30964086 is calculated in the Merger Agreement by dividing (x) the number of shares of CaminoSoft common stock issuable pursuant to the Merger by (y) the sum of the number shares of the Shea capital stock issued and outstanding immediately prior to the Merger plus the number of shares of Shea common stock issuable under convertible preferred stock, warrants and options issued and outstanding immediately prior to the Merger.
 
Treatment of Stock Options and Warrants
 
Each outstanding option to purchase Shea common stock granted under Shea’s 2007 Stock Option and Performance Awards Plan will be assumed by CaminoSoft. Each such assumed Shea option shall be entitled to receive options to purchase the number of shares of CaminoSoft common stock obtained by multiplying (x) the number of shares of Shea common stock issuable under such assumed option by (y) an exchange ratio of 0.30964086, representing the number of shares of CaminoSoft common stock issuable pursuant to the Merger in exchange for one share of Shea common stock. The exercise price for the new CaminoSoft options will be equal to the exercise price of such cancelled Shea option divided by the exchange ratio. Other than as described above, the terms and conditions of the newly issued CaminoSoft options shall be identical to the terms and conditions of the cancelled Shea options.

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Similarly, each outstanding warrant to purchase Shea common stock, will be assumed by CaminoSoft subject to adjustment by the exchange ratio.
 
Issuance of New CaminoSoft Warrants
 
Further, existing holders of CaminoSoft common stock will be entitled to receive in respect of each share of CaminoSoft common stock, five-year warrants to purchase, following the consummation of the merger, 0.333 shares of CaminoSoft common stock at an exercise price of 110% per share of the shares of Shea capital stock issued under a private placement of Shea most recently completed prior to the closing of the merger.
 
Charter Documents; Directors and Officers
 
Upon consummation of the Merger, the directors and officers of Shea in place immediately prior to the Merger shall become the directors and officers of CaminoSoft. Similarly, upon consummation of the Merger, the Articles of Incorporation and Bylaws of Shea as in effect immediately prior to the Merger shall be the Articles of Incorporation and Bylaws of the surviving entity following the Merger.
 
Representations and Warranties
 
The Merger Agreement contains various customary representations and warranties that CaminoSoft and Shea make for each other’s benefit.  The representations and warranties relate to, among other things:
 
 
·
corporate organization and similar corporate matters;
 
 
·
licenses and permits;
 
 
·
authorization and enforceability of the Merger Agreement and related matters;
 
 
·
conflicts under charter documents, required consents or approvals, and violations of any agreements or law;
 
 
·
capital structure;
 
 
·
timely filing, accuracy and completeness of documents filed with government agencies and bank regulatory agencies;
 
 
·
financial statements;
 
 
·
intellectual property;
 
 
·
absence of certain material adverse events, changes, effects or undisclosed liabilities;
 
 
·
litigation;
 
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·
compliance with laws and regulations;
 
 
·
tax returns and audits;
 
 
·
title to assets;
 
 
·
ownership of real property;
 
 
·
labor matters;
 
 
·
material contracts; and
 
 
·
accuracy of corporate records.
 
The foregoing is an outline of the representations and warranties made by CaminoSoft and Shea contained in the Merger Agreement attached as Appendix A.  You should carefully review the entire Merger Agreement, and in particular Articles 3 and 4, containing the detailed representations and warranties of the parties.
 
Covenants
 
As a condition to the Merger, CaminoSoft and Shea have agreed, among other things, that:
 
 
·
CaminoSoft will deliver to Shea a list of key employees of CaminoSoft, and such key employees shall be required to execute employment agreements with the surviving entity in the merger. In addition, CaminoSoft and Shea will work together to determine which of the remaining CaminoSoft employees (other than the key employees) will be offered employment following consummation of the Merger. All remaining employees of CaminoSoft shall be terminated following the merger, however, each such terminated employee will be entitled to receive all benefits to which they are entitled under any employment agreements or options awards;
 
 
·
CaminoSoft will file a proxy statement-prospectus in connection with registering the shares of CaminoSoft capital stock, options and warrants issued to Shea shareholders and CaminoSoft warrants issued CaminoSoft shareholders in connection with the merger. The proxy-statement prospectus will also be used to seek approval from the shareholders of CaminoSoft with respect to the merger and related proposals, including, the proposed amendments to CaminoSoft’s Articles of Incorporation and the contemplated reverse split of existing CaminoSoft common stock;
 
 
·
Each will provide the other party with reasonable access to their respective records;
 
 
·
CaminoSoft will call a special meeting of its shareholders and recommend approval of the Merger, Merger Agreement and any other related proposals, subject to their fiduciary duties. Similarly, Shea shall obtain shareholder approval for the Merger and Merger Agreement via written consent;
 
 
·
Each of them will notify the other of (i) any violation of promises to carry on its business in the ordinary course until the Merger becomes effective, (ii) any event expected to have a material adverse effect on it, or (iii) any awareness of an untrue statement in the proxy statement - prospectus;
 
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·
Each of them will use commercially reasonable efforts to obtain any consent or approval required in connection with the merger and the transactions contemplated in the Merger Agreement;
 
 
·
Each of them is prohibited from soliciting, initiating, encouraging or facilitating certain alternative transaction proposals with any third party until the earlier of the termination of the Merger Agreement or the closing of the Merger; and
 
 
·
Each of them will not disclose any confidential information disclosed to the other in the process of negotiating and finalizing the Merger and Merger Agreement.
 
The foregoing is an outline of the additional agreements made by CaminoSoft and Shea contained in the Merger Agreement attached as Appendix A.  You should carefully review the entire Merger Agreement, and in particular Article 5, containing the detailed additional agreements of the parties.
 
Conduct of Business Until Consummation of the Merger
 
The Merger Agreement places restrictions on and requires commitments by CaminoSoft and Shea regarding the conduct of their respective businesses between the date of the Merger Agreement and the closing.  Each of CaminoSoft and Shea has agreed that until the closing it will carry on its business in the ordinary course in substantially the manner in which heretofore conducted, and neither shall, without the prior written approval of the other (including, without limitation):
 
 
·
Amend their respective Articles of Incorporation or By-Laws;
 
 
·
Declare dividends, redeem or sell stock or other securities, acquire or dispose of fixed assets;
 
 
·
Change the terms of any existing employment relationship;
 
 
·
Enter into any material or long-term contract;
 
 
·
Guarantee obligations of any third party;
 
 
·
Settle or discharge any material balance sheet receivable for less than its stated amount
 
 
·
Pay more on any liability than its stated amount; or
 
 
·
Enter into any other transaction other than in the regular course of business.
 
In addition, CaminoSoft and Shea have agreed to do the following with respect to preserving their respective businesses until consummation of the merger, including, without limitation:
 
 
·
Carry on its business in the ordinary course consistent with past practice;
 
 
·
Pay its taxes and other obligations consistent with its past practices, to pay or perform other obligations when due consistent with its past practices, subject to any good faith disputes over such taxes and other obligations;
 
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·
Use reasonable efforts and institute all policies to preserve intact its present business organization;
 
 
·
Use reasonable efforts to keep available the services of its present officers and key employees; and
 
 
·
Use reasonable efforts to preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and other persons having business dealings with it.
 
The foregoing is a summary of the material negative and affirmative covenants of the Merger Agreement. You are encouraged to carefully read the terms of the Merger Agreement attached as Appendix A, including the specific covenants contained in Article 5.
 
Conditions to the Parties’ Obligations
 
The obligations of CaminoSoft and Shea to complete the Merger are subject to certain mutual conditions, including, but not limited to the following:
 
 
·
Accuracy of all representations and warranties made by each party, as of the closing of the Merger;
 
 
·
Performance of all covenants and obligations contained in the Merger Agreement required to be performed or complied with prior to the closing of the Merger;
 
 
·
Obtaining all approvals and consents necessary in connection with the Merger;
 
 
·
Approval of the Merger, Merger Agreement and other transactions contemplated in connection with the Merger by CaminoSoft’s and Shea’s respective shareholders;
 
 
·
The proxy statement - prospectus will have been filed with, and declared effective by the Securities and Exchange Commission;
 
 
·
Execution of employment agreements between key employees of CaminoSoft (as identified to Shea) and the surviving entity in the Merger;
 
 
·
Absence of litigation, or any injunction or order of any sort prohibiting consummation of the Merger, or the existence of any law having a material adverse effect on the Merger and the transactions contemplated in the Merger Agreement;
 
 
·
All indebtedness of CaminoSoft shall have been converted into equity of CaminoSoft, including all indebtedness owed by CaminoSoft to Renaissance Capital and affiliated funds, except that any amounts advanced by Renaissance Capital or its affiliated funds to CaminoSoft after September 4, 2007, the date of the Merger Agreement, up to $250,000, shall be repaid at the closing of the Merger;
 
 
·
CaminoSoft shall have received a fairness opinion issued by The Mentor Group, which such fairness opinion shall state that the Merger and the transactions contemplated thereby are fair to CaminoSoft;
 
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·
Centrecourt Asset Management shall have received a security interest in all of the assets of CaminoSoft;
 
 
·
CaminoSoft shall have adopted and assumed Shea’s 2007 Stock Option and Performance Awards Plan;
 
 
·
The amount of any accrued vacation in excess of one year due and payable to Steve Crosson, CaminoSoft’s Chief Financial Officer, shall have been paid; and
 
 
·
No material adverse change in the business, operations or financial condition of each of CaminoSoft, CC Merger Corp. and Shea.
 
Although not a closing condition, the Merger Agreement contemplates that prior to the closing of the Merger, either of CaminoSoft or Shea shall undertake an equity financing pursuant to which CaminoSoft or Shea, as applicable, shall raise at least $6,000,000 in proceeds at a per share price of not less than $0.50 (on a post reverse-split basis).
 
The foregoing is a summary of the material conditions of the Merger Agreement.  You are encouraged to read the terms of the Merger Agreement attached as Appendix A, including the specific provisions contained in Article 6 of the Merger Agreement.
 
Termination
 
CaminoSoft and Shea can mutually agree in writing to terminate the Merger Agreement and abandon the Merger at any time. Additionally under certain circumstances, either CaminoSoft or Shea can terminate the Merger Agreement These circumstances include:
 
 
·
If the Merger does not close on or before December 31, 2007;
 
 
·
If the shareholders of either of CaminoSoft or Shea fail to approve the Merger and the transactions contemplated in the Merger Agreement;
 
 
·
If any court of competent jurisdiction or other governmental authority has issued an order making illegal or otherwise permanently restricting, preventing or otherwise prohibiting the Merger and such order shall have become final; or
 
 
·
In the event of a breach of any provision or covenant of the Merger Agreement, or if any representation or warranty made by either party becomes inaccurate, and such breach or inaccuracy would cause the related closing condition, if any, not be satisfied, upon 30 days written notice that such breach has occurred or such representation is inaccurate.
 
Upon termination of the Merger Agreement, the Merger Agreement will become null and void and there will be no liability or obligation on the part of CaminoSoft, CC Merger Corp. or Shea. However, no termination of the Merger Agreement will relieve any of the parties to the Merger Agreement from liability for willful breach of its representations, warranties, covenants or agreements contained in the Merger Agreement.
 
The foregoing is a summary of the material termination provisions of the Merger Agreement.  You are encouraged to read the terms of the Merger Agreement attached as Appendix A, including the specific provisions contained in Article 8 of the Merger Agreement.
 
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DESCRIPTION OF CAMINOSOFT
 
Business
 
CaminoSoft develops and manufactures software solutions that store, manage, and safeguard large quantities of data created in a business and application settings. CaminoSoft’s software for Microsoft Windows 2000 and 2003 and Novell NetWare environments enables organizations to maximize storage resources, reduce backup and recovery time and control file retention is available worldwide through commercial distributors, value-added resellers, systems integrators and O.E.M. partners.
 
CaminoSoft was organized in 1983 as Interscience Computer Services, Inc. to be a third-party provider of maintenance services for computer hardware and related peripheral equipment. During 1998 and 1999 the hardware maintenance and high speed printing toner and fusing agent businesses were sold. On September 17, 1999, CaminoSoft acquired certain assets (the “Assets”) from CaminoSoft Software Systems, Inc. for 468,000 shares of our common stock and the assumption of $315,172 of certain liabilities of CaminoSoft Software Systems, Inc. The Assets consisted of the name, CaminoSoft Software Systems, Inc., the Highway Server hierarchical data storage management (“HSM”) software, certain business contracts, and intangible personal property. On April 17, 2000, we changed our name to CaminoSoft to reflect the change to a software sales and development firm.
 
In February 2004, we joined EMC Corporation’s Centera Partner Program and completed the integration of The Managed Server storage management - Centera Edition with the EMC Centera Compliance Edition content addressed storage or CAS solution. EMC Centera represents an entirely new software-driven storage architecture specifically designed to address the information storage requirements of unchanging digital assets, such as print and mail electronic “reference” documents.
 
In February 2004, we completed the development of a product named Managed Client HSM™ for Windows XP. Based on our Managed Server HSM for Windows 2000/2003 solution, selected as a SIIA 2004 Codie Award “Best Storage Software” finalist, this innovative Windows XP-based product brings vital storage management capabilities to popular Microsoft desktops.
 
In May 2004, we joined Hewlett Packard’s Information Lifecycle Management Partner Program. Our Managed Server HSM software provides a solution for automatically handling reference file dispersal and retention based on a consistent set of administrative management policies. By combining our software with the HP StorageWorks solutions and services portfolio, organizations may simplify and better control the provisioning and utilization of their data storage resources.
 
On June 30, 2005, we signed an OEM licensing and distribution agreement with Computer Associates International for our Managed Server HSM for Windows 2000 and 2003, Managed Server Library Edition and Managed Server HSM for Windows XP products. The OEM agreement allows Computer Associates to distribute these products under the BrightStor suite of storage management products for Computer Associates.
 
In July 2005, CaminoSoft certified its suite of HSM products for use with the nStor line of SATA based storage hardware. nStor’s hardware products are now certified to work with CaminoSoft’s suite of storage management products to provide Information Lifecycle Management storage hardware and software solutions.
 
In July 2005, CaminoSoft received “Ready for IBM Tivoli Software” certification for the HSM suite of data management products for use with IBM Tivoli storage infrastructures. CaminoSoft is currently distributing Managed Server HSM Tivoli Edition for use in IBM Tivoli back up and storage environments.

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In August 2005, CaminoSoft did a second round of formal certification with EMC Centera compliance and non compliance storage for our Managed Server HSM products. CaminoSoft tested its software products with a third party testing firm and was awarded “Centera Proven Edition” status for our HSM products. This EMC certification signifies to storage clients, current and prospective, that our software is certified and approved for use with EMC Centera data storage devices.
 
In September 2006, CaminoSoft announced the release of an upgraded version of Managed Server HSM - Tivoli Edition. The enhanced version of Managed Server HSM supports the IBM System Storage DR550. The IBM System Storage DR550 is ideal for clients seeking near-line storage application needs at an entry level price point while capitalizing on mainframe inspired levels of reliability, security, and functionality. CaminoSoft’s solution, which has “Ready for IBM Tivoli Software” validation provides a straightforward, cost-effective solution for managing data storage across multiple tiers, including the DR550, IBM Tivoli storage pool devices, SAN’s, SATA RAID subsystems, NAS target appliances, and general purpose servers.
 
During September 2006, CaminoSoft released Managed Server HSM for NetApp. The NetApp edition runs on a Windows 2000/2003 server and provides true file system integration via NetApp’s FPolicy® application program interface. Key advantages for customers include, fast efficient recall of migrated files, reclamation of NetApp NAS data storage space for active production file usage, dramatic reduction in the amount of time needed for backup (and recovery in the event of an outage), and facilitation of compliance with corporate and industry regulations governing data file retention and deletion.
 
During February 2007, CaminoSoft announced a partnership with RAID Inc. to provide data and storage management solutions. RAID is a manufacturer of enterprise class storage with options including fibre channel, SAS and SATA solutions that deliver scalability, redundancy and speed. Organizations can automate file migration and retrieval from primary to secondary and tertiary storage utilizing the combination of Managed Server HSM and RAID’s line of storage devices to address the rapid growth of data while providing storage resource and data management.
 
During May 2007, CaminoSoft announced support for IBM N series unified storage products. CaminoSoft successfully completed interoperability testing with IBM® System Storage™ and has been confirmed as IBM System Storage Proven. The program allows IBM and third-party partners to deliver products and solutions that are tested to work together in IBM storage environments. CaminoSoft believes the latest certification and interoperability testing will open additional opportunities for joint selling with IBM sales teams around the world.
 
CaminoSoft’s software provides products and integrated solutions for addressing the increasing need for sophisticated management of data. Today IT departments face a variety of challenges with some of the most critical relating to data storage and management. Two of these challenges are (1) reducing the total cost of ownership of data storage by better leveraging IT resources, both hardware and people, and (2) increasing productivity by enabling better access to information, thereby making quicker and faster decisions. Our software virtualizes pools of stored data both to the end-user transparently and to the IT administrator while integrating with most operating systems and applications. CaminoSoft can reduce the back-up window, lower the overall cost of storage and enhance the value of information across the organization. Our strategy is built on the benefits our technology brings, our expanding distribution channel, and our ability to execute. As part of our current strategy:
 
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·
We intend to continue to expand and leverage our base of partners (OEMs, distributors, and value-added resellers, or VAR’s) to sell additional products to end users. We intend to enhance our international presence and partner base as we internationalize, localize and bring to market existing and new products. We intend to focus on systems integrators and other strategic partners to open new avenues of distribution for our products and solutions;
 
 
·
We intend to focus and expand on our core strengths in today’s soft economic environment. IT spending is tight and customers require products and solutions with attractive price points and demonstrable value. We can leverage success in one department or work group to demonstrate the value of our storage management solution, then use the success in that area to expand to other departments, workgroups or the enterprise. We believe our cost effective data management solutions can then be repeated in other areas of the organization for other types of information and compliance requirements;
 
 
·
We intend to leverage our position as a provider of email storage and management solutions to grow in the messaging market. Managed Server combined with Novell GroupWise email archiving systems provides extended storage functions for these GroupWise email systems. This combination was our first step to capitalize on this growing market for automated data storage management for Novell GroupWise email systems. We intend to utilize this same approach with other platforms and partners focused on providing automated data management for users of other email messaging systems such as Microsoft Exchange and Lotus Notes. We believe this vertical partner approach will broaden the adoption of our solutions in the electronic collaboration market, allowing our partners to remain focused on their core strengths in the markets they serve; and
 
 
·
Europe, the Middle East, Africa, and Asia Pacific represent active markets for expansion, with Europe representing the first market outside North America CaminoSoft is focused on. We intend to continue to internationalize and localize our products and solutions to penetrate this marketplace. Currently, CaminoSoft has added resources for EMEA operations based in the UK to support our UK and European distribution partners
 
Products and Services
 
Our products are designed to meet the storage management needs of small, medium, and enterprise organizations. We serve markets that produce and manage large amounts of data such as Banking, Financial Services, Healthcare, Legal Services, Engineering and Architectural Services, Federal and State Government, and Higher Education. We believe that our products and solutions enable organizations to (a) reclaim expensive storage resources, (b) reduce manual intervention in managing files, (c) reduce the amount of time needed for back-up and recovery, (d) establish automated policies for compliance with new laws and regulations governing data retention, and (e) set up data lifecycles for different types of information in production environments.
 
Managed Server HSM
 
Our Managed Server HSM software provides a solution for data management. Designed to meet the data storage management requirements for local area networks (“LAN”), wide area networks (“WAN”), and intranet environments, Managed Server HSM offers the ability to manage files on Microsoft Windows and Novell NetWare servers in environments where mass storage devices are deployed.

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Our Managed Server HSM can accommodate large volumes of information. We have partnered with The Messaging Architects’ to provide a Novell GroupWise e-mail archiving solution. Their GWArchive product in conjunction with Managed Server HSM, addresses the archival and compliance needs of GroupWise e-mail users. For GroupWise customers who just want to manage the growth of their e-mail file attachments, as opposed to archiving and content searching, Managed Server HSM can manage GroupWise attachments as it does normal data files.
 
Our Managed Server HSM-Centera Proven Edition provides organizations with a storage hierarchy capable of significant expansion, while addressing regulatory requirements for data retention. Once relegated to optical disks, tape archives, or file cabinets, fixed content data is now being driven to Content Addressable Storage (“CAS”) solutions. Organizations running Novell NetWare and Microsoft Windows server environments can implement a structured, online data repository through which they can manage, access, and protect their fixed content data. All of the standard benefits of Managed Server HSM are now available for users of the EMC Centera. By applying a consistent set of policies, network system administrators can control the migration, location, and retention of files throughout their lifecycle across all storage tiers, including high-performance storage are network (“SAN”) and network attached storage (“NAS”) subsystems, general purpose disk arrays, and EMC Centera archives. Files migrated in such a way tend to become more fixed in nature over time as they move along the storage hierarchy. The Centera system’s combined features of fixed content optimization, high availability, scalability, and cost effectiveness make it very attractive as an archive solution for controlling the otherwise explosive growth of an organization’s primary storage infrastructure.
 
Our Managed Server HSM-Tivoli Edition directly operates with IBM Tivoli Storage Manager. It also provides a straightforward, cost effective solution for managing data storage across multiple tiers of storage, including Tivoli storage pool devices, SAN’s, RAID subsystems, NAS target appliances and general purpose servers. Managed Server HSM Tivoli Edition allows organizations to leverage existing investments in Tivoli software and hardware resources by making use of the storage capacity, high availability, security, and protection provided the Tivoli Storage Manager policies and infrastructure. It also allows organizations to better plan contemplated investment in Tivoli software and hardware by making available an automated multi-tiered storage environment based on the current and planned data growth of the organization.
 
StandbyServer for NetWare
 
StandbyServer for NetWare is a server mirroring solution for NetWare servers that connect one or more primary servers to a standby machine. If a primary server fails, due to hardware or software failure, the standby machine automatically takes over and makes the mirrored data and network services available to users in just a few moments. Data is mirrored between the servers using a dedicated high-speed link, creating a fully redundant system that protects users against both hardware and software failures. The StandbyServer configuration consists of three main elements: a primary server, a standby server, and the communications path that connects them. The disk devices in the standby machine are treated as external disk systems to the primary server.

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OFFSite Archive for NetWare
 
OFFSite Archive for NetWare is an electronic data vaulting and disaster recovery product for NetWare servers that protect data in the event of a disaster by electronically transferring a stable point-in-time image of the data to an offsite location. OFFSite Archive automatically transfers data to be protected from a source server to a target server using the IPX or IP protocol over a LAN, WAN, or Internet connection. The latest version of OFFSite Archive allows multiple source servers to mirror data to a single remotely-located target server. OFFSite Archive uses SnapShotServer for NetWare (discussed below) technology to create snapshots of protected volumes of data. Each snapshot contains all of the data, or a pointer to the data, on the source server’s protected volume at the instant the snapshot was taken. This snapshot is then transferred from the source server to the target server. Through an initial synchronization, all of the data on the source server is mirrored to the target server. Then, after the initial synchronization, only the delta changes are sent to the target server. Since OFFSite Archive does not mirror data in real-time, a high-speed communications link is not required.
 
SnapShotServer for NetWare
 
SnapShotServer for NetWare gives an administrator more control of the back-up process. With the capability to capture live data at any time with SnapShotServer, open files or “live” databases can be backed-up at the administrator’s convenience. The program creates “snapshot” images of “live” data volumes at administrator-defined intervals. These snapshots can then be mounted as regular NetWare volumes and backed up by any NetWare approved back-up utility. When taking a snapshot of a volume, SnapShotServer creates a virtual image of the volume; there is no actual duplication of the entire volume. If changes are made to the original data after taking the snapshot, the program makes a copy of the original data before it is changed and stores that copy in its buffer. This buffer and the unchanged portions of the disk make up the snapshot volume, which provides a virtual image of the volume as it was at the time the snapshot was taken. SnapShotServer works with both StandbyServer and OFFSite Archive.
 
Competition
 
The competition in the storage systems market consists of a small group of leading vendors, such as EMC, Hewlett Packard, IBM, Hitachi Data Systems, and Network Appliance, and a cadre of hardware and software companies who OEM, remarket, or aggregate storage products from third parties.
 
Our products compete in the data management software segments. The cost barriers for entry into these markets are relatively low, which means our competitors can range from small companies with limited resources to large, more established companies with substantial resources. Some competitors have substantially greater financial, technical, marketing, sales, distribution, and personnel resources.
 
Strategy
 
Our goal is to be a leading supplier of data management solutions that work seamlessly with major operating system and storage vendors’ hardware and software solutions and deliver advanced storage management for small, medium, and enterprise organizations.
 
As part of our current strategy:
 
 
·
We intend to continue to increase and leverage our base of partners, including OEMs, distributors, and value-added resellers (VARs).
 
 
·
We intend to further expand our international presence and partner base worldwide.
 
 
·
We intend to continue to focus on systems integrators and other strategic partners to open new avenues of distribution for our products and solutions.
 
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·
Working at the field sales level with our strategic partners, we intend to leverage their expertise to provide joint solutions to their customer base.
 
Sales and Marketing Strategy
 
Our sales and marketing strategy is to further establish strong partnerships with storage vendors and storage channel partners worldwide in order to introduce and promote joint solutions. We have been targeting large Novell NetWare and GroupWise customers with Managed Server HSM for NetWare and are also now using the same strategy to target organizations using Microsoft Windows operating systems.
 
Strategic Partnerships
 
To take advantage of the large NetWare customer installed base, we have partnered with firms such as Novell, Computer Associates, and EMC to solicit introductions into their accounts as an approved technology partner. We receive numerous leads generated from Novell’s website as a result of our partnership, whereby visitors to their website can search for third-party NetWare solutions and are provided access to our website link. We are also engaging Novell sales and service engineers at the field level to gain introductions and access to their accounts. Our ability to support both Netware and Windows is an advantage no matter which operating system an account wishes to acquire.
 
We partner with EMC to promote joint sales of their Centera (magnetic WORM compliance) subsystem through Managed Server HSM - Centera Proven Edition, which is EMC certified through strict independent testing. EMC selected Veritest to perform integration testing for EMC Centera, which utilize a range of rigorous test criteria designed by EMC and Veritest to ensure each certified partner meet a very high level of quality and operability.
 
The certification of Managed Server HSM for Windows 2000 and our partnership with Microsoft was another milestone in our strategic plan for multi-platform distribution. Adding support for Windows 2003 servers has opened up new partnering opportunities with other strategic storage vendors.
 
The first strategic partnership to specifically utilize Managed Server HSM for Windows technology is with CA under the OEM Licensing and Distribution Agreement signed on June 30, 2005. As of the date of this filing CA (formerly known as Computer Associates) and CaminoSoft are working on a plan to jointly sell CaminoSoft’s products in conjunction with CA’s line of BrightStor and Unicenter products. CaminoSoft will now directly sell its products into CA customer prospects needing the data management and data movement provided by CaminoSoft’s ILM product line. This will allow CA to focus on its suite of enterprise level products while we focus on the mutli tiered storage environment solutions within these joint sales.
 
IBM has certified our Managed Server products with Ready for IBM Tivoli Software validation. CaminoSoft can now offer its suite of data management solutions for use in existing and future IBM Tivoli Storage Manager environments. Managed Server HSM Tivoli Edition will provide users of Tivoli back up and Tivoli storage pools the full range of benefits provided by automated multi-tiered HSM. Our strategic plan includes leveraging these capabilities and IBM’s distribution channel to help CaminoSoft promote this relationship and new product offerings in the upcoming fiscal year.
 
Channel Partnerships
 
In addition to working with large storage vendors to gain assess to their installed base of customers, CaminoSoft is expanding its value added reseller (“VAR”) program to recruit high-end storage resellers, VARs, and Systems Integrators to do the same with their customer base. During the prior fiscal year we announced a Premier Reseller program to target these high-end channel partners with a goal of having broad geographic and industry coverage.
 
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Working with our strategic partner storage vendors, we intend to bring on additional non-exclusive distributors worldwide that support our strategy and open new markets for our ILM solutions. The strategic partner relationships developed during the current fiscal year will also open additional distribution channels not previously available to CaminoSoft.
 
Major Customer
 
We currently rely upon one distributor for between 11-20% of our aggregate gross revenues. If we were to lose this distributor, our operations would be materially effected.
 
Technology Partnerships
 
To assist us in providing as much of a complete solution as possible for our target markets and clients, we will continue to establish technology partnerships that broaden our product portfolio. We signed an integration and distribution agreement with Pegasus Disk Technologies to distribute InveStore archive management software drivers for UDO, magneto-optical, and DVD management. CaminoSoft also completed certification testing and announced solutions combining Managed Server HSM for NetWare and Windows 2000/2003 with nStor’s NexStor® 4700 Serial ATA data storage systems. The combination provides users with reliable lower cost storage, and increased data availability for storing migrated information from expensive production storage.
 
We have also established partnerships with two firms that provide e-mail archiving solutions: The Messaging Architects (Novell GroupWise e-mail systems) and Executive Technologies (Microsoft Exchange/Outlook email systems). Together, we provide the basic platform for e-mail and electronic document retention policy compliance.
 
Employees
 
As of November 2, 2007, CaminoSoft had 9 full-time employees and employs additional people as consultants on a full time basis as needed.
 
Properties
 
As of November 2, 2007, CaminoSoft leases one office facility in Westlake Village, California for its executive offices pursuant to a lease extension expiring January 31, 2008, at a rental rate of $10,035 per month.
 
Legal Proceedings
 
CaminoSoft may, from time to time, be involved in legal proceedings, claims and litigation arising in the ordinary course of business. It is possible the outcome of such legal proceedings, claims and litigation could have a material effect on the operating results or cash flows when resolved in a future period. These matters are not expected to have a material adverse effect upon CaminoSoft’s financial statements.
 
Currently CaminoSoft has no ongoing legal proceedings.
 
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Description of Securities
 
General
 
Our authorized capital consists of 100,000,000 shares of common stock, no par value per share. As of November 2, 2007, we had 14,258,756 shares of common stock outstanding. We have no shares of preferred stock issued or outstanding.
 
Common Stock
 
Subject to rights which may be granted to holders of preferred stock in the future, each share of our common stock is entitled to one vote at all meetings of our shareholders. Our common shareholders are not permitted to cumulate votes in the election of directors. All shares of our common stock are equal to each other with respect to liquidation rights and dividend rights. There are no preemptive rights to purchase any additional shares of our common stock. In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to receive, on a pro rata basis, all of our assets remaining after satisfaction of all liabilities and preferences of outstanding preferred stock, if any.
 
Transfer Agent

Our transfer agent is U.S. Stock Transfer Corporation in Glendale, California.
 
Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act
 
As of August 31, 2007, the directors and executive officers of CaminoSoft are as follows:
 
Name
 
Age
 
Position
Robert Pearson
 
71
 
Director
         
Robert Degan
 
68
 
Chairman of the Board
         
Stephen Crosson
 
48
 
Chief Financial Officer, Chief Operating Officer
         
Russell Cleveland
 
68
 
Director
         
Michael Skelton
 
56
 
Chief Executive Officer, Director
         
Lee Pryor
 
70
 
Director

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

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Robert Degan. Mr. Degan became a director in January 2001 and was named Chairman in March 2006. From 1989 to 1996, Mr. Degan was President and Chief Executive Officer of Tylink Corporation, a private company, which designs, manufactures and markets digital access products. In August, 1996, Tylink Corporation was acquired by Sync Research a public company. From August 1996 to December 1996 Mr. Degan was Executive Vice President of Sync Research. From 1997 to 1998, Mr. Degan was Chairman, President and Chief Executive Officer of Summa Four Inc., a public company, which is a leading provider of switching platforms. In 1998 Summa Four, Inc. was acquired by Cisco Systems, Inc. and from November 1998 through December 1999 Mr. Degan was General Manager of the Enhanced Services and Migration business unit of Cisco Systems, Inc. From January 2000 to the present, Mr. Degan has been a private investor. Mr. Degan holds a directorship with Overland Storage, a data storage manufacturing firm and Flexi International, both NASDAQ companies.
 
Stephen Crosson. Mr. Crosson joined CaminoSoft in March 1985 and was manager of accounting and government contracts and logistics. In September 1989, Mr. Crosson became a financial analysis officer with First Interstate Banks Controller’s office. In March 1992, Mr. Crosson returned to CaminoSoft as Director of Operations. In April 1995, he became Vice President of Operations. In January of 1997, Mr. Crosson became Corporate Secretary and in April 1998 he became Chief Operating Officer and Treasurer. In January 2003, Mr. Crosson became the Chief Executive Officer, and in August 2003, Mr. Crosson was elected a director. In April 2004, Mr. Crosson became the Chief Financial Officer. Currently Mr. Crosson is the Chief Financial Officer, Chief Operating Officer and Corporate Secretary.
 
Russell Cleveland. Mr. Cleveland became a director in February 2004. Mr. Cleveland is the President, Chief Executive Officer, sole director, and the majority shareholder of the RENN Capital Group, Inc. Mr. Cleveland has been with RENN Group in these capacities for over ten years since the first fund was formed in 1994. He is a Chartered Financial Analyst with more than 35 years experience as a specialist in investments for smaller capitalization companies. A graduate of the Wharton School of Business, Mr. Cleveland serves on the Boards of Directors of Renaissance US Growth Investment Trust PLC, BFS US Special Opportunities Trust PLC, Renaissance Capital Growth & Income Fund III, Inc., Integrated Security Systems, Inc., Tutogen Medical, Inc., Digital Recorders, Inc., and Cover-All Technologies, Inc.
 
Michael Skelton. Mr. Skelton joined CaminoSoft in April 2004 as the Chief Executive Officer. From August 2001 to April 2004, Mr. Skelton was an interim executive management consultant working with public and private technology companies. From 1987 to 1992, Mr. Skelton was Vice President and General Manager of TAB Products Co., a records management company. From 1993 to 1995, Mr. Skelton was Vice President of Sales and Marketing for SCO Inc., a company that provides UNIX operating system software. From 1996 to 1997, Mr. Skelton was President and C.E.O. of TracePoint Technology, Inc., a provider of software developer tools. From 1998 to 1999, Mr. Skelton was Vice President of Sales for NetManage, Inc., a provider of enterprise application integration software and services. From January 2000 to July 2001, Mr. Skelton was President and C.E.O. of Menta Software, Ltd., which provided technology to web enable Microsoft Windows applications.
 
Lee Pryor. Mr. Pryor became a director in March 2006. Mr. Pryor is founder and chief executive officer of Interventures, LLC, an advisory and coaching services firm assisting start-up and late-stage entrepreneurial companies. During the past five years Mr. Pryor has provided advisory services to businesses for strategy evaluation, marketing programs and management best practices. Mr. Pryor also gives speeches on management and entrepreneurship and provides seminars and workshops on the topics of management, marketing and strategy to his clients. Mr. Pryor attended Johns Hopkins University, the U.S. Naval Academy, and Northwestern University. He is a frequent speaker at venture capital conferences, association meetings, and business schools on such topics as strategy, leadership, and managing for success.

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Family Relationships
 
There are no family relationships between or among the directors, executive officers or persons nominated or charged by us to become directors or executive officers.
 
Meetings; Attendance; Committees
 
CaminoSoft’s Board of Directors has an Audit Committee. The duties of the Audit Committee include (i) recommending to the Board the engagement of the independent auditors, (ii) reviewing the scope and results of the yearly audit by the independent auditors, (iii) reviewing our system of internal controls of procedures, and (iv) investigating, when necessary, matters relating to the audit functions. It reports to the Board concerning its activities. The current members of this Committee are Messrs. Degan and Pryor. The Board of Directors has determined that Robert Degan is the Audit Committee Financial Expert and Mr. Degan is deemed to be independent under applicable rules. Mr. Degan serves as the audit committee chairman. The audit committee held four meetings during the current fiscal year.
 
The Board also has a Compensation Committee. The Compensation Committee makes recommendations to the Board concerning compensation and other matters relating to employees. The Committee also grants options under, and administers, our Stock Option Plan. The current members of the Committee are Messrs. Degan and Pryor. Mr. Pryor serves as chairman of the compensation committee. The Compensation Committee held two meetings during the current fiscal year.
 
Director Compensation
 
Directors do not receive any annual compensation. Outside directors receive $1,000 each for each meeting attended and reimbursement for reasonable out-of-pocket expenses incurred for attending meetings. Mr. Pearson and Mr. Cleveland have waived the meeting fees. The board has held 9 meetings during the current fiscal year.
 
Employment Agreements
 
During the fiscal year ended September 30, 2004, CaminoSoft entered into an employment agreement with Michael Skelton (C.E.O. & Director). Mr. Skelton will receive a $14,000 per month salary for an indeterminate period of time. CaminoSoft or Mr. Skelton may terminate the contract at any time. If Mr. Skelton is terminated without cause he will receive salary and benefits for up to 6 months after termination.
 
During the fiscal year ended September 30, 2003, CaminoSoft entered into a two-year employment agreement with Mr. Stephen Crosson to be Chief Executive Officer of CaminoSoft reporting to the Chairman of the Board of Directors. The contract was for two years beginning August 1, 2003, with an annual salary of $150,000 per year with the possibility of bonuses at the discretion of the Board of Directors. The agreement was amended on April 19, 2004. Mr. Crosson is currently the Chief Financial Officer and Chief Operating Officer of CaminoSoft and will receive $12,500 per month for an indeterminate period of time. The contract includes a bonus fee of 1% of any acquisition price or licensing fee over $1,000,000 paid to CaminoSoft. If Mr. Crosson is terminated without cause he