<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 7, 2000
-----------------------------
NOBLE ONIE, INC.
---------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 0-26141 88-0350154
- ---------------------------- ------------------------ -------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
18952 MACARTHUR AVENUE, SUITE 315, IRVINE, CALIFORNIA 92612
---------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (949) 261-2101
----------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
-1-
<PAGE>
Item 7. Financial Statements and Exhibits.
This report amends the current report filed by Noble Onie, Inc. (the
"Company") dated February 23, 2000. Effective February 8, 2000, the Company
completed the acquisition of The National Capital Companies, Inc., an Oklahoma
corporation ("National Capital"), in exchange for 4,000,000 shares of the
Company's common stock. The audited financial statements of National Capital as
of December 31, 1999 and for each of the two fiscal years ended December 31,
1999 are presented at pages F-1 to F-15, below.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NOBLE ONIE, INC.
(Registrant)
Date: April 24, 2000 By: /s/ Darrell T. Uselton
------------------------------
Darrell T. Uselton, President
-2-
<PAGE>
April 17, 2000
Independent Auditors' Report
----------------------------
To the Board of Directors and stockholders of
The National Capital Companies, Inc.
We have audited the accompanying consolidated balance sheet of The National
Capital Companies, Inc. and subsidiaries as of December 31, 1999, and the
related consolidated statements of income, stockholders' equity, and cash flows
for the years ended December 31, 1999 and 1998. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of The National
Capital Companies, Inc. and subsidiaries at December 31, 1999, and the
consolidated results of its operations and its cash flows for the years ended
December 31, 1999 and 1998 in conformity with generally accepted accounting
principles.
/s/ Lesley, Thomas, Schwarz & Postma, Inc.
A Professional Accountancy Corporation
Newport Beach, California
F-1
<PAGE>
THE NATIONAL CAPITAL COMPANIES, INC.
------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
DECEMBER 31, 1999
-----------------
ASSETS
------
<TABLE>
<S> <C>
Cash and cash equivalents (Notes 1 and 7) $1,090,042
Receivables from clearing organizations (Note 4) 675,800
Accounts receivable, net of allowance for doubtful accounts of $11,000 265,425
Employee advances (Note 3) 40,400
Note receivable (Note 3) 35,000
Securities owned, at estimated fair value (Notes 1 and 5) 2,211,718
Investment in limited partnership (Note 13) 159,799
Furniture and equipment, less accumulated depreciation of $62,360 (Notes 1
6, and 15) 220,621
Deferred tax assets (Note 8) 62,000
Goodwill, less accumulated amortization of $88,872 (Notes 1 and 2) 1,435,271
Other assets 114,659
----------
Total assets $6,310,735
==========
</TABLE>
See the accompanying notes to these financial statements
F-2
<PAGE>
THE NATIONAL CAPITAL COMPANIES, INC.
------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
DECEMBER 31, 1999
-----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Accounts payable $ 373,811
Income taxes payable (Note 8) 894,000
Commissions payable 961,513
Payables to clearing organizations (Note 4) 517,712
Other liabilities 28,303
Due to affiliates (Note 14) 425,000
Deferred tax liability (Note 8) 16,000
Notes payable (Note 15) 549,395
----------
3,765,734
----------
MINORITY INTEREST IN NATIONAL CAPITAL, LLC (Note 1) 3,698
----------
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS' EQUITY
Preferred stock (Note 11)
$.001 par value,
1,000,000 shares authorized,
20,000 shares issued and outstanding 20
Common stock (Note 12)
$0.001 par value,
9,000,000 shares authorized,
2,000,000 shares issued and outstanding 2,000
Additional paid in capital 1,265,357
Retained earnings 1,273,926
----------
Total stockholders' equity 2,541,303
----------
Total liabilities and stockholders' equity $6,310,735
==========
</TABLE>
See the accompanying notes to these financial statements
F-3
<PAGE>
THE NATIONAL CAPITAL COMPANIES, INC.
------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------
1999 1998
---------------- ---------------
<S> <C> <C>
REVENUES (Notes 1 and 2)
Investment banking $4,801,980 $ 920,532
Principal transactions 2,762,999 371,185
Commissions 1,138,236 228,951
Interest 5,147 2,531
Other 200,368 27,254
---------- ----------
Total revenues 8,908,730 1,550,453
---------- ----------
EXPENSES
Employee compensation and benefits 894,879 417,769
Commissions 3,456,871 ---
Management fees and services 40,841 346,096
Clearance charges and related fees 131,195 192,539
Licenses and registrations 39,026 27,259
Occupancy 347,079 75,571
Travel, conventions and meetings 185,056 46,553
Legal and professional fees 688,715 11,931
Postage and delivery 44,876 12,742
Interest expense 41,533 ---
Communication --- 66,971
Office expense 69,330 66,538
Insurance 63,577 10,414
Advertising and promotion 48,775 13,636
Depreciation 47,060 15,300
Amortization of goodwill 88,872 ---
Finders fees 400,000 ---
Terminal operating fees 139,290 ---
Contributions --- 20,085
Other expenses 297,060 9,053
---------- ----------
Total expenses 7,024,035 1,332,457
---------- ----------
INCOME BEFORE INCOME TAXES 1,884,695 217,996
PROVISION FOR INCOME TAXES (Note 8) 787,000 93,570
---------- ----------
NET INCOME (Note 2) $1,097,695 $ 124,426
========== ==========
</TABLE>
See the accompanying notes to these financial statements
F-4
<PAGE>
THE NATIONAL CAPITAL COMPANIES, INC.
------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------
<TABLE>
<CAPTION>
Common Stock Preferred Stock Additional Total
--------------------------- ---------------------------
Paid-In Retained Stockholders'
Shares Amount Shares Amount Capital Earnings Equity
------------ ------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1998 1,290,000 $ 1,290 --- $ --- $ 299,497 $ 51,805 $ 352,592
ISSUANCE OF COMMON STOCK
100,000 100 --- --- 249,900 --- 250,000
ADDITIONAL PAID-IN CAPITAL
--- --- --- --- 93,369 --- 93,369
NET INCOME --- --- --- --- --- 124,426 124,426
------------ ------------- ------------ ------------- ------------ ------------- ------------
BALANCE, December 31, 1998 1,390,000 1,390 --- --- 642,766 176,231 820,387
ISSUANCE OF STOCK 610,000 610 20,000 20 622,591 --- 623,221
NET INCOME --- --- --- --- --- 1,097,695 1,097,695
------------ ------------- ------------ ------------- ------------ ------------- ------------
BALANCE, December 31, 1999 2,000,000 $ 2,000 20,000 $ 20 $ 1,265,357 $ 1,273,926 $ 2,541,303
============ ============= ============ ============= ============ ============= ============
</TABLE>
See the accompanying notes to these financial statements
F-5
<PAGE>
THE NATIONAL CAPITAL COMPANIES, INC.
------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------
1999 1998
----------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,097,695 $ 124,426
----------------- ----------------
Adjustments to reconcile net income to net cash provided by
(used in) operating activities
Depreciation 47,060 15,300
Amortization of goodwill 88,872 ---
Allowance for doubtful accounts 11,000 ---
Minority interest in income of consolidated subsidiary 812 ---
Loss from investment in limited partnership --- 216
Net (increase) decrease in deferred taxes (46,310) 310
Changes in operating assets and liabilities
Increase in accounts receivable (276,425) ---
Increase in receivable from clearing organizations (651,919) (23,881)
Increase in note and other receivables (27,927) (47,373)
Increase in securities owned (1,289,382) (777,165)
Increase in other assets (30,533) (30,458)
Increase in accounts payable 324,360 48,231
Increase in income taxes payable 766,006 127,994
Increase in commissions payable 949,236 12,277
(Increase) decrease in payables to clearing organizations (50,176) 369,875
Increase in other liabilities 803 27,500
----------------- ----------------
Total adjustments (184,523) (277,174)
----------------- ----------------
Net cash provided by (used in) operating activities 913,172 (152,748)
----------------- ----------------
</TABLE>
See the accompanying notes to these financial statements
F-6
<PAGE>
THE NATIONAL CAPITAL COMPANIES, INC.
------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------
1999 1998
----------------- ----------------
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of furniture and equipment (188,284) (77,530)
Acquisition of limited partnership interest (159,799) ---
Business acquisition (1,524,143) ---
----------------- ----------------
Net cash used in investing activities (1,872,226) (77,530)
----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common and preferred stock 623,221 581,014
Proceeds from issuance of notes payable 549,395 ---
Allowances from affiliates 425,000 ---
----------------- ----------------
Net cash provided by financing activities 1,597,616 581,014
----------------- ----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 638,562 350,736
CASH AND CASH EQUIVALENTS, beginning of year 451,480 100,744
----------------- ----------------
CASH AND CASH EQUIVALENTS, end of year $ 1,090,042 $ 451,480
================= ================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest $ 39,026 $ 0
================= ================
Income Taxes $ 4,464 $ 1,203
================= ================
</TABLE>
See the accompanying notes to these financial statements
F-7
<PAGE>
THE NATIONAL CAPITAL COMPANIES, INC.
------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
DECEMBER 31, 1999
-----------------
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Business - The National Capital Companies, Inc.
-----------------------------------
and its subsidiaries (the "Company") provides full-service investment banking,
brokerage, trading, and financing services to new and rapidly growing companies.
The Company's primary focus is servicing small capitalized companies and special
situation investments for individual and institutional investors. Some of the
Company's subsidiaries are registered broker-dealers licensed by the Securities
and Exchange Commission ("SEC") and are members of the National Association of
Securities Dealers ("NASD").
Principles of Consolidation - The accompanying consolidated financial
---------------------------
statements include the accounts of The National Capital Companies, Inc. and its
wholly owned subsidiaries, Travis Morgan Securities, Inc., National Capital
Merchant Group, Ltd., Cornerstone Capital Management, Inc., National Capital
Asset Group, Inc., National Brokers and Distributors, Inc., NC Capital Markets,
Inc., National Capital Securities Research, Inc., NC Corporate Services, Inc.,
and NC Development Group, Inc., and its majority owned subsidiary, National
Capital LLC (collectively, the "Company"). The minority interest in the
earnings or losses of National Capital LLC have been recorded as minority
interest in the consolidated financial statements. All significant intercompany
accounts and transactions have been eliminated.
Accounting Estimates - The preparation of financial statements in
--------------------
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results may differ from those estimates.
Cash and Cash Equivalents - For purposes of the consolidated balance sheet
-------------------------
and statements of cash flows, the Company considers all highly liquid debt
instruments purchased with a maturity of three months or less to be cash
equivalents.
Furniture, Equipment and Depreciation - Furniture and equipment are
-------------------------------------
recorded at cost. Depreciation is provided on a straight-line basis over an
estimated useful life of three (3) to seven (7) years. Expenditures for
additions and major improvements are capitalized, whereas the cost of
maintenance, repairs, and minor renewals and betterments are charged to expense.
F-8
<PAGE>
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Securities Transactions - Proprietary securities transactions in regular-
-----------------------
way trades are recorded on the trade date, as if they had settled. Profit and
loss arising from all securities and commodities transactions entered into for
the account and risk of the Company are recorded on a trade date basis.
Customers' securities and commodities transactions are reported on a settlement
date basis with related commission income and expenses reported on a trade date
basis.
Amounts receivable and payable for securities transactions that have not
reached their contractual settlement date are recorded net on the balance sheet.
Securities owned are comprised principally of "non-recognized exchange"
traded issues (i.e., issues traded in the over-the-counter ("OTC") markets).
Securities owned are stated at fair value as determined by management after
considering market valuation within a range of bid and asked prices, liquidity,
and other market information.
Investment Banking - Investment banking revenues include gains, losses, and
------------------
fees, net of syndicate expenses, arising from securities offerings in which the
Company acts as an agent. Investment banking revenues also include fees earned
from providing merger-and-acquisition and financial restructuring advisory
services. Investment banking management fees are recorded on offering date and
sales concessions on settlement date.
Commissions - Commissions and related clearing expenses are recorded on a
-----------
trade-date basis as securities transactions occur.
Investment Advisory Income - Investment advisory fees are received
--------------------------
quarterly but are recognized as earned on a pro rata basis over the term of
the contract.
Goodwill - Goodwill is recorded at cost, and is being amortized using the
--------
straight-line method over ten years. The recoverability of goodwill is assessed
periodically based on management estimates of undiscounted future operating cash
flows from each of the acquired businesses to which he goodwill relates.
Long-Lived Assets - The Company follows Financial Accounting Standards
-----------------
Board Statement ("FAS") No 121, "Accounting for the impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of, which requires impairment
losses to be recorded on long-lived assets used in operations when indicators of
impairment are present.
Long-lived assets and certain indentifiable intangibles held and used by
the Company are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The recoverability test is performed at the individual entity level
based on undiscounted cash flows. Based upon its analysis, the Company believes
that no impairment of the carrying value of is long-lived assets, inclusive of
goodwill, existed at December 31, 1999. The Company's analysis was based on an
estimate of future undiscounted cash flows using forecasts contained in the
Company's strategic plan. It is at least reasonably possible that the Company's
estimate of future undiscounted cash flows may change during 2000. If the
Company's estimate of future undiscounted cash flows should change or if the
strategic plan is not achieved, future analyses may indicate insufficient future
undiscounted cash flows to recover the carrying value of the Company's
long-lived assets, in which case such assets would be written down to estimated
fair value.
Income Taxes - The Company and its subsidiaries are included in the
consolidated federal income tax return filed by the parent. The Company
recognizes a liability or asset utilizing currently enacted Tax laws and rates
for the deferred
------------
tax consequences of temporary differences between the tax basis of assets or
liabilities and their reported amounts in the financial statements. These
temporary differences will result in taxable or deductible amounts in future
years when the reported amounts of the assets or liabilities are recovered or
settled. The deferred tax assets are reviewed for recoverability and valuation
allowances are provided, as necessary.
NOTE 2 - ACQUISITIONS
In May 1999, the Company entered into an agreement to acquire the capital
stock of Cornerstone Capital Management, Inc. ("CCM") in exchange for $1,000,000
and 50,000 shares of the Company's common stock. CCM is a registered investment
advisor with the SEC. CCM provides professional money management services to
mutual funds, hedge funds, individuals, institutions, foundations, endowments
and municipalities.
This acquisition was accounted for under the purchase method of accounting
in accordance with Accounting Principles Board Opinion No. 16, "Business
Combinations" (APB 16). A portion of the purchase price has been allocated to
assets acquired and liabilities assumed based on estimated fair market value at
the date of acquisition with the excess recorded as goodwill. Goodwill is
amortized over ten (10) years on a straight-line basis.
F-9
<PAGE>
NOTE 2 - ACQUISITIONS (CONTINUED)
In March 1999, the Company entered into an agreement to acquire all
outstanding common stock of NC Corporate Services, Inc. ("NCCS") in exchange for
20,000 shares of the Company's Series A preferred stock. NC Corporate Services
provides investment banking services including assistance with access to venture
capital and public relations. This acquisition was accounted for under the
purchase method of accounting in accordance with Accounting Principles Board
Opinion No. 16, "Business Combinations" (APB 16). The purchase price has been
allocated to assets acquired and liabilities assumed based on estimated fair
market value at the date of acquisition.
NOTE 3 - NOTE RECEIVABLE AND EMPLOYEE ADVANCES
On November 23, 1999, the Company entered into a note agreement with
Grantland Construction. This note bears interest at the rate of ten percent
(10%) and is due upon demand. The note is secured by all accounts receivable and
equipment of Grantland Construction.
The Company makes cash advances to employees periodically throughout the
year. These advances are non-interest bearing and are due upon demand.
NOTE 4 - RECEIVABLES FROM AND PAYABLES TO BROKER-DEALERS AND CLEARING
ORGANIZATIONS
The Company clears its customer transactions through another broker-dealer
on a fully disclosed basis. The amount payable to the clearing broker relates
to the aforementioned transactions and is collateralized by securities owned by
the Company.
NOTE 5 - SECURITIES OWNED
Marketable securities owned consist of trading and investment securities at
estimated fair values as follows:
Owned
------------
Corporate stocks $ 2,211,718
============
At December 31, 1999, forty-five percent (45%) of the value of securities
owned by the Company consisted of six (6) holdings.
F-10
<PAGE>
NOTE 6 - FURNITURE AND EQUIPMENT
The following is a summary of furniture and equipment
Computer equipment and software $ 116,616
Furniture and fixtures 105,707
Automobiles 60,658
----------
282,981
Less: accumulated depreciation (62,360)
----------
$ 220,621
==========
NOTE 7 - CONCENTRATIONS OF CREDIT RISK
The Company and its subsidiaries are engaged in various trading and
brokerage activities in which counterparties primarily include broker-dealers,
banks, and other financial institutions. In the event counterparties do not
fulfill their obligations, the Company may be exposed to risk. The risk of
default depends on the creditworthiness of the counterparty or issuer of the
instrument. It is the Company's policy to review, as necessary, the credit
standing of each counterparty.
The Company maintains its cash balances in several financial institutions
throughout the United States. The Federal Deposit Insurance Corporation
("FDIC") insures balances up to $100,000. Other cash balances are insured by
the Securities Investor Protection Corporation ("SIPC") up to $250,000. At
December 31, 1999, the Company's uninsured cash balance totaled approximately
$535,460.
NOTE 8 - INCOME TAXES
The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109 ("SFAS 109"). This statement mandates the
liability method of accounting for deferred income taxes and permits the
recognition of deferred tax assets subject to an ongoing assessment of
realizability.
Deferred income taxes are provided for timing differences in the
recognition of certain income and expense items for tax and financial statement
purposes. The Company's tax provision consists of the following:
<TABLE>
<CAPTION>
1999 1998
---------- -------
<S> <C> <C>
Current $ 744,000 $93,260
Deferred 46,000 310
---------- -------
$ 787,000 $93,570
========== =======
</TABLE>
F-11
<PAGE>
NOTE 8 - INCOME TAXES (CONTINUED)
The tax effect of the temporary differences giving rise to the Company's
deferred tax assets and liabilities as of December 31, 1999 are as follows:
Assets
(Liabilities)
-------------
Allowance for doubtful accounts $ 5,000
Depreciation (16,000)
State income taxes 57,000
-------------
46,000
Less: deferred income tax asset 62,000
-------------
Deferred income tax liability $ (16,000)
=============
NOTE 9 - RELATED PARTY TRANSACTIONS
During 1999 the Company entered into a consulting agreement with Shogun
Investment Group Ltd., a three percent (3%) owner of the Company. The
consulting relates to the subsequent merger with Noble Onie, Inc. Total fees
are $400,000 with $75,000 paid and $325,000 accrued at December 31, 1999.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries lease certain office space and facilities
under non-cancellable operating leases. The leases generally provide the leasee
to pay taxes, maintenance, insurance and certain other operating costs of the
leased property. The leases on the properties expire through January 2005 and
contain renewal options.
Rent expense for the years ended December 31, 1999 and 1998 was $347,079
and $75,571, respectively.
F-12
<PAGE>
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Following is a summary of future minimum payments under operating leases
that have initial or remaining terms in excess of one year at December 31, 1999:
Year Ending December 31, Amount
------------------------ ----------
2000 $ 301,589
2001 311,075
2002 203,960
2003 60,727
2004 62,142
2005 5,188
----------
$ 944,681
==========
The Company subleases office space under a non-cancelable operating lease.
The sublease expires in June 2002.
Rent income for the year ended December 31, 1999 was $2,678.
The following is a summary of future minimum receipts under the operating
lease:
Year Ending December 31, Amount
------------------------ ----------
2000 $ 16,377
2001 16,995
2002 8,652
----------
$ 42,024
==========
NOTE 11 - PREFERRED STOCK
In February 1999, the Company authorized for issuance 1,000,000 shares of
preferred stock with a $.001 par value. These shares have been designated as
Series A Preferred Stock ("Series A") and have a stated liquidation preference
value of $5,000,000. This issue is senior to all common stock and has weighted
voting rights equal to the number of shares of common stock into which it can be
converted. Dividends on the Series A are cumulative and are payable quarterly
in either cash or common stock, at the election of the Company, in an amount
equal to ten percent (10%) of the Company's earnings before income taxes for the
preceding quarter. Holders of the Series A also have the right to convert each
of their shares, in whole or in part, into one share of common stock.
F-13
<PAGE>
NOTE 12 - COMMON STOCK
The Company authorized an issue of Common Stock Purchase Warrants
("warrants") covering the right to purchase 20,000 shares of common stock of the
Company. The warrants are exercisable for sixty (60) months at an exercise price
of $7.00 per share. Holders of warrants retain no voting rights or do they
receive dividends and are subject to certain other restrictions and limitations
set forth in the Company's Common Stock Purchase Warrant agreement.
NOTE 13 - INVESTMENT IN LIMITED PARTNERSHIP
A subsidiary of the Company is a general partner in Cornerstone Alpha Fund,
LP. This investment is accounted for under the equity method of accounting.
NOTE 14 - DUE TO AFFILIATES
The Company has liabilities to companies owned by a stockholder of the
Company. The stockholder owns less than fifty percent (50%) of the Company,
therefore the affiliates are not consolidated with the Company.
NOTE 15 - NOTES PAYABLE
<TABLE>
<S> <C>
Notes payable for automobiles, monthly payments of $1,124 including
interest at 11.95% per annum, secured by automobiles, through August
2001. $ 51,676
Note payable for equipment, monthly payments of $565 including
interest at 17.50% per annum, secured by equipment, through February
2001. 7,104
Unsecured note payable to Shogun Investment Group, Ltd. For consulting
fees regarding the merger with Noble Onie, Inc., monthly payments of
$50,000 including interest at 6%, through June 2000. 325,000
Unsecured note payable to Craig D. VanHulzen for the purchase of
Cornerstone Capital Management, Inc. capital stock, monthly payments
of $4,078 through October 2000. This is a non-interest bearing note. 36,699
</TABLE>
F-14
<PAGE>
NOTE 15 - NOTES PAYABLE (CONTINUED)
<TABLE>
<S> <C>
Unsecured note payable to D. Bruce Ellsworth for purchase of Ellsworth
Advisory Group, Inc., monthly payments of $8,333 including interest
at 4.79% per annum, through May 2001. 128,916
-----------
$ 549,395
===========
</TABLE>
NOTE 16 - SUBSEQUENT EVENT
On February 4, 2000 the Company was acquired by Noble Onie, Inc., a Nevada
corporation, ("Noble"). Noble is a publicly held company whose shares trade in
the over-the-counter market ("OTC-BB"). Pursuant to the Securities Purchase and
Plan of Reorganization agreement, Noble acquired one hundred (100%) of the
common stock of the Company in exchange for 4,000,000 shares of Noble. The
acquisition will be accounted for under the purchase method of accounting and is
intended to qualify as a tax-free reorganization under IRC (S)368(a)(1)(B).
Since the stockholders of the Company owned approximately 61.5% of the
outstanding shares of the common stock of Noble after giving effect to the
Reorganization, the acquisition is considered a reverse merger and the Company
has been deemed the acquirer for accounting purposes. As such, the equity of the
Company will be carried forward as the equity of Noble. Prior to this
transaction, Noble was previously engaged in the business of land acquisitions
and pursuit of merger and acquisition candidates.
F-15
