UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment Number 2
to
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
OneCap
(Name of Small Business Issuers in its charter)
Nevada 88-0429535
(State of other jurisdiction of (I.R.S. Employer Identification
incorporation or organization Number)
5450 West Sahara Avenue, 2nd 89146
Floor
Las Vegas, Nevada
(Address of principal executive (zip code)
offices)
Issuer's telephone number: (702) 948-8800
Securities to be registered under section 12(b) of the Act:
Title of Each Class Name on each exchange on which
To be so registered Each class is to be registered
Securities to be registered under section 12(g) of the Act:
Common Stock, $0.001 par value per share, 20,000,000 shares
authorized, 8,811,618 issued and outstanding as of September 20,
2000.
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TABLE OF CONTENTS
Page
Part I 3
Item 1. Description of Business 3
Item 2. Management's Discussion and Analysis and Plan of 14
Operation
Item 3. Description of Property 17
Item 4. Security Ownership of Management 17
Item 5. Directors and Executive Officers 18
Item 6. Executive Compensation 21
Item 7. Certain Relationships and Related Transactions 22
Item 8. Description of Securities 22
Part II 23
Item 1. Market Price of and Dividends on the 23
Registrant's Common Equity and Related
Stockholder Matters
Item 2. Legal Proceedings 23
Item 3. Changes in and Disagreements with Accountants 23
Item 4. Recent Sales of Unregistered Securities 23
Item 5. Indemnification of Directors and Officers 24
Part F/S 25
Item 1. Financial Statements 26
Part III 36
Item 1. Index to Exhibits 36
/2/
Forward Looking Statements
Some of the statements contained in this Form 10-SB that are
not historical facts are "forward-looking statements" which can
be identified by the use of terminology such as "estimates,"
"projects," "plans," "believes," "expects," "anticipates,"
"intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to
be cautious of the forward-looking statements, that such
statements, which are contained in this Form 10-SB, reflect our
current beliefs with respect to future events and involve known
and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No
assurances can be given regarding the achievement of future
results, as actual results may differ materially as a result of
the risks we face, and actual events may differ from the
assumptions underlying the statements that have been made
regarding anticipated events. Factors that may cause actual
results, our performance or achievements, or industry results, to
differ materially from those contemplated by such forward-looking
statements include without limitation:
1. Our ability to maintain, attract and integrate internal
management, technical information and management information
systems;
2. Our ability to generate customer demand for our services;
3. The intensity of competition; and
4. General economic conditions.
All written and oral forward-looking statements made in
connection with this Form 10-SB that are attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by these cautionary statements. Given the uncertainties
that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.
Part I
We are filing this Form 10-SB on a voluntary basis to:
1. Provide current, public information to the investment
community;
2. Expand the availability of secondary trading exemptions
under the Blue Sky laws and thereby expand the trading market in
our securities; and
3. Comply with prerequisites for listing of our securities on
the NASD OTC Bulletin Board.
Item 1. Description of Business
A. Business Development and Summary
We were formed as a Nevada Corporation on June 7, 1999 under
the name OneCap. Our articles authorize us to issue up to
20,000,000 shares of common stock at a par value of $0.001 per
share and 5,000,000 shares of preferred stock at par value. We
are filing this Form 10-SB voluntarily with the intention of
establishing the fully reporting status with the SEC. The fully
reporting status is a necessary step in accomplishing our goal of
having our stock listed on the OTC Bulletin Board in the future.
Consequently, we will continue to voluntarily file all necessary
reports and forms as required by existing legislation and the SEC
rules. Presently, we have no market maker and we have not
discussed with any market maker or registered broker any aspect
of our operations.
We provide real estate and mortgage brokerage services to real
estate owners, buyers, tenants and investors. Our goal is to
service real estate transactions by providing:
/3/
1. Homebuyer and seller representation,
2. Land sales or purchases,
3. Commercial property sales or purchases,
4. Homeowner and commercial mortgages,
5. Construction loans,
6. Land loans,
7. Mezzanine financing,
8. Development loans and
9. Equity financing.
We developed strategic alliances with local and regional
companies to provide these services. We have alliances with
wholesale mortgage lenders to broker mortgage loans. Brokering
involves initiating and processing loan applications to be
submitted to a wholesale lender for funding. The wholesaler
underwrites, approves, closes and funds the loans based on lender-
specific, Federal National Mortgage Association (FNMA), Federal
Home Loan Mortgage Corporation (FHLMC), Federal Housing
Administration (FHA) and Veterans Administration (VA) guidelines.
Examples of the companies we work with are:
1. Interfirst, a division of ABN AMRO Mortgage Group;
2. Fleet Mortgage Corporation;
3. Irwin Mortgage Corporation;
4. North American Mortgage Company; and
5. Greenpoint Mortgage Funding, Inc.
Most of our initial revenues were derived from two related
entities in which one of our shareholders, has ownership
interests:
1. Pacific Properties & Development, LLC, a developer of
commercial properties and
2. Pacific Homes, a developer of residential property.
Our CEO and Director, Mr. Steven D. Molasky, is the sole
owner of Pacific Properties. Additionally, Pacific Homes is
fifty percent owned by Mr. Steven Molasky with the remaining
fifty percent owned by Mr. Alan Molasky, Mr. Steven Molasky's
brother. Our affiliation to these companies provides an
immediate clientele base to market our services. Both Pacific
Properties and Pacific Homes target their real estate projects in
the Nevada market. We plan to focus our operations in Nevada and
in other Southwest markets.
Agreements and Contracts
We have entered into relationships with credit services,
wholesale lenders and advertising media companies. An overview of
the material terms of each contract is included in this section.
Please refer to each individual exhibit for the full terms and
obligations associated with each agreement and contract.
/4/
1. Credit services - We have entered into agreements to obtain
credit information on prospective borrowers. Credit reports
provide our wholesale lenders and us due diligence to determine
the credit quality and financial background of the client
requesting a mortgage. Our agreements are as follows:
Exhibit 10a Client Information Form/Agreement
with Factual Data of Nevada, signed April 18,
2000
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Factual Receive OneCap pays OneCap Perpetual
Data to credit market rate must Contract.
provide reports as fees for comply No notice
credit ordered credit with Fair required
reports to reports Credit to
OneCap ordered ($47 Reporting terminate
per full Act
report)
Exhibit 10b Service Agreement
with Executive Reporting Services, signed
September15, 1999
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
ERS Receive OneCap pays OneCap Perpetual
provides credit market rate must Contract.
credit reports as fees for comply No notice
reports to ordered credit with Fair required
OneCap1 reports Credit to
ordered ($65 Reporting terminate
per full Act
report)
1 reports to be used for real estate transactions only
2. Mortgage brokering agreements - We have entered into
agreements to originate mortgage loans for wholesale lenders.
Under the agreements we prepare the paperwork and perform
background checks on prospective borrowers. We then contact a
lender, who will fund the mortgage. Our brokering agreements are
as follows:
Exhibit 10c Mortgage Broker Agreement
with Fleet Mortgage Corporation, signed October
1, 1999
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Underwrite, All All ancillary Loans must Perpetual
close, and credits fees charged be Contract.
fund loans for by lender in originated 30 day
pricing addition to in written
above par any costs for accordance notice to
and/or a pricing below with fed terminate
service par and state
release law
premium1
Exhibit 10d Broker Agreement
with Greenpoint Mortgage Funding, Inc., signed
February 25, 2000
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Underwrite, All All ancillary Loans must Perpetual
close, and credits fees charged be Contract.
fund loans for by lender in originated 30 day
pricing addition to in written
above par any costs for accordance notice to
and/or a pricing below with fed terminate
service par and state
release law
premium1
Exhibit 10e Wholesale Lending Agreement
with Interfirst, a division of ABN Amro Mortgage
Corp., signed October 8, 1999
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Underwrite, All All ancillary Loans must Perpetual
close, and credits fees charged be Contract.
fund loans for by lender in originated 30 day
pricing addition to in written
above par any costs for accordance notice to
and/or a pricing below with fed terminate
service par and state
release law
premium1
/5/
Exhibit 10f Loan Broker Agreement
with Irwin Mortgage Corporation, signed October
14, 1999
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Underwrite, All All ancillary Loans must Perpetual
close, and credits fees charged be Contract.
fund loans for by lender in originated 30 day
pricing addition to in written
above par any costs for accordance notice to
and/or a pricing below with fed terminate
service par and state
release law
premium1
Exhibit 10g Mortgage Broker Agreement
with North American Mortgage Company, signed
March 3, 2000
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Underwrite, All All ancillary Loans must Perpetual
close, and credits fees charged be Contract.
fund loans for by lender in originated 30 day
pricing addition to in written
above par any costs for accordance notice to
and/or a pricing below with fed terminate
service par and state
release law
premium1
----
(1) a service release premium is the amount paid by the lender
for the value of the servicing rights to the loan.
3. Advertising agreements - We advertise in print media, during
television programs and on the Internet. We have engaged various
publications and products to display our promotions on a
recurring basis. We advertise with the following companies:
Exhibit 10h Advertising Agreement
with "The House Detective", dated December 20,
1999
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
TV show Airtime $225 $225 paid Start: Jan
opening and every sponsorship every week 8, 2000
closing other week for every in advance Continues
ident. plus program that by OneCap until
2.5 - 3 airs our for either
minute seg. advertising scheduled party cxls
every other advertising with 2
week week
written
notice
Exhibit 10i Advertising Agreement
with "The Home Show", dated February 10, 2000
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
3 channel Airtime $1,030 per OneCap Contract
TV airtime: per week for 1 agrees to runs from
1) weekly 1 schedule min spot purchase 2/12/00
min spot set forth airing 7 both thru
(Financial) under times per Realty and 12/22/00.
& 2 min material week, and Financial 30 days
spot obligations $870 for 2 spots written
(Realty); min spot through notice to
2) twice airing 7 12/22/00 terminate
weekly 1 times per
min spot week
(Financial)
& 2 min
spot
(Realty);
3) 5 times
per week 1
min spot
(Financial)
& 2 min
spot
(Realty)
/6/
Exhibit 10j Advertising Agreement
with "Here is Las Vegas", dated October 13, 1999
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Magazine Advertising $3,162 for OneCap Terminatio
agrees to in each issue in agrees to n due in
provide winter/spring which OneCap provide writing
four color & advertising the ad lay- within 72
full-page summer/fall is displayed out in hours of
advertiseme 2000 time for contract
nts issues printing date
Exhibit 10k Advertising Agreement
with "Southern Nevada Homes Magazine", dated
April 5, 2000
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Contracted One page $1,440 per OneCap Termination
one page of monthly issue agrees to must be
advertiseme advertisement provide received
nt in all the ad lay- prior to
monthly out in that
issues time for month's
distributed printing space
from reservation
February to deadline
December
2000
Exhibit 10l Advertising Agreement
with Las Vegas Chamber of Commerce Relocation
Guide, dated May 22, 2000
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Magazine Advertising $2,495 for OneCap Contract
agrees to in each issue in agrees to is for
provide one winter/spring which OneCap provide year 2001.
four color & advertising the Terminatio
full-page summer/fall is displayed artwork by n due in
advertiseme 2001 1/31/01 writing
nts issues for the within 72
winter/spr hours of
ing contract
printing & date.
6/30/01 After 72
for the hours but
summer/fal before art
l printing deadine
date
requires
25% of
contracted
fee
Exhibit 10m Advertising Agreement
with "Homes and Living", dated February 9, 2000
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
Magazine Magazine $1,675 for Advertisem Contract
agrees to advertisin monthly ent began
provide one g space in magazine continues February
four color magazine advertising & automatica 2000 and
full-page and direct $1,440 for lly until renews
advertiseme mail map monthly mail written every
nts in guide map guide notice is month. 60
monthly advertising received, day
magazine or a new written
and one contract notificati
four color is signed on prior
half-page to
advertiseme publication
nt in a required
direct mail to
map guide terminate
contract
4.Sub-Lease Agreements - We entered into a sub-lease agreement
with Sierra Pacific Energy Corp. The sub-lease terms are as
follows:
/7/
Exhibit 10n Sublease Agreement
with Sierra Pacific Energy Corporation, dated
April 18, 2000
Material Rights/Payments Rights/Payments Conditions Termination
Obligations Due OneCap Due Other Party to be Met Provisions
----------- --------------- --------------- ---------- -----------
13,173 Right of $19,759.50 Normal Agreement
gross quiet for 8/1/00 lease is from
square feet enjoyment thru 9/30/00; provision 7/8/00
of office of leased $20,549.88 s; thru
space premises, for 10/1/00 premise 1/31/03
leased all thru 9/30/01; to be with an
utilities $21,340.26 used and optional
included for 10/1/01 occupied extension
except thru 9/30/02; for period
power and $22,130.64 general ending
phone for 10/1/02 office 9/30/04
thru 9/30/03 and requiring
(if extended administr written
past 1/31/03 ative notificati
contract end) purposes on by
7/3/02
S Corporation Status
On November 5, 1999, we revoked our S election and elected not
to have the pro rata allocation of S corporation items under the
IRC Section 1362(e)(2) apply to the S termination year. Before
November 5, 1999, we were treated as an S corporation for Federal
income tax purposes. As an S corporation, we passed through the
taxable income and losses to our shareholders each year as it was
recognized, and thus we paid no corporate income tax.
Our business involves the delivery of real estate and mortgage
services and is sensitive to interest rate activity. Our success
depends largely upon the effects of interest rates on real estate
transactions. Significant rises in rates will generally cause a
reduction in real estate and mortgage activity. Such a slow down
in the real estate community will have a negative effect on our
ability to broker real estate and mortgage transactions.
B. Business of Issuer
(1) Principal services and principal markets
We provide real estate and mortgage brokering services to the
real estate community. Our clients can search for a property,
sell a property, apply for a loan or ask for other related real
estate services in a single location or via the Internet. There
are two distinct divisions of OneCap: (1) real estate brokerage
and (2) mortgage brokerage services.
Real Estate Brokerage
Our OneCap Realty division provides brokerage services for
commercial and residential clients. We may market, buy or sell
on behalf of our clients and ourselves the following types of
properties:
1. Apartments;
2. Industrial, office and retail buildings;
3. Multi- and single-family residences;
4. Hotels and resorts; and
5. Undeveloped and developed land.
/8/
We promote our services mainly by representing buyers and
sellers in real estate transactions, which can be either new
developments or existing products. By being involved in the
sale, development and finance of various properties, we provide
our customers with quality information, service and
representation.
When we receive a new brokerage engagement, we begin by
assisting the client develop a sales strategy to maximize the
sales proceeds. We consider the client's individual situation,
including time parameters, sensitivity to publicity and cash flow
needs. We also investigate and analyze the physical condition of
the property, its cash flow and tenant characteristics, market
rents and market dynamics within sub-markets and comparable
transactions.
We structure our brokerage commission rates to demonstrate
confidence in our ability to sell the property at a reasonable
price. For example, if we are expected to sell a property at or
near a specified price, we might offer a commission rate that is
comparable to or below the going market rate. However, if the
seller would like us to sell the property at a price higher than
specified, we may request a higher commission rate.
Mortgage Brokerage
Our loan originations focuses on two primary areas:
residential and commercial. The residential loan volume will be
generated primarily from referrals from OneCap Realty and
referrals from independent brokers and realtors. We offer a wide
range of mortgage programs through correspondent lender
relationships. We are also an approved lender through the
Housing and Urban Development Department and VA, and offer all
types of FHA and VA financing. In addition to the traditional
referral sources, we also attract customers via our website at
www.onecap.com.
The commercial volume includes referrals from affiliated
companies, such as Pacific Properties, as well as originations
through outside builders and developers. We have various
relationships with banks, life insurance companies, large
national lenders and investment banking companies. Once we have
located the lender with the best pricing and terms for our
client, we present the quote to the potential customer. This
quote includes a 0.5%-2% fee to be payable by the borrower
directly to us at the closing of the financing transaction. We
do not have any specific agreements with any commercial lending
institutions regarding pricing arrangements and fee payments;
every transaction is quoted individually. Our loan products
include land acquisition, construction lending, mezzanine loans
and permanent loans. Although we have access to multiple loan
programs, we expect to capitalize on our ability to provide niche
products, such as high-leverage land acquisition loans and equity
lending through strategic alliances with several investment
banks.
However, we have a limited operating history, and we face all
of the risks inherent in the real estate industry. These risks
include, but are not limited to, market acceptance and
penetration of our services, our ability to broker real estate
and mortgage products and services, management of the costs of
conducting operations, general economic conditions and factors
that may be beyond our control. We cannot assure you that we
will be successful in addressing these risks. Failure to
successfully address these risks could have a material adverse
effect on our operations.
(2) Distribution methods of our services
Our strategy is to achieve high levels of customer
satisfaction and repeat business and to establish recognition and
acceptance of our business. Our strategy includes the following
key elements:
1. Introducing new financing products to satisfy client needs
and attract new clients,
2. Bolstering our Internet presence,
3. Forming additional strategic alliances, and
/9/
4. Building our brand equity.
Introducing New Financing Products to Satisfy Client Needs and
Attract New Clients
We believe that a gap exists in the market today for
specific higher leverage loan services and products for
commercial projects. Our goal is to introduce and market these
services and products. We plan to combine traditional
construction or permanent loans with mezzanine or equity loan
products that produce higher leverage for the developer or owner
of the property. Leverage is defined as the use of credit or
borrowed funds to improve one's speculative capacity and increase
the rate of return from an investment. Providing these packaged
services and products will serve to both satisfy existing client
needs and attract new clients. They will provide a variety of
options for buyers and sellers, which should increase the
likelihood of closing each potential transaction.
Bolstering Our Internet Presence
The Internet allows us to expand our geographical impact by
reaching prospective customers and introducing greater
efficiencies to the real estate and mortgage process. We are
continuing to design and develop our website as a mechanism for
the marketing and sale of real estate. Our website includes
photographs of properties available for sale, real estate reports
on each of those properties and an electronic loan application
for residential and commercial loans.
Forming Additional Strategic Alliances
Our goals for pursuing strategic alliances entail forming
correspondent or broker relationships with lenders who offer
similar high leverage and other loan products as we do. This
would allow our Company access to homebuilders and provide an
avenue for recommending their buyers' use of our home mortgage
division. We also plan to establish alliances with homebuilders
for home contingency programs (in which we sell the current home
a potential new home purchaser still owns).
Our business relationship with a Las Vegas developer of
commercial properties, Pacific Properties and Development LLC,
provides us with an existing market for our services and the
ability to expand our customer base. This company is one hundred
percent owned by Mr. Steven Molasky, CEO of OneCap, however,
OneCap does not pay any amounts of monies, directly or
indirectly, back to Mr. Molasky or other related entities for
referrals. Real estate and mortgage commercial brokerage
services for Pacific Properties are provided at market rates.
We also provide mortgage services to homebuyers who purchase
homes from Pacific Homes, a related entity. The real estate
brokerage and mortgage brokerage services that we provide to
Pacific Homes and Pacific Properties, as affiliated clients, are
on the same general terms and conditions as third party clients.
We provide real estate brokerage services to Pacific Homes
under a typical listing agreement. For each sale, OneCap
receives between 3-6% real estate commissions for its services,
paid by Pacific Homes. Pacific Homes also refers its homebuyers,
at the homebuyer's sole election, to OneCap's mortgage division
to provide the financing for the homebuyer's new home purchase.
Once an agreement is signed, OneCap is paid a typical 1% loan
origination fee from the homebuyer, and receives customary
overage revenue from the wholesale lender (the difference between
the wholesale lender annual percentage rate and the retail annual
percentage rate charged to the buyer).
We will typically act as real estate broker for Pacific
Properties in the purchase or sale of any commercial property for
a customary commission fee, most often paid by the seller of the
property. If Pacific Properties is the seller of the property,
then they pay the fee. If Pacific Properties is the purchaser of
the property, then most often the third party seller pays the
fee. Typical commissions range from 0.75%-5%, depending on the
size and complexity of the transaction. We also provide
commercial mortgage services to Pacific Properties finding the
best suitable financing for specific real estate projects.
Pacific Properties
/10/
will typically pay us an amount of 0.5%-1% of
the funded loan amount for our procurement services. All of
these terms are comparable to our normal and customary charges to
outside third party clients.
Building Our Brand Equity
We believe that building awareness of the OneCap brand is
important in expanding our customer base. We intend to
aggressively market and advertise to enhance our brand
recognition with consumers. We currently advertise through
traditional and non-traditional media such as local newspapers
and industry-specific publications, as well as over the Internet.
Our marketing efforts have consisted of television, print
and Internet advertising. With appropriate networking,
advertising and marketing, we plan to differentiate ourselves
from the competition, and put our Company in a better position to
generate increasing revenues. We cannot assure you that we will
be successful in attracting new customers, or retaining the
future business of existing customers. If we fail to attract and
retain customers, we would be unable to generate revenues to
support continuing operations.
(3) Status of any announced new service
As of September 20, 2000, we have:
1. Developed and implemented a business plan;
2. Recruited and retained an appropriate management team and
board of directors;
3. Attained capital from an equity offering;
4. Developed our corporate web site at www.onecap.com;
5. Instituted a marketing campaign encompassing print,
television and the Internet; and
6. Entered into agreements with wholesale lenders to originate
mortgage loans.
We have commenced operations and have begun generating
revenues. However, we expect our industry to become increasingly
competitive, despite the growth expected in the market. We
intend to compete by offering a wide range of products and
services to commercial and residential real estate clients. Our
goal is to ensure client satisfaction with our services and to
develop strategic relationships to increase our service
offerings.
(4) Industry background
The most critical components of all real estate transactions
are service, financing and comprehensive and reliable
information. Property-specific information, accurate market
information and providing timely financing needs translates to
time and money for a client. Typically, each step in the buying
or selling transaction requires several different service
companies and takes an inordinate amount of the client's time
searching for the right combination of services. Companies often
have multiple real estate brokers and financing sources, which
require an excessive amount of time to find the right lender or
realtor for each specific request or transaction. A single
project may require several different companies' involvement in
the process of development. For example, when a builder wants to
build an office building, the following steps must be performed:
1. A broker finds the land;
2. A land lender finances the initial purchase and an equity
lender finances what the land lender cannot;
/11/
3. A development and construction lender must be found to take
on the project;
4. Another broker is needed to lease the office space as it is
being built;
5. A permanent lender is found to finance the end-loan; and
6. Another broker may be selected to sell the building.
Lenders and brokers are usually specific by transaction, which
is time consuming, and a single source would save time and money.
We operate in a highly competitive market and compete with a
variety of organizations that offer services similar to those we
offer. The market includes a variety of participants, including
national and regional:
1. Realty brokers,
2. Mortgage institutions and
3. Financial lending institutions.
Some of our competitors have significantly greater financial,
technical and marketing resources, generate greater revenues and
have greater name recognition than we do.
Our ability to compete depends in part on:
1. Economic factors such as interest rates and the level of
economic expansion;
2. Our ability to attract, hire, develop and retain skilled
personnel;
3. The level of real estate activity; and
4. Our ability to market our real estate and mortgage brokering
services to the real estate market.
Failure to address these risks could make our business
unprofitable.
(6) Customers
Our focus is on developing our brand recognition and a quality
reputation in the market place. We will also convey the quality
and wide range of services offered that is expected from
professional representation on either the buyer's or seller's end
of a real estate transaction.
The current forms of advertising we currently use are:
1. Our corporate website - We have developed a website for
OneCap at www.onecap.com. The website features a mortgage
calculator, resale listings, news and public relation stories.
The web page may be eventually linked to many of the major search
engines to increase attraction and website visits. Additionally
an E-mail database has been established to link our web page to E-
mail news that can be sent on a monthly basis to realtors,
builders, banks and mortgage companies.
2. Brochures describing buyers representation and our services
- These brochures are included at our existing offices and are
promoted internally with the on-site agent. Additional points of
advertising may include rip-off racks at the chamber of commerce,
malls and in the lobbies of several apartment communities
currently managed by an affiliated entity, Molasky Pacific
Management, partially owned and controlled by Mr. Steven D.
Molasky.
/12/
3. Our monthly newsletter - We have a monthly newsletter called
" Las Vegas Real Estate Update" that is posted on our website.
It is used to inform readers of our corporate development, growth
and the services we provide. This letter will target market
groups such as non-owner occupied residences, data source
obtained from mall traffic and those wishing to subscribe and
current or future clients. Visitors to our website are able to
subscribe to receive our newsletter via regular mail.
4. Signage - Residential and commercial signs are placed on
listings handled by us and magnetic car plaques have been
distributed to our agents. We believe this promotes our name
through reach and frequency in the marketplace and further
generates qualified clients.
5. Regional print media - We have committed to advertising and
marketing our services in various home buying and relocation
guides that are distributed in Southern Nevada. These print
magazines allow us to target families and individuals seeking to
purchase a new or resale home in the Las Vegas community.
6. Regional television media - We signed an agreement to
advertise on the weekly regional television program, "The Home
Show." The program airs locally in the Southern Nevada area. In
addition, our agreement allows us to place a web link on the
programs Internet site, www.lasvegashomeshow.com. This link
takes visitors to our corporate web page, where they are able to
learn about our services more in-depth.
For the year ended June 30, 2000, we generated $854,900 of
sales revenue. We anticipate that we will continue to derive the
majority of our revenues from related entities under common
control. Our business is dependent on revenues received from
fees related to the services we provide our clients. If we fail
to market our services and thereby attract new customers or
maintain existing relationships, we will be unable to generate
sufficient revenue to continue operations.
(7) Service Marks
On September 16, 1999, we applied for new service marks
with the Assistant Commissioner for Trademarks. As of December
11, 2000, our service mark application number 13630-0001 is
pending.
(8) Regulation
Our real estate operations are subject to various federal,
state and local regulations in the U.S. We must have an officer
licensed as a real estate broker or we must associate with a
licensed broker in each state in which we provide our services.
Each employee that performs certain brokerage functions in the
State of Nevada must be a licensed real estate salesperson and
she must work under the supervision of a broker licensed by that
state. In addition to these licensing requirements, certain
state governmental entities, such as the Nevada Department of
Real Estate, regulates our brokerage operations by requiring our
resident operative to be licensed.
In various states, governmental entities license individual
auctioneers and administer various regulations governing their
activities and may require that auctioneers post bonds. We
believe that we are in compliance with all material licensing and
bonding requirements in the State of Nevada, in which auctioning
licenses and bonds are required, and in which we are engaged in
material auction activities.
Our mortgage brokerage operations are subject to the rules and
regulations of the FHA, VA, FNMA, FHLMC and Government National
Mortgage Association with respect to originating and processing
mortgage loans. Those rules and regulations, among other things,
prohibit discrimination and establish underwriting guidelines
which include provisions for inspections and appraisals, require
credit reports on prospective borrowers and fix maximum interest
rates. Moreover, lenders are subject to FNMA, FHA, FHLMC, GNMA
and VA examinations at any time to assure compliance with the
applicable regulations, policies and procedures. Our mortgage
loan production activities are subject to the Truth-in-Lending
Act
/13/
and Regulation Z promulgated, thereunder. The Truth-in-
Lending Act contains disclosure requirements designed to provide
consumers with uniform, understandable information with respect
to the terms and conditions of loans and credit transactions in
order to give them the ability to compare credit terms. The
Truth-in-Lending Act also guarantees consumers a three-day right
to cancel certain credit transactions, including any refinance
mortgage or junior mortgage loan on a consumer's primary
residence. We are also required to comply with the Equal Credit
Opportunity Act of 1974, as amended, which prohibits creditors
from discriminating against applicants on the basis of race,
color, sex, age or marital status. Regulation B promulgated
under ECOA restricts creditors from obtaining certain types of
information from loan applicants. It also requires certain
disclosures by lenders regarding consumer rights and requires
lenders to advise applicants of the reasons for any credit
denial. In instances where the applicant is denied credit or the
rate or charge for loans increases as a result of information
obtained from a consumer credit agency, another statute, the Fair
Credit Reporting Act of 1970, as amended, requires the lenders to
supply the applicant with a name and address of the reporting
agency. The Federal Real Estate Settlement Procedure Act
imposes, among other things, limits on the amount of funds a
borrower can be required to deposit with us in an escrow account
for the payment of taxes, insurance premiums or other charges.
We have policies, procedures and systems in place to ensure
compliance with RESPA.
(9) Effect of existing or probable government regulations
We believe that we will be able to comply in all material
respects with laws and regulations governing real estate and
mortgage brokering activities. We are not aware of any probable
government regulations that may adversely affect our business.
(12) Employees
We presently have 10 full-time and no part-time employees.
Our employees are not represented by a collective bargaining
agreement, and we believe that our relations with our employees
are good.
The OneCap Real Estate Division has three full-time
employees with licenses. Eric Bordenave has a Nevada real estate
brokers license (#19412), and is the qualifying employee for the
real estate division. Bob Greene has a Nevada broker/salesman
real estate license (#34066), and Kristi Franzese has a Nevada
salesman real estate license (#43688). The OneCap Mortgage
Division has a mortgage company license (#MB00344), and Scott
Lawrence is the Company's qualifying employee for that
license.
We adopted a retirement savings plan for our employees under
Section 401(k) of the Internal Revenue Code. The plan allows
employees to defer up to the lesser of the Internal Revenue Code
prescribed maximum amount or 15% of their income on a pre-tax
basis through contributions to the plan. We will match 25% of
eligible employees' contributions up to a maximum of 6% of their
individual earnings.
On July 27, 2000, we approved a stock option plan with the
goal of motivating our employees. We have allocated up to
1,250,000 shares of common stock that may be granted under our
stock option plan. The purchase price for the shares covered
under each option will be no less than 100% of the fair market
price per share of our stock on the date the option is granted.
However, if the option is granted to a person owning more than
10% of our voting stock, the option can be converted at no less
than 110% of the fair market price per share on the date the
option is granted. No options have been granted as of September
20, 2000.
Item 2. Management's Discussion and Analysis
A. Management's Discussion and Analysis
(1) For the year ended June 30, 2000, we realized a net loss
of $(102,400) and generated $854,900 in revenues from
operations.
The following comprises the capitalization history for OneCap:
/14/
1. On June 7, 1999, we issued 100 shares of our common stock
with no par value to one founding shareholder. The shares were
issued in exchange for cash and assets totaling $19,600. This
original stock offering was made in accordance with Section 4(2)
of the Securities Act of 1933, as amended.
2. On November 2, 1999, the one shareholder exchanged all of
his 100 shares of common stock with no par value for 100 shares
of common stock with a par value of $0.001 per share and an
additional 4,999,900 shares of common stock at par value of
$0.001 per share. In addition, we issued 1,937,500 shares of
$0.001 par value common stock to a second individual. These
shares were issues in exchange for cash of $6,900. This stock
issuance was made in accordance with Section 4(2) of the
Securities Act of 1933, as amended.
3. On May 26, 2000, we issued 1,659,200 shares of common stock
to 130 unaffiliated shareholders and eight affiliated
shareholders at a price of $0.25 per share, for total receipts of
$414,800 in cash. This offering was made in reliance upon an
exemption from the registration provisions of the Securities Act
of 1933, as amended, in accordance with Regulation D, Rule 504 of
the Act.
4. On May 26, 2000, we issued 214,918 shares to one shareholder
in lieu of services rendered in the amount of $53,729. This
stock issuance was made in accordance with Section 4(2) of the
Securities Act of 1933, as amended.
As of the date of this filing, we have 8,811,618 shares of par
value common voting stock issued and outstanding, which are held
by approximately 141 shareholders of record. If we require more
capital, we may be required to raise additional capital via a
public or private offering of equity or debt. There are no
preliminary loan agreements or understandings between us, our
officers, directors or affiliates or lending institutions. We
have no arrangements or commitments for accounts and accounts
receivable financing. We cannot assure you that any such
financing can be obtained or, if obtained, that it will be on
reasonable terms.
For the year ended June 30, 2000, we have generated $854,900
in sales revenues and devoted our efforts primarily to
developing our services, implementing our business strategy and
raising working capital through equity financing. Our revenues
are primarily dependent upon our ability to market and provide
real estate and mortgage products and services. Our priorities
for the next 12 months of operations are:
1. Completing our relocation to our new corporate offices
(This was completed on August 15, 2000. We moved to 5450 W.
Sahara Ave., 2nd Floor, Las Vegas, NV 89146 a space consisting of
+13,000 square feet. OneCap currently leases this space from
Sierra Pacific Energy Company) ;
2. Expand our clientele base and accounts through marketing and
advertising, our Internet site, personal and business contacts
and print and television media;
3. Modify our web site to allow secure mortgage applications to
be completed electronically;
4. Expand our commercial real estate division to include
commercial property management and leasing activities;
5. Enter the Spanish-speaking market through our bi-lingual
loan officer;
6. Developing further strategic relationships; and
7. Increase the number of residential and commercial loan
originators from two to five within the next six months, through
active and aggressive interviewing and networking. We also plans
on expanding our independent real estate agents as well,
targeting 20 agents signed by year-end
/15/
2000, and 50 signed by mid
2001, again through active and aggressive interviewing and
networking.
We cannot guarantee you that we will be able to compete
successfully or that the competitive pressures we may face will
not have an adverse effect on our business, results of
operations and financial condition. Additionally, intensified
competition in the real estate market could force us out of
business.
(2) The following is a summary of our results of operations for
the year ended June 30, 2000 and for the period June 7, 1999 to
June 30, 1999.
Year Period
Ended Ended
June 30, June 30,
2000 1999
-------- ---------
Revenue(1) $854,900(2) $ -0-
Expenses $957,300(3) $ 1,000
-------- ---------
Net income $(102,400) $(1,000)
(loss) ======== =========
1 The Company anticipates fee rates charged to customers in
future periods to be similar to those charged from 07/99
through 06/00.
2 Each of the following transactions or group of related
transactions accounted for more than 10% of revenues:
1) Revenues generated include a non-recurring property
acquisition project with a related entity, PH LLC. The
company earned a total of $90,622 in gross revenue (real
estate commissions) for the period of 6/30/99 - 6/30/00.
2) The Company also assisted in the closing of a 16.65 acre,
$3,783,500 land sale/purchase to a third party buyer, in
which the seller was an affiliated entity, Lake Mead Horizon
LLC. The company earned a total commission of $104,046.
3) The Company also assisted in obtaining a $22,550,000 loan
for a related entity, Pacific Crest LP, which owns a 274
unit luxury apartment complex. The Company earned a total
commission of $150,500.
3 Net of interest income of $4,000.
Although every real estate transaction or mortgage loan is
specific by nature, and thus nonrecurring, we plan to continue
expanding its client base and generating revenues through similar
future transactions. The Company has every intention of
expanding to a more outside, third party client base, and relying
less heavily on revenues generated from its affiliated companies.
(3) The following is a summary of our revenues for the year
ended June 30, 2000 quantifying the aggregate dollar amount of
revenues earned from transactions involving affiliated versus
nonaffiliated parties.
Affiliated
----------
# of Transaction Average Revenue
Transactions Volume Revenue Earned
($) (%)
Real Estate 7 10,530,599 2.97 313,243
Commission
Mortgage 9 41,401,160 .81 333,666
Brokerage ---- ---------- ------ -------
16 51,931,758 646,909
/16/
Affiliated Referrals (Pacific Homes)1
-------------------------------------
Mortgage 61 7,060,302 2.16 152,498
Brokerage
Non-Affiliated
--------------
Real Estate 8 1,115,389 2.80 31,262
Commission
Mortgage 9 960,482 2.52 24,231
Brokerage
17 2,075,871 55,493
----- ---------- ------ -------
Total 94 61,067,932 854,900
===== ========== ====== =======
1 These transactions were independent homebuyers who
purchased a new home from our affiliated entity, Pacific
Homes, and decided to use OneCap as their Mortgage Company.
None of the revenues were received from Pacific Homes nor did
Pacific Homes obtain any referral fees. Pacific Homes only
referred these individuals to our mortgage division.
To fund fiscal 2000 operations, we believe our current
financial resources and ability to generate revenues will be
adequate to fund our operations and provide for our working
capital needs through December 2000. However, we may experience
fluctuations in operating results in future periods due to a
variety of factors, such as:
1. We have a limited operating history on which to base
estimates of future performance;
2. We may need to obtain additional financing in the event that
we are unable to realize sales of our services or if we require
more capital than we currently have;
3. Our market is highly competitive; and
4. We may experience difficulty in managing growth.
Item 3. Description of Property
A. Description of Property
Our corporate offices are located at 5450 West Sahara Avenue,
2nd Floor, Las Vegas, NV 89146. These new facilities will allow
for our future expansion and growth. On July 9, 2000, we entered
into a lease agreement for approximately 13,173 square feet of
office space, ending January 31, 2003 with an option to renew for
20 months. The lease payments will total $19,800 per month with
4% annual increases each year on October 1.
Item 4. Security Ownership of Management
A. Security Ownership of Management
The following table sets forth as of September 20, 2000
certain information regarding the beneficial ownership of our
common stock by:
1. Each person who is known us to be the beneficial owner of
more than 5% of the common stock,
2. Each of our directors and executive officers and
3. All of our directors and executive officers as a group.
/17/
Except as otherwise indicated, the persons or entities listed
below have sole voting and investment power with respect to all
shares of common stock beneficially owned by them, except to the
extent such power may be shared with a spouse. No change in
control is currently being contemplated.
Name and Address Shares Percentage of Shares
Beneficially Outstanding
Owned
---------------- ------------ -------------------
Steven D. 5,000,000 56.74%
Molasky
5450 West Sahara
Avenue
2nd Floor
Las Vegas,
Nevada 89146
Vincent W. 1,937,500 21.99%
Hesser
5450 West Sahara
Avenue
2nd Floor
Las Vegas,
Nevada 89146
Eric Bordenave 40,000 0.45%
5450 West Sahara
Avenue
2nd Floor
Las Vegas,
Nevada 89146
Scott Lawrence 4,000 NMF1
5450 West Sahara
Avenue
2nd Floor
Las Vegas,
Nevada 89146
Total ownership 6,981,500 79.23%
by our officers
and directors
(four
individuals)
1. Represents a percentage of less than 0.01%.
B. Persons Sharing Ownership of Control of Shares
No person other than Steven D. Molasky and Vincent W. Hesser
owns or shares the power to vote 5% or more of our securities.
Item 5. Directors and Executive Officers
A. Directors and Executive Officers
The following table sets forth certain information with
respect to each of our executive officers or directors.
Name Age Position Appointed
------ ----- ----------------- ---------
Steven D. 48 CEO, Secretary, Treasurer July 1,
Molasky and Director 1999
Vincent W. 34 President, COO and Director July 1,
Hesser 1999
Scott Lawrence 40 Vice President - Mortgage June 7,
Operations 1999
Eric Bordenave 38 Vice President, Corporate May 15,
Broker 2000
B. Work Experience
/18/
Steven D. Molasky, Chief Executive Officer, Secretary,
Treasurer and Director - Mr. Molasky has experience in the real
estate development business dating back to the late 1960's.
Through his various companies, including Pacific Homes and
Pacific Properties, Mr. Molasky has developed:
1. Homes and condominiums for sale;
2. Apartment complexes;
3. Distribution and industrial product;
4. Master-planned communities;
5. Retail shopping centers; and
6. High rise office buildings.
Mr. Molasky specializes in real estate financing, having
nurtured and developed long-term relationships within the
industry. Included in this group are:
1. Prudential Real Estate,
2. Long Term Credit Bank of Japan,
3. Northwestern Mutual Life Insurance Company,
4. Teachers Insurance and Annuity Association,
5. Bank One, and
6. Nomura Asset Capital Corporation and Capital Company of
America.
Also included are liaisons with local and regional financial
institutions.
Having a strong sense of community, Mr. Molasky has:
1. Served as a founding member and past chairman of the Nevada
Institute for Contemporary Art;
2. Been appointed by the Clark County Commission as a director
and board member of the McCarran Arts Advisory Council; and
3. Was appointed by the Nevada Legislature as a board member of
the Nevada Nuclear Projects Commission.
Mr. Molasky also serves as a trustee/director of the
University of Nevada, Las Vegas Foundation and is a member of the
Young President's Organization.
Vincent W. Hesser, President, Chief Operating Officer and
Director - Mr. Hesser's areas of responsibility includes
1. Coordinating the development of corporate policies, goals
and objectives relative to company operations;
2. Lender and investor relations; and
3. Financial performance and growth.
/19/
Mr. Hesser oversees the daily company operations and business
affairs to ensure that business objectives are achieved. During
his tenure as a finance executive at Pacific Properties from 1992-
1999, Mr. Hesser has obtained project equity and debt financing
for real estate projects, and he has overseen the build-out of
housing, apartment and commercial real estate projects.
Mr. Hesser began his career at PriMerit Bank, which was
subsequently purchased by Norwest, which was in turn acquired by
Wells Fargo, in Las Vegas, Nevada. He was responsible for
analyzing, evaluating and reporting on real estate joint ventures
throughout the southwestern United States, with real estate and
development companies. He also assisted the bank in their
reviews with the Office of Thrift Supervision and Federal Deposit
Insurance Corporation in relation to those investments.
Mr. Hesser is a graduate of Southern Utah University and
earned his Master of Accountancy degree, summa cum laude and with
high distinction. He has obtained his CPA Certificate and also
holds a general contractors license in the State of Nevada.
Scott Lawrence, Vice President - Mortgage Operations - With
over 16 years of mortgage lending experience, specializing in new
home financing, Mr. Lawrence brings knowledge of mortgage
financing. He created and managed the mortgage operations and an
interest rate-hedging program for Falcon Development, a developer
in Las Vegas and Denver.
In 1996, Mr. Lawrence worked on creating the mortgage
subsidiary for Beazer Homes, consulted with builders, such as
Trinity Homes, Zaring Homes, Oriole Homes and Weitzer Homes, on
strategies for mortgage origination's, as well as retro-fitting
the mortgage operations for a homebuilder in Las Vegas.
Subsequently, Mr. Lawrence took a position with Pacific Homes
Financial in late 1996. In addition to the end-loan financing
that Pacific Homes Financial previously provided, Mr. Lawrence
has created several strategic alliances with various capital
sources to provide purchasing, development, construction and
permanent financing for the various multi-family and commercial
projects that Pacific Properties & Development, LLC, develops in
various markets.
Prior to coming to Las Vegas in 1994, Mr. Lawrence worked with
a consulting firm, working with the Builder 200, setting up and
managing builder owned mortgage companies. Mr. Lawrence
graduated with a Bachelor of Science degree in Marketing
Management from New England College in Henniker, New Hampshire in
1981.
Eric Bordenave, Vice President and Corporate Broker
Mr. Bordenave was employed with the City of Las Vegas,
Office of Business Development as a Senior Project Development
Officer from 12/94 - 05/00, prior to joining OneCap. Mr.
Bordenave worked under the direction of the City Manager's Office
and directly with the Director of OBD. Mr. Bordenave's duties
included project evaluation, financial analysis, acquiring and
developing property for the City's Redevelopment Agency, the Las
Vegas Technology Center and Las Vegas Enterprise business parks,
community centers and golf courses.
Mr. Bordenave was also responsible as senior project officer
for several special projects for the City manager where he was
the liaison between the City and commercial developers to
negotiate, coordinate and implement city contracts and walk the
development through the maze of city departments such as, City
Attorney's Office, Building and Planning Departments, Public
Works and Leisure Services (Parks) and business licensing. Mr.
Bordenave worked directly with companies looking to expand or
relocate their business operations to the City of Las Vegas
including international companies from Pacific Rim countries.
Also during his employ with the City of Las Vegas, Mr. Bordenave
maintained his real estate license as an independent contractor
with two real estate companies during that time period.
Cornerstone Company 07/90 - 04/97, and Commercial West Realty
Advisors 04/97 - 06/00.
/20/
Mr. Bordenave is a graduate of the University of Nevada, Las
Vegas and holds a Bachelor of Science in Business Administration
with a major in Business Management. He currently is the
qualifying real estate broker for OneCap.
Item 6. Executive Compensation
Remuneration of Directors and Executive Officers
We do not currently have employment agreements with our
executive officers but we expect to sign employment agreements
with each in the next approximately six months. No arrangements
have been made in advance of these signed agreements as the
format and terms of these agreements have not been adequately
clarified. Messrs. Scott Lawrence and Eric Bordenave have been
drawing salaries since they were appointed to their positions.
Name Capacities in which Time Spent Annual
Remuneration was on OneCap Compensati
Recorded Business on
------ ------------------ ---------- ---------
Steven D. CEO, Secretary, 20% Incentive
Molasky Treasurer and Director Basis1
Vincent President, COO and 50% Incentive
W. Hesser Director Basis1
Scott Vice President - 100% $125,000
Lawrence Mortgage Operations
Eric Vice President, 100% $90,000
Bordenave Corporate Broker
1. Certain executives have deferred payment of salaries based
on our cash flow and financial performance. Messieurs Steven D.
Molasky and Vincent W. Hesser are compensated on a cash incentive
basis, based on performance. This incentive is 12.5% of our net
revenues, dispersed on a monthly basis, which will be split
equally between the two individuals.
Stock Option Plan
On July 27, 2000, we approved a stock option plan. The plan
allocated up to 1,250,000 shares of common stock that may be
granted. The purchase price for the shares covered under each
option may be no less than 100% of the market price per share on
the date the option is granted. However, if the option is
granted to a person owning more than 10% of our voting stock, the
option cannot be converted at less than 110% of the fair market
price per share on the date the option is granted. No options
have been granted as of August 10, 2000.
Compensation of Directors
There were no arrangements pursuant to which any director was
compensated for the period from June 7, 1999 to September 20,
2000, for service provided as a director.
Item 7. Certain Relationships and Related Transactions
There were no actual or proposed transactions that occurred
over the past two years, to which any person related to the
issuer had or is to have a direct or indirect material interest
as set forth in item 404 of Regulation S-B of the Securities and
Exchange Act of 1933.
/21/
Item 8. Description of Securities
Our authorized capital stock consists of 20,000,000 shares
of common stock, par value per share and 5,000,000 shares of
preferred stock, par value. As of September 20, 2000, we had
8,811,618 shares of common stock outstanding. To date, we have
not issued preferred stock. The following summary about certain
provisions of our common stock and preferred stock is not complete
and is subject to the provisions of our "Articles of
Incorporation" and bylaws.
Common Stock
As a holder of our common stock:
(a) you have equal rights to dividends from funds legally
available, ratably, when as and if declared by our Board of
Directors;
(b) you are entitled to share, ratably, in all of our assets
available for distribution upon liquidation, dissolution, or
winding up of our business affairs;
(c) you do not have preemptive, subscription or conversion
rights and there are no redemption or sinking fund provisions
applicable;
(d) you are entitled to 1 vote per share of common stock you
own, on all matters that stockholders may vote, and at all
meetings of shareholders; and
(e) your shares are fully paid and non-assessable.
Additionally, there is no cumulative voting for the election
of directors.
Preferred Stock
Although, we have not issued any preferred stock to date, nor have
we developed the descriptive attributes of these preferred shares,
we can issue shares of preferred stock in series with such
preferences and designations as our board of directors may
determine. Our board can, without shareholder approval, issue
preferred stock with voting, dividend, liquidation, and conversion
rights. This could dilute the voting strength of the holders of
common stock and may help our management impede a takeover or
attempted change in control.
/22/
Part II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Related Stockholder Matters
A. Market Information
There is no current market for our common equity.
Additionally, our common equity is not subject to outstanding
options or warrants to purchase, or securities convertible into,
common equity. No sales of common equity have been sold pursuant
to Rule 144 of the Securities Act, nor has an offering been made
that could have a material effect on the market price of our
common equity.
B. Holders
As of September 20, 2000, we had approximately 141
stockholders of record.
D. Reports to Shareholders
We will furnish our shareholders with annual reports
containing audited financial statements and such other periodic
reports as we determine to be appropriate or as may be required
by law. We are filing this Form 10-SB voluntarily with the
intention of establishing the fully reporting status with the
SEC. Upon the effectiveness of this Registration Statement, we
will be required to comply with periodic reporting, proxy
solicitation and certain other requirements by the Securities
Exchange Act of 1934. Consequently, we will voluntarily file
all necessary reports and forms as required by existing
legislation and the SEC rules.
E. Transfer Agent and Registrar
The Transfer Agent for our shares of common voting stock is
Shelley Godfrey, Pacific Stock Transfer Company, 5844 S. Pecos,
Suite D, Las Vegas, Nevada 89120, (702)-361-3033.
Item 2. Legal Proceedings
We are not currently involved in any legal proceedings nor do
we have any knowledge of any threatened litigation.
Item 3. Changes in and Disagreements with Accountants
We have had no disagreements with our independent accountants.
Item 4. Recent Sale of Unregistered Securities
The following discussion describes all the securities we have
sold within the past three fiscal years:
On June 7, 1999, we issued 100 shares of our common stock with
no par value to one founding shareholder. The shares were
issued in exchange for cash and assets totaling $19,600. This
original stock offering was made in accordance with Section 4(2)
of the Securities Act of 1933, as amended. No underwriting
discounts or commissions were paid in this offering.
On November 2, 1999, the one shareholder exchanged all of his
100 shares of common stock with no par value for 100 shares of
common stock with a par value of $0.001 per share and an
additional 4,999,900 shares of common stock at par value of
$0.001 per share. In addition, we issued 1,937,500 shares of
$0.001 par value common stock to a second individual. These
shares were issues in exchange for cash of $6,900. This stock
issuance was made in accordance with Section 4(2) of the
Securities Act of 1933, as amended.
/23/
On May 26, 2000, we issued 1,659,200 shares of common stock to
130 unaffiliated and eight affiliated shareholders at a price of
$0.25 per share, for total receipts of $414,800 in cash. This
offering was made in reliance upon an exemption from the
registration provisions of the Securities Act of 1933, as
amended, in accordance with Regulation D, Rule 504 of the Act.
In addition, this offering was made on a best efforts basis and
was not underwritten.
On May 26, 2000, we issued 214,918 shares to one
shareholder in lieu of services rendered in the amount of
$53,729. The issuance of shares represented payment to a
consulting company for facilitating the preparation of the
documentation necessary to become a publicly traded company.
This stock issuance was made in accordance with Section 4(2) of
the Securities Act of 1933, as amended. No brokers or dealers
were involved in this transaction and no discounts or
commissions were paid.
Item 5. Indemnification of Directors and Officers
Neither our Articles of Incorporation nor our bylaws
provide for the indemnification of a present or former director
or officer. However, pursuant to Nevada Revised Statutes Section
78.750 and 751 we must indemnify any of our directors, officers,
employees or agents who are successful on the merits or otherwise
in defense on any action or suit. Such indemnification shall
include, expenses, including attorney's fees actually or
reasonably incurred by him. Nevada law also provides for
discretionary indemnification for each person who serves as or at
our request as one of our officers or directors. We may
indemnify such individuals against all costs, expenses and
liabilities incurred in a threatened, pending or completed
action, suit or proceeding brought because such individual is one
of our directors or officers. Such individual must have
conducted himself in good faith and reasonably believed that his
conduct was in, or not opposed to, our best interests. In a
criminal action, he must not have had a reasonable cause to
believe his conduct was unlawful (see Exhibit 3b. Bylaws of the
Company Article VII Indemnification of Officers, Directors,
Employees and Agents: Insurance).
/24/
Part F/S
Item 1. Financial Statements
The following documents are filed
as part of this report:
a) OneCap Page
Report of Bradshaw, Smith & Co., 1
LLP
Balance sheet 2
Statements of operations 3
Statements of changes in 4
stockholder's equity
Statements of cash flows 5
Notes to financial statements 6
/25/
INDEPENDENT AUDITORS' REPORT
Board of Directors
OneCap
Las Vegas, Nevada
We have audited the accompanying balance sheet of OneCap as of
June 30, 2000, and the related statements of operations, changes
in stockholders' equity, and cash flows for the year then ended
and for the period from June 7, 1999 (inception) to June 30,
1999. 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 financial position
of OneCap as of June 30, 2000, and the results of its operations
and its cash flows for the year then ended and for the period
from June 7, 1999 (inception) to June 30, 1999 in conformity with
generally accepted accounting principles.
/s/ Bradshaw, Smith & Co., LLP
September 15, 2000
/F-1/
OneCap
BALANCE SHEET
JUNE 30, 2000
ASSETS
Current assets:
Cash $ 492,200
Accounts receivable (net of allowance for 1,200
doubtful accounts of $-0-)
Income tax receivable 2,700
-------
Total current assets 496,100
Property and equipment (Note 3) 31,300
Other assets (net of accumulated 9,900
amortization of $2,000) -------
537,300
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other liabilities 101,400
-------
Total current liabilities 101,400
-------
Commitments and contingencies (Note 4) --
Stockholders' equity (Note 5):
Preferred stock, $.001 par value; --
5,000,000 shares authorized,
no shares issued and outstanding
Common stock, $.001 par value; 20,000,000 8,800
shares authorized,
8,811,618 shares issued and outstanding
Additional paid-in capital 530,500
Accumulated deficit (103,400)
---------
435,900
537,300
=========
The Notes to Financial Statements are an integral part of these
statements
/F-2/
OneCap
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2000 AND
FOR THE PERIOD FROM JUNE 7, 1999 (INCEPTION) TO JUNE 30,
1999
Year Period
Ended Ended
June 30, 2000June 30, 1999
Revenues:
Loan fees and commissions $ 854,900 $ --
Expenses:
General and administrative 950,300 1,000
expenses (Notes 2 and 5)
Depreciation and amortization 10,000 --
expense
960,300 1,000
(105,400)
Loss from operations (1,000)
Other income:
Interest income 4,000 --
(101,400) (1,000)
Net loss before income taxes
Income tax expense:
Current federal 1,000 --
Deferred federal -- --
1,000 --
Net loss (102,400) (1,000)
========= ========
(.021) (10.00)
Loss per common share ======== ========
Weighted average number of common 4,784,536 100
shares outstanding ========= ======
The Notes to Financial Statements are an integral part of these
statements
/F-3/
OneCap
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED JUNE 30, 2000 AND
FOR THE PERIOD FROM JUNE 7, 1999 (INCEPTION) TO JUNE 30, 1999
Common Stock Additional Accumu Stockho
-------------- paid-in lated lders'
capital deficiT equity
Shares Amount
------ ------ --------- ------- -------
Balance, June 7, 1999 -- $ - $ -- $ -- $ --
(Inception) -
Issuance of shares 100 -- 19,600 -- 19,600
Net loss -- -- -- (1,000) (1,000)
Balance, June 30, 100 -- 19,600 (1,000) 18,600
1999
November 1, 1999, 6,937,400 6,900 -- -- 6,900
issuance of
shares
May, 2000 issuance 1,874,118 1,900 402,900 -- 404,800
of shares
Services contributed -- -- 108,000 -- 108,000
by stockholders
Net loss for the year -- -- -- (102,400) (102,400)
ended June 30, 2000
Balance, June 30, 8,811,618 $8,800 $530,500 $(103,400) $435,900
2000 ========= ====== ======== ========= =======
The Notes to Financial Statements are an integral part of
these statements
/F-4/
OneCap
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2000 AND
FOR THE PERIOD FROM JUNE 7, 1999 (INCEPTION) TO JUNE 30,
1999
Year Period
Ended Ended
June 30, June 30,
2000 1999
-------- ----------
Cash flows from operating
activities:
Net loss $(102,400) $ (1,000)
Changes to net loss not
requiring cash outlays:
Services contributed by 108,000 --
stockholders
Depreciation and 10,100 --
amortization
Changes in:
Accounts receivable 2,700 --
Other assets (11,800) --
Accounts payable and other 100,400 1,000
liabilities
Income tax receivable (2,700) --
Net cash provided by 104,300 --
operating activities
Cash flows from investing
activities:
Additions to property and (24,000) --
equipment
Net cash used in investing (24,000) --
activities
Cash flows from financing
activities:
Issuance of stock 411,700 200
Net cash provided by 411,700 200
financing activities
Net increase in cash 492,000 200
Cash at beginning of period 200 --
Cash at end of period 492,200 200
Supplemental disclosure of
cash flow information:
Cash paid for income taxes $ 3,700 $ --
Schedule of noncash
activities:
Contribution of assets
(Note 2):
Property and equipment $ -- $ 15,500
Accounts receivable -- 3,200
Intercompany receivables -- 700
Additional paid in capital $ -- $ 19,400
Services contributed by $108,000 $ --
stockholders ======== ========
In May, 2000, the Company issued 214,918 shares of
restricted common stock to Campbell Mello Associates for
services rendered.
The Notes to Financial Statements are an integral part of these
statements
/F-5/
OneCap
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2000
AND FOR THE PERIOD FROM JUNE 7, 1999 (INCEPTION) TO JUNE 30, 1999
1. Summary of significant accounting policies:
Organization and nature of business:
OneCap (the "Company") was incorporated in the State of Nevada
on June 7, 1999 to serve as a loan and real estate broker for
residential and commercial loan and real estate transactions.
The majority of the Company's revenues are derived from doing
business with related entities. The Company is authorized to
issue 20,000,000 shares of common stock with a par value of
$.001 and 5,000,000 shares of preferred stock with a par
value of $.001.
In June, 1999, the Company issued 100 shares of common stock,
no par value, in exchange for cash and other assets totaling
$19,600. (See note 2). On November 1, 1999, the Articles of
Incorporation were amended to increase the number of
authorized shares of Common Stock to 20,000,000 with a par
value of $.001 and to authorize 5,000,000 shares of Preferred
Stock with a par value of $.001. On November 2, 1999, the
100 shares of Common Stock outstanding with no par value were
exchanged for 100 shares of Common Stock with a par value of
$.001 and an additional 6,937,400 shares of Common Stock with
a par value of $.001 were issued for $6,900.
In May, 2000, the Company issued an additional 1,659,200
shares of common stock through an offering in the State of
Nevada. The stock was offered at $.25 per share and the
maximum shares of the offering was 2,000,000 shares. The net
proceeds to the Company after issuing costs of $10,000 was
$404,800. In connection with the offering, the Company
issued 214,918 restricted shares of common stock to Campbell
Mello Associates ("CMA") for services rendered. The offering
was pursuant to Section 4(2) of the Securities Act of 1933.
There have been no other issuances of common or preferred
stock.
The Company uses the accrual method of accounting. The
Company has adopted June 30 as its fiscal year end.
Cash and cash equivalents:
The Company considers highly liquid investments with
maturities of three months or less when purchased to be cash
equivalents.
The Notes to Financial Statements are an integral part of these
statements
/F-6/
OneCap
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2000
AND FOR THE PERIOD FROM JUNE 7, 1999 (INCEPTION) TO JUNE 30, 1999
1.Summary of significant accounting policies (continued):
Organization costs:
The Company's policy is to amortize organizational
expenditures using the straight-line method over five years.
Earnings per share:
Earnings per share was computed by dividing the net income by
the weighted average number of common shares outstanding.
Use of estimates in preparation of financial statements:
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 could
differ from those estimates.
Advertising costs:
Advertising costs are charged to expense as incurred.
Advertising expenses were $77,100 and $0 for the year ended
June 30, 2000, and for the period from June 7, 1999
(inception) to June 30, 1999, respectively.
Recognition of loan origination fees:
Loan origination fees are recognized upon the closing of a
loan, which occurs after all significant services have been
performed.
Income taxes:
Effective November 5, 1999, the Company revoked its S election
and elected not to have the pro rata allocation of S
corporation items under IRC Section 1362 (e)(2) apply to the
S termination year. Prior to November 5, 1999, the Company
was treated as an S Corporation for Federal income tax
purposes. As an S Corporation, the Company passes through
the taxable income and losses to its stockholders each year
as recognized, and thus pays no corporate income tax itself.
The Notes to Financial Statements are an integral part of these
statements
/F-7/
OneCap
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2000
AND FOR THE PERIOD FROM JUNE 7, 1999 (INCEPTION) TO JUNE 30, 1999
1.Summary of significant accounting policies (continued):
Property and equipment:
Property and equipment is stated at cost less accumulated
depreciation. Depreciation is provided principally on the
accelerated and straight-line methods over the estimated
useful lives of the assets.
The cost of maintenance and repairs is charged to expense as
incurred. Expenditures for property betterments and renewals
are capitalized. Upon sale or other disposition of
depreciable property, cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected
in income.
2.Related party transactions:
a.Revenues:
The majority of the Company's revenues are derived from
commercial loan closings for related entities in which one
stockholder has an ownership interest and loans processed
for buyers in Southern Nevada who purchase homes developed
by Pacific Homes and other related entities under common
control.
b.Office space:
The Company leases office space from an affiliated
partnership on a month-to-month basis. The total rent
paid for office space was $44,200 and $0 for the year
ended June 30, 2000 and for the period from June 7, 1999
(inception) to June 30, 1999, respectively.
c.Contribution of assets:
During the period ended June 30, 1999, one stockholder of
the Company contributed net assets totaling $19,600 to the
Company as follows:
Petty cash $ 200
Accounts receivable 3,200
Furniture and equipment 15,500
Intercompany receivables 700
------
$19,600
======
The Notes to Financial Statements are an integral part of these
statements
/F-8/
OneCap
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2000
AND FOR THE PERIOD FROM JUNE 7, 1999 (INCEPTION) TO JUNE 30, 1999
2.Related party transactions (continued):
d.Services contributed by stockholders:
During the year ended June 30, 2000, two stockholders
contributed their services, valued at $108,000, to the
Company. Mr. Steven Molasky, CEO contributed services
valued at $48,000 and Mr. Vince Hesser, President,
contributed services valued at $60,000. Mr. Molasky spent
approximately 8 hours per week (or 20%) and Mr. Hesser spent
approximately 20 hours per week (or 50%) of their working
time on OneCap business. The Company estimates the annual
full-time fair value compensation to be $240,000 for the CEO
and $120,000 for the President. Based upon these
assumptions, services contributed by the CEO and President
would be $48,000 ($240,000 x 20%) and $60,000 ($120,000 x
50%), respectively. The values were determined based upon
the Company's estimates of a reasonable compensation package
for this type of Company and position.
3. Property and equipment:
Property and equipment at June 30, 2000 consisted of the
following:
Computer equipment $ 26,700
Computer software 4,900
Furniture and equipment 7,800
--------
39,400
Less accumulated depreciation 8,100
--------
$ 31,300
========
Depreciation expense for the year ended June 30, 2000 was
$8,100.
4.Commitments and contingencies:
Concentration of credit risk:
In the normal course of business, the Company maintains cash
at a financial institution in excess of federally insured
limits.
Employee benefit plan:
The Company adopted a retirement savings plan for its employees
under Section 401(k) of the Internal Revenue Code. The plan
allows employees of the Company to defer up to the lesser of
the Internal Revenue Code prescribed maximum amount or 15% of
their income on a pre-tax basis through contributions to the
plan. The Company matches 25% of eligible employees'
contributions up to a maximum of 6% of their individual
earnings.
The Notes to Financial Statements are an integral part of these
statements
/F-9/
OneCap
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2000
AND FOR THE PERIOD FROM JUNE 7, 1999 (INCEPTION) TO JUNE 30, 1999
5.Stockholders' equity:
Restricted shares of common stock:
7,356,418 of the total shares of common stock outstanding are
restricted.
Preferred stock:
The Board of Directors has the authority to issue the
preferred stock, the terms of which (including, without
limitation, dividend rates, conversion rights, voting rights,
terms of redemption and liquidation preferences) may be fixed
by the Board at its sole discretion. The holders of the
Company's common stock will not be entitled to vote upon such
matters. No shares of preferred stock of any series are
outstanding and the Board of Directors has no present
intention to issue any such shares. Shares of preferred
stock issued in the future could have conversion rights,
which may result in the issuance of additional shares of
common stock, which could dilute the interest of the holders
of common stock. Such shares could also have voting rights
and liquidation preferences which are senior to the rights
and preferences of the common stock. Additionally, such
shares could have dividend, redemption or other restrictive
provisions.
Warrants and options:
There are no warrants or options outstanding to acquire any
additional shares of common stock.
Capital contributions:
As discussed in Note 2, during the year ended June 30, 2000,
two stockholders contributed their services as CEO and
President. The Company included the compensation expense in
general and administrative expenses with a corresponding
increase in additional paid-in-capital.
6.Subsequent events:
On July 27, 2000, the Company adopted a stock option plan for a
maximum of 1,250,000 shares of common stock.
On July 9, 2000, the Company entered into an operating lease
agreement for corporate office space in Las Vegas, Nevada.
The lease commences on August 1, 2000 and expires January 31,
2003 with an option to renew for 20 months. Monthly payments
are $19,800 with 4% annual increases each year on October 1.
In connection with the lease, the Company entered into a sub-
lease agreement with Pacific Properties and Development, LLC,
a company under common control. The sub-lease commences
August 1, 2000 and expires January 31, 2003 with an option to
renew for 20 months. Under the agreement, the Company will
receive $9,900 per month with 4% annual increases each year on
October 1.
The Notes to Financial Statements are an integral part of these
statements
/F-10/
Part III
Item 1. Index to Exhibits
Exhibit Name and/or Identification of Exhibit
Number
------ --------------------------------------
3 Articles of Incorporation & By-Laws
a. Articles of Incorporation of the Rendered
Company filed June 7, 1999 as
Previously
Filed
b. By-Laws of the Company adopted June Rendered
7, 1999 as
Previously
Filed
10 Material Contracts
a. Client Information Form/Agreement with Rendered as
Factual Data of Nevada, Previously
signed April 18, 2000 Filed
b. Service Agreement with Executive Rendered as
Reporting Services, Previously
signed September 15, 1999 Filed
c. Mortgage Broker Agreement with Fleet Rendered as
Mortgage Corporation, Previously
signed October 1, 1999 Filed
d. Broker Agreement with Greenpoint Rendered as
Mortgage Funding, Inc., Previously
signed February 25, 2000 Filed
e. Wholesale Lending Agreement with Rendered as
Interfirst, a division of Previously
ABN Amro Mortgage Corporation, signed OctoberFiled
8, 1999
f. Loan Broker Agreement with Irwin Rendered as
Mortgage Corporation, Previously
signed October 14, 1999 Filed
g. Broker Agreement with North American Rendered as
Mortgage Company, Previously
signed March 3, 2000 Filed
h. Advertising Agreement with "The House Rendered as
Detective," Previously
dated December 20, 1999 Filed
i. Advertising Agreement with "The Home
Show,"
dated February 10, 2000
j. Advertising Agreement with "Here is Las Rendered as
Vegas," Previously
dated October 13, 1999 Filed
k. Advertising Agreement with "Southern Rendered as
Nevada Homes Magazine," Previously
dated April 5, 2000 Filed
l. Advertising Agreement with the Las VegasRendered as
Chamber of Commerce Previously
Relocation Guide, dated May 22, 2000 Filed
m. Advertising Agreement with "Homes and Rendered as
Living," Previously
dated February 9, 2000 Filed
n. Sublease Agreement with Sierra Pacific Rendered as
Energy Corporation, Previously
dated July 9, 2000 Filed
23 Consent of Experts and Counsel
Consents of independent public Rendered
accountants as
Previously
Filed
27 Financial Data Schedule
Financial Data Schedule of OneCap ending
June 30, 2000
99 Additional Exhibits
Stock Option Plan adopted by the Board Rendered
of Directors on July 27, 2000 as
Previously
Filed
/36/
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized.
OneCap
(Registrant)
Date: December 8, 2000
By: /s/ Vincent W. Hesser
Vincent W. Hesser, President
/37/
