UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-KSB

(Mark One)

X    Annual report under section 13 or 15(d) of the  Securities  Exchange Act of
--   1934 for the fiscal year ended June 30, 2004



__   Transition report under section 13 or 15(d) of the Securities  Exchange Act
     of 1934 for the transition period ended ______________

Commission File Number: 0-31369

                                     OneCap
                 (Name of small business issuer in its charter)

           Nevada                                            88-0429535
(State or other jurisdiction               (I.R.S. Employer Identification No.)
 of incorporation or organization)

5440 West Sahara Avenue, 3rd Floor, Las Vegas, Nevada             89146
(Address of principal executive offices)                       (Zip code)

Issuer's telephone number (702) 948-8800

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act: $0.001 par value per
share, 20,000,000 shares authorized

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes   X     No   __
      -

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Company's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. Yes __ No X

The registrant had revenues of $9,067,310 during the year ended June 30, 2004.

The aggregate market value of voting common stock held by non-affiliates of the
issuer was $2,992,251 on October 1, 2004, based on the average bid and asked
prices of such stock as reported in the OTC Electronic Bulletin Board.

On October 4, 2004, the registrant had 2,538,888 shares of common stock, par
value $.001, issued and outstanding.


                     Transitional Small Business Disclosure
                               Format (Check one):
                                   Yes __ No X
                                            ---

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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS


PART I
                                                                                                     Page

<S>                                                                                                  <C>
Item 1.  Description of Business                                                                      3

Item 2.  Properties                                                                                  12

Item 3.  Legal Proceedings                                                                           13

Item 4.  Submission of Matters to a Vote of Security Holders                                         13

PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters                       13

Item 6.  Management's Discussion and Analysis or Plan of Operation                                   14

Item 7.  Financial Statements                                                                        18

Item 8.  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure        18

Item 8A. Controls and Procedures                                                                     18

PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act                                      19

Item 10. Executive Compensation                                                                      23

Item 11. Security Ownership of Certain Beneficial Owners and Management                              24

Item 12. Certain Relationships and Related Transactions                                              26

Item 13. Exhibits and Reports on Form 8-K                                                            28

Item 14. Principal Accountant Fees and Services                                                      29

Signatures                                                                                           31

Financial Statements and Schedules                                                                   F-1
</TABLE>



                                       2

<PAGE>


         This Annual Report contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The words "may,"
"anticipate," "believe," "expect," "estimate," "project," "suggest," "intend,"
and similar expressions are intended to identify forward-looking statements.
Such statements reflect the Company's current views with respect to future
events and financial performance and are subject to certain risks,
uncertainties, and assumptions, including those discussed in "Item 1.
Description of Business -- Business Risks." Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, believed, expected,
estimated, projected, suggested, or intended.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

OVERVIEW

OneCap was incorporated in Nevada on June 7, 1999. OneCap is a full-service firm
providing real estate and mortgage brokerage services to real estate owners,
buyers, tenants, and investors. Based on management's extensive knowledge of the
real estate and mortgage brokerage markets, OneCap serves as a single-source
provider of full range solutions for its client's real estate needs. OneCap
provides the following real estate services: (i) homebuyer representation, (ii)
seller representation, (iii) land sales or purchases, (iv) commercial property
sales or purchases, (v) mortgage loans for homeowners, (vi) commercial
mortgages, (vii) construction loans, (viii) land loans, (ix) mezzanine
financing, (x) development loans and (xi) equity and corporate financing. In
addition to a physical office location, the Company has developed an Internet
website for complementary operations at the URL address www.onecap.com.

OneCap's mission is to provide its clients with exceptional customer service in
delivering financial and real estate products of superior value and quality at
competitive prices. The Company's objectives include (i) building a brand name
franchise, (ii) increasing market penetration; (iii) becoming a "one-stop-shop"
for real estate transactions; (iv) introducing new financing products, which
satisfy the needs of current clients and attract new clients; and (v)
acquisition of real estate properties.

Management of the Company has developed several strategic alliances with local
and regional companies to provide comprehensive real estate services. In
particular, OneCap has alliances with wholesale mortgage lenders to whom the
Company delivers mortgage loans. The Company originates and processes all of the
loans, and submits them to the wholesale company to underwrite, approve, close,
and fund based on lender-specific, Federal National Mortgage Association
("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Housing
Administration ("FHA"), and Veterans Administration ("VA") guidelines. The
Company's strategic alliances with wholesale lenders allow it to originate loans
based on a pre-determined, agreed-upon set of underwriting guidelines and
pricing models that may be superior to those of the Company's competition.

OneCap Business Operations

OneCap simplifies real estate transactions by offering multiple services under
one roof. To a large extent, OneCap accomplishes this by forming strategic
alliances with other related service companies involved in the real estate
process. The client can search for a property, sell a property, apply for any
type of loan, or ask for any other related real estate service all in one
location or via the Internet. There are three distinct divisions of OneCap: (1)


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real estate brokerage; (2) mortgage brokerage service; and (3) property
division.

Real Estate Brokerage

The real estate division of OneCap, OneCap Realty, provides brokerage services
for both commercial and residential markets. The Company markets, buys or sells
the following on behalf of its clients and itself:

     o    Apartments, industrial, office, and retail buildings;

     o    Multi- and single-family residences;

     o    Hotels and resorts; and

     o    Undeveloped and developed land.

The Company represents buyers and/or sellers of homes and commercial real
estate, either new or existing. By getting involved in each step from sales to
development to financing of residential, commercial, and industrial properties,
OneCap intends that its customers receivE information, service, and
representation of the highest quality available.

The business of OneCap, at least initially, focuses predominantly on the
Southern Nevada market targeting investment, development, and real estate
professionals. However, by pioneering an integrated business model of real
estate services, OneCap anticipates that the Company will attract substantial
interest in other geographic markets. OneCap fosters the ideals of the
importance of customer needs coupled with healthy, understanding relationships,
and a professional commitment to satisfaction.

For every new brokerage engagement, OneCap Realty develops a sales strategy
aimed at maximizing the sales proceeds subject to the client's individual
constraints, including time parameters, sensitivity to publicity, and cash flow
needs. Also, OneCap Realty investigates and analyzes, among other things, the
physical condition of the property, its cash flow and tenant characteristics,
market rents and market dynamics within sub-markets and comparable transactions.
The Company conducts commercial property sales through conventional brokerage
transactions and private negotiations. In addition, the Company conducts
residential property sales through conventional brokerage activities.

           Commercial Brokerage Services

           As part of its efforts to market each commercial property, OneCap
           Realty develops and implements cost effective marketing campaigns.
           Each marketing campaign is tailored to the client's objectives and
           the property's characteristics. The Company also markets properties
           directly to various investors in real estate property transactions
           with whom it maintains ongoing business relationships.

           When OneCap Realty engages in a competitive bidding process for
           brokerage engagements, its brokerage commission rates will often be
           structured to demonstrate its confidence in its ability to sell the
           property at a high price. For example, the Company might offer a
           property owner a market or below-market brokerage commission rate for
           selling a property at the price the owner initially expects and a
           higher rate for selling the property for a higher price. On average,
           the Company expects its commercial brokerage assignments to last for
           three to twelve months from the listing of the property to the
           payment of a brokerage commission upon its sale. Generally, the
           Company will not enter into long-term contracts for brokerage
           services.



                                       4
<PAGE>

           Residential Brokerage Services

           OneCap Realty designs marketing programs to sell single- and
           multi-family home developments and condominium projects using
           conventional sales programs. The Company also designs and implements
           marketing programs for exclusive estates and land for residential
           development. Most of the residential properties that it expects to
           broker are located in Nevada. OneCap's potential clients include
           builders, developers, private/public sellers and buyers, financial
           institutions and government agencies.

Mortgage Brokerage

OneCap's loan originations focus on two primary areas: residential and
commercial. The residential loan volume is generated primarily from referrals
from OneCap Realty, as well as referrals from independent brokers and realtors.
The Company currently offers a wide range of mortgage programs through
correspondent lender relationships throughout the United States. Also, OneCap is
an approved lender through the Housing and Urban Development ("HUD") Department
and Veterans Administration ("VA"), and offers all types of Federal Housing
Administration ("FHA") and Veterans Administration financing. In addition to the
traditional referral sources, OneCap will also originate loans through its
website: www.onecap.com.

OneCap's commercial loan originations are fairly broad based. The commercial
volume includes referrals from affiliated companies (including Pacific
Properties & Development, LLC), as well as originations through outside builders
and developers. OneCap has various relationships with local and national banks,
life insurance companies, large national lenders, as well as Wall Street
investment banking companies. The loan products include land acquisition,
construction lending, mezzanine loans and permanent loans for all types of
commercial, multi-family and industrial properties. Although OneCap has the
ability and access to multiple loan programs, the Company expects to capitalize
on its ability to provide niche products such as high-leverage land acquisition
loans and equity lending through strategic alliances and our private client
base. OneCap will also originate corporate loans on an as-needed basis. The
Company has also added a private client division, which is focused on trust deed
investments and other real-estate-related loans or investments. The private
client division pools private investor funds and loans these funds on a
short-term (generally one to three year terms) basis to property investors,
developers, and owners.

Property Division

OneCap's wholly owned subsidiary, OneCap Properties, was created to capitalize
on value added real estate opportunities. The Property Division's focus is to
seek out and purchase real estate properties that management considers to have
potential for enhanced appreciation. These purchases may include existing
apartments, office buildings, retail, industrial, or to-be-built properties.
Most properties will be purchased or built in conjunction with joint venture
equity partners. The goal of the property division is to add long-term
appreciating assets to the company's portfolio.

Competitive Advantages

The Company believes that it has a number of competitive advantages relative to
its actual and potential competitors including:

Full Service Solution. Determining the client's needs is the first step to
provide the best solution for their needs. The company has existing personnel to
service the individual homebuyer and the large real estate developer. OneCap


                                       5
<PAGE>

offers many types of real estate services from homebuyer representation, seller
representation, land sales or purchases, commercial property purchases or sales,
mortgage loans for homeowners, commercial mortgages, construction loans, land
loans, mezzanine financing, development loans, and equity financing.

Management believes that the Company has long-standing relationships with
clients who have diverse real estate needs. The Company typicallydevelops a
relationship with a client by offering a single service and later attempts to
expand the relationship by recommending and implementing strategies designed to
meet the client's diverse real estate needs.

Complementary Services. OneCap's real estate and mortgage services are
interrelated, and as a result, management believes that OneCap can increase it's
business by providing the multiple services necessary to meet more of the
complex real estate needs of clients. For example, the Company can assist a
client with assessing property acquisition opportunities, consummating an
acquisition, obtaining financing, leasing space, and maximizing value.

Capitalizing on the Outsourcing Trend. Looking for the right company to provide
real estate services can be very time consuming and management intensive.
OneCap's resources of lenders and work force assist the client in obtaining the
best fit for financing real estate projects without wasting time searching for
and finding the wrong fit.

Relationships with Key Clients and Related Entities. Because the Company has a
current business relationship with a related party, Pacific Properties &
Development, LLC ("PPD"), a Las Vegas developer of commercial properties, OneCap
has already developed a market for its services. The Company may be able to
capitalize on this relationship for expansion of its client base by utilizing
existing real estate offerings from PPD. With appropriate networking,
advertising, and marketing, OneCap may be able to penetrate this market and
differentiate itself from the competition.

OneCap has provided mortgage services to homebuyers who purchased homes from a
related entity, Pacific Homes ("PH"). Due to the existing services and
operations already offered and in place, residential sales, buyer's
representation and listings may be established relatively quickly and easily.
The Company anticipates that PH will not provide substantial revenue in the
future, and as a result, OneCap is expanding into the homebuyer representation
which includes both new and re-sale homes. Both PPD and PH are related entities
through common ownership of one (1) stockholder, Mr. Steven D. Molasky, of
OneCap.

Relationships with Key Suppliers. The company is currently negotiating and has
negotiated with several key suppliers of financing products to offer various
financial products to the Nevada market. The Company will also be advertising in
select media.

Experienced Management Team. The members of OneCap's management team have an
approximate, combined eighty years of experience in brokering, managing,
underwriting, and investing in real estate.

Building upon its competitive advantages, the Company's objective is to provide
real estate and financing brokerage services in the Southwestern United States.
The Company's goal is to become a "one-stop-shop" service provider of all of its
clients' real estate transaction needs in its focused target markets. To
accomplish this objective, the Company has developed a strategy designed to
achieve high levels of customer satisfaction and repeat business, as well as to
establish recognition and acceptance of the OneCap concept. The Company's
strategy includes the following key elements:


                                       6
<PAGE>


Provide and Maintain Quality Service

OneCap's plan is to penetrate the market with quality service and follow up with
comprehensive coverage of each property. The Company believes it is essential
that the client feels that he or she is being treated with the utmost care,
urgency, and professionalism. All staff and personnel will be required to go
through a continuing training program that teaches many of the skills needed for
successful client relations and customer service. The Company believes its
commitment to service will provide a competitive advantage in establishing and
maintaining productive broker and correspondent relationships. Emphasis will be
placed on real estate brokers and loan officers responding promptly and
consistently on every loan submission and real estate service need.

The Company believes that its ability to establish and maintain long-term
relationships with its industry contacts and customers and to foster referrals
depends, in part, on the strength of its customer support and service operations
and staff. Furthermore, the Company values frequent communication with and
feedback from its customers to continually improve its services.

Increase Market Penetration and Revenues in New and Established Markets

The Company plans a geographic expansion in the Southwest United States, but its
initial focus is in the Nevada markets. The Company, independently or in
connection with a strategic acquisition or affiliation, intends to gain an
initial foothold in each new target market with the Company's financing services
and, then over time, introduce all of its services in that target market.

The Company believes that substantial opportunities exist in its initial target
market, Nevada, to both attract new clients and increase revenue from existing
and potential clients. The Company also seeks to increase revenue from existing
clients by increasing available services to those clients, aggressive
advertising, and enhancements to its website. The Company plans to increase
revenue by introducing all of its services to each market it penetrates.

Introduce New Financing Products to Satisfy Client Needs and Reach New Clients

The Company believes its introduction of other financing products will offer the
estate owners many expand opportunities to work with OneCap. By providing these
products, the Company believes it will package services and product that will
fill the need in the market for higher leveraged financing that will both
satisfy existing clients and attract new clients. These services and products
will provide many options for buyers and sellers alike, increasing the
likelihood of closed transactions.

Maintaining Underwriting Standards

The Company believes the experience of its underwriting staff, coupled with
consistent application of its underwriting procedures and criteria, provide the
infrastructure needed to manage and sustain the Company's growth, while
maintaining the quality of loans originated. The experience in the Company's
underwriting department provides two significant competitive advantages: (1)
ensuring that the Company's underwriting standards and subjective judgments
required in the non-conforming market are consistently applied, thus enabling
the Company to effectively implement a risk-based pricing strategy; and (2)
providing opportunities to expand underwriting activities beyond the Company's
headquarters while maintaining consistent underwriting standards.

Bolster Internet Presence

OneCap believes the Internet will provide the opportunity to expand the


                                       7
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Company's traditional real estate and mortgage services by reaching new
customers and introducing greater efficiencies to the real estate and mortgage
process. The Company currently has and is continuing to design and develop its
website as a mechanism for the marketing and sale of residential and commercial
real estate. The website includes photographs of properties available for sale,
real estate reports on each property, and an electronic loan application for
residential loans. In addition, the website allows clients to submit
electronically a commercial loan application for their financing needs. It is
OneCap's intent to continually strive to provide ongoing upgrades to its website
to incorporate advances in technology and provide features and advantages to
facilitate ease and use for all of its clients.

Selectively Pursuing Strategic Alliances or Acquisitions

The Company intends to selectively pursue alliance and acquisition targets to
expand its capability to serve clients. The expected benefits of such alliances
and acquisitions include expanding and enhancing its product and service
offerings, broadening its geographic market coverage and generating economies of
scale. The Company will only pursue alliances or acquisitions which meet its
standards for quality of service and are compatible with the Company's culture
and business operations. Currently, the Company has not identified any
acquisition targets or additional alliances.

Build Brand Equity

The Company believes that due to its focus in the Nevada market, it will be able
to quickly create one of the leading brand names in its sector. The Company
intends to aggressively market and advertise to enhance its brand recognition
with consumers. The Company believes that strengthening brand awareness of the
OneCap name among consumers is critical to attracting buyers and sellers of real
estate, increasing purchases and, in turn, increasing the size of OneCap's
clientele base. The Company intends to advertise through traditional and
non-traditional media such as local newspapers and industry-specific
publications, as well as over the Internet.

Government Regulation

OneCap's real estate operations are subject to various federal, state, and local
regulations in the U.S. The Company must have an officer licensed as a real
estate broker or it must associate with a broker licensed by the State of
Nevada, in which the Company provides brokerage services. Each of its employees
that performs certain brokerage functions in the State of Nevada must be a
licensed real estate salesperson in that state, and he or 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, regulate the Company's brokerage operations by
requiring its resident operative to be licensed. In various states, governmental
entities license individual real estate auctioneers and/or administer various
regulations governing their activities and may require that auctioneers post
bonds.

The Company's mortgage brokerage operations are subject to the rules and
regulations of the Federal Housing Administration ("FHA"), Veterans
Administration ("VA"), Federal National Mortgage Association ("FNMA"), Federal
Home Loan Mortgage Corporation ("FHLMC"), and Government National Mortgage
Association ("GNMA") 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 times to assure compliance with the applicable regulations,
policies and procedures. The Company's mortgage loan production activities are
subject to the Truth-in-Lending Act and Regulation Z or B promulgated
thereunder. The Truth-in-Lending Act contains disclosure requirements designed
to provide consumers with uniform, understandable information with respect to


                                       8
<PAGE>

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.
The Company also is required to comply with the Equal Credit Opportunity Act of
1974, as amended ("ECOA"), which prohibits creditors from discriminating against
applicants on the basis of race, color, sex, age, or marital status. Regulations
S, Z, and B promulgated under ECOA restrict creditors from obtaining certain
types of information from loan applicants. They also require certain disclosures
by lenders regarding consumer rights and require 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 ("RESPA") imposes, among other things, limits on the
amount of funds a borrower can be required to deposit with the Company in an
escrow account for the payment of taxes, insurance premiums or other charges.
Conventional mortgage operations also may be subject to state usury statutes.
FHA and VA loans are exempt from the effect of such statutes.

EMPLOYEES AND CONSULTANTS

Employees

At June 30, 2004, the Company had 20 full-time employees and had 58 independent
real estate agents affiliated with the Company. Of the Company's full-time
employees, 4 were engaged in real estate brokerage and realty administration and
9 were engaged in lending and finance, and 7 were engaged in corporate business
development, corporate business administration, and accounting/treasury. The
Company relies on its employees to perform business administrative functions,
internal related party transactions, lending functions, and business
development, but relies on its independent real estate agents to perform real
estate transactions. The Company believes its relationship with its employees is
good.

The Company adopted a retirement savings plan for its 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. The Company
will match 25% of eligible employees' contributions up to a maximum of 6% of
their individual earnings.

On July 27, 2000, the Company approved a stock option plan with the goal of
motivating its employees. The Company had allocated up to 1,250,000 shares of
common stock that may be granted under the stock option plan. As of June 30,
2004, all options granted under this option plan have been cancelled.

On March 24, 2004, the Company approved a new stock option plan (the "2004
Plan") with the goal of motivating its employees. The Company has allocated up
to 5,000,000 shares of common stock that may be granted under the 2004 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. A total of 1,214,500
options have been granted as of June 30, 2004, and none are vested or
exercisable.



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<PAGE>



BUSINESS RISKS

Short Operating  History of OneCap Provides Limited Basis for Evaluating  Future
Prospects.

The Company was incorporated on June 7, 1999, to become a full-service real
estate firm providing comprehensive services to real estate owners, buyers,
tenants, and investors. The Company has a limited operating history on which to
evaluate its business and prospects. The Company's prospects must be considered
in light of the risks, expenses, and difficulties frequently encountered by
companies entering dynamic markets such as the real estate and mortgage markets.
The risks for the Company include, but are not limited to, an evolving and
unpredictable business model, dependence on the growth in volume of real estate
transactions in the Company's principal markets, the acceptance of the Company's
services, the effective ability to broker real estate and mortgage products and
services, and the management of growth. There can be no assurance that the
Company will be successful in attracting a sufficient number of clients on a
sustainable basis. The failure to do so could result in loss of revenue,
persistent losses, and depletion of cash reserves and other material assets.

Economic Downturn May Result in Loss of Revenue and Income for OneCap.

The condition of the real estate markets in which the Company operates tends to
be cyclical. It is related to the actual condition of the U.S national economy
and the popular perception of the economic outlook. Cyclical increases in
interest rates and declining demand for real estate in times of economic
hardship in the past have had a direct negative impact on the real estate
market. A recurrence of such conditions could result in a reduction of OneCap's
revenues. Further, a deterioration in the local economic conditions in the
markets where OneCap operates may have a similarly negative effect.

The Company's ability to respond to an adverse economic environment is limited.
Certain significant expenditures, such as debt service costs, real estate taxes,
and operating and maintenance costs are generally not reduced when market
conditions are poor. Thus, a deterioration in the economic environment could
lead to:

     o    fewer  purchases and sales of  properties  by clients,  resulting in a
          decrease in revenues from fees and brokerage commissions;

     o    a decline in actual and projected sale prices of properties leading to
          lower returns to the Company from these properties;

     o    higher  interest rates,  higher loan costs,  less desirable loan terms
          and a reduction in the  availability  of mortgage  loans and mezzanine
          financing  which  could  limit the  Company's  ability to acquire  and
          dispose of real estate assets; and

     o    a decrease in the availability of lines of credit and other sources of
          capital used to purchase real estate investments and mortgage lending.

OneCap Faces Intense Competition.

The real estate and mortgage brokerage services industries are highly
competitive. OneCap competes against other real estate service providers,
institutional lenders, insurance companies, investment banking firms, and
investment managers. OneCap's principal competitors include large multinational,
national, and regional firms, such as LaSalle Partners, Inc.; Trammell Crow
Company; CB Richard Ellis Services, Inc.; and Insignia Financial Group. Most of
these competitors have greater financial resources and a broader domestic, and
sometimes global presence, than OneCap. The Company competes with these and
other companies in the U.S. and, to a limited extent, in the Nevada real estate
market with respect to:

     o    brokerage  of  commercial  and  residential  properties  on  behalf of
          customers;

     o    tenant representation;



                                       10
<PAGE>

     o    financing services, including construction and development lending;

     o    purchases  of  commercial  and  residential   properties  as  well  as
          undeveloped land for clientele accounts.

Competition in the real estate and mortgage industries may result in smaller
fees, lower brokerage commissions, and otherwise reduced compensation. There can
be no assurance that the Company in the future will compete effectively and be
able to maintain current fee or margin levels.

OneCap Revenues Depend Disproportionately on the Nevada Market.

The Company's initial business activities are concentrated in the Nevada real
estate market. Consequently, OneCap's business, results of operations and
financial condition are dependent upon general trends in the Nevada economy and
its real estate market. The Nevada economy may experience a local recession that
may be accompanied by a sustained decline in the value of Nevada real estate.
Real estate market declines may become so severe that the market value of the
properties securing loans may be significantly less than the outstanding
balances of those loans, and real estate market declines may negatively affect
the Company's ability to sell property at a profit. The existence of adverse
economic conditions or the occurrence of natural disasters in Nevada could have
a material adverse effect on the Company's business, financial condition and
results of operations.

OneCap  May Have  Liabilities  in  Connection  With  Real  Estate  and  Mortgage
Brokerage Activities.

As a licensed real estate and mortgage broker, OneCap and its licensed employees
are subject to certain statutory due diligence, disclosure, and standard-of-care
obligations. Failure to fulfill these obligations could subject the Company or
its employees to litigation from parties who purchased or sold properties the
Company or its employees brokered or managed. In addition, the Company may
become subject to claims by participants in real estate sales claiming that the
Company did not fulfill its statutory obligations as a broker. Adverse outcomes
of litigation could result in excessive non-recurring costs.

OneCap Lacks Long-Term Agreements with Key Personnel.

The Company's performance is substantially dependent on the services and on the
performance of its executive management team. The Company's performance also
depends on the Company's ability to attract, hire, retain and motivate its
officers and key employees. The loss of the services of any of its executive
officers or other key employees could result in losses of clients, revenues, and
net income. The Company has entered into a long-term employment agreement only
with its CEO and currently has no "Key Man" life insurance policies.

OneCap May Expend Substantial Resources on Growth Strategy Implementation.

The Company may experience a significant expansion of its business along with
the growth in its customer base and market opportunities. The Company's
expansion may place a significant strain on the Company's management,
operational, and financial resources. There can be no assurance that the
Company's planned personnel, systems, procedures and controls will be adequate
to support the Company's future operations, that management will be able to
hire, train, retain, motivate and manage required personnel or that the
Company's management will be able to identify, manage, and exploit existing and
potential market opportunities.

In the course of its expansion, the Company may enter new geographic regions in
which it has no previous operating experience. The Company's success in opening
new branches will depend on a number of factors, many of which are beyond the
control of the Company. These factors include, among other things, selection and


                                       11
<PAGE>

availability of suitable locations, negotiation of acceptable lease or financing
terms, timely construction of projects, securing of required governmental
permits, and approvals and employment and training of qualified personnel. If
the Company is unable to manage growth effectively, the Company may lose a
substantial amount of its assets.

Officers,  Directors  and  Major  Shareholders  of OneCap  May Have  Substantial
Conflict of Interest.

Mr. Steven Molasky, a major shareholder, may have substantial conflicts of
interest. Mr. Molasky owns and operates a substantial real estate development
company, Pacific Properties and Development LLC ("PPD"). OneCap provides
business services to PPD on an ongoing basis, which provides business and
revenue to OneCap but may also pose potential conflicts arising from investments
in competing real estate properties. Conflicts may also arise in the event
OneCap is requested to invest in PPD projects. However, in no event will any
investment be at less than fair market, third party terms. Also see "Certain
Relationships and Related Transactions."

ITEM 2. PROPERTIES

Our corporate offices are located at 5440 West Sahara Avenue, 3rd Floor, Las
Vegas, NV 89146. The Company subleases one floor of the office building,
approximately 13,480 square feet, on a lease agreement entered into October 1,
2002, expiring in five years, with monthly payments of $24,972, and the
remainder of the space is subleased to other tenants. The Company has subleased
approximately 1,600 square feet of its facilities to an affiliated company,
Copyright Media Corporation, under the same terms and conditions as the
Company's lease terms. The Company believes that its facilities will be adequate
for its operations in the next few years. During the current fiscal year, the
Company purchased a 40% tenant in common interest in the office building for
$2,435,201 with cash of $835,201 and a short term note of $1,600,000 at 5.5%
interest per annum, due in January 2005 with a six month extension option. The
CEO of OneCap, Vincent Hesser, personally guaranteed the promissory note. OneCap
Realty, a wholly owned subsidiary, is the property manager for the building.

Pacific Hilltop 2, LLC, owned 60% by OneCap Properties and a consolidated
subsidiary, owns a commercially zoned, 3.92 acre property located in Henderson,
Nevada. The Company plans to develop and lease commercial retail property on the
site. A site plan has been developed for the property, and the Company's leasing
agents are currently marketing the property to potential tenants. Building plans
have been submitted to the City of Henderson for approval, and the Company
expects to start construction the first quarter of 2005.

In the past fiscal year ending June 2003, Pacific Stonegate Nevada, LLC, and
subsequently Harbors VV, LLC, owned and operated a well-established, 172-unit
apartment complex in Las Vegas, Nevada. The property was sold to a third party
on June 30, 2003, for a total of $9,460,000 in cash and a note, resulting in a
net gain of $1,523,249. The property was zoned as a condominium project which
resulted in a premium paid by the Buyer due to the fact that each unit could be
sold to individual homebuyers at a higher value than in bulk to one apartment
owner.

The Company's wholly owned subsidiary, OneCap Properties, completed the purchase
of an approximate $22 million retail property in December 2002. The property is
located on Las Vegas Boulevard and Convention Center Way and is
triple-net-leased to Walgreen Co. for a minimum twenty-year term ending in the
year 2020, and a ten-year permanent loan of $21,061,477 at 6.2% was financed on
the property. The Company sold a 50% tenant in common interest in this property
to a third party in June 2004. The sales price was $12,235,190 with $2,000,000
cash and assumption of $10,235,190 of the existing debt, resulting in a net gain
of $933,004.



                                       12
<PAGE>

During the latest fiscal year ending June 30, 2004, the company sold its 10%
tenant in common interest in a 200-acre parcel of land for a net gain of
$707,894. The company acquired this interest as a consequence of procuring the
loan for the acquisition of the property.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject to various claims and legal proceedings covering a wide
range of matters that arise in the ordinary course of its business activities.
Management believes that any liability that may ultimately result from the
resolution of these matters will not have a material adverse effect on the
financial condition or results of operations of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

              On November 14, 2003, the Company held its annual meeting of
shareholders at its corporate headquarters in Las Vegas, Nevada. The record date
for the meeting was October 1, 2003, at which time there were 9,021,618 shares
entitled to vote at the meeting.

The first matter voted upon at the meeting was the election of directors. The
following directors were elected:

<TABLE>
<CAPTION>
                             Shares                    Shares                    Shares
Director                     Voted in Favor            Voted Against             Abstaining
-------------------------- -------------------       ------------------        --------------------
<S>                              <C>                       <C>                    <C>
Vincent W. Hesser                8,382,126                 0                          0
Antony Santos                    8,382,126                 0                          0
Dana Rogers                      8,381,126                 0                      1,000
</TABLE>

The second matter voted upon at the meeting was the approval of Beckstead &
Watts, L.L.P., as the independent public accountants for the Company for the
fiscal years ending June 30, 2003 and 2004. The results of the voting were
8,382,126 shares in favor, 0 shares against, and 0 shares withheld or
abstaining.

              Additionally, in November 2003, the holders of a majority of the
outstanding common stock of the Company approved, by written consent, an
amendment to the Company's Certificate of Incorporation. The amendment
effectuated a one-share-for-seven-shares reverse stock split, and increased the
authorized capital of the Company from 20,000,000 shares of common stock to
50,000,000 shares of common stock, and from 5,000,000 shares of preferred stock
to 10,000,000 shares of preferred stock. The reverse stock split became
effective on December 29, 2003.

              The Company provided notice of the corporate action by providing
an Information Statement on Schedule 14C, pursuant to Rule 14C-101, outlining
the specific terms of the amendments. The definitive Information Statement was
filed with the United States Securities and Exchange Commission on December 9,
2003.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        (a) OneCap's Common Stock, par value $0.001 per share, was cleared for
trading on the OTC Bulletin Board(R) (OTCBB(R)) under the ticker symbol "ONCP"
on March 20, 2001. On December 29, 2003, the Company effectuated a seven-for-one
reverse split of its stock and its ticker symbol was changed to "ONEA". The
following table sets forth the monthly high and low prices for the Company's


                                       13
<PAGE>

Common Stock on the OTCBB for the past two fiscal years by quarter to June 30,
2004:

<TABLE>
<CAPTION>
                    Date                              HIGH                  LOW
                                               -------------------- ---------------------
<S>                                                   <C>                   <C>
             Jul 1-Sep 30, 2002                       0.85                  0.27
             Oct 1-Dec 31, 2002                       0.76                  0.40
             Jan 1-Mar 31, 2003                       0.65                  0.40
             Apr 1-Jun 30, 2003                       1.01                  0.55
            Jul 1 - Sep 30, 2003                      0.70                  0.42
            Oct 1 - Dec 31, 2003                      0.60                  0.40
            Jan 1 - Mar 31, 2004                      5.00                  1.25
            Apr 1 - Jun 30, 2004                      2.50                  1.35
</TABLE>

OTCBB quotations of OneCap's Common Stock reflect inter-dealer prices, without
retail mark-ups, markdowns or commissions, and may not necessarily represent
actual transactions.

The reverse stock split took effect December 29, 2003. All prices shown
beginning in January 1, 2004, reflect post-reverse stock split prices.

(b) HOLDERS

On June 30, 2004, there were approximately 140 stockholders of record of the
Company's Common Stock.

(c) DIVIDENDS

The Company has never paid dividends on the Common Stock. The Company currently
intends to retain earnings, if any, to support the development of the Company's
business and does not anticipate paying dividends in the foreseeable future.
Payment of future dividends, if any, will be at the discretion of the Company's
Board of Directors after taking into account various factors, including the
Company's financial condition, operating results, current and anticipated cash
needs and plans for expansion.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements reflect the
Company's current views with respect to future events and financial performance
and are subject to certain risks, uncertainties and assumptions, including those
discussed in "Item 1. Description of Business - Business Risks." Those views are
based on certain assumptions regarding the progress of business expansion
efforts, the execution of new agreements with strategic alliances, success at
existing and future business development programs, and other factors relating to
the Company's growth. Such expectations may not materialize if business
development and expansion efforts are delayed, if negotiations with potential
strategic alliances are unsuccessful, if such regulatory approvals are not
forthcoming, or if other assumptions prove incorrect. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated in such
forward-looking statements.



                                       14
<PAGE>



OVERVIEW
The Company's single-source business model represents an attractive way for both
commercial and residential customers to maneuver through the complex real estate
and financing process in a time-efficient, cost-effective manner. During the
next year, OneCap plans on expanding its client base to obtain suitable revenue
growth to consistently maintain each of its three divisions: Realty, Mortgage,
and Properties. Currently, the Company maintains offices in Las Vegas, Nevada,
and is working on attracting new clients, expanding its business with existing
clients, obtaining new financing sources and financing products and obtaining
the ability to provide services in other markets. The Company's goal is to focus
its efforts in each division into transactions that should provide enhanced
revenue yield on the future transaction volume. The Company has also begun
operations related to private trust deed investing in its Commercial Finance
division. Through the Company's private client services group, investors fund
loans secured by real property or real estate assets. The Company funds and
services these loans on behalf of third party clients and earns brokerage fees
and servicing revenue in relation to these loans. The Company expects to expand
this division and its investor base during the next twelve months. The Company
also expects to continue to expand its asset base through future acquisitions
and investments, and expand its total assets through its subsidiary, OneCap
Properties. The Company plans a geographic expansion in the Southwest United
States, but its initial focus will be in the Nevada markets. The Company,
independently or in connection with a strategic acquisition or affiliation,
intends to gain an initial foothold in each new target market with the Company's
financing services, then over time, introduce all of its services in that target
market. Real estate markets are significantly influenced by local conditions as
well as by national economic conditions. Real estate markets vary in each region
and local knowledge of a real estate market is essential to prudent business.
The Company currently plans in most cases to affiliate with local real estate
agents, developers, lenders, and real estate professionals who are believed to
have substantial familiarity with the markets into which the Company is
expanding. It is not possible at this time to predict if the Company will be
successful in this effort. Any difficulties encountered by the Company in this
regard could slow down its expansion plans. OneCap is aimed at developing
long-term strategic relationships, concentrating on value-added client servicing
and addressing customers' all-inclusive real estate needs. High-margin, value
added services include assisting clients through the real estate process
including acquisition, entitlement and planning, financing, development,
leasing, and disposition. These relationships could provide greater market
penetration in both existing and developing sales channels. The company is also
currently developing many individual relationships through its private client
group in anticipation of funding several private loans during the coming year to
investors and developers.

OneCap has invested in the technology and personnel that enables the Company to
expand its market reach without the capital investments required for brick and
mortar office space. The Company's website is its primary technology focus -
from lead generation to marketing. The website offers one-stop shopping for all
real estate and associated financial transactions. The Company anticipates that
its state-of-the-art computer system for back-end operations including
accounting, tracking files, internal systems and Multiple Listing Service will
remain sufficient for future operations. OneCap plans to continue investing in
training programs for its independent Realtors focusing on the advantages, uses,
and marketing benefits of having their business computerized with the new age.

The Company is embarking on an aggressive advertising, public relations and
on-line marketing campaign designed to create awareness of its single-source
approach to real estate and finance.



                                       15
<PAGE>

RESULTS OF OPERATIONS

Comparison of Fiscal Years Ended June 30, 2004 and 2003

Revenues

The Company's revenues totaled $9,067,310 for the current fiscal year ended June
30, 2004, a 66% increase compared to $5,446,033 for the fiscal year ended June
30, 2003. Revenues for the current fiscal year were $1,655,878 from 233 realty
transactions, $4,787,336 from 134 mortgage transactions, $305,565 from 12
related party mortgage transactions, $2,173,127 from rental revenues, and
$145,404 in mortgage service fee revenue. During the prior fiscal year ending
June 30, 2003, revenues were $1,045,752, from 197 realty transactions,
$1,277,479 from 89 mortgage transactions, $82,125 from one related party realty
transaction, $387,969 from 13 related party mortgage transactions, $2,596,488
from rental revenues, and $56,220 in mortgage service fee revenue. Realty
revenues increased $610,126, or 58% in fiscal year 2004; mortgage revenues
increased $3,509,857, or 275%; related party realty revenues decreased $82,125,
or 100%; related party mortgage revenues decreased $82,404, or 21%, service fee
revenue increased $89,184, or 159%; and rental revenues decreased $423,361, or
16%.

A substantial increase in revenues is attributable to the increase in mortgage
operations. Although the number of core realty transactions has increased by
18%, the net revenueS from those transactions have increased this year by 58%.
The mortgage operations have also had similar increases; the number of
transactions have only increased by 51%, but the revenues generated from those
transactions have increased 275%. This has been primarily due to the focus of
operations to commercial private lending in 2004. There are also fewer related
party transactions during the current fiscal year as compared to the prior year,
as the company continues to focus on outside third party business. A portion of
revenues resulted from related party transactions from affiliated real estate
development companies. Those related party gross revenues totaled $305,565 and
$470,094 in the fiscal years 2004 and 2003, respectively, before commission
expense.

Expenses

Operating Expenses totaled $6,199,779 this year compared to $4,749,761 in the
last fiscal year, a 31% increase. Commission expense totaled $1,239,564,
compared to $686,695 in the prior year, an increase of $552,869, or 81% from the
prior year due to increased volume of loan fees and commission revenues. Rental
expenses related to leased real property the company owns was $175,677 this
year, compared to $1,005,414 in the prior year, an decrease of $829,737 due to
the sale of the Stonegate rental assets in the prior fiscal year. General and
Administrative expenses totaled $4,526,734 in the current fiscal year, a 78%
increase compared to $2,537,485 last year. The increase resulted from higher
expenses due to higher sales volume, and implementation of advertising and
promotions programs. Depreciation and amortization also decreased to $257,804
this year from $411,667 last year, again due to a decrease in property owned by
the Company.

Income (Loss) from Operations

Income from operations totaled $2,867,531 this fiscal year compared to $696,272
in the prior year ended June 30, 2003, an increase of 312%. One key factor
provided this change; namely, an increase in loan fees and commissions generated
from third party business.

Other Income and Expense



                                       16
<PAGE>

Interest and other income generated this year totaled $2,422,013 compared to
$444,619 last year, an increase of 445%. This was attributable to higher
balances and therefore investment earnings on cash, investments in loans, and
investment in mortgage loans on real estate. Interest expense totaled $2,675,205
this year compared to $1,784,562 last year, an increase of 55%. This increase
was primarily due to an increase of interest expense on short term notes
payable. One of the company's subsidiaries also earned a $700,000 fee from
assignment of a real estate contract to purchase a commercial property. The
terms of the contract were negotiated via a bankruptcy estate sale at which time
the Company obtained favorable terms based on market value. Gain on sale of real
estate increased slightly and totaled $1,640,898 this year compared to
$1,523,249 for the same period last year. In the current fiscal year, the
Company sold a 50% tenant in common interest in its Walgreen property to a third
party resulting in a net gain of $933,004 and a 10% tenant in common ownership
in a large parcel of land for a net gain of $707,894, compared to a sale of the
Stonegate assets in the prior fiscal year for a net gain of $1,523,249.

Net Income

Net Income before tax totaled $4,955,237 for the year ended June 30, 2004,
compared to $879,578 in the prior fiscal year, a 463% increase. Net Income after
tax was $3,286,930, or $1.91 per share, compared to net income of $569,439, or
$0.45 per share in the prior fiscal year, a 477% increase. The weighted average
number of shares outstanding were 1,720,310 and 1,263,830 in the years ended
June 30, 2004 and 2003 respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically relied upon the cash flow from operations and
financing to provide for its capital requirements. At the end of June 30, 2004,
the Company had cash on hand of $6,080,980, compared to $4,059,184 at June 30,
2003. The Company believes that cash generated from operations during the next
fiscal year, collection of account and notes receivable, sale of assets, or
refinance of existing debt will be sufficient to provide for its capital
operating requirements for at least the next 12 months. Historically, the
Company has several short term notes payable outstanding at any given time,
which are extended on an as needed basis. There is no guarantee that these notes
will continue to be extended on terms favorable to the Company, or that the sale
of any particular assets will generate a guaranteed amount of proceeds to the
Company.

QUARTERLY FLUCTUATIONS

As of June 30, 2004, the Company has engaged in a number of third party
transactions and related party transactions resulting in revenue for the latest
fiscal year. Although the Company's plan is to ramp up the number of
transactions from year to year, the real estate business is cyclical, and very
dependent on client relationships and the regional economy. The Company's
revenues to date have also resulted from many single, high revenue generating,
transactions. The Company's operating results may fluctuate significantly from
period to period as a result of a variety of factors, including consumer and
client home buying patterns, changes in Nevada's commercial and residential real
estate economy, addition or deletion of strategic alliances or business
development milestone achievements, greater or fewer related party transactions,
and changes resulting in competitive pricing structures.

ITEM 7. FINANCIAL STATEMENTS

Independent auditors' report                                             F-1
Financial Statements:
           Consolidated balance sheet                                    F-2
           Consolidated statements of operations                         F-3


                                       17
<PAGE>

           Consolidated statements of changes in stockholders' equity    F-4
           Consolidated statements of cash flows                         F-6
Notes to consolidated financial statements                               F-7

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

       Effective August 19, 2003, the Company dismissed Bradshaw, Smith & Co.,
LLP ("Bradshaw"), as its independent auditors and appointed Beckstead and Watts
LLP ("Becstead & Watts") as its independent auditors. The report of Bradshaw on
the financial statements for the past two years did not contain an adverse
opinion or disclaimer of opinion; and was not modified as to uncertainty, audit
scope, or accounting principles. The dismissal of Bradshaw and the appointment
of Beckstead & Watts was approved by the Company's Board of Directors. During
the period from July 1, 2002 through August 19, 2003, there were no
disagreements with Bradshaw, Smith & Co., LLP on any matters of accounting
principles or practices, financial statement disclosure, or auditing scope and
procedures which, if not resolved to the satisfaction of Bradshaw, Smith & Co.,
LLP would have caused Bradshaw, Smith & Co., LLP to make reference to the matter
in their report.
ITEM 8A.   CONTROLS AND PROCEDURES
We have established disclosure controls and procedures to ensure that material
information relating to us, including our subsidiaries, is made known to the
officers who certify our financial reports and to other members of senior
management and the board of directors. As required by SEC rules, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this report. This
evaluation was carried out under the supervision and with the participation of
our management, including our principal executive officer and principal
financial officer. Based on this evaluation, these officers have concluded that
the design and operation of our disclosure controls and procedures are
effective. There were no significant changes to our internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of their evaluation.
Disclosure controls and procedures are our controls and other procedures that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by us in the reports that we file under the Exchange Act is
accumulated and communicated to our management, including our principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure.



                                       18
<PAGE>


PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS AND EXECUTIVE OFFICERS

Listed below are the Company's directors whose terms expire at the next annual
meeting of the shareholders. Set forth below is also certain information
concerning the executive officers and key employees of the Company, including
the business experience of each during the past five years.


<TABLE>
<CAPTION>
                      NAME                       AGE                                           POSITION
         ------------------------------- --------------------- ---------------------------------------------------------------
<S>                                               <C>          <C>
         Vincent W. Hesser                        38           President, Chief Executive Officer and Director
         Heidi Williams                           37           Assistant Vice President - Mortgage Operations
         Eric Bordenave                           42           Vice President - Broker
         Tammy Hardcastle                         46           Secretary and Treasurer
         Dana Rogers                              40           Director
         Antony M. Santos                         38           Director
         ------------------------------- --------------------- ---------------------------------------------------------------
</TABLE>

Vincent W. Hesser, President, Chief Executive Officer and Director - Mr.
Hesser's areas of responsibility include coordinating the development of
corporate policies, goals, and objectives relative to company operations; lender
and investor relations; and financial performance and growth. Mr. Hesser
oversees the Company's daily operations and business affairs to ensure that its
business objectives are achieved. During his tenure as a finance executive at
Pacific Properties (1992-1999), Mr. Hesser obtained project equity and debt
financing for various real estate projects, and he oversaw the build-out of
housing, apartment, and commercial real estate projects.

Mr. Hesser began his career at PriMerit Bank (subsequently purchased by Norwest)
in Las Vegas, Nevada. He was responsible for analyzing, evaluating and reporting
on numerous real estate joint ventures over twenty real estate and development
companies throughout the southwestern United States. He also assisted PriMerit
in its reviews with the Office of Thrift Supervision (OTS) and Federal Deposit
Insurance Corporation (FDIC) with respect to those investments.

Mr. Hesser is a graduate of Southern Utah University (Class of 1990) 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. Mr. Hesser also accepted the position of Chairman of the
Board on August 14, 2003.

Heidi Williams, Assistant Vice President - Mortgage Operations - With almost ten
years mortgage lending experience, specializing in new home finance, Ms.
Williams brings with her a tremendous knowledge of all aspects of mortgage
lending.

Ms. Williams is responsible for the daily operations of the residential mortgage
finance division of OneCap. These duties include overseeing the origination,
processing, pre-underwriting and closing of all mortgage loans. Currently OneCap
originates FHA, VA, Conventional and Jumbo loans that are sold "servicing
released" to a select number of institutional investors. OneCap utilizes a wide
array of technology in its daily business using the state of the art
MortgageWare TC System as well as the Fannie Mae and Freddie Mac automated
underwriting systems, DU and LP.



                                       19
<PAGE>

As the mortgage industry continues to change through technology and Internet
originations, Ms. Williams has positioned OneCap to take full advantage of these
opportunities.

Eric Bordenave, Vice President and Corporate Broker - Prior to joining OneCap,
Mr. Bordenave was employed with the City of Las Vegas, Office of Business
Development, as a Senior Project Development Officer from December 1994 to May
2000. Mr. Bordenave worked under the direction of the City Manager's Office and
directly with the Director of the Office of Business Development. Mr.
Bordenave's duties included project evaluation, financial analysis and 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, in which he acted as a liaison between the City
and commercial developers to negotiate, coordinate and implement city contracts
and assist in regulatory matters. In such capacity, 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. During his employment with the City of Las Vegas, Mr. Bordenave also
served as an independent contractor for two real estate companies: Cornerstone
Company (July 1990 to April 1997) and Commercial West Realty Advisors (April
1997 to June 2000).

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.

Tammy Hardcastle, Treasurer - Ms. Hardcastle is responsible for the day-to-day
accounting at OneCap. Ms. Hardcastle, as well has been involved in the document
preparation for the SEC filings of a public company, as well as publishing
quarterly 10-QSB reports and annual 10-KSB reports to be submitted to the SEC.

Ms. Hardcastle has been involved in real estate accounting and development since
1990. Her accomplishments include accounting work for the Lake Las Vegas
destination resort community with its one of a kind man-made lake. Ms.
Hardcastle has performed the conversion of an entire accounting system for
multiple Las Vegas real estate development companies to a new custom software
package unique to the construction industry.

Ms. Hardcastle holds a Bachelor degree in Accounting from the University of
Nevada Las Vegas.

Dana Rogers, Director - Mr. Rogers has a 15-year professional background in
selling, marketing and research, relating to homebuilding and real estate
development companies, consumer products and services. Mr. Rogers has held
senior level management positions as Vice President of Sales and Marketing, Vice
President of Special Projects and Vice President of Business Development and has
consulted for several organizations in Las Vegas. Mr. Rogers also previously
owned and operated a Video Production and Marketing Research Company for three
years in Las Vegas. He is presently the Vice President of Business and Marketing
at Ryland Homes. From April 2002 to September 2003, he worked at OneCap as
Director of Business Development. Before that, from May 2000 through March 2002,
he worked as Vice President of Sales and Marketing for John Laing Nevada, and
from February 1996 through May 2002, he worked as Marketing Manager at Pacific
Properties/Pacific Homes.

During his career Mr. Rogers has successfully been involved in developing and
implementing creative strategies in operations, business development, sales, and
marketing for many prominent companies. Mr. Rogers received a Bachelor of Arts
in Radio/TV and Film Production and a Bachelor of Science in Marketing from Cal


                                       20
<PAGE>

State Long Beach, and received his Masters of Business Administration degree
with Honors from the University of Phoenix. Additionally, Mr. Rogers holds a
Nevada Contractors license and a Nevada Real Estate Brokers License.

Antony M. Santos, Director - Mr. Santos was appointed director of OneCap on
September 8, 2003, and is an attorney licensed with the State of Connecticut. He
serves as General Counsel with NevWest Securities Corporation, d.b.a. OneCap
Securities. Mr. Santos' focus is in securities and corporate law. His
professional career began with an emphasis on commercial law and taxation,
particularly international aspects of U.S. income taxation and cross-border
commercial transactions. In 1996 he worked with the international law firm of
Barros, Sobral & Gomes at their offices in Lisbon, Portugal. There, he
cultivated a familiarity with European Union law and multinational commerce and
privatization projects in emerging markets including Brazil, Mozambique and
Portugal. In conjunction with his work in Lisbon, Mr. Santos also worked with
Madeira Fiducia, an offshore tax consultancy firm in Funchal, Madeira.
Subsequent to his work overseas, Mr. Santos worked with the law firm of Fazzano,
Tomasiewcz, & Dewey in Hartford, Connecticut from 1996-1998. His work there
included litigation and trial work, particularly involving corporate fraud and
fiduciary issues. He joined NevWest Securities Corporation in April of 1999 as
General Counsel and has worked with NevWest since then. Mr. Santos received his
education at the University of Connecticut as both an undergraduate and graduate
student in the Department of Economics undergraduate and masters programs. He
received his J.D. at the University of Connecticut, School of Law. Mr. Santos
served in the United States Marine Corps 4th Marine Expeditionary Brigade. He is
a combat veteran of Desert Shield/Storm and participated in Operation Eastern
Exit in Mogadishu, Somalia. In the course of this service, Mr. Santos earned the
Kuwait Liberation Medal, Southwest Asia Medal, a Naval Unit Commendation, two
Combat Action Ribbons, a Military Service Humanitarian Award and a Good Conduct
Medal. Mr. Santos presently holds the following securities licenses: Series 7,
24, and 63.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and officers, and persons who own more than 10% of the
Common Stock, to file initial reports of ownership and reports of changes in
ownership (Forms 3, 4, and 5) of Common Stock with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater than 10% stockholders
are required by SEC regulation to furnish the Company with copies of all such
forms that they file. Based solely on its review of the copies of such forms
furnished to the Company during the fiscal year ended June 30, 2003, the Company
is aware of the following untimely filings:

           On February 25, 2004, Mr. Hesser received 1,250,000 shares of common
stock of the Company. The transaction was reported on a Form 4 filed March
3, 2003.

           On April 29, 2004, the Company granted options to Mr. Hesser to
purchase up to 1,000,000 shares of the Company's common stock. The transaction
was reported on a Form 4 filed in May 2004.

           On April 29, 2004, the Company granted options to Ms. Hardcastle to
purchase up to 25,000 shares of the Company's common stock. The transaction was
reported on a Form 4 filed in May 2004.

           On April 29, 2004, the Company granted options to Mr. Bordenave to
purchase up to 25,000 shares of the Company's common stock. The transaction was
reported on a Form 4 filed in May 2004.

           On April 29, 2004, the Company granted options to Ms. Williams to
purchase up to 15,000 shares of the Company's common stock. The transaction was
reported on a Form 4 filed in May 2004.



                                       21
<PAGE>

           On April 29, 2004, the Company granted options to Mr. Santos to
purchase up to 50,000 shares of the Company's common stock. The transaction was
reported on a Form 4 filed in May 2004.

           On April 29, 2004, the Company granted options to Mr. Rogers to
purchase up to 50,000 shares of the Company's common stock. The transaction was
reported on a Form 4 filed in June 2004.

           Mr. Hesser, Ms. Hardcastle, Mr. Bordenave, and Ms. Williams all filed
Forms 5 on September 3, 2004.

           Mr. Santos and Mr. Molasky filed Forms 5 on September 9, 2004.

           Mr Rogers's Form 5 was filed on October 5, 2004.

Audit Committee Financial Expert

           The Board of Directors has determined that we do not have an audit
committee financial expert. We have been seeking to add an individual with these
qualifications to our Board of Directors but have been unable to find a suitable
individual. We continue to search for someone who meets the qualifications of an
audit committee financial expert.

Code of Ethics

           On March 19, 2004, our Board of Directors adopted a Code of Ethics
(the "Code"), that applies to its and our executive officers, including, among
others, our chief executive officers and senior financial officers, as well as
all of our employees at all levels, including our subsidiaries. The Code is
designed to deter wrongdoing and to matters of business ethics including, but
not limited to:

           o Business Ethics - The Code states that it is the policy of the
Company that each employee should conduct his or her affairs with uncompromising
honesty and integrity.

           o Public Reports - The Code notes that OneCap is a public reporting
company, and expresses the policy that any employee who has a responsibility for
assisting in preparation of public reports or other public filings must assure
that the information contained in the report or filing is complete, accurate,
and true in every respect.

           o Conflicts of Interest - The Code discusses possible situations of
conflicts of interest, and requires that potential conflicts of interest be
cleared through the Company's Audit Committee

           o The Code prohibits gifts, bribes, or kickbacks being given or
received by OneCap employees. Additionally, the Code prohibits: loans to
officers or directors; improper use or theft of Company property; falsifying
records; abuse of Company, customer, associate, or vendor information; gathering
information regarding competitors of the Company; defamation or misstatements;
and improper use of Company or third-party software.

           We have included a copy of our Code of Ethics as an exhibit to this
annual report, and intend to post it on our website. Additionally, we undertake
to provide to any person without charge, upon request, a copy of our Code of
Ethics. Such request may be made in writing to the Board of Directors at our
address listed on the first page of this report.



                                       22
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

DIRECTORS' MEETINGS AND COMPENSATION

The Company's operations are managed under the broad supervision of the Board of
Directors, that has ultimate responsibility for the establishment and
implementation of the Company's general operating philosophy, objectives, goals
and policies. The Board members and executives serving as board members had no
compensation unless listed below under "compensation of executive officers"
during the fiscal year ended June 30, 2004.

COMPENSATION OF EXECUTIVE OFFICERS

Summary Compensation Table

The following table provides certain summary information concerning compensation
paid or accrued during the last fiscal year to the Company's President and Chief
Executive Officer and to each of the paid executive officers and key employees
of the Company, determined as of the end of the last three fiscal years (the
"Named Executive Officers"):




<TABLE>
<CAPTION>
                                                         Annual Compensation                     Long Term Compensation
---------------- ---------------------- ------------------------------------------------- ------------------------------------
    Name of      Position with Company  Fiscal      Salary      Bonus         Other            Awards           All Other
  Individual                              Year                                                                Compensation
---------------- ---------------------- --------- ----------- ----------- --------------- ----------------- ------------------
<S>              <C>                      <C>      <C>         <C>              <C>              <C>                <C>
Vincent W.       President, Chief         2002     200,000           0          0                0                  0
Hesser           Executive Officer
                 and Director (1)

                                          2003     200,000      14,763          0                0                  0

                                          2004     251,282     328,347          0                0                  0

Heidi Williams   Vice President -         2002      55,000       3,300          0                0                  0
                 Mortgage Operations

                                          2003      71,154      21,946          0                0                  0

                                          2004      74,423      60,269          0                0                  0

Eric Bordenave   Vice President -         2002      90,000      15,445          0                0                  0
                 Broker

                                          2003      90,000           0          0                0                  0

                                          2004      90,000       5,000          0                0                  0

Tammy            Secretary and            2002      24,000           0          0                0                  0
Hardcastle       Treasurer (1)

                                          2003      93,077       7,500          0                0                  0

                                          2004     103,183      75,000          0                0                  0
---------------- ---------------------- --------- ----------- ----------- --------------- ----------------- ------------------
</TABLE>

(1) Mr. Hesser and Ms. Hardcastle also were employed and compensated by various


                                       23
<PAGE>

affiliated companies over the years ended 2002, 2003, and 2004.

Management's salary will be based upon the performance of the Company.
Management's performance bonuses will be decided by a majority of the Board of
Directors of the Company. In addition, management's base salaries can be
increased by the Board of Directors of the Company based on the attainment of
financial and other performance guidelines set by the Company.

Members of the Company's Board of Directors will serve until the next annual
meeting of the stockholders and until their successors are duly elected and
qualified, unless earlier removed as provided in the Bylaws of the Company.
Executive officers are appointed and serve terms determined at the discretion of
the Board of Directors.

The following Option/SAR Grants Table sets forth the individual grants of stock
options made in fiscal 2004 to the Company's Executive Officers, Directors and
key employees named in the Summary Compensation Table above.

                    Option/SAR Grants in the Last Fiscal Year
                               (Individual Grants)

<TABLE>
<CAPTION>
              Name     Shares Underlying Options    % of Total Options Granted       Exercise Price        Expiration Date
                                Granted                   in Fiscal 2004              ($ per share)
---------------------- --------------------------- ------------------------------ ---------------------- ---------------------
<S>                            <C>                            <C>                        <C>                  <C>
Vincent Hesser                 1,000,000                      82.34%                     $1.65                01/01/09
---------------------- --------------------------- ------------------------------ ---------------------- ---------------------
Heidi Williams                    15,000                       1.24%                     $1.50                01/01/09
---------------------- --------------------------- ------------------------------ ---------------------- ---------------------
Eric Bordenave                    25,000                       2.06%                     $1.50                01/01/09
---------------------- --------------------------- ------------------------------ ---------------------- ---------------------
Tammy Hardcastle                  25,000                       2.06%                     $1.50                01/01/09
---------------------- --------------------------- ------------------------------ ---------------------- ---------------------
Dana Rogers                       50,000                       4.17%                     $1.50                01/01/09
---------------------- --------------------------- ------------------------------ ---------------------- ---------------------
Antony M. Santos                  50,000                       4.17%                     $1.50                01/01/09
---------------------- --------------------------- ------------------------------ ---------------------- ---------------------
</TABLE>


The options granted to Mr. Hesser,  Mr. Rogers,  and Mr. Santos vest in full and
are  exercisable on January 1, 2005. The options granted to Mr.  Bordenave,  Ms.
Hardcastle, and Ms. Williams vest in full and exercisable on January 1, 2006.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of June 30, 2004, with
respect to the beneficial ownership of the Company's Common Stock by all persons
known by the Company to be beneficial owners of more than 5% of any such
outstanding classes, and by each director and executive officer, key employees
and by all officers, directors, and key employees as a group. As of October 1,
2004, there were 2,538,888 shares issued and outstanding of the Company's Common
Stock. The named beneficial owner has, to the Company's knowledge, sole voting
and investment power with respect to the shares listed as owned by such owner.
Unless indicated otherwise, the address of the stockholder is our principal
executive offices, 5440 W. Sahara Ave, 3d Floor, Las Vegas, NV 89146



                                       24
<PAGE>



<TABLE>
<CAPTION>
                         Common Stock Beneficially Owned


          Name of Beneficial Owner                         Number of Shares                             % of Class

<S>                                                         <C>       <C>                                 <C>
Vincent W. Hesser                                           1,530,214 (1)                                 60.27%

Eric Bordenave                                                  8,029 (2)                                    *

Heidi Williams                                                    357 (3)                                    *

Tammy Hardcastle                                                    0 (4)                                    *

Antony M. Santos                                                2,871 (5)                                    *

Dana Rogers                                                         0 (6)                                    *

Steven D. Molasky                                             722,857                                     28.47%
3111 S. Maryland Parkway
Las Vegas, NV 89109

All Officers and Directors as a Group                       1,541,471 (7)                                 60.71%
(6 Persons)
--------------------------------------------- ------------------------------------------- ----------------------------------------
</TABLE>

* Less than one percent.

(1) During December 2003, the Company's one-share-for-seven-shares reverse stock
split took effect, pursuant to which Mr. Hesser's 1,961,500 shares were reverse
split into 280,214 shares of common stock. Mr. Hesser subsequently received an
additional 1,250,000 shares of stock, which vest at a rate of 250,000 per year
for five years. Mr. Hesser's ownership of the aggregate amount of those shares
is reflected in the table above. In April 2004, 250,000 unexercised options held
by Mr. Hesser outstanding at the time of the reverse stock split were canceled.
Does not include options to purchase 1,000,000 shares which are not exercisable
now or within 60 days.

(2) During December 2003, the Company's one-share-for-seven-shares reverse stock
split took effect, pursuant to which Mr. Bordenave's 66,200 shares were reverse
split into 9,457 shares of common stock. In April 2004, 102,500 unexercised
options held by Mr. Bordenave outstanding at the time of the reverse stock split
were canceled. Does not include options to purchase 25,000 shares which are not
exercisable now or within 60 days.

(3) During December 2003, the Company's one-share-for-seven-shares reverse stock
split took effect, pursuant to which Ms. Williams's 2,500 shares were reverse
split into 357 shares of common stock. In April 2004, 17,500 unexercised options
held by Ms. Williams outstanding at the time of the reverse stock split were
canceled. Does not include options to purchase 15,000 shares which are not
exercisable now or within 60 days.

(4) In April 2004, 20,000 unexercised options held by Ms. Hardcastle outstanding
at the time of the reverse stock split were canceled. Does not include options
to purchase 25,000 shares which are not exercisable now or within 60 days.

(5) During December 2003, the Company's one-share-for-seven-shares reverse stock


                                       25
<PAGE>

split took effect, pursuant to which Mr. Santos's 9,900 shares were reverse
split into 1,414 shares of common stock, and the 10,200 shares held by NevWest
Securities Corp., of which Mr. Santos has an approximate 10% ownership interest,
were reverse split into 1,457 shares. Does not include options to purchase
50,000 shares which are not exercisable now or within 60 days.

(6) Does not include options to purchase 50,000 shares which are not exercisable
now or within 60 days.

(7) Consisting of 1,541,471 shares. Does not include options to purchase
1,165,000 shares which are not exercisable now or within 60 days.

OPTION PLANS

           The following table sets forth information about the Company's 2004
Stock Option Plan, including the number of securities to be issued upon the
exercise of outstanding options, warrants, and rights; the weighted average
exercise price of the outstanding options, warrants, and rights; and the number
of securities remaining available for issuance under the 2004 Plan.

<TABLE>
<CAPTION>
------------------------------ -------------------------------- --------------------------------- --------------------------------
                                 Number of securities to be     Weighted average exercise price   Number of securities remaining
                                   issued upon exercise of          of outstanding options,        available for future issuance
                               outstanding options, warrants,         warrants, and rights        under equity compensation plans
Plan Category                            and rights
------------------------------ -------------------------------- --------------------------------- --------------------------------
<S>                            <C>                              <C>                                                             <C>
Equity compensation plans                                0      $                              0                                0
approved by shareholders
------------------------------ -------------------------------- --------------------------------- --------------------------------
Equity compensation plans not  2004 Plan         1,214,500      $                           1.62                        3,785,500
approved by shareholders*
------------------------------ -------------------------------- --------------------------------- --------------------------------
Total                                            1,214,500      $                           1.62                        3,785,000
------------------------------ -------------------------------- --------------------------------- --------------------------------
</TABLE>


* The Company's board of directors adopted the 2004 Plan in March 2004. The two
principal shareholders of the Company also approved the adoption of the 2004
Plan in March 2004. The Company intends to present the adoption of the 2004 Plan
for approval by all of the shareholders of the Company at the 2004 Annual
Meeting of Shareholders.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Conflict of Interest Policy

OneCap acts as a service company to several affiliated companies, and obtains
standard commission or fees for doing so. In order to avoid conflicts of
interest, OneCap has developed the following policy:

1.   Payment of fair and appropriate fees to OneCap for services  rendered.  Any
     transaction   that   results  or  will  result  in  the  payment  of  fees,
     commissions, incentives, or any type of consideration whatsoever from or to
     OneCap by any related party, any individual employed by a related party, or
     any independent  contractor requires an approval by the President of OneCap
     prior to entering into any such transaction.  This policy is not written to
     be  all-inclusive,  and any  transaction  that might fall under this policy
     should be brought to the  attention of the  President of OneCap  before the
     fact for  clarification on how it will be handled.  The  transactions  that
     fall under this  policy  include:

                                       26
<PAGE>


     a.   Any real estate commission listing agreement with OneCap and a related
          party to sell company-owned real property.

     b.   Any real  estate  commission  listing  agreement  with  OneCap  and an
          employee of a related party to sell employee-owned real property.

     c.   Any real  estate  commission  listing  agreement  with  OneCap  and an
          independent  contractor  with a related  party to sell his or her real
          property.

     d.   Any real estate  agreement  with a related  party to purchase any real
          property in which OneCap acts as buyer agent.

     e.   Any real  estate  agreement  with an  employee  of a related  party to
          purchase any real property in which OneCap acts as buyer agent.

     f.   Any  real  estate  agreement  with an  independent  contractor  with a
          related  party to purchase  any real  property in which OneCap acts as
          buyer agent.

     g.   Any other real estate  transaction,  in which OneCap represents either
          as a buyer or seller  agent,  or  principal,  any related party in the
          sale, purchase, or lease of any real property.

     h.   Any  transaction in which OneCap brokers any mortgage loan or any type
          of  financing  for an  employee,  independent  contractor,  or related
          parties of OneCap.

     i.   Any  services  or work  performed  by OneCap or its  employees  at the
          request of any related party.

     j.   Any payments or agreements  for payment made to or from OneCap and any
          related party, employees, or independent contractors.

Any questions regarding this policy should be referred to the President of
OneCap for clarification.

2.    Referral Fees Paid Out to Brokers. OneCap has a strict policy regarding
      payments of referral fees to brokers for loan or real estate transactions.
      All brokers must have a valid state license for the type of transaction
      they are submitting, and OneCap will not pay any referral fees to an
      affiliated company, or the sponsors of said company, for any business or
      clients they have referred to OneCap.

Related Party Transactions

During the current fiscal year, the Company entered into several transactions in
which the buyer, seller, or borrower was controlled by a related party (owned or
a majority owned by OneCap's directors, officers, or employees). The following
table outlines these related party transactions in which the Company has engaged
during the Company's current fiscal year ending June 30, 2004:

<TABLE>
<CAPTION>

----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
 Payment Amount     Transaction      Revenue %    Transaction Type                Details                    Entity
                       Volume
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
<S>     <C>            <C>                 <C>    <C>               <C>                                  <C>
         $23,500          $750,000         3.13%  Mortgage Broker   OneCap procured a loan for a            Pacific
                                                        Fee         related entity                       Properties LLC
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
         $41,500        $1,350,000         3.07%  Mortgage Broker   OneCap procured a loan for a            Pacific
                                                        Fee         related entity                       Properties LLC
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
         $45,000        $1,500,000         3.00%  Mortgage Broker   OneCap procured a loan for a            Pacific
                                                        Fee         related entity                       Properties LLC
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
         $81,000        $2,700,000         3.00%  Mortgage Broker   OneCap procured a loan for a            Pacific
                                                        Fee         related entity                       Properties LLC
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
         $60,000        $2,000,000         3.00%  Mortgage Broker   OneCap procured a loan for a            Pacific
                                                        Fee         related entity                       Properties LLC
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------


                                       27
<PAGE>

         $40,500        $1,350,000         3.00%  Mortgage Broker   OneCap procured a loan for a            Pacific
                                                        Fee         related entity                       Properties LLC
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
         $13,765        $3,983,600         0.35%  Mortgage Broker   OneCap procured various home          Various (5)
                                                        Fee         mortgage loans for officers and
                                                                    directors
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
            $300               n/a                  Reconveyance    OneCap miscellaneous fees earned      Various (1)
                                                        Fees        from a related entities
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
        $305,565       $13,633,600         2.24%                    Total Related Party Revenues

----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
         $34,944        N/A             N/A         Sublease by     OneCap subleases some of its           Copyright
                                                     OneCap to      existing space to a related              Media
                                                  Copyright Media   company at the same lease terms       Corporation
                                                                    provided to OneCap
----------------- ----------------- ------------- ----------------- ------------------------------------ ---------------
</TABLE>

During the year ended June 30, 2004, the Company sold $11,125,640 in loans to
the OneCap Real Estate Fund 1, LLC pursuant to the terms of the operating
agreement of the Fund which permits the Fund to acquire loans from the Company.
The Company sold the loans at face value and did not recognize any gain or loss
from the transactions. The manager of the Fund is OneCap Partners LLC, an
affiliated company owned by OneCap's directors and officers.

During the year ended June 30, 2004, the Company originated mortgage home loans
totaling $3,983,600 to Company employees, officers, directors, and family
members.

During the year ended June 30, 2004, the Company, its officers, directors,
employees, or family members, had profit participation positions in seven
borrowers that originated loans with the Company.

ITEM 13. EXHIBITS AND REPORTS

(a) Exhibits. The exhibits as indexed below are included as part of this annual
report on Form 10-KSB.

EXHIBIT INDEX

The following documents are incorporated herein by reference:


<TABLE>
<CAPTION>
--------------- -------------------------------------------------------------------------------------- ---------------------
Exhibit Number  Description                                                                            Page Number and
                                                                                                       Filing Method
--------------- -------------------------------------------------------------------------------------- ---------------------
<C>             <C>                                                                                    <C>
1.1             Placement Agent Agreement with NevWest Securities Corporation dated July 16, 2001      **
--------------- -------------------------------------------------------------------------------------- ---------------------
3.1             Articles of Incorporation of the Company filed June 7, 1999                            *
--------------- -------------------------------------------------------------------------------------- ---------------------
3.2             By-Laws of the Company adopted June 7, 1999                                            *
--------------- -------------------------------------------------------------------------------------- ---------------------
10.1            Sublease Agreement with Sierra Pacific Energy Corporation, dated July 9, 2000          *
--------------- -------------------------------------------------------------------------------------- ---------------------
10.2            Sublease Agreement with Pacific Properties and Development LLC, dated July 9, 2000     **
--------------- -------------------------------------------------------------------------------------- ---------------------
10.3            Promissory Note from Pacific Properties and Development LLC, dated June 28, 2001       **
--------------- -------------------------------------------------------------------------------------- ---------------------
10.4            Promissory Note with Bank of America, dated August 28, 2000                            **
--------------- -------------------------------------------------------------------------------------- ---------------------
10.5            Employment Agreement between the Company and Vincent W. Hesser, dated February 25,     ***
                2004
--------------- -------------------------------------------------------------------------------------- ---------------------


                                       28
<PAGE>

14              Code of Ethics                                                                         ****
--------------- -------------------------------------------------------------------------------------- ---------------------
31.1            Certification of President                                                             ****
--------------- -------------------------------------------------------------------------------------- ---------------------
31.2            Certification of Chief Financial Officer                                               ****
--------------- -------------------------------------------------------------------------------------- ---------------------
32.1            Certification of President and Chief Financial Officer under Section 906 of the        ****
                Sarbanes-Oxley Act of 2002
--------------- -------------------------------------------------------------------------------------- ---------------------
99.1            Stock Option Plan adopted by the Board of Directors on July 27, 2000                   *
--------------- -------------------------------------------------------------------------------------- ---------------------
99.2            2004 Stock Option Plan, adopted by the Board of Directors on March 24, 2004            *****
--------------- -------------------------------------------------------------------------------------- ---------------------
</TABLE>

* Previously filed by the Company on Form 10-SB, filed with the Commission on
August 24, 2000, File No. 000-31369.

** Previously filed by the Company with its 2001 Annual Report on Form 10-KSB,
filed with the Commission on October 1, 2001.

*** Previously filed by the Company as Exhibit 10 to its Current Report on Form
8-K, filed with the Commission on March 3, 2004.

****  Filed herewith.

***** Previously filed by the Company as Exhibit 99 to its Registration
Statement on Form S-8, filed with the Commission on April 9, 2004.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

(1) AUDIT FEES

           The aggregate fees billed for the fiscal year ended June 30, 2004,
for professional services rendered by Beckstead and Watts, LLP, for the audit of
the registrant's annual financial statements and review of the financial
statements included in the registrant's Form 10-QSB or services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for fiscal year 2004 were $49,000.

           The aggregate fees billed for the fiscal year ended June 30, 2003,
for professional services rendered by Beckstead and Watts, LLP, for the audit of
the registrant's annual financial statements and review of the financial
statements included in the registrant's Form 10-QSB or services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for fiscal year 2003 were $22,312.50.

           The aggregate fees billed for the fiscal year ended June 30, 2003,
for professional services rendered by Bradshaw Smith & Co., LLP, for the review
of the financial statements included in the registrant's Form 10-QSB or services
that are normally provided by the accountant in connection with statutory and
regulatory filings or engagements for fiscal year 2003 were $27,000. The
aggregate fees billed for the fiscal year ended June 30, 2002, for professional
services rendered by Bradshaw Smith & Co., LLP, for the audit of the
registrant's annual financial statements and review of the financial statements
included in the registrant's Form 10-QSB or services that are normally provided
by the accountant in connection with statutory and regulatory filings or
engagements for fiscal year 2002 were $53,765.

(2) AUDIT-RELATED FEES

           The aggregate fees billed for the fiscal year ended June 30, 2003,
for assurance and related services by Beckstead and Watts, LLP, that are
reasonably related to the performance of the audit or review of the registrant's
financial statements for fiscal year 2004 were $5,000. The services provided in
connection with those fees were the Company's HUD audit.



                                       29
<PAGE>

           The aggregate fees billed for the fiscal year ended June 30, 2003,
for assurance and related services by Beckstead and Watts, LLP, that are
reasonably related to the performance of the audit or review of the registrant's
financial statements for fiscal year 2003 were $5,000. The services provided in
connection with those fees were the Company's HUD audit.

           The aggregate fees billed for each of the fiscal years ended June 30,
2003 and 2002, for assurance and related services by Bradshaw Smith & Co., LLP,
that are reasonably related to the performance of the audit or review of the
registrant's financial statements for fiscal years 2003 and 2002 were $5,255 and
6,175, respectively. Services included special audit and compliance procedures
required by Governmental audit standards and filings for HUD Type II Loan
Correspondents and the State of Nevada for first trust deed services, and client
assistance with preparation of June 30, 2003, audit performed by other principal
auditor.

(3) TAX FEES

           The aggregate fees billed for the fiscal year ended June 30, 2004,
for professional services rendered by Bradshaw Smith & Co., LLP, for tax
compliance, tax advice, and tax planning were $8,500. Services provided included
preparation of Federal Income Tax Returns Form 1120, tax planning, and research
regarding 1031 exchange.

           The aggregate fees billed for each of the fiscal years ended June 30,
2003 and 2002, for professional services rendered by Bradshaw Smith & Co., LLP,
for tax compliance, tax advice, and tax planning, for those fiscal years were
$10,464 and $8,680, respectively. Services provided included preparation of
Federal Income Tax Returns Form 1120, tax planning, and research regarding 1031
exchange.

(4) ALL OTHER FEES

           The aggregate fees billed in each of the fiscal year ended June 30,
2004, for products and services provided by Beckstead and Watts, LLP, other than
those services reported above, were $0.

           The aggregate fees billed in each of the fiscal years ended June 30,
2003 and 2002, for products and services provided by Bradshaw Smith & Co., LLP,
other than those services reported above, for those fiscal years were $6,407 and
$1,427, respectively. Services provided included research regarding state
regulations, corporate matters, and analysis of compensation packages.

(5) AUDIT COMMITTEE POLICIES AND PROCEDURES

           Not applicable.

(6) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.

           Not applicable.




                                       30
<PAGE>



                                   SIGNATURES

           In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                      ONECAP


                                      By /s/ Vincent W. Hesser
                                        ---------------------------------------
                                      Vincent W. Hesser
                                      President and Chief Executive Officer

Date:  October ___, 2004

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



/s/ Vincent W. Hesser           Director, President, CEO       October __, 2004
--------------------------
Vincent W. Hesser               (Principal Executive Officer)


/s/ Tammy Hardcastle            Chief Financial Officer        October __, 2004
--------------------------
Tammy Hardcastle                (Principal Accounting Officer)






                                       31

<PAGE>

BECKSTEAD AND WATTS, LLP
Certified Public Accountants
                                                          3340 Wynn Road, Ste. B
                                                         Las Vegas, Nevada 89102
                                                               702.257.1984 tel.
                                                                702.362.0540 fax

                          INDEPENDENT AUDITORS' REPORT




To the Board of Directors
of OneCap
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheet of OneCap and
Subsidiaries as of June 30, 2004, and the related consolidated statements of
operations, changes in stockholders' equity, and cash flows for the year then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of OneCap and
Subsidiaries as of June 30, 2004, and the results of its operations and its cash
flows for the year then ended in conformity with U.S. generally accepted
accounting principles.

BECKSTEAD AND WATTS, LLP


/s/ Beckstead and Watts, LLP


September 29, 2004
Las Vegas, Nevada

                                      F-1
<PAGE>


OneCap
Consolidated Balance Sheet
June 30, 2004





<TABLE>
<CAPTION>

          ASSETS
<S>                                                                           <C>
Cash                                                                          $            6,080,980
Restricted cash                                                                              150,000
Accounts receivable (net of allowance of $8,385)(Note 5)                                     518,779
Notes and loans receivable - related party                                                   152,746
Investment in mortgage loans on real estate (Note 6)                                       5,313,894
Real estate held for development and sale (Note 7)                                         1,860,672
Investments (Note  8)                                                                      1,515,394
Other assets                                                                                 588,692
Property and equipment:
   Operating real property                                                                13,512,734
   Other property and equipment                                                              429,966
   Less accumulated depreciation                                                            (341,298)
                                                                              -----------------------
      Net Property                                                                        13,601,402
                                                                              -----------------------

                                           Total assets                       $           29,782,559
                                                                              =======================




       LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and other liabilities                                        $              709,433
Income taxes payable                                                                       1,037,249
Notes payable (Note 10)                                                                   20,565,684
                                                                              -----------------------

                                           Total liabilities                              22,312,366
                                                                              -----------------------

Commitments and contingencies                                                                      -

Minority interest                                                                          1,896,870
                                                                              -----------------------

Stockholders' equity
Preferred stock, $.001 par value; 10 million shares authorized,                                    -
   no shares issued and outstanding
Common stock, $.001 par value; 50 million shares authorized,                                   1,289
   2,538,888 shares issued and outstanding
Additional paid-in capital                                                                 2,273,790
Prepaid stock-based compensation                                                          (1,340,500)
Retained earnings                                                                          4,701,920
Less treasury stock - 11,443 shares at cost                                                  (63,176)
                                                                              -----------------------

                                           Total stockholders' equity                      5,573,323
                                                                              -----------------------

                                           Total liabilities and
                                           stockholders' equity               $           29,782,559
                                                                              =======================
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      F-2

<PAGE>

OneCap
Consolidated Statements of Operations
For the years ended June 30, 2004 and 2003



<TABLE>
<CAPTION>
                                                                                            For the years ended June 30,
                                                                                  --------------------------------------------------
                                                                                            2004                       2003
                                                                                  --------------------------------------------------

Revenues
<S>                                                                               <C>                        <C>
     Loan fees and commission revenue                                             $             6,443,214    $            2,323,231
     Loan fees and commission revenue - related parties                                           305,565                   470,094
     Service fee revenue                                                                          145,404                    56,220
     Rental revenue                                                                             2,173,127                 2,596,488
                                                                                  ------------------------   -----------------------
                Total revenues                                                                  9,067,310                 5,446,033
                                                                                  ------------------------   -----------------------

Expenses
     Commission expense                                                                         1,239,564                   686,695
     Public relation and consulting expense                                                             -                   108,500
     Rental expenses                                                                              175,677                 1,005,414
     General and administrative expenses                                                        4,526,734                 2,537,485
     Depreciation and amortization                                                                257,804                   411,667
                                                                                  ------------------------   -----------------------
                Total expenses                                                                  6,199,779                 4,749,761
                                                                                  ------------------------   -----------------------

                Income from operations                                                          2,867,531                   696,272

Other income (expense)
     Interest and other income                                                                  2,422,013                   444,619
     Interest expense                                                                          (2,675,205)               (1,784,562)
     Fee from contract assignment (Note 7)                                                        700,000                         -
     Gain on Sale of real estate (Note 8)                                                       1,640,898                 1,523,249

                                                                                  ------------------------   -----------------------
                Net income before income taxes and minority interest                            4,955,237                   879,578

Minority interest                                                                                       -                         -
                                                                                  ------------------------   -----------------------

                Net income before income taxes                                                  4,955,237                   879,578

Income tax expense (benefit)
     Current federal                                                                            1,415,699                   357,039
     Deferred federal                                                                             252,608                   (46,900)
                                                                                  ------------------------   -----------------------
                                                                                                1,668,307                   310,139
                                                                                  ------------------------   -----------------------

Net income                                                                        $             3,286,930    $              569,439
                                                                                  ========================   =======================

Earnings per common share - basic and fully diluted                               $                  1.91    $                 0.45
                                                                                  ========================   =======================

Weighted average number of common shares outstanding -                                          1,720,310                 1,263,830
                                                                                  ========================   =======================
basic and fully diluted
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      F-3

<PAGE>

OneCap
Consolidated Statements of Changes in Stockholders' Equity
For the year ended June 30, 2004



<TABLE>
<CAPTION>
                                   Common Stock                       Additional       Prepaid                         Total
                             -------------------------
                                                           Treasury     Paid-in        Stock-based    Retained     Stockholders'
                               Shares       Amount          Stock       Capital        Compensaton    Earnings        Equity
                             ----------- ------------- ------------- --------------   ------------  -------------- --------------

<S>                           <C>         <C>          <C>           <C>              <C>           <C>            <C>
Balance as of June 30, 2002   1,258,888   $     1,259       (38,455)       604,250              -         845,550      1,412,604

Treasury stock purchased              -             -       (24,721)             -              -               -        (24,721)

Shares issued for services       30,000            30             -        108,290              -               -        108,320

Net income                            -             -             -              -             -          569,439        569,439
                             ----------- ------------- ------------- --------------   ------------  --------------   ------------

Balance as of June 30, 2003   1,288,888         1,289       (63,176)       712,540              0       1,414,989      2,065,642

Shares issued                 1,250,000             -             -      1,561,250     (1,561,250)           -                 0

Expense recognized from               -             -             -              -        220,750           -            220,750
stock-based compensation

Net income                            -             -             -              -             -        3,286,930      3,286,930
                             ----------- ------------- ------------- --------------   ------------  -------------- --------------


Balance as of June 30, 2004   2,538,888   $     1,289   $   (63,176) $   2,273,790    $(1,340,500)  $   4,701,919  $   5,573,322
                             =========== ============= ============= ==============   ============  ============== ==============
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                      F-4

<PAGE>


OneCap
Consolidated Statements of Cash Flows
For the years ended June 30, 2004 and 2003


<TABLE>
<CAPTION>
                                                                                        For the years ended June 30,
                                                                            ------------------------------------------------------
                                                                                         2004                         2003
                                                                            ------------------------------------------------------

Cash flows from operating activities:
<S>                                                                         <C>                           <C>
     Net income                                                             $               3,286,931     $               569,439
     Adjustments to reconcile net income to
     net cash used by operating activities:
          Stock-based compensation                                                            220,750                           -
          Depreciation and amortization                                                       257,804                     411,667
          Shares issued for public relations and consulting expense                                 -                     108,500
          Gain on sale                                                                     (1,640,898)                 (1,523,249)
          Changes in operating assets and liabilities:
              Restricted cash                                                                       -                    (150,000)
              Accounts receivable                                                            (184,187)                   (124,335)
              Other assets                                                                   (362,673)                   (237,043)
              Prepaid expense                                                                  23,844                           -
              Accounts payable and other liabilities                                         (230,796)                    613,914
              Income tax receivable                                                                 -                     130,500
              Deferred income tax payable                                                     185,608                           -
              Deferred tax asset, non-current                                                  67,000                           -
              Income tax payable                                                              494,602                     347,339
                                                                            --------------------------   -------------------------
                           Net cash provided by operating activities                        2,117,985                     146,732
                                                                            --------------------------   -------------------------

Cash flows from investing activities:
     Purchase of real property                                                              8,519,503                    (305,740)
     Proceeds from real estate sale                                                         1,640,898                   1,593,841
     Purchase of real estate held for development and sale                                    (62,805)                   (139,110)
     Purchase of investments                                                               (1,219,397)                   (295,997)
     Increase in notes receivable                                                                   -                     (28,695)
     Decrease in investment in mortgage loans on real estate                                8,654,687                  (7,260,873)
     Decrease in notes and loans receivable - related party                                   146,626                     400,601
                                                                            --------------------------   -------------------------
                           Net cash provided (used) by investing activities                17,679,512                  (6,035,973)
                                                                            --------------------------   -------------------------

Cash flows from financing activities:
     Increase in minority interest                                                                  -                           -
     Increase in restricted cash                                                                    -                           -
     Net proceeds from notes payable                                                                -                  10,265,392
     Purchase of treasury stock                                                                     -                     (24,721)
     Payments on notes payable                                                            (17,775,701)                   (737,262)
                                                                            --------------------------   -------------------------
                           Net cash (used) provided by financing activities               (17,775,701)                  9,503,409
                                                                            --------------------------   -------------------------

                           Net increase in cash                                             2,021,796                   3,614,168
                           Cash at beginning of year                                        4,059,184                     445,016
                                                                            --------------------------   -------------------------
                           Cash at end of year                              $               6,080,980    $              4,059,184
                                                                            ==========================   =========================
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      F-5

<PAGE>


<TABLE>
<CAPTION>
Supplemental disclosure of cash flow information:
<S>                                                        <C>                          <C>
     Cash paid for interest expense                        $               2,675,205    $              1,657,062
                                                           ==========================   =========================
     Cash paid for income taxes                            $                 625,000    $                      -
                                                           ==========================   =========================
</TABLE>


     Non-cash transactions:
     During the year ended June 30, 2004, the Company issued 1,250,000 share of
     its $0.001 par value common stock to an officer as part of employment
     agreement valued at $1,561,250.


The accompanying notes are an integral part of these financial statements.

                                      F-6

<PAGE>


NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION
OneCap (the "Company") was incorporated in the State of Nevada on June 7, 1999.
The Company conducts its operations through OneCap Mortgage, OneCap Realty, and
OneCap Properties, all wholly owned subsidiaries incorporated in the State of
Nevada. OneCap Mortgage operates as a licensed Nevada mortgage broker. OneCap
Mortgage is engaged in the brokerage and placement of land, acquisition and
development, construction, mezzanine, permanent, commercial and residential
mortgage loans secured by real property. OneCap Realty operates as a licensed
Nevada Real Estate Broker. OneCap Realty is engaged in client representation of
commercial, and residential real property acquisitions and dispositions. OneCap
Properties operates as an owner, equity participant, and developer of real
estate properties. OneCap Properties is engaged in the purchase, ownership,
equity participation, construction, and development of to-be-built or existing
real estate properties, and is a Nevada B2 classification licensed contractor.

The Company has adopted June 30 as its fiscal year end.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant inter-company transactions and balances have
been eliminated in consolidation.

The Company's subsidiaries include OneCap Realty, a real estate broker organized
in the State of Nevada in October 2001; OneCap Properties, a commercial real
estate developer and investor incorporated in the State of Nevada in October
2001; 3025 LVBS, LLC, a limited liability company organized in the State of
Nevada in December 2002; 5440 W. Sahara, LLC, a limited liability company
organized in the State of Nevada in August 2002; Harbors VV, LLC, a limited
liability company organized in the State of Nevada in January 2003; and OneCap
Mortgage, a mortgage company incorporated in the State of Nevada in December
2001. The Company has a 60% interest in Pacific Hilltop 2, LLC, a limited
liability company organized in the State of Nevada in January 2002 to develop
and lease commercial rental property in Henderson, Nevada.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.

REVENUE RECOGNITION

The Company recognizes revenue primarily from loan placement fees, loan
servicing fees, and extension fees. Loan placement fees are recorded as revenue
at the close of escrow and reduced by direct loan placement costs on loans which
the Company has not recorded as investments in mortgage loans on its financial
statements. Typically, deeds of trust related to loans placed are initially in
the Company's name to facilitate the loan placement process. Upon arranging a
funding source for such loans, the deeds of trust are assigned to the respective
investor (i.e., individual investors or OneCap Real Estate Fund I, LLC). Loan
servicing fees are recorded as revenue when such services are rendered.
Servicing fees represent the interest spread between what is paid to the
investor and what the borrower pays for the use of the money, which can vary
from loan to loan. Servicing costs approximate servicing fees and therefore, the
Company has not recognized a servicing asset or liability. Extension fees are
generally recorded as revenue at the extension grant date. Sale or transfer of
mortgage loans to affiliate parties is based on the carrying basis, which
approximates fair value of such loans at the sale or transfer date.

                                      F-7

<PAGE>

Gains from sales of operating properties and revenues from land sales are
recognized using the full accrual method provided that various criteria relating
to the terms of the transactions and any subsequent involvement by the Company
with the properties sold are met. Gains or revenues relating to transactions
that do not meet the established criteria are deferred and recognized when the
criteria are met or using the installment or cost recovery methods, as
appropriate in the circumstances. For land sale transactions under the terms of
which the Company is required to perform additional services and incur
significant costs after title has passed, revenues and cost of sales are
recognized on a percentage of completion basis.

Cost of land sales is generally determined as a specified percentage of land
sales revenues recognized for each land development project. The cost ratios
used are based on actual costs incurred and estimates of development costs and
sales revenues to completion of each project. The ratios are reviewed regularly
and revised periodically for changes in estimates or development plans.
Significant changes in these estimates or development plans, whether due to
changes in market conditions or other factors, could result in changes to the
cost ratio used for a specific project. The specific identification method is
used to determine cost of sales for certain parcels of land.

In general, minimum rent revenues are recognized when due from tenants; however,
estimated collectible minimum rent revenues under leases which provide for
varying rents over their terms are averaged over the terms of the leases. Rents
based on tenant sales are recognized when tenant sales exceed any contractual
threshold.

Interest income on investments in mortgage loans on real estate is accrued by
the effective interest method. The Company does not recognize interest income
from loans once they are determined to be impaired. A loan is impaired when,
based on current information and events, it is probable that the Company will be
unable to collect all amounts due according to the contractual terms of the loan
agreement or when the payment of interest is 30 days past due.

REAL ESTATE HELD FOR DEVELOPMENT AND SALE

Real estate properties held for development and sale are carried at the lower of
their carrying values (i.e., cost less accumulated depreciation and any
impairment loss recognized, where applicable) or estimated fair values less
costs to sell. The net carrying values of operating properties are classified as
properties held for sale when the properties are actively marketed, their sale
is considered probable within one year, and various other criteria relating to
their disposition are met. Depreciation of these properties is discontinued at
that time, but operating revenues, interest, and other operating expenses
continue to be recognized until the date of sale. If active marketing ceases or
the properties no longer meet the criteria to be classified as held for sale,
the properties are reclassified as operating, depreciation is resumed,
depreciation for the period the properties were classified as held for sale is
recognized, and deferred selling costs, if any, are charged to earnings.

                                      F-8

<PAGE>


INVESTMENTS

The equity method of accounting is used when the Company has a 20% to 50%
interest in other entities. Under the equity method, original investments are
recorded at cost and adjusted by the Company's share of undistributed earnings
or losses of these entities. Nonmarketable investments in which the Company has
less than a 20% interest and in which it does not have the ability to exercise
significant influence over the investee are initially recorded at cost, and
periodically reviewed for impairment.

INVESTMENT IN MORTGAGE LOANS ON REAL ESTATE

Investments in mortgage loans on real estate are secured by trust deeds and
mortgages. Generally, all of the Company's mortgage loans require interest only
payments with a balloon payment of the principal at maturity. The Company has
both the intent and ability to hold mortgage loans until maturity and,
therefore, mortgage loans are classified and accounted for as held for
investment and are carried at cost. Loan to value ratios are based on appraisals
obtained at the time of loan origination and may not reflect subsequent changes
in value estimates. Such appraisals are generally dated within 12 months of the
date of loan origination. Appraisals are also based on either an "as is basis"
or "as-if completed basis'." These appraised values do not reflect immediate
sales values, which may be substantially less.

INVESTMENT IN LOANS AND ALLOWANCE FOR LOAN LOSSES

Investments in loans are carried at their principal amount outstanding less any
unearned income or unamortized discount. Interest on loans is accrued and
credited to interest income based on the daily principal amount outstanding.
Loans are generally placed in nonaccrual status when principal or interest is
delinquent for 30 days (unless adequately secured and in the process of
collection) or circumstances indicate that full collection of principal and
interest is in doubt.

The Company maintains an allowance for loan losses on its investment in loans
for estimated credit impairment in the Company's investment in loans portfolio.
The Company's estimate of losses is based on a number of factors including the
types and dollar amounts of loans in the portfolio, adverse situations that may
affect the borrower's ability to repay, prevailing economic conditions, and the
underlying collateral securing the loan. Additions to the allowance are provided
through a charge to earnings and are based on an assessment of certain factors
including, but not limited to, estimated losses on the loans. Actual losses on
loans are recorded as a charge-off or a reduction to the allowance for loan
losses. Subsequent recoveries of amounts previously charged off are added back
to the allowance.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Expenditures for major additions
and improvements are capitalized, and minor replacements, maintenance, and
repairs are charged to expense as incurred. When property and equipment are
retired or otherwise disposed of, the cost and accumulated depreciation are
removed from the accounts and any resulting gain or loss is included in the
results of operations for the respective period. Depreciation is provided over
the estimated useful lives of the related assets using the straight-line method
for financial statement purposes. The Company uses other depreciation methods
(generally accelerated) for tax purposes where appropriate. The estimated useful
lives for significant property and equipment categories are as follows:

       Furniture and office equipment                     3 to 7 years
       Buildings and improvements                         10 to 40 years

Amortization of leasehold improvements is computed using the straight-line
method over the shorter of the remaining lease term or the estimated useful
lives of the improvements. The Company reviews the carrying value of property


                                      F-9
<PAGE>

and equipment for impairment whenever events and circumstances indicate that the
carrying value of an asset may not be recoverable from the estimated future cash
flows expected to result from its use and eventual disposition. In cases where
undiscounted expected future cash flows are less than the carrying value, an
impairment loss is recognized equal to an amount by which the carrying value
exceeds the fair value of assets. The factors considered by management in
performing this assessment include current operating results, trends and
prospects, and the effects of obsolescence, demand, competition, and other
economic factors. Based on this assessment, there was no impairment at June 30,
2004.

Direct costs associated with financing and leasing of operating properties are
capitalized as deferred costs and amortized using the interest or straight-line
methods, as appropriate, over the periods benefited by the expenditures.

Depreciation of operating properties is computed using the straight-line method.
The annual rate of depreciation the rental properties, retail centers, all
office buildings and other properties are generally depreciated using composite
lives of 40 years.

If events or circumstances indicate that the carrying value of an operating
property to be held and used may be impaired, a recoverability analysis is
performed based on estimated undiscounted future cash flows to be generated from
the property. If the analysis indicates that the carrying value is not
recoverable from future cash flows, the property is written down to estimated
fair value and an impairment loss is recognized. Fair values are determined
based on estimated future cash flows using appropriate discount and
capitalization rates.

Properties held for sale are carried at the lower of their carrying values
(i.e., cost less accumulated depreciation and any impairment loss recognized,
where applicable) or estimated fair values less costs to sell. The net carrying
values of operating properties are classified as properties held for sale when
the properties are actively marketed, their sale is considered probable within
one year, and various other criteria relating to their disposition are met.
Depreciation of these properties is discontinued at that time, but operating
revenues, interest, and other operating expenses continue to be recognized until
the date of sale. If active marketing ceases or the properties no longer meet
the criteria to be classified as held for sale, the properties are reclassified
as operating, depreciation is resumed, depreciation for the period the
properties were classified as held for sale is recognized, and deferred selling
costs, if any, are charged to earnings.

ADVERTISING COSTS

Advertising costs are expensed as incurred and were approximately $237,410 and
$126,417 for the years ended June 30, 2004 and 2003, respectively.

INCOME TAXES

The Company accounts for its income taxes using the liability method, which
requires recognition of deferred tax assets and liabilities for the future tax
consequences attributable to differences between carrying amounts of existing
assets and liabilities and their respective tax bases and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.

                                      F-10

<PAGE>


IMPAIRMENT OF LONG-LIVED ASSETS

The Company continually monitors events and changes in circumstances that could
indicate that carrying amounts of long-lived assets may not be recoverable. When
such events or changes in circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value of
such assets will be recovered through undiscounted expected future cash flows.
If the total of the future cash flows is less than the carrying amount of those
assets, the Company recognizes an impairment loss based on the excess of the
carrying amount over the estimated fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or the fair value
less costs to sell.

STOCK REPURCHASE PROGRAM

In March 2002, the Company's Board of Directors approved a stock repurchase
program whereby up to $500,000 worth of common stock may be purchased from time
to time at the discretion of management. As of June 30, 2004, the Company had
purchased 11,443 shares at a total cost of $63,176. The repurchased shares are
held as treasury stock, recorded at cost, and are available for general
corporate purposes.

STOCK-BASED COMPENSATION

The Company applies Accounting Principles Board ("APB") Opinion No. 25,
Accounting for Stock Issued to Employees, and Related Interpretations, in
accounting for stock options issued to employees. Under APB No. 25, employee
compensation cost is recognized when estimated fair value of the underlying
stock on date of the grant exceeds exercise price of the stock option. For stock
options and warrants issued to non-employees, the Company applies Statement of
Financial Accounting Standards ("SFAS 123") No. 123, Accounting for Stock-Based
Compensation, which requires the recognition of compensation cost based upon the
fair value of stock options at the grant date using the Black-Scholes option
pricing model.

The following table represents the effect on net loss and loss per share if the
Company had applied the fair value based method and recognition provisions of
SFAS 123, to stock- based employee compensation:


<TABLE>
<CAPTION>
                                                                            2004                      2003
                                                                   -----------------------     --------------------
<S>                                                                 <C>                         <C>
Net income, as reported                                             $        3,286,930          $       569,439
Deduct: Total stock-based employee compensation expense                              0                  (26,347)
determined under fair value based methods for all awards,
net of related tax effects
                                                                   =======================     ====================
Pro forma net income                                                $        3,286,930          $       543,092
                                                                   =======================     ====================
Net income per common share
      Basic earnings per share, as reported                         $             1.91          $          0.45
      Basic earnings per share, pro forma                           $             1.91          $          0.45
</TABLE>

As required, the pro forma disclosures above include options granted during each
fiscal year. Consequently, the effects of applying SFAS No. 123 for providing
pro forma disclosures may not be representative of the effects on reported net
income for future years until all options outstanding are included in the pro
forma disclosures.

                                      F-11

<PAGE>


RECENT ACCOUNTING PRONOUNCEMENTS

In November 2002, the Financial Accounting Standards Board issued FASB
Interpretation No. 45 ("FIN No. 45"), Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others an interpretation of SFAS No. 5, 57, and 107 and rescission of FASB
Interpretation No. 34. FIN No. 45 clarifies the requirements of SFAS No. 5,
Accounting for Contingencies, relating to a guarantor's accounting for, and
disclosure of, the issuance of certain types of guarantees. The adoption of the
provisions of FIN No. 45 did not have a material impact on the Company's results
of operations, financial position, or cash flows.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"), which addresses consolidation by
business enterprises of variable interest entities ("VIEs"). The accounting
provisions and expanded disclosure requirements for VIEs are effective at
inception for VIEs created after January 31, 2003, and are effective for
reporting periods beginning after June 15, 2003, for VIEs created prior to
February 1, 2003. An entity is subject to consolidation according to the
provisions of FIN 46 if, by design, either (i) the total equity investment at
risk is not sufficient to permit the entity to finance its activities without
additional subordinated financial support from other parties, or (ii) as a
group, the holders of the equity investment at risk lack: (a) direct or indirect
ability to make decisions about an entity's activities' (b) the obligation to
absorb the expected losses of the entity if they occur; or (c) the right to
receive the expected residual returns of the entity if they occur. In general,
FIN 46 will require a VIE to be consolidated when an enterprise has a variable
interest that will absorb a majority of the VIE's expected losses or receive a
majority of the VIE's expected residual return. Implementation had no effect on
results of operations for the year. The Company continues to evaluate its
relationships and interest in entities that may be considered VIEs. The impact
of adopting FIN 46 on the Consolidated Financial Statements is still being
reviewed.

NOTE 2 - CASH AND EQUIVALENTS

The Company maintains cash balances in non-interest-bearing accounts that may at
times exceed federally insured limits. For the purpose of the statements of cash
flows, all highly liquid investments with an original maturity of three months
or less are considered to be cash equivalents. The Company included in its
$6,080,980 cash balance, "cash held in trust" totaling $4,466,405 on June 30,
2004.

NOTE 3 -- RESTRICTED CASH

The Company maintains restricted cash as required by the lender on commercial
rental property. The Company must maintain a minimum of $150,000. The funds are
held at a federally-insured bank, and in the event of sale or refinance of the
property, the funds including accrued interest will be refunded to the Company.

                                      F-12

<PAGE>


NOTE 4 -- RELATED PARTY TRANSACTIONS

           Notes and loans receivable:

As of June 30, 2004, notes and loans receivable, related parties consisted of
the following:

<TABLE>
<CAPTION>
<S>                                                                                              <C>
        Onecap Partners, owned by two significant stockholders, advanced to manager of Onecap                  68,350
        Real Estate Fund.

        Note receivable from Copyright Media of Nevada, a company owned by a
        significant 72,632 stockholder and an officer, unsecured, non-interest
        bearing, due on demand.

        Commission advances to real estate agents, unsecured, non-interest bearing, due upon                   11,764
        closings of sales transactions.
                                                                                                 ---------------------
                                                                                                  $           152,746
                                                                                                 =====================
</TABLE>

       The Company recognized interest income from notes and loans receivable,
       related parties totaling $0 and $29,719 during the year ended June 30,
       2004 and 2003, respectively.

Loans sold to real estate fund

During the year ended June 30, 2004, the Company sold $11,125,640 in loans at
cost to the OneCap Real Estate Fund I, LLC (the "Fund") pursuant to the terms of
the Operating Agreements of the Fund which permits the Fund to acquire loans
from the Company if the loans were originated to facilitate a sale to the Fund
and provided that the price paid is no greater than the Company's cost. The
Fund's managing member is a company which is owned by the Company's officer and
the Company's other major shareholder.

                                      F-13

<PAGE>


Revenues

A portion of the Company's revenue is derived from commercial loan closings and
commissions from land sales for related entities in which a significant
stockholder has an ownership interest. During the year ended June 30, 2004,
twelve transactions totaled $305,565, or 3.4% of gross revenues, from related
parties. During the year ended June 30, 2003, fourteen transactions totaled
$470,094, or 8.6% of gross revenues, from related parties.

During the years ended June 30, 2004 and 2003, the Company originated mortgage
loans totaling $3,983,600 and $835,127, respectively, to Company employees,
officers, directors, and family members of which there were 0%-3.2% loan
origination and servicing fees totaling $20,111 and $11,057, respectively.

      Office space

The Company subleased office space to Pacific Properties and Development, LLC, a
company owned by the majority stockholder. The sublease commenced August 1, 2000
and expired February 28, 2003. During the year ended June 30, 2004 and 2003, the
Company received $0 and $78,558, respectively, under the sublease. The lease was
not renewed.

The Company subleased office space to NevWest Securities, Inc., a Company
stockholder and corporate consulting firm for the Company. The sublease
commenced June 15, 2003, and expires June 14, 2008. During the year ended June
30, 2004, the Company received $113,244 under the sublease.

The Company subleased office space to Copyright Media of Nevada, a company owned
by a majority stockholder and an officer. The sublease commenced April 1, 2003
and expires September 30, 2007. During the year ended June 30, 2004 and 2003,
the Company received $34,944 and $8,736, respectively, under the sublease.

      Service fee revenue

During the years ended June 30, 2004 and 2003, the Company serviced loans for
entities managed by a company owned by a significant shareholder. The Company
earned $36,344 or 24% of gross service fee revenue and $12,959 or 23% of gross
service fee revenue from servicing the loans during the years ended June 30,
2004 and 2003, respectively. Service fees are not impacted by the performance of
the borrowers. We receive a set amount for each loan serviced.

NOTE 5 - ACCOUNTS RECEIVABLE

The Company services loans which have been arranged for the investor parties
through a servicing agreement. Accounts receivable represent extension,
interest, and loan placement fees earned but not yet received. As of June 30,
2004, accounts receivable totaling $518,780 was net of allowance for doubtful
accounts of $8,385.

Loan placement fees related to mortgage loans held by us as an investment would
be deferred if the maturity of such loans are beyond twelve months from the
reporting period of such financial statements. However, we will continue to
analyze each mortgage loan held as an investment to ascertain that such loan
placement fee is not material to which deferral of such fee is required in
accordance with paragraph 27 c of Financial Accounting Standards No. 91 ("FAS
91") ensuring that the financial statements taken as a whole are materially
correct.

NOTE 6 -- INVESTMENT IN MORTGAGE LOANS ON REAL ESTATE

Investment  in mortgage  loans on real estate  consisted of the  following as of
June 30, 2004:

                                      F-14

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                     <C>
Note receivable from Aquillard, secured by real property through a first trust deed,    $              11,670
bearing interest at 13%, payable in interest only installments of $126.42 per month,
due in March 2005.

Notes receivable from Bubbles/Summerlin, secured by a 2nd trust deed, bearing                         250,000
interest at 15%, payable in interest only installments of $3,125.00 per month, due
in October 2004

Notes receivable from McDonald Ranch pads 1, 5, 6 secured by real property through a                   28,275
first trust deed, bearing interest at 12%, payable in interest only installments of
$282.75 per month, due in February 2005.

Notes receivable from Parker, secured by real property through a first trust deed,                     11,000
bearing interest at 12.5%, payable in interest only installments of $114.58 per
month, due in September 2005.

Notes receivable from Merchant-La Cholla, secured by real property through a first                     13,600
trust deed, bearing interest at 12.5%, payable in interest only installments of
$141.66 per month, due in January 2005.

Notes receivable from South Shore, secured by real property through a first trust                   1,509,434
deed, bearing interest at 13%, payable in interest only installments of $16,352.20
per month, due in January 2005.

Notes receivable from St. Thomas, secured by real property through a first trust                       25,000
deed, bearing interest at 14%, payable in interest only installments of $291.66 per
month, due in October 2004.

Notes receivable from Paseo Verde, secured by real property through a first trust                   1,399,664
deed, bearing interest at 14.25%, payable in interest only payments of $16,621.00
per month, due in December 2004.

Notes receivable from Tioga/Oakey #10, secured by real property through a first                        80,625
trust deed, bearing interest at 13%, payable in interest only installments of
$873.43 per month, due in February 2005.

Notes receivable from D. Lange, secured by a 2nd trust deed, bearing interest at
52,080 20%, payable in interest only installments of $867.99 per month, due in
October 2004.

Note receivable from Sunrise Valley, secured by real property through a first trust                 1,932,549
deed, bearing interest at 12%, payable in interest only payments of $19,325.49 per
month, due in April 2007.
                                                                                       -----------------------

                                                                                        $           5,313,897
                                                                                       =======================
</TABLE>

We analyze our investment in loans and investments in mortgage loans
periodically for allowance for loan loss and impairments in accordance with FAS
5, FAS 114, and FAS 121. As of June 30, 2004, loans related to investment in
loans and investments in mortgage loans were performing with respect to the

                                      F-15

<PAGE>

terms of the loan agreements. Accordingly, we do not believe an allowance for
loan loss or impairment was considered necessary as of June 30, 2004. We will
continue to monitor our loans periodically throughout the next fiscal year.

NOTE 7 -- REAL ESTATE HELD FOR DEVELOPMENT AND SALE

Real estate held for development and sale as of June 30, 2004, consisted of 3.92
acres of undeveloped real property located in Henderson, Nevada.

The Company capitalized interest and other costs totaling $0 and $136,611 as a
component of real estate held for development and sale during the years ended
June 30, 2004 and 2003, respectively.

The Company had a contract to purchase a commercial building in Las Vegas for
$5,300,000. The Company assigned a portion of the contract to a third party for
an assignment fee of $700,000.

NOTE 8 - INVESTMENTS

The Company invests in companies that are accounted for on the equity method of
accounting. Investments consist of the following: (1) 20% interest in Copyright
Media, Inc. an advertising and marketing company; (2) 19% interest in NevWest,
Inc. a company engaged in securities consulting; (3) 20% interest in D'Nal 3,
LLC, a company engaged in the acquisition and development of raw land; (4) 7%
interest in Ascendant Select Fund, LLC a company engaged in investment
securities; (5) 9% interest in Ascendant Universal Fund, LLC a company engaged
in investment securities. The combined investment in these companies amounted to
$1,515,391 and $251,200 at June 30, 2004 and June 30, 2003, respectively.

NOTE 9 -- PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of June 30, 2004:

<TABLE>
<CAPTION>
Operating real properties:
<S>                                                                                  <C>
Land                                                                                 $            9,931,885
Rental properties, buildings and improvements                                                     3,580,849
                                                                                     --------------------------
                                                                                                 13,512,734

Other property and equipment:
Furniture and fixtures                                                                              172,479
Computers and equipment                                                                             110,047
Computer software                                                                                    99,683
Leasehold improvements                                                                               47,757
                                                                                     --------------------------
                                                                                                 13,942,700
Less: Accumulated depreciation                                                                     (341,297  )
                                                                                     --------------------------
Total property and equipment                                                         $           13,601,403
                                                                                     ==========================
</TABLE>

Depreciation expense totaled $257,804 and $411,667 for the years ended June 30,
2004 and 2003, respectively.

On June 30, 2003, the Company sold a property for cash of $2,607,986 and a note
of $6,800,000 for a sales price totaling $9,460,000 and a net gain of $1,523,249
(net of selling and closing costs of $52,014). The note was paid in full during
August 2003.

On June 18, 2004, the Company sold 50% of a property for a sales price totaling
$12,235,190 and a net gain of $933,904 (net of selling and closing costs of
$103,757).

                                      F-16

<PAGE>

NOTE 10 -- NOTES PAYABLE

Notes payable as of June 30, 2004, consisted of the following:

<TABLE>
<CAPTION>
<S>                                                                                                 <C>
Note payable to a bank, secured by a first trust deed on commercial rental property, bearing                   9,863,058
interest at 6.2% per annum, with monthly principal and interest payments of $72,214, scheduled to
mature in December 2012.  As of June 30, 2004, the net book value of the underlying property
totaled $11,081,009.

Note payable to various individuals and Private Family Trust, unsecured, bearing interest                      9,102,626
between12%-14% per annum, scheduled to mature on various dates between September 2004 - December
2004, due upon demand.

Note payable to a bank, secured by a first trust deed on commercial rental property, bearing                   1,600,000
interest at index plus 1.500 points currently at 5.50% per annum, with monthly interest only
payments $7,333.33, scheduled to mature in January 2005.  As of June 30, 2004, the net book value
of the underlying property totaled $2,431,725.

                                                                                                    ---------------------
                                                                                                     $        20,565,684
                                                                                                    =====================
</TABLE>

Maturities of notes payable are as follows:

             Year ended June 30,
             2005                       $             10,932,750
             2006                                        245,014
             2007                                        260,868
             2008                                        276,118
             2009                                        295,613
             Thereafter                                8,555,321
                                       --------------------------
             Total principal            $             20,565,684
                                       ==========================

Interest expense totaled $2,675,205 and $1,784,562 for the years ended June 30,
2004 and 2003, respectively.

NOTE 11 -- TRUST ACCOUNTS

The Company manages certain trust assets including cash and receivables on
behalf of investors. The cash is held at a financial institution, and the
Company records and reconciles the receivables from borrowers. At June 30, 2004,
the assets held in trust approximated $14,393,330. The related trust liabilities
were $14,393,330 at June 30, 2004. The trust assets and liabilities were not
recorded on the Company's balance sheet at June 30, 2004.

                                      F-17

<PAGE>


NOTE 12 -- LOANS SERVICED FOR OTHERS

The Company services loans for others which are not shown on the balance sheet.
The face amount of loans currently serviced at June 30, 2004, approximated
$97,537,534. The Company receives a servicing fee for the services rendered.

NOTE 13 -- INCOME TAXES

The reconciliation of the statutory federal rate to the Company's effective
income tax rate is as follows:

<TABLE>
<CAPTION>
                                                                        2004                       2003
                                                                ------------------------  ------------------------
<S>                        <C>                                   <C>                       <C>
Statutory tax provision at 34% rate                              $            1,696,375    $           299,056
Non-deductible expenses and
other adjustments                                                              (28,068)                 11,083
                                                                ------------------------  ------------------------
                                                                 $            1,668,307    $           310,139
                                                                ========================   =======================
</TABLE>

Deferred taxes result from temporary differences in the recognition of certain
revenue and expense items for income tax and financial reporting purposes. The
significant components of the Company's deferred taxes as of June 30, 2004 are
as follows:

<TABLE>
<CAPTION>

<S>                                                              <C>
Loan fees eliminated in consolidation recognized for             $                     76,195
tax purposes
                                                                                            -
Timing of subsidiary losses

Excess of depreciation and amortization for tax purposes                              (21,119)
                                                                ----------------------------------
1031 Exchange                                                                        (240,684)
                                                                ==================================
Net deferred asset (tax liability)                               $                   (185,608)
                                                                ==================================
</TABLE>

Deferred tax assets are included in other assets in the accompanying
Consolidated Balance Sheet.

NOTE 14 -- EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share is calculated by dividing net income
(loss) by the weighted average number of common share outstanding during the
period. Diluted earnings per common share is calculated by dividing net income
(loss) by the sum of the weighted average number of common shares outstanding,
plus all additional common shares that would have been outstanding if
potentially dilutive securities or common stock equivalents had been issued.

There were no securities considered to be dilutive in the computation of
earnings (loss) per share.

NOTE 15 -- MINORITY INTEREST

The consolidated financial statements include the accounts of Pacific Hilltop 2,
LLC ("Hilltop"). The Company has a 60% ownership interest in Hilltop. The
minority interest in the consolidated balance sheet consists of the remaining
ownership interests not owned by the Company.

                                      F-18

<PAGE>


NOTE 16 -- EMPLOYEE BENEFIT PLAN

401(K) PLAN

The Company adopted a retirement savings plan for its employees under Section
401(k) of the Internal Revenue Code. The plan allows Company 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. The
Company matches 25% of eligible employees' contributions up to a maximum of 6%
of their individual earnings. The Company contributed approximately $8,863 and
$4,856 to the plan for the years ended June 30, 2004 and 2003, respectively.

NOTE 17 -- STOCKHOLDERS' EQUITY

The Company is authorized to issue 5,000,000 shares of $0.001 par value
preferred stock and 20,000,000 shares of $0.001 par value common stock.

PREFERRED STOCK

The Company 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 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 that are
senior to the rights and preferences of the common shares. Additionally, such
shares could have dividend, redemption or other restrictive provisions.

COMMON STOCK

On May 1, 2003, the Company issued 210,000 shares of its $0.001 par value common
stock for public relation and consulting services valued at $108,500.


In February 2004, the Company entered into an employment agreement with the
President/CEO of the company. As part of the employment agreement, the officer
was issued 1,250,000 shares of common stock which shall be vested at a rate of
250,000 shares per year for the term of the agreement or a total of five (5)
years and subject to risk of forfeiture. In the event the President/CEO
terminates his employment or abandons his duties, he shall be obligated to sell
back to the Company the common stock received with regards to this agreement not
yet vested at a price of $0.10 per share. The shares are valued at $1,561,250,
and $125,000 was immediately booked as a current expense due to the $0.10 sell
back provision, and the remaining balance of $1,413,542 will be expensed monthly
at a rate of $23,958 for the next five (5) years. For the year ended June 30,
2004, the Company has recorded $220,750 in compensation expense related to this
agreement.

                                      F-19

<PAGE>


STOCK OPTIONS

In 2001, the Company's Board of Directors approved the creation of the "OneCap
2000 Stock Option Plan" which reserves 1,250,000 shares of the Company's common
stock for issuance to employees, officers and directors of the Company and
others who are involved in the continuing development and success of the Company
and its subsidiaries. The options under the plan are granted at not less than
100% of the market value of the Company's common stock on the date of grant. All
options under this plan have been forfeited or expired.

In 2004, the Company's Board of Directors approved the creation of the "OneCap
2004 Stock Option Plan" which reserves 5,000,000 shares of the Company's common
stock for issuance to employees, officers and directors of the Company and
others who are involved in the continuing development and success of the Company
and its subsidiaries. The options under the plan are granted at not less than
100% of the market value of the Company's common stock on the date of grant.

As of June 30, 2004, outstanding stock options for shares of common stock on a
one-for- one basis totaled 1,214,500. The stock options will be 100% vested as
follows: 1,100,000 options will be vested in 2005, and 114,500 options will be
vested in 2006.

The following is a summary of activity of outstanding stock options under the
2004 Stock Option Plan:

<TABLE>
<CAPTION>
                                                                                                               Weighted
                                                                                                                Average
                                                                                Number                         Exercise
                                                                               Of Shares                         Price
                                                                        ------------------------       --------------------------
<S>                                                                     <C>                            <C>
Balance, June 30, 2000                                                                     -           $                    -

Options granted                                                                      232,500                             1.00
Options forfeited/expired                                                             (1,000)                            1.00
                                                                        ------------------------       --------------------------

Balance, June 30, 2001                                                               231,500                             1.00

Options granted                                                                      150,000                             1.00
Options forfeited/expired                                                            (38,000)                            1.00
                                                                        ------------------------       --------------------------

Balance, June 30, 2002                                                               343,000                             1.00

Options granted                                                                      249,500                             1.00
Options forfeited/expired                                                            (85,000)                            1.00
                                                                        ------------------------       --------------------------

Balance, June 30, 2003                                                               507,500                             1.00

Options forfeited/expired                                                           (507,500)                            1.00
Options granted                                                                    1,214,500                             1.62
                                                                        ------------------------       --------------------------

Balance, June 30, 2004                                                             1,214,500                             1.62
                                                                        ========================       ==========================

Exercisable, June 30, 2004                                                                 0           $                    0
                                                                        ========================       ==========================
</TABLE>

                                      F-20

<PAGE>

The following is a summary of information about the 2004 Stock Option Plan
options outstanding at June 30, 2004:

<TABLE>
<CAPTION>
                                                                                            Shares Underlying
                   Shares Underlying Options Outstanding                                   Options Exercisable
----------------------------------------------------------------------------    -------------------------------------------
                                                  Weighted
                          Shares                  Average        Weighted               Shares                Weighted
                        Underlying               Remaining        Average             Underlying              Average
     Range of             Options               Contractual      Exercise               Options               Exercise
 Exercise Prices        Outstanding                 Life           Price              Exercisable              Price
------------------  --------------------     ---------------  ----------------     ------------------     -----------------
<S>    <C>             <C>                      <C>               <C>                                              <C>
 $1.50-1.65            1,214,500                2.75 years        $1.62                   0                        $1.62
</TABLE>


Pro forma information regarding net income and net income per share, as
disclosed in Note 1, has been determined as if the Company had accounted for its
Employee stock-based compensation plans and other stock options under the fair
value method of SFAS No. 123. The fair value of each option and warrant grant
are estimated on the date of grant using the Black-Scholes option pricing model
with the following weighted-average assumptions used for grants under the fixed
option plan:


---------------------------------- ------------------ -----------------
                                         2004               2003
---------------------------------- ------------------ -----------------
Average risk-free interest rates          5.05%            5.05%
---------------------------------- ------------------ -----------------
Average expected life (in years)             4                  4
---------------------------------- ------------------ -----------------
Volatility                                 351%             246%
---------------------------------- ------------------ -----------------

The Black-Scholes option valuation model was developed for use in estimating the
fair value of short-term traded options that have no vesting restrictions and
are fully transferable. In addition, option valuation models require the input
of highly subjective assumptions including expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion the existing models do not necessarily provide a reliable single measure
of the fair value of its employee stock options. During 2004 and 2003, there
were no options granted with an exercise price below the fair value of the
underlying stock at the grant date.

The weighted average fair value of options granted with exercise prices at the
current fair value of the underlying stock during 2004 and 2003 was
approximately $0.21 and $0.16 per option, respectively.

TREASURY STOCK

During 2004 and 2003, the Company purchased 0 and 11,443 shares of treasury
stock under its stock repurchase program.

No formal plans exist regarding a stock repurchase plan, and we did not reissue
any treasury stock. The 2003 repurchase of stock was non-recurring. We do not
anticipate future stock repurchase at this time.

                                      F-21

<PAGE>


NOTE 18 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash, accounts receivable, accounts payable, dividends
payable, and notes payable approximate fair value because of the short-term
maturity of these instruments.

The carrying value of mortgage loans and notes receivable approximated the fair
value at June 30, 2003. The fair value was estimated based upon projected cash
flows discounted at the estimated current interest rates at which similar loans
would be made. The estimated fair value of debt was determined based on quoted
market prices for similar debt offered in the market-place and on the discounted
estimated future cash payments to be made for other debt. The discount rates
used approximated current market rates for loans or groups of loans with similar
maturities and credit quality. The estimated future payments included scheduled
principal and interest payments and lenders' participations in operating
results, where applicable.

The carrying  amount and  estimated  fair value of our debt at June 30, 2004 and
2003 are summarized as follows:

<TABLE>
<CAPTION>
                                                                                     2004
                                                           ---------------------------------------------------
                                                                Carrying Amount             Estimated
                                                                                           Fair Value
                                                           --------------------------  -----------------------
<S>                                                         <C>                        <C>
Fixed-rate debt                                             $             18,965,684   $        18,965,684
---------------------------------------------------------- --------------------------  -----------------------
Variable-rate debt                                                         1,600,000             1,600,000
---------------------------------------------------------- --------------------------  -----------------------
                                                            $             20,565,684   $        20,565,684
---------------------------------------------------------- ==========================  =======================
</TABLE>

Fair value estimates are made at a specific point in time, are subjective in
nature and involve uncertainties and matters of significant judgment. Settlement
of our debt obligations at fair value may not be possible and may not be a
prudent management decision.

NOTE 19 -- CONCENTRATIONS

Financial instruments, which potentially subject the Company to credit risk,
include cash in bank, accounts receivable, and loans secured by trust deeds.

The Company maintains its cash in bank deposit accounts, which, at times, may
exceed federally insured limits. The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash.

Concentration of credit risk with respect to accounts receivable is limited
because of the large number of diverse customers. The Company controls credit
risk through real estate securing mortgage loans and monitoring procedures. The
Company believes it is not exposed to any significant credit risk on accounts
receivable.

Substantially all of the Company's operations are derived from the Southwestern
region of the United States. Consequently, the Company's results of operations
and financial condition are affected by general economic trends and the
commercial and residential real estate market in the Southwestern region.

Concentrations of mortgage loans existed at June 30, 2004, in commercial,
construction, and acquisition and development loans. Concentrations of mortgage
loans also existed with one borrower which represents approximately 12% of the
total investments in mortgage loans at June 30, 2004. Concentrations of
guarantees on mortgage loans also existed with one individual, who is a
significant shareholder of the Company. As such, the Company has a significant
product concentration and concentration of credit risk with one borrower and
guarantor that may be adversely affected by periods of economic decline.

                                      F-22

<PAGE>

NOTE 20 -- COMMITMENTS AND CONTINGENCIES

FUNDING COMMITMENTS
The Company had commitments to fund various loans totaling $25,495,656 as of
June 30, 2004.

LESSORS

An operating lease arose from the leasing of the Company's commercial land and
building to a retail customer. The initial lease term is 20 years. The Company
became lessor on December 26, 2002, the date the Company purchased the property.

Future minimum rental payments to be received on non-cancelable operating leases
are contractually due as follows as of June 30, 2004:

             Year ended June 30,
             2005                       $              1,773,200
             2006                                      1,773,200
             2007                                      1,773,200
             2008                                      1,773,200
             2009                                      1,773,200
             Thereafter                               20,627,335
                                       --------------------------
                                        $             29,493,335
                                       ==========================

The significant terms of the lease are as follows: The lease term is 50 years
which represents an initial 20-year non-cancelable term, with six cancellation
options every five year period at the lessee's sole election. The minimum lease
payments are $147,767 per month for the first ten years, $162,543 per month for
the next ten years, $178,798 per month for the third ten years, $196,677 for the
fourth ten years, and $216,345 per month thereafter. There is also a provision
in the lease that could potentially raise the minimum lease payments based on
the higher of 1) the minimum lease payments above or 2) 2.0% of gross store
sales excluding food, beverage, and prescription items, plus 0.5% of gross sales
of food, beverage and prescription items. The minimum lease payments disclosed
are based on the remaining term of the fifty year lease.

The Company sold a 50% tenancy in common interest in this property to a third
party in June 2004. The sales price was $12,235,190 with $2,000,000 cash and
assumption of $10,235,190 of the existing debt.

LITIGATIONS

The Company is subject from time to time to various claims and legal proceedings
covering a wide range of matters that arise in the ordinary course of its
business activities, including product liability claims. Management believes
that any liability that may ultimately result from the resolution of these
matters will not have a material adverse effect on the financial condition or
results of operations of the Company.

LOAN GUARANTEES

On April 1, 2004, the Company entered into an agreement whereby it sold a 50%
interest in a previously wholly owned subsidiary. Per the "Agreement", the buyer
agreed to pay cash in the amount of $2,000,000 and assumed 50% of all
outstanding debt encumbering the real property. Per the note and deed of trust,
the Company acknowledged and agreed that nothing contained in the sale agreement
would release or relieve it from the original obligations and guarantee of the
mortgage loan notwithstanding that the buyer jointly and severally assumed the
note obligations. The Company has determined that in the event of default on the
loan, the Company is sufficiently able to meet the requirements of the
non-recourse debt through the fair market value of the under-lying assets.

                                      F-23

<PAGE>


NOTE 21 - SEGMENT INFORMATION

Revenues (net commission expense), operating income (loss) (excluding
amortization and depreciation), identifiable assets, capital expenditures, and
depreciation and amortization are as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------- -------------------------- -----------------------------
                                                                        2004                         2003
------------------------------------------------------------- -------------------------- -----------------------------
Revenues:
------------------------------------------------------------- -------------------------- -----------------------------
<S>                                                           <C>                        <C>
   Sale of real estate                                        $                    0     $                       0
------------------------------------------------------------- -------------------------- -----------------------------
   Realty division                                                         1,655,878                     1,127,878
------------------------------------------------------------- -------------------------- -----------------------------
   Mortgage division                                                       5,238,305                     1,721,667
------------------------------------------------------------- -------------------------- -----------------------------
   Property division                                                       2,173,127                     2,596,488
------------------------------------------------------------- -------------------------- -----------------------------
                                                              $            9,067,310     $               5,446,033
                                                              ========================== =============================

------------------------------------------------------------- -------------------------- -----------------------------
Operating income (loss):
------------------------------------------------------------- -------------------------- -----------------------------
   Sale of real estate                                        $                    0     $                       0
------------------------------------------------------------- -------------------------- -----------------------------
   Realty division                                                            72,769                        79,184
------------------------------------------------------------- -------------------------- -----------------------------
   Mortgage division                                                       3,986,555                       801,373
------------------------------------------------------------- -------------------------- -----------------------------
   Property division                                                       1,997,450                     1,615,353
------------------------------------------------------------- -------------------------- -----------------------------
   Corporate                                                              (3,189,243)                   (1,799,638)
------------------------------------------------------------- -------------------------- -----------------------------
                                                              $            2,867,531     $                 696,272
                                                              ========================== =============================

------------------------------------------------------------- -------------------------- -----------------------------
Identifiable assets:
------------------------------------------------------------- -------------------------- -----------------------------
   Realty division                                                           261,177                        91,281
------------------------------------------------------------- -------------------------- -----------------------------
   Mortgage division                                                       3,401,187                       905,576
------------------------------------------------------------- -------------------------- -----------------------------
   Property division                                                      15,877,991                    32,793,118
------------------------------------------------------------- -------------------------- -----------------------------
   Development division                                                    2,124,006                     2,108,410
------------------------------------------------------------- -------------------------- -----------------------------
   Corporate                                                               9,623,238                     7,702,781
------------------------------------------------------------- -------------------------- -----------------------------
                                                              $           29,782,559     $              43,601,166
                                                              ========================== =============================

------------------------------------------------------------- -------------------------- -----------------------------
Capital expenditures:
------------------------------------------------------------- -------------------------- -----------------------------
   Corporate                                                  $            8,519,503     $                (305,740)
------------------------------------------------------------- ========================== =============================

------------------------------------------------------------- -------------------------- -----------------------------
Depreciation and amortization:
------------------------------------------------------------- -------------------------- -----------------------------
   Property division                                                         179,153                       358,144
------------------------------------------------------------- -------------------------- -----------------------------
   Corporate                                                                  78,651                        53,523
------------------------------------------------------------- -------------------------- -----------------------------
                                                              $              257,804     $                 411,667
                                                              ========================== =============================
</TABLE>


                                      F-24