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, 2002

          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)

5450 West Sahara Avenue, 2nd 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 $1,655,878 during the year ended June 30, 2002.

The aggregate market value of voting common stock held by non-affiliates of the
issuer was $531,815 on September 26, 2002, based on the average bid and asked
prices of such stock as reported in the OTC Electronic Bulletin Board.

On September 26, 2002, the registrant had 8,770,418 shares of common stock, par
value $.001, issued and outstanding.


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


<PAGE>


                                TABLE OF CONTENTS


PART I
                                                                           Page

Item 1.  Description of Business                                               3

Item 2.  Properties                                                           11

Item 3.  Legal Proceedings                                                    11

Item 4.  Submission of Matters to a Vote of Security Holders                  11

PART II

Item 5.  Market for Registrant's Common Equity and
         Related Stockholder Matters                                          11

Item 6.  Management's Discussion and Analysis or Plan of Operation            12

Item 7.  Financial Statements                                                 14

Item 8.  Changes in and Disagreements With Accountants on
         Accounting and Financial Disclosure                                  14

PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act               14

Item 10. Executive Compensation                                               17

Item 11. Security Ownership of Certain Beneficial Owners and Management       19

Item 12. Certain Relationships and Related Transactions                       19

Item 13. Exhibits and Reports on Form 8-K                                     22

Signatures/Certification                                                      24

Financial Statements and Schedules                                           F-1





<PAGE>



                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

         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.

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. [Note:
Reference to the Company's website is not intended and does not incorporate any
of the information contained on such website and should not be considered a part
of this annual report.]

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)
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:


                                       3
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          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 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 is able to assist its customers in receiving information, service, and
representation of the highest quality available.

The business of OneCap, at least initially, predominantly focuses 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 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 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
           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 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
           an "at 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.

           Residential Brokerage Services

           OneCap 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. Concurrently, the Company may broker residential and
           commercial properties that may be developed by Pacific Properties and
           Development LLC ("PPD") a company owned and operated by Steven D.
           Molasky, the Company's Chairman of the Board. 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


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<PAGE>

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 financing. In addition to the traditional referral
sources, OneCap will also originate loans through its website.

OneCap's commercial loan originations are fairly broad based. The commercial
volume includes referrals from affiliated companies including PPD, as well as
originations through outside builders and developers. OneCap has 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 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.

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 clients' needs is the first step to
providing the best solution for their needs. The company has personnel to
service the individual homebuyer and the large real estate developer. OneCap
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 develops a relationship
with a client by offering a single service and later expands the relationship by
recommending and implementing strategies designed to meet the client's ongoing
diverse real estate needs.

Complementary Services. OneCap's real estate and mortgage services are
interrelated, and as a result, the Company believes that it can increase its
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 time consuming and management intensive. OneCap's
resources of lenders and work force assists the client in obtaining the best fit
for financing its real estate project without wasting time searching and coming
up with the wrong fit.

Relationships with Key Clients and Related Entities. Since the Company has a
current business relationship with a related party, 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.



                                       5
<PAGE>

OneCap has provided mortgage services to homebuyers who purchased homes from
another 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 Pacific Homes 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 stockholder, Steven D. Molasky,
Chairman 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 that is limited by nature.

Experienced Management Team. The members of OneCap's management team have an
approximate, combined eighty (80) 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 the
client's 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:

           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 the skills needed for
successful client relations and customer service. The Company believes its
commitment to service will provide it with a competitive advantage in
establishing and maintaining productive broker and correspondent relationships.
Emphasis will be placed on real estate brokers and loan officers' attempts to
respond 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 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 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.

The Company believes that substantial opportunities exist in its target market,
Nevada, to both attract new clients and increase its 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 web site. 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
real estate owner many other opportunities. 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.



                                       6
<PAGE>

           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) to
ensure 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) to
provide the opportunity to expand underwriting activities beyond the Company's
headquarters while maintaining consistent underwriting standards.

           Bolster Internet Presence

OneCap believes the Internet will allow the Company the opportunity to expand
its 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 electronically submit a
commercial loan application for their financing needs. It is OneCap's intent to
continually strive to provide ongoing upgrades to its web site 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/or acquisition targets to
expand its capability to serve clients. The expected benefits of such alliances
and/or 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 and/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 attract buyers and sellers of real
estate, increase purchases and, in turn, increase 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.


                                       7
<PAGE>

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 and B promulgated,
thereunder. The Truth-in-Lending Act contains disclosure requirements designed
to provide consumers with uniform, understandable information with respect to
the terms and conditions of loans and credit transactions in order to give them
the ability to compare credit terms. The Truth-in-Lending Act also guarantees
consumers a three-day right to cancel certain credit transactions, including any
refinance mortgage or junior mortgage loan on a consumer's primary residence.
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
Z and B promulgated under ECOA restrict creditors from obtaining certain types
of information from loan applicants. It also requires certain disclosures by
lenders regarding consumer rights and requires lenders to advise applicants of
the reasons for any credit denial. In instances where the applicant is denied
credit or the rate or charge for loans increases as a result of information
obtained from a consumer credit agency, another statute, the Fair Credit
Reporting Act of 1970, as amended, requires the lenders to supply the applicant
with a name and address of the reporting agency. The Federal Real Estate
Settlement Procedure Act ("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

At June 30, 2002, the Company had 12 full-time employees and had 58 independent
real estate agents affiliated with the Company. Of the Company's full-time
employees, four were engaged in real estate brokerage and realty administration,
five were engaged in lending and finance, and three 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 has allocated up to 1,250,000 shares of
common stock that may be granted under the stock option plan. The purchase price
for the shares covered under each option will be no less than 100% of the fair
market price per share of our stock on the date the option is granted. However,
if the option is granted to a person owning more than 10% of our voting stock,
the option can be converted at no less than 110% of the fair market price per
share on the date the option is granted. A total of 343,000 options have been
granted as of June 30, 2002.

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


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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;

          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.
Declines in the real estate market 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


                                       9
<PAGE>

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 not entered into long-term employment agreements
with any of its key personnel 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
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 and Directors of OneCap May Have Substantial Conflict of Interest

Steven Molasky, the Chairman of the Board of Directors of OneCap and 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 substantial 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 5450 West Sahara Avenue, 2nd Floor, Las
Vegas, NV 89146. On July 9, 2000, we entered into a lease agreement for
approximately 13,173 square feet of office space, ending January 31, 2003 with
an option to renew for 20 months. The lease payments will total $19,800 per
month with 4% annual increases each year on October 1. The Company has subleased
approximately 50% of its facilities to an affiliated company, Pacific Properties
and Development LLC, under the same terms and conditions as the Company's lease
terms. The Company believes that its facilities will be adequate for its
operations through December 31, 2002, and is currently identifying additional
office space to satisfy the Company's growth plans.



                                       10
<PAGE>

During the year, Pacific Hilltop 2, LLC, owned 60% by OneCap Properties,
purchased 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. The property has a
loan in the amount of $1,323,610 payable to the other 40% member in the LLC that
was due on July 4, 2002. The note has a provision for extension in accordance
with the approved development plan of the property. A development plan has been
created and the Company and its partner are in current discussions for the
approval of that development plan and the extension of the note.

During June 2002, the Company exchanged its 25% interest in MF Devco-Carlsbad,
LLC for a 99% interest in Pacific Stonegate Nevada, LLC ("Pacific Stonegate").
Pacific Stonegate owns and operates a well established 172 unit apartment
complex in Las Vegas, Nevada. The exchange was effectuated in a non-monetary
conversion with an affiliated company, PPD. The Company assumed approximately
$6,235,000 in debt associated with the property, and is in the process of
securing financing to refinance the existing loans. The current net operating
income of the property is currently sufficient to service the debt assumed.

ITEM 3. LEGAL PROCEEDINGS

No current or pending litigation, and no claims or counter claims involving the
Company as a plaintiff or a defendant exist.

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

On December 20, 2001, the Company held its Annual Meeting of Shareholders in Las
Vegas, Nevada. The record date for the meeting was October 23, 2001, on which
date there were 8,811,618 shares of the Company's common stock outstanding.

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>
Steven D. Molasky          8,250,751              0                1,000
Vincent W. Hesser          8,250,751              0                1,000
</TABLE>

The second matter voted upon at the meeting was the approval of Bradshaw Smith &
Co, LLP, as the independent public accountants for the Company. The results of
the voting were 8,251,751 shares in favor, 0 shares against, and 284,210 shares
withheld or abstaining.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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. The following table sets forth the monthly high and low prices for the
Company's Common Stock on the OTCBB(R) for the current fiscal year by quarter to
June 30, 2002:



<TABLE>
<CAPTION>
       Date                              HIGH                  LOW
                                  -------------------- ---------------------
<S>                                      <C>                   <C>
Jul 1-Sep 30, 2001                       0.85                  0.35
Oct 1-Dec 31, 2001                       0.75                  0.22
Jan 1-Mar 31, 2002                       0.53                  0.20
Apr 1-Jun 30, 2002                       1.08                  0.50
</TABLE>



                                       11
<PAGE>

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

HOLDERS

On June 30, 2002, there were approximately 154 stockholders of record of the
Company's Common Stock.

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.

OVERVIEW

The Company's single-source business model represents an attractive way for both
residential and commercial customers to maneuver through the complex real estate
and financing process in a time-efficient, cost-effective manner.


The Company plans a geographic expansion in the Southwest United States, within
initial focus 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. 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. OneCap has formed strategic
alliances with companies like PPD and Copyright Media Corporation, affiliated
entities of the Company, as well as Stanpark Homes of Nevada. These
relationships 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.



                                       12
<PAGE>

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. Newly remodeled, 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.

RESULTS OF OPERATIONS

Comparison of Fiscal Years Ended June 30, 2002 and 2001

Revenues
The Company's revenues totaled $2,299,458 for the current fiscal year ended June
30, 2002, a 45% decrease compared to $4,172,954 for the fiscal year ended June
30, 2001. Revenues for the current fiscal year were $900,144, from 193 realty
transactions, $283,235 from 81 mortgage transactions, $198,252 from 3 related
party realty transactions, $803,074 from 15 related party mortgage transactions,
$99,105 from rental revenues, and $15,648 in mortgage service fee revenue.
During the prior fiscal year ending June 30, 2001, revenues were $402,866 from
61 realty transactions, $116,396 from 39 mortgage transactions, $1,574,216 from
17 realty transactions that were part of a one-time property acquisition
project, $1,201,230 from 17 related party realty transactions, and $878,246 from
8 related party mortgage transactions. Realty revenues increased $497,278, or
123% exclusive of the one-time acquisition project in fiscal year 2001; mortgage
revenues increased $166,838, or 143%; related party realty revenues decreased
$1,002,978, or 83%; and related party mortgage revenues decreased $75,172, or
9%.

Net revenues after commission expense were $1,655,878 and $2,823,741 for the
years ended 2002 and 2001, respectively, a 41% decrease. Mortgage revenue
totaled $1,101,957 for 2002, an 11% increase compared to $994,642 in 2001.
Realty revenues after commission expenses totaled $454,816 for 2002, a 75%
decrease compared to $1,829,099 in 2001. Although core realty operations have
increased this year, the decrease in net revenue is attributable to fewer
related party realty transactions during the current fiscal year and the
comparison to the one-time property acquisition project in fiscal year 2001. A
substantial portion of revenues resulted from related party transactions from
affiliated real estate development companies. Those related party gross revenues
totaled $1,001,326 and $2,079,476 in the fiscal years 2002 and 2001,
respectively, before commission expense.

Expenses
General and Administrative expenses totaled $1,718,453 in the current fiscal
year, a 31% increase compared to $1,307,309 last year. The increase resulted
from additional expansion to larger office space, increased expenses due to
higher volume, staffing, and implementation of advertising and promotions
programs.

Net Income
Net Loss before tax totaled $121,167 for the year ended June 30, 2002, compared
to a net income of $1,521,583 in the prior fiscal year. Net Loss after tax was
$86,867, or $0.001 per share for 2002, compared to net income of $1,046,492, or
$0.119 per share in the prior fiscal year. The weighted average number of shares
outstanding were 8,804,806 and 8,811,618 in the years ended June 30, 2002 and
2001 respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically relied upon the cash flow from operations to
provide for its capital requirements. At the end of June 30, 2002, the Company
had cash on hand of $445,016, compared to $1,282,491 the prior June 30, 2001.
Total working capital deficit was $6,986,490 at June 30, 2002, compared working
capital of $870,009 in the prior fiscal year ended June 30, 2001. This deficit
is created by the $7,607,799 of current loans that are scheduled to mature
during the next twelve months and are secured by long term assets. The Company
plans to either refinance these loans during the next fiscal year, or sell the


                                       13
<PAGE>

assets that secure these loans. At June 30, 2002, the cash flows used in
operating activities of the Company equaled $418,199 or 25% of the Company's
total revenue after commission expense, compared to providing $1,427,740 or 51%
during fiscal year 2001. Cash used in investing activities approximated 47% of
the Company's revenues after commission expense during 2002, compared to 27% in
2001. The Company believes that cash generated from operations during the next
fiscal year, collection of account and notes receivable, or sale of long term
assets will be sufficient to provide for its capital operating requirements for
at least the next 12 months.

QUARTERLY FLUCTUATIONS

As of June 30, 2002, the Company has engaged in a substantial number of third
party transactions and related party transactions resulting in significant
revenue for the latest fiscal year. Although the Company's plan is to increase
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, related party 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 6A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         None.

ITEM 7. FINANCIAL STATEMENTS


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

         None.

                                    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>
Steven D. Molasky                        50           Chairman of the Board of Directors
Vincent W. Hesser                        36           President, Chief Executive Officer and Director
Heidi Williams                           35           Assistant Vice President - Mortgage Operations
Eric Bordenave                           40           Vice President - Broker
Tammy Hardcastle                         44           Secretary and Treasurer
------------------------------- --------------------- -----------------------------------------------
</TABLE>

Steven D. Molasky, Chairman of the Board of Directors - Mr. Molasky has
extensive experience in the real estate development business dating back to the
late 1960's. Through his various companies, including Pacific Homes and Pacific
Properties, Mr. Molasky has developed (i) homes and condominiums, (ii) apartment
complexes, and (iii) distribution and industrial product, master-planned


                                       14
<PAGE>

communities, retail shopping centers and high rise office buildings.

Mr. Molasky specializes in real estate financing, having nurtured and developed
strong, long-term relationships within the financing industry. Entities with
whom he has worked or developed relationships include Prudential Real Estate,
Long Term Credit Bank of Japan, Northwestern Mutual Life Insurance Company,
Teachers Insurance and Annuity Association, Bank One, Nomura Asset Capital
Corporation, and Capital Company of America. Also included are liaisons with
local and regional financial institutions.

Mr. Molasky has served as a founding member and past chairman of the Nevada
Institute for Contemporary Art, was appointed by the Clark County Commission as
a director and board member of the McCarran Arts Advisory Council, and was
appointed by the Nevada Legislature as a board member of the Nevada Nuclear
Projects Commission. Mr. Molasky also serves as a trustee/director of the
University of Nevada, Las Vegas Foundation, and is a member of the Young
President's Organization.

Vincent W. Hesser, President, Chief 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.


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.

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


                                       15
<PAGE>

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  has also been  involved in the document
preparation for the SEC filings of the Company,  including  preparing  quarterly
and annual reports 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


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.

To the Company's knowledge, based solely on the Company's review of the copies
of such reports received by the Company and on written representations by
certain reporting persons that no reports on Form 5 were required, the Company
believes that during the fiscal year ended June 30, 2002, all Section 16(a)
filing requirements applicable to its officers, directors and 10% stockholders
were complied with in a timely manner.

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, 2002.

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 two fiscal years (the
"Named Executive Officers"):


                                       16
<PAGE>


<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>
Steven D.        Chairman of the          2001            0                0              0              0                0
Molasky          Board of Directors

                                          2002            0                0              0              0                0

Vincent W.       President, Chief         2001       56,250 (1)            0              0              0                0
Hesser           Executive Officer
                 and Director

                                          2002      200,000                0              0              0                0

Heidi Williams   Vice President -         2001       52,500            6,600              0              0                0
                 Mortgage Operations

                                          2002       55,000            3,300              0              0                0

Eric Bordenave   Vice President -         2001       90,000           10,000              0              0                0
                 Broker

                                          2002       90,000           15,445              0              0                0

Tammy            Secretary and            2001        6,000 (1)            0              0              0                0
Hardcastle       Treasurer

                                          2002       24,000                0              0              0                0
---------------- ---------------------- --------- ----------------- ----------------- ------------ -------------- -----------------
</TABLE>

(1) Vincent W. Hesser had current total annual salary compensation of $175,000
from OneCap as President, CEO, and Director beginning April 1, 2001, and was
paid a total of $12,500 during the period July 1, 2000 to March 31, 2001. Ms.
Tammy Hardcastle has current total annual salary compensation of $24,000 from
OneCap as Secretary and Treasurer beginning April 1, 2001

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.



                                       17
<PAGE>

The following Option/SAR Grants Table sets forth the individual grants of stock
options made in fiscal 2002 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 2002             ($ per share)
--------------------------- --------------------------- ------------------------------ ---------------------- ---------------------
<S>                               <C>                                 <C>                    <C>                  <C>
Steven Molasky                          0                               -                       -                      -

Vincent Hesser                    150,000                             100.0%                 $1.00                01/29/07

Heidi Williams                          0                               -                       -                      -

Eric Bordenave                          0                               -                       -                      -

Tammy Hardcastle                        0                               -                       -                      -
--------------------------- --------------------------- ------------------------------ ---------------------- ---------------------
</TABLE>


Each of these options vest in full and are exercisable on January 2, 2003, the
second anniversary of the granting date. None of the options are exercisable as
of the Company's fiscal year June 30, 2002.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of June 30, 2002, 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. Currently, there
are 8,770,418 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.

                         Common Stock Beneficially Owned


<TABLE>
<CAPTION>
          Name of Beneficial Owner                         Number of Shares                             % of Class
--------------------------------------------- ------------------------------------------- ----------------------------------------

<S>                                                           <C>                                        <C>
Steven D. Molasky                                             5,000,000                                   57.01%


3111 S. Maryland Parkway


Las Vegas, NV 89109

Vincent W. Hesser                                             1,937,500                                   22.09%


5450 W. Sahara Ave, 2nd Floor


Las Vegas, NV 89146

Eric Bordenave                                                   56,200                                    0.64%


5450 W. Sahara Ave, 2nd Floor


Las Vegas, NV 89146

Heidi Williams                                                    4,000                                    0.05%


5450 W. Sahara Ave, 2nd Floor


Las Vegas, NV 89146

--------------------------------------------- ------------------------------------------- ----------------------------------------

All Officers, Directors and Key Employees                     6,997,700                                   79.79%
as a Group
(6 Persons)

Total Issued and Outstanding                                  8,770,418                                  100.00%
</TABLE>

                                       18
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


In consideration for the Company's initial issuance of 100 shares of Common
Stock, Mr. Steven Molasky contributed net assets to the Company with an
aggregate value of $19,600, consisting of $15,500 in furniture and equipment,
$3,200 in accounts receivable, $200 in petty cash, and $700 in inter-company
receivables.

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:

          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.



                                       19
<PAGE>

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.

Insurance Coverage by a Related Party

OneCap currently has general liability insurance coverage through a related
party: OneCap is a named insured under PPD policy. The liability limits are up
to $1 million per occurrence.

Related Party Transactions

The following tables outline the related party transactions in which the Company
has engaged during the Company's current fiscal year ending June 30, 2002:

<TABLE>
<CAPTION>
Quarter Ended 9/30/01
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
 Payment Amount   Transaction      Average     Transaction Type                Details                   Entity        Transaction
                     Volume       Revenue %                                                                               Dates
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
<C>              <C>             <C>          <C>               <C>                                  <C>            <C>
$         2,490  $       83,000        3.00%    Real Estate     OneCap represented the seller in a   Pacific Homes         9/01
                                                 Commission     home sale transaction

$       166,712  $   33,682,218        0.50%  Mortgage Broker   OneCap procured a construction           EDH              8/01
                                                    Fee         loan for a related entity            Apartments LLC
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
                                       0.50%                    Total Related Party Revenues

$        30,825      N/A               N/A      Sublease by     OneCap subleases some of its           Pacific         7/01-9/01
                                                 OneCap to      existing space to a related          Properties LLC
                                                  Pacific       company at the same lease terms
                                               Properties LLC   provided to OneCap
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
</TABLE>


                                       20
<PAGE>

<TABLE>
<CAPTION>
Quarter Ended 12/31/01
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
 Payment Amount   Transaction      Average     Transaction Type                Details                   Entity        Transaction
                     Volume       Revenue %                                                                               Dates
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
<C>              <C>             <C>          <C>               <C>                                  <C>            <C>
$       276,260  $   27,626,000        1.00%  Mortgage Broker   OneCap procured a construction loan      Chateau           10/01
                                                    Fee         for a related entity                  Alexander LLC

$         45,000      6,080,000        0.74%  Mortgage Broker   OneCap procured a construction loan      7 Hills           10/01
                                                    Fee         for a related entity                     Business
                                                                                                        Center LLC

$         12,200        600,000        2.03%  Mortgage Broker   OneCap procured a land loan for a       Lake Mead          12/01
                                                    Fee         related entity                         Horizon LLC

$         85,550 $       4,277,500     2.00%    Real Estate     OneCap represented the buyer in the      Chateau           10/01
                                                Commissions     purchase of a land parcel             Alexander LLC

$         85,378 $       1,707,552     5.00%    Real Estate     OneCap represented the buyer in the   Pacific              12/01
                                                Commissions     purchase of a land parcel            Hilltop 2 LLC
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
                                       1.25%                    Total Related Party Revenues


$         32,010        N/a             N/a     Sublease by     OneCap subleases some of its             Pacific        10/01-12/01
                                                   OneCap       existing space to a related company   Properties LLC
                                                                at the same lease terms provided to
                                                                OneCap
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
</TABLE>



                                       21
<PAGE>


<TABLE>
<CAPTION>
Quarter Ended 3/31/02
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
 Payment Amount   Transaction      Average     Transaction Type                Details                   Entity        Transaction
                     Volume       Revenue %                                                                               Dates
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
<C>              <C>             <C>          <C>               <C>                                  <C>            <C>
$       17,500   $   3,500,000         0.50%  Mortgage Broker   OneCap procured a land loan for a          MF             01/02
                                                    Fee         related entity                       Devco-Carlsbad
                                                                                                           LLC

$       59,700       2,975,000         2.01%  Mortgage Broker   OneCap procured a land loan for a        Lake Mead        01/02
                                                    Fee         related entity                          Horizon LLC

$       25,000       1,240,000         2.02%  Mortgage Broker   OneCap procured a land loan for a        Lake Mead        02/02
                                                    Fee         related entity                          Horizon LLC

$       25,000       1,240,000         2.02%  Mortgage Broker   OneCap procured a land loan for a        Lake Mead        02/02
                                                    Fee         related entity                          Horizon LLC

$       16,700         825,000         2.02%  Mortgage Broker   OneCap procured a land loan for a        Lake Mead        02/02
                                                    Fee         related entity                          Horizon LLC

$       45,200       1,500,000         3.01%  Mortgage Broker   OneCap procured a land loan for a        Lake Mead        02/02
                                                    Fee         related entity                          Horizon LLC

$       24,835         993,383         2.50%    Real Estate     OneCap represented the seller in a       Lake Mead        03/02
                                                 Commission     land sale                               Horizon LLC

$       23,200       1,150,000         2.02%  Mortgage Broker   OneCap procured a land loan for a        Lake Mead        03/02
                                                    Fee         related entity                          Horizon LLC
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
                                       1.77%                    Total Related Party Revenues

$       32,010        n/a             n/a       Sublease by     OneCap subleases a portion of its        PPD LLC       01/02-03/02
                                                   OneCap       office space to a related company
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
</TABLE>


                                       22
<PAGE>


<TABLE>
<CAPTION>
Quarter ended 6/30/02
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
 Payment Amount   Transaction      Average     Transaction Type                Details                   Entity        Transaction
                     Volume       Revenue %                                                                               Dates
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
<C>              <C>             <C>          <C>               <C>                                  <C>            <C>
$       23,400       1,160,000        2.02%   Mortgage Broker   OneCap procured a land loan for a      Lake Mead          04/02
                                                    Fee         related entity                        Horizon LLC

$       51,880       2,584,000        2.01%   Mortgage Broker   OneCap procured a land loan for a      Lake Mead          04/02
                                                    Fee         related entity                        Horizon LLC

$       55,000       2,740,000        2.01%   Mortgage Broker   OneCap procured a land loan for a      Lake Mead          05/02
                                                    Fee         related entity                        Horizon LLC

$       45,700       2,275,000        2.01%   Mortgage Broker   OneCap procured a land loan for a      Chateau            06/02
                                                    Fee         related entity                       Summerlin LLC
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
                                      2.01%                     Total Related Party Revenues

$       32,010       n/a             n/a         Sublease by     OneCap subleases a portion of its      PPD LLC        04/01-06/01
                                                   OneCap        office space to a related company
---------------- --------------- ------------ ----------------- ------------------------------------ -------------- ---------------
</TABLE>

The related party revenue of $85,378 in 12/01 from Pacific Hilltop 2, LLC (a
consolidated affiliate) is presented as a reduction of property basis as opposed
to revenue in the consolidating financial statements.


                                       23
<PAGE>


ITEM 13. EXHIBITS AND REPORTS

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

Item 14.  CONTROLS AND PROCEDURES

     Item 14 has been omitted pursuant to the transition  provisions of Exchange
Act Release No. 34-46427.


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                            **
---------------- -------------------------------------------------------------------------------------- ---------------------
99.1             Certification Pursuant to 18 U.S.C. Section 1350                                       ***
---------------- -------------------------------------------------------------------------------------- ---------------------
</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.

***  Filed herewith.


                                       24
<PAGE>


                                 CERTIFICATIONS

I, Vince Hesser, certify that:

1.         I have reviewed this annual report on Form 10-KSB of OneCap;

2.                   Based on my knowledge, this annual report does not contain
                     any untrue statement of a material fact or omit to state a
                     material fact necessary to make the statements made, in
                     light of the circumstances under which such statements were
                     made, not misleading with respect to the period covered by
                     this annual report;

3.                   Based on my knowledge, the financial statements, and other
                     financial information included in this annual report,
                     fairly present in all material respects the financial
                     condition, results of operations and cash flows of the
                     registrant as of, and for, the periods presented in this
                     annual report.

[Items 4, 5 and 6 omitted  pursuant to the transition  provisions of Release No.
34-46427.]

Date: 9/30/02
                                   /s/ Vince Hesser
                                  -------------------------------------------
                                  Vince Hesser
                                     CEO/COO


                                       25
<PAGE>

                                     OneCap

              REPORT ON AUDITS OF CONSOLIDATED FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001


<PAGE>



                                     OneCap

                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001





                                    CONTENTS

                                                                           PAGE

Independent auditors' report                                                 1

Financial Statements:
           Consolidated balance sheets                                       2
           Consolidated statements of operations                             3
           Consolidated statements of changes in stockholders' equity        4
           Consolidated statements of cash flows                             6
Notes to consolidated financial statements                                   7



<PAGE>



                          INDEPENDENT AUDITORS' REPORT


Board of Directors
OneCap
Las Vegas, Nevada


           We have audited the accompanying consolidated balance sheets of
OneCap and Subsidiaries as of June 30, 2002 and 2001, and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the years 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 audits.

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

           In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of OneCap
and Subsidiaries as of June 30, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.


BRADSHAW, SMITH & CO., LLP


/s/ Bradshaw Smith & Co.


August 21, 2002
Las Vegas, Nevada


<PAGE>


OneCap
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2002 AND 2001


<TABLE>
<CAPTION>
                                                                                 As of           As of
                                                                             June 30, 2002       June 30, 2001
                                                                         ----------------------  -----------------
ASSETS
Current assets:

<S>                                                                      <C>                     <C>
Cash                                                                     $             445,016   $      1,282,491
                                                                         ----------------------  -----------------
Accounts receivable (net of allowance for doubtful accounts of $0)                      75,885              8,338

         Notes and loans receivable, current portion (Note 3)                            8,385                 --

Notes and loans receivable, related parties, current portion (Note 2)                  269,056             31,549

Income tax receivable (Note 9)                                                         130,500                 --

Prepaid expense                                                                         18,782                707
                                                                         ----------------------  -----------------
Total current assets                                                                   947,624          1,323,085

Notes and loans receivable (Note 3)                                                    170,000                 --

Notes receivable, related parties, net current portion (Note 2)                        265,917            540,003

Land held for development (Notes 4 and 7)                                            1,658,757                 --

Property and equipment (Notes 5 and 7)                                               6,712,150            183,800

Other assets (net accumulated amortization of $60,588 and $0)                           61,039             19,759
                                                                         ----------------------  -----------------
                                                                         $           9,815,487   $      2,066,647
                                                                         ======================  =================
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and other liabilities (Note 6)                          $             326,315   $         41,076

Income tax payable (Note 9)                                                                 --            362,929

Notes payable, current portion (Note 7)                                              7,607,799             49,071
                                                                         ----------------------  -----------------
Total current liabilities                                                            7,934,114            453,076

Notes payable, net current portion (Note 7)                                              9,497             63,424

Deferred income tax payable (Note 9)                                                     9,700             12,400
                                                                         ----------------------  -----------------
Total liabilities                                                                    7,953,311            528,900
                                                                         ----------------------  -----------------
Commitments and contingencies (Note 10)                                                     --                 --

Minority interest (Note 11)                                                            449,751                 --
                                                                         ----------------------  -----------------
Stockholders' equity (Note 12):                                                                                --

Preferred stock, $.001 par value; 5,000,000 shares authorized,                              --                 --
   No shares issued and outstanding

Common stock, $.001 par value; 20,000,000 shares authorized,                             8,771              8,812
   8,770,418 and 8,811,618 shares issued and outstanding

Additional paid-in capital                                                             596,518            596,518

Retained earnings                                                                      845,550            932,417
                                                                         ----------------------  -----------------
                                                                                     1,450,839          1,537,747

                    Less treasury stock - 41,200 shares at cost                        (38,414)                --
                                                                         ----------------------  -----------------
                                                                                     1,412,425          1,537,747
                                                                         ----------------------  -----------------


                                                                         $           9,815,487  $       2,066,647
                                                                         ======================  =================
</TABLE>



             The Notes to Consolidated Financial Statements are an integral part
of these statements.

                                        2

<PAGE>



OneCap
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2002 AND 2001



<TABLE>
<CAPTION>
                                                                           June 30, 2002          June 30, 2001
                                                                         ----------------------  -------------------
Revenues:

<S>                                                                      <C>                     <C>
Loan fees and commission revenue                                         $          1,183,379    $        2,093,478

Loan fees and commission revenue, related parties (Note 2)                          1,001,326             2,079,476

Service fee revenue (Note 2)                                                           15,648                    --

Rental revenues                                                                        99,105                    --

Less commission expense (Note 2)                                                     (643,580)           (1,349,213)
                                                                         ----------------------  -------------------
                                                                                    1,655,878             2,823,741
                                                                         ----------------------  -------------------
Expenses:

         Rental expenses                                                               56,326                    --

General and administrative expenses (Note 2)                                        1,718,453             1,307,309

Depreciation and amortization expense                                                  60,280                25,899
                                                                         ----------------------  -------------------
                                                                                    1,835,059             1,333,208
                                                                         ----------------------  -------------------

Income (loss) from operations                                                        (179,181)            1,490,533

Other income (expense):

Interest and other income (Note 2)                                                    113,546                41,465

Interest expense (Note 8)                                                             (55,781)              (10,415)
                                                                         ----------------------  -------------------
Net income (loss) before income taxes and minority interest                          (121,416)            1,521,583

Minority interest (Note 11)                                                               249                    --
                                                                         ----------------------  -------------------
Net income (loss) before income taxes                                                (121,167)            1,521,583

Income tax expense (benefit):

         Current federal                                                              (31,600)              462,691

Deferred federal                                                                       (2,700)               12,400
                                                                         ----------------------  -------------------
                                                                                      (34,300)              475,091
                                                                         ----------------------  -------------------
Net income (loss)                                                        $            (86,867)    $       1,046,492
                                                                         ======================  ===================
                   Earnings (loss) per common share                      $              (0.01)    $           0.119
                                                                         ======================  ===================
         Weighted average number of common shares outstanding                       8,804,806             8,811,618
                                                                         ======================  ===================
</TABLE>


             The Notes to Consolidated Financial Statements are an integral part
of these statements.

                                        3

<PAGE>



OneCap
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 2002 AND 2001





<TABLE>
<CAPTION>
                                   Common Stock                Additional         Retained         Treasury          Stock-
                                                                paid-in           earnings           Stock          holders'
                                                                capital         (accumulated                         equity
                               Shares           Amount                            deficit)
-----------------------------  -----------  ---------------  --------------   -------------------  ------------  ---------------
<S>                            <C>          <C>              <C>              <C>                  <C>           <C>
Balance, June 30, 2000          8,811,618   $       8,812    $     530,518    $       (114,075)    $       --    $      425,255
-----------------------------  -----------  ---------------  --------------   -------------------  ------------  ---------------
 Services contributed by               --               --           66,000                  --             --            66,000
      stockholders
-----------------------------  -----------  ---------------  --------------   -------------------  ------------  ---------------
Net income for the year                --               --               --           1,046,492             --         1,046,492
ended June 30, 2001
-----------------------------  -----------  ---------------  --------------   -------------------  ------------  ---------------
Balance, June 30, 2001          8,811,618            8,812          596,518             932,417             --         1,537,747
-----------------------------  -----------  ---------------  --------------   -------------------  ------------  ---------------
Purchase of treasury             (41,200)             (41)               --                  --       (38,414)          (38,455)
stock
-----------------------------  -----------  ---------------  --------------   -------------------  ------------  ---------------
Net loss for the year                  --               --               --            (86,867)             --          (86,867)
ended June 30, 2002
-----------------------------  -----------  ---------------  --------------   -------------------  ------------  ---------------
Balance, June 30, 2002          8,770,418   $       8,771    $     596,518    $        845,550        (38,414)   $    1,412,425
-----------------------------  -----------  ---------------  --------------   -------------------  ------------  ---------------
</TABLE>





             The Notes to Consolidated Financial Statements are an integral part
of these statements.

                                        4

<PAGE>



OneCap
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2002 AND 2001





<TABLE>
<CAPTION>
                                                                           June 30, 2002          June 30, 2001
                                                                      ----------------------- ---------------------
Cash flows from operating activities:

<S>                                                                   <C>                     <C>
Net income (loss)                                                     $              (86,867) $          1,046,492
                                                                      ----------------------- ---------------------
     Adjustments to reconcile net income (loss) to net cash (used in)
               provided by operating activities:

Changes to net income (loss) not requiring cash outlays:

Services contributed by stockholders                                                      --                66,000

Depreciation and amortization                                                         60,280                25,899

Changes in:

Accounts receivable                                                                  (45,378)               (7,100)

Other assets                                                                          (1,792)              (20,466)

Prepaid expenses                                                                       9,919                    --

Accounts payable and other liabilities                                                98,822               (60,294)

Deferred tax liability                                                                (2,700)               12,400

Accrued interest payable                                                              42,946                    --

Income tax receivable                                                               (130,500)                1,880

Income tax payable                                                                  (362,929)              362,929
                                                                      ----------------------- ---------------------
Net cash (used in) provided by operating activities                                 (418,199)            1,427,740
                                                                      ----------------------- ---------------------
Cash flows from investing activities:

Additions to property and equipment                                                  (32,109)             (178,371)

Increase in land held for investment                                                (378,093)                   --

Investments in limited liability companies                                          (225,000)                   --

Increase in notes and loans receivable                                              (178,385)                   --

Increase in notes and loans receivable, related parties                               36,579              (571,552)
                                                                      ----------------------- ---------------------
Net cash used by investing activities                                               (777,008)             (749,923)
                                                                      ----------------------- ---------------------
Cash flows from financing activities:

Purchase of treasury stock                                                           (38,455)                   --

Increase in minority interest                                                        449,751                    --

Proceeds from notes payable                                                                --              150,000

Payments on notes payable                                                            (53,564)              (37,505)
                                                                      ----------------------- ---------------------
Net cash provided by financing activities                                            357,732               112,495
                                                                      ----------------------- ---------------------
Net (decrease) increase in cash                                                     (837,475)              790,312

Cash at beginning of period                                                         1,282,491              492,179
                                                                      ----------------------- ---------------------
Cash at end of period                                                 $              445,016  $          1,282,491
                                                                      ======================= =====================
          Supplemental disclosure of cash flow information:

     Cash paid for interest expense (net of amounts capitalized)      $               55,781  $             10,415
                                                                      ======================= =====================
                      Cash paid for income taxes                      $              461,829  $             98,527
                                                                      ======================= =====================
                 Services contributed by stockholders                 $                   --  $             66,000
                                                                      ======================= =====================
</TABLE>


             The Notes to Consolidated Financial Statements are an integral part
of these statements.

                                        5

<PAGE>



OneCap
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2002 AND 2001 (Continued)


         Schedule of non-cash investing and financing activities

         In June 2002, the Company exchanged its 25% interest in MF
Devco-Carlsbad, LLC, for a 99% interest in Pacific Stonegate Nevada, LLC, as
follows:


<TABLE>
<CAPTION>
<S>                                                                                   <C>
                  Rental property                                                     $     6,552,482

                  Accounts receivable                                                           22,169

                  Other assets                                                                  42,820

                  Prepaid expenses                                                              28,701

                  Notes payable                                                            (6,234,755)

                  Accounts payable and accrued liabilities                                   (186,417)

                  Investment in limited liability company                                    (225,000)
                                                                                      ----------------
                                                                                      $            --
                                                                                      ================
</TABLE>

         During the year ended June 30, 2002, the Company financed the purchase
of a parcel of land as follows:



                  Land held for development        $     1,280,664

                  Note payable                          (1,280,664)
                                                   ----------------
                                                   $            --
                                                   ================


             The Notes to Consolidated Financial Statements are an integral part
of these statements.

                                        6

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.       Summary of significant accounting policies:

         Organization and nature of business:

         OneCap (the "Company") was incorporated in the State of Nevada on June
7, 1999 to serve as a loan and real estate broker for residential and commercial
loan and real estate transactions and real estate investment. A substantial
amount of the Company's revenues are derived from doing business with related
entities. The Company is authorized to issue 20,000,000 shares of common stock
with a par value of $.001 and 5,000,000 shares of preferred stock with a par
value of $.001.

         In June, 1999, the Company issued 100 shares of common stock, no par
value, in exchange for cash and other assets totaling $19,600. On November 1,
1999, the Articles of Incorporation were amended to increase the number of
authorized shares of Common Stock to 20,000,000 with a par value of $.001 and to
authorize 5,000,000 shares of Preferred Stock with a par value of $.001. On
November 2, 1999, the 100 shares of Common Stock outstanding with no par value
were exchanged for 100 shares of Common Stock with a par value of $.001 and an
additional 6,937,400 shares of Common Stock with a par value of $.001 were
issued for $6,900.

         In May, 2000, the Company issued an additional 1,659,200 shares of
common stock through an offering in the State of Nevada. The stock was offered
at $.25 per share and the number of shares sold in the offering was 2,000,000
shares. The net proceeds to the Company, after deducting offering costs of
$10,000 was $404,800. In connection with the offering, the Company issued
214,918 restricted shares of common stock to Campbell Mello Associates ("CMA")
for services rendered. The offering was made pursuant to Section 4(2) of the
Securities Act of 1933.

         During 2002, the Company purchased 41,200 shares of treasury stock
under its stock repurchase program. There have been no other issuances of common
or preferred stock.

     The Company uses the accrual method of accounting.  The Company has adopted
June 30 as its fiscal year end.

         Principles of consolidation:

         The accompanying consolidated financial statements include the accounts
of OneCap and its consolidated interest in its subsidiaries. A description of
those subsidiaries follows. The Company's wholly owned 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; and OneCap Mortgage, a
mortgage company incorporated in the State of Nevada in December, 2001. The
Company has a 99% interest in Pacific Stonegate Nevada, LLC ("Stonegate"), a
Nevada limited liability company organized in the State of Nevada, in February,
2001. Stonegate owns and leases an apartment complex in Las Vegas, Nevada. The
Company has a 60% interest in Pacific Hilltop 2, LLC, a Nevada limited liability
company, organized in the State of Nevada in January, 2002 to develop and lease
commercial rental property in Henderson, Nevada. The Company currently owns the
only unit issued by OneCap Real Estate Fund I, LLC, a limited liability company
organized in the State of Nevada in April, 2001. OneCap Real Estate Fund is a
development stage company.

         All significant intercompany balances and transactions have been
eliminated.

         Cash and cash equivalents:

         The Company considers highly liquid investments with maturities of
three months or less when purchased


                                        7

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


to be cash equivalents.

         Earnings (loss) per share:

         Earnings (loss) per share was computed by dividing the net income
(loss) by the weighted average number of common shares outstanding. The
computations of basic earnings per common share are based on the weighted
average number of common shares outstanding. The computations of diluted
earnings per share are based on the weighted average number of common shares and
common share equivalents outstanding. Stock purchase options outstanding and
exercisable at or below the market price are considered common share
equivalents. For the periods presented, there were no common share equivalents.
At June 30, 2002 and 2001, all of the 343,000 and 231,500 stock options,
respectively, were excluded from the computation of diluted earnings (loss) per
share because they were antidilutive.

         Use of estimates in preparation of consolidated financial statements:

         The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

         Description of rental arrangements:

         The Company's rental operations consist of leasing units in an
apartment complex located in Las Vegas, Nevada. The Company generally leases the
apartment units under leases with a term of one year or less.

         Land under development:

         Land, site improvements, buildings and related structures are carried
at cost. All costs directly and indirectly associated with the acquisition,
development and construction, including construction period interest, are
capitalized to the project. Upon receipt of a Certificate of Occupancy, costs
related to the structure ready for occupancy are transferred to rental property.

         Advertising costs:

         Advertising costs are charged to expense as incurred. Advertising
expenses were $157,526 and $190,650 for the years ended June 30, 2002 and 2001,
respectively.

         Recognition of loan origination fees and commissions:

         Loan origination fees and commissions are recognized upon the closing
of a loan or closing of an escrow, which occurs after all significant services
have been performed.

         Income taxes:

         Effective November 5, 1999, the Company revoked its S election and
elected not to have the pro rata allocation of S corporation items under IRC
Section 1362 (e)(2) apply to the S termination year. Prior to November 5, 1999,
the Company was treated as an S Corporation for Federal income tax purposes. As
an S Corporation, the Company passed through the taxable income and losses to
its stockholders each year as recognized, and thus paid no corporate income tax
itself.



                                        8

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Property and equipment:

         Property and equipment is stated at cost less accumulated depreciation.
Depreciation is provided principally on the accelerated and straight-line
methods over the estimated useful lives of the assets.

         The cost of maintenance and repairs is charged to expense as incurred.
Expenditures for property betterments and renewals are capitalized. Upon sale or
other disposition of depreciable property, cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected in income.

         Fair value of financial instruments:

         Cash and cash equivalents, accounts receivable, notes and loans
receivable, notes and loans receivable related parties, accounts payable and
notes payable are reported at amounts that approximate their fair values.

2.       Related party transactions:

         a.       Notes and loans receivable, related parties:

         As of June 30, 2002 and 2001, notes and loans receivable, related
parties consisted of the following:


<TABLE>
<CAPTION>
                                                                 June 30, 2002          June 30, 2001
                                                            ------------------------    -------------------
<S>                                                         <C>                         <C>
Note receivable from Pacific Properties and                 $               479,036     $          504,157
Development, LLC, a company owned by the
majority stockholder, unsecured, bearing interest at
12% per annum, with principal and interest
payments of $49,750 due quarterly, scheduled to
mature in July, 2003.

Note receivable from Pacific Properties and                                   16,712                 28,164
Development, LLC, a company owned by the
majority stockholder, secured by furniture and
equipment, bearing interest at 10.5% per annum
with monthly principal and interest payments of
$1,235, scheduled to mature in August, 2003.

Note receivable from Pacific Properties and                                   20,234                     --
Development, LLC, a company owned by the
majority stockholder, unsecured, bearing interest at
14% per annum, with interest only payments due
monthly, scheduled to mature in May, 2003.

Subscription receivable from First Capital Real                                   --                 20,000
Estate Fund, unsecured, non-interest bearing.

Commission advances to real estate agent,                                     18,991                 19,231
unsecured, non-interest bearing, due upon closing
of sales transactions.

                                                                             534,973                571,552

Less current portion                                                         269,056                 31,549
                                                            ------------------------    -------------------

                                                            $               265,917               $540,003
                                                            ========================    ===================
</TABLE>


                                       9
<PAGE>

         The Company recognized interest income from notes and loans receivable,
related parties totaling $76,835 and $2,992 during the years ended June 30, 2002
and 2001, respectively.

         b.       Investment and rental property:

         In June, 2002, the Company exchanged its 25% interest in MF
Devco-Carlsbad, LLC for a 99% interest in Pacific Stonegate, LLC. The
non-monetary exchange was done with Pacific Properties and Development, LLC
("PPD"), a company owned by the majority stockholder.

         The principal business activity of MF Devco-Carlsbad, LLC is to
acquire, develop, operate and sell a parcel of real property in Carlsbad,
California. Pacific Stonegate Nevada, LLC owns and operates 172 units in an
apartment complex in Southern Nevada. The Company recorded the acquired assets
based upon the cost basis of the assets surrendered. No gain or loss was
reported. See Note 16 for further detail.

         c.       Revenues:

         A significant portion of the Company's revenues are derived from
commercial loan closings and commissions from land sales for related entities in
which the majority stockholder has an ownership interest. During the years ended
June 30, 2002 and 2001, two and seven transactions accounted for 19% and 42% of
gross revenues, respectively.

         d.       Office space:

         The Company subleases office space to PPD. The sublease commenced
August 1, 2000 and expires January 31, 2003 with an option to renew for 20
months. Under the agreement, the Company will receive $10,670 per month with 4%
annual increases each year on October 1. During the years ended June 30, 2002
and 2001, the Company received $128,656 and $112,235 under the sub-lease.

         e.       Services contributed by stockholders:

         During the year ended June 30, 2001, two stockholders contributed their
services, valued at $66,000, to the Company. Steven Molasky, CEO, contributed
services valued at $36,000, and Vince Hesser, President, contributed services
valued at $30,000. Mr. Molasky spent approximately 8 hours per week (or 20%) and
Mr. Hesser spent approximately 20 hours per week (or 50%) of their working time
on OneCap business. The Company estimates the annual full-time fair value
compensation to be $240,000 for the CEO and $120,000 for the President. The
values were determined based upon the Company's estimates of a reasonable
compensation package for this type and size of Company and the responsibilities
of this type of position.

         f.       Commission expense:

         During the year ended June 30, 2001, the Company worked on a joint
acquisition project with PH, LLC, a company in which a relative of the majority
stockholder has an ownership interest. In connection with the project, the
Company paid a portion of the commissions earned to PH, LLC. PH, LLC received
$1,141,231 during the year then ended.

         g.       Service fee revenue:

         During the year ended June 30, 2002, the Company serviced loans for
companies under common control. OneCap earned $15,648 in fees from servicing the
loans during the year ended June 30, 2002.


                                        10

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         h.       Administration fees:

         During the year ended June 30, 2001, the Company paid administration
fees totaling $29,000 to PPD, for administrative services provided.

3.       Notes and loans receivable:

         As of June 30, 2002 and 2001, notes and loans receivable consisted of
the following:


<TABLE>
<CAPTION>
                                                                   June 30, 2002         June 30, 2001
                                                                   -------------------   ------------------
<S>                                                                <C>                   <C>
Notes receivable from PCTV Homes, unsecured, non-interest          $            8,385    $              --
bearing, due on demand.

Note receivable from Cyberlux Corporation, secured by assets                   170,000                   --
of the company, bearing interest at 13% per annum, with the
greater of interest only or 5% of gross revenue due monthly.
Scheduled to mature in October, 2002 with a six month extension.
The note has a conversion feature for common stock of Cyberlux.
                                                                   -------------------   ------------------
                                                                               178,385                   --

Less current portion                                                             8,385                   --
                                                                   -------------------   ------------------
                                                                   $          170,000    $              --
                                                                   ===================   ==================
</TABLE>

4.       Land held for development:

         Land held for development as of June 30, 2002 consists of 3.92 acres of
real property in Henderson, Nevada. Pacific Hilltop 2, LLC is planning on
developing the land and building commercial rental property.

5.       Property and equipment:

         Property and equipment at June 30, 2002 and 2001 consisted of the
following:


<TABLE>
<CAPTION>
                                                              June 30, 2002         June 30, 2001
                                                         ------------------------   --------------------
<S>                                                      <C>                        <C>
Land                                                     $               850,000    $                --

Rental property buildings and improvements (Pacific                    5,855,157                     --
Harbors)

Computer equipment                                                        47,121                 28,763

Computer software                                                          5,950                  4,878

Furniture and equipment                                                  174,733                153,617

Leasehold improvements                                                    34,757                 30,493
                                                         ------------------------   --------------------
                                                                       6,967,718                217,751

Less accumulated depreciation                                            255,568                 33,951
                                                         ------------------------   --------------------
                                                         $             6,712,150    $           183,800
                                                         ========================---====================
</TABLE>




                                       11

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Depreciation expense for the years ended June 30, 2002 and 2001 was
$56,241 and $25,899, respectively.

6.       Accounts payable and other liabilities:

         Accounts payable and other liabilities as of June 30, 2002 and 2001
consisted of the following:


<TABLE>
<CAPTION>
                                                                        June 30, 2002            June 30, 2001
                                                                   -----------------------  -----------------------
<S>                                                                <C>                      <C>
                  Operating accounts payable                       $              191,750   $               25,946

                            Tenant security deposits                               32,863                       --

                  Prepaid rent from tenants                                        21,319                       --

                  Accrued payroll and commissions                                  80,383                   15,130
                                                                   -----------------------  -----------------------
                                                                   $              326,315   $               41,076
                                                                   =======================  =======================
</TABLE>

7.       Notes payable:

         Notes payable as of June 30, 2002 and 2001 consisted of the following:


<TABLE>
<CAPTION>
                                                                June 30, 2002           June 30, 2001
                                                                --------------------- ---------------------
<S>                                                             <C>                     <C>
Note payable to a bank, secured by first trust deed and         $          6,230,528    $               --
assignment of rents on Pacific Harbors, bearing interest at
9% per annum, with monthly principal and interest payments
of $48,700, scheduled to mature in March, 2003.  The
majority stockholder has personally guaranteed the note.

Note payable to a member of Pacific Hilltop 2, LLC, secured                 1,323,610                    --
by land held for development, bearing interest at 8% per annum,
originally scheduled to mature on July 4, 2002, extension is
in negotiation.

Note payable to a bank, secured by furniture and equipment,                    63,158               112,495
bearing interest at 9.5% per annum, scheduled to mature in
August, 2003.  The note is personally guaranteed by the
majority stockholder.
                                                                --------------------- ---------------------
                                                                            7,617,296               112,495

Less current portion                                                        7,607,799                49,071
                                                                --------------------- ---------------------
                                                                $              9,497    $           63,424
                                                                =====================   ===================
</TABLE>






         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Notes payable are scheduled to mature as follows:


     For the year ending
          June 30,
--------------------------------
            2003                 $                    7,607,799
            2004                                           9,497
                                 -------------------------------
            Total                $                    7,617,296
                                 ===============================



                                       12

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.       Interest expense:

         The Company capitalized interest as a component of land held for
development. Total interest incurred during the years ended June 30, 2002 and
2001 follows:


<TABLE>
<CAPTION>
                                              June 30, 2002            June 30, 2001
                                       ----------------------------    ----------------------
<S>                                    <C>                             <C>
Interest charged to income             $        55,781                 $        10,415

Interest capitalized                            42,946                                 --
                                       ----------------------------    ----------------------
                                       $        98,727                 $        10,415
                                       ============================    ======================
</TABLE>

9.       Income taxes:

         The provision for federal income taxes differs from that computed by
applying federal statutory rates to income before federal income tax expense, as
indicated in the following analysis:


<TABLE>
<CAPTION>
                                                                     2002             2001
                                                            ------------------------- ------------------
<S>                         <C>                             <C>                       <C>
Expected tax provision at a 34% rate                        $              (41,281)   $         517,339

Change in valuation allowance                                                    --             (49,964)

Non-deductible fair market value of officers' salaries                           --              22,440

Other nondeductible expenses and other adjustments                            6,981             (14,724)
                                                            ------------------------- ------------------
                                                            $               (34,300)  $         475,091
                                                            ========================  ==================
</TABLE>

         Deferred tax asset and deferred tax liability has been provided for
taxable temporary differences related primarily to timing of a subsidiary's year
end for tax purposes and excess of depreciation and amortization for tax
purposes over the amount for financial reporting purposes as follows:


<TABLE>
<CAPTION>
                                                                     2002             2001
                                                            ------------------------- ------------------
<S>                                                         <C>                       <C>
Timing of subsidiary losses                                 $                8,475    $              --

Excess of depreciation and amortization for tax purposes                   (18,175)             (12,400)
                                                            ------------------------- ------------------
Net deferred tax liability                                  $               (9,700)   $         (12,400)
                                                            =======================-- ==================
</TABLE>

10.      Commitments and contingencies:

         Concentrations:

         In the normal course of business, the Company maintains cash at
financial institutions in excess of federally insured limits.

     Substantially  all  of  the  Company's  operations  are  derived  from  the
Southwestern region of the United


                                       13

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


States. Consequently, the Company's results of operations and financial
condition are affected by general trends in the Southwestern States' economy and
its commercial and residential real estate market.

         The Company leases apartment units primarily to individuals located in
Las Vegas, Nevada. The terms of the leases generally require basic rent payments
at the beginning of each month. Each tenant is also required to make a deposit
at the inception of the lease. Credit risk associated with the lease agreements
is limited to the amounts of rent receivable from tenants less security
deposits.

         Employee benefit plan:

         The Company adopted a retirement savings plan for its employees under
Section 401(k) of the Internal Revenue Code. The plan allows employees of the
Company to defer up to the lesser of the Internal Revenue Code prescribed
maximum amount or 15% of their income on a pre-tax basis through contributions
to the plan. The Company matches 25% of eligible employees' contributions up to
a maximum of 6% of their individual earnings.

         Stock option plan:

         On July 27, 2000, the Company adopted a stock option plan for a maximum
of 1,250,000 shares of common stock. The Board of Directors has the authority to
issue stock options, the terms of which including, without limitation, vesting
periods and strike prices (but in no event can options be issued with a strike
price less than 100% of current FMV of the stock price) may be fixed by the
Board of Directors at its sole discretion. Through June 30, 2002, 343,000 of the
stock options that have been granted are still outstanding and will be vested at
100% in twenty-four months from the grant date.

         Lease agreement:

         The Company leases corporate office space in Las Vegas, Nevada, under
an operating lease expiring in January, 2003 with an option to renew for 20
months.

         Note payable:

         As a condition of the exchange of investment interests between OneCap
and PPD, OneCap must negotiate with the current lender of Pacific Stonegate
Nevada, LLC to remove Mr. Molasky as a personal guarantor or refinance the
property. As of the report date, the Company was still in negotiations with the
bank.

         Proceeds:

         Upon the sale of Pacific Stonegate Nevada, LLC, a prior owner of the
rental property is entitled to receive 60% of the net cash proceeds.

11.      Minority interest:

         The consolidated financial statements include the accounts of Pacific
Stonegate Nevada, LLC ("Stonegate") and Pacific Hilltop 2, LLC ("Hilltop").
OneCap has a 99% ownership interest in Stonegate and a 60% ownership interest in
Hilltop. The minority interest in the consolidated balance sheets consist of the
remaining ownership interests not owned by the Company.

12.      Stockholder's equity:

         Restricted shares of common stock:


                                       14

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         7,272,342 of the total shares of common stock outstanding as of June
30, 2002 are restricted.

         Preferred stock:

         The Board of Directors has the authority to issue the preferred stock,
the terms of which (including, without limitation, dividend rates, conversion
rights, voting rights, terms of redemption and liquidation preferences) may be
fixed by the Board at its sole discretion. The holders of the Company's common
stock will not be entitled to vote upon such matters. No shares of preferred
stock of any series are outstanding and the Board of Directors has no present
intention to issue any such shares. Shares of preferred stock issued in the
future could have conversation rights, which may result in the issuance of
additional shares of common stock, which could dilute the interest of the
holders of common stock. Such shares could also have voting rights and
liquidation preferences which are senior to the rights and preferences of the
common stock. Additionally, such shares could have dividend, redemption or other
restrictive provisions.

         Warrants and options:

         There are 343,000 options outstanding to acquire additional shares of
common stock.

         Stock repurchase program:

         In March, 2002, the Board of Directors authorized the repurchase of
OneCap common stock. The Board authorized the use of funds up to $500,000. As of
June 30, 2002, the Company has repurchased 41,200 shares at a cost of $38,455.

         Capital contributions:

         As discussed in Note 2, during the year ended June 30, 2001, two
stockholders contributed their services as CEO and President. The Company
included the compensation expense in general and administrative expenses with a
corresponding increase in additional paid-in-capital.

         Stock option plan:

         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 or 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.

         The following is a summary of activity of outstanding stock options
under the 2000 Stock Option Plan:


                                       15

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




<TABLE>
<CAPTION>
                                              Options Outstanding
                                  -------------------------------------------
                                          Shares           Weighted Average
                                                           Exercise Price
                                  ------------------------ ------------------
<S>                               <C>                      <C>
Balance June 30, 2000                                 --   $              --
                                  ------------------------ ------------------
Granted                                         232,500                 1.00

Canceled/expired                                 (1,000)                1.00
                                  ------------------------ ------------------
Balance, June 30, 2001                          231,500                 1.00

Granted                                         150,000                 1.00

Canceled/expired                                (38,500)                1.00
                                  ------------------------ ------------------
Balance, June 30, 2002                          343,000    $            1.00
                                  ======================   ==================
Exercisable, June 30, 2002                            --   $            1.00
                                  ======================   ==================
</TABLE>


         The following is a summary of information about the 2000 Stock Option
Plan options outstanding at June 30, 2002:


<TABLE>
<CAPTION>
    Range of      Number           Weighted average     Weighted         Number          Weighted
 exercise prices  outstanding      remaining            average          exercisable     average
                                   contractual life     exercise price                   exercise price
                                   (years)
--------------------------------------------------------------------------------------- -----------------
<S>               <C>              <C>                  <C>              <C>             <C>
$           1.00          343,000                 6.8   $          1.00              0   $          1.00
================= ================ ==================== ================ ==============  ================
</TABLE>

         Statement of Financial Accounting Standards No. 123 - Accounting for
Stock-Based Compensation (ASFAS 123"), provides that companies may elect to
account for employee stock options using a fair value-based method or continue
to apply the intrinsic value-based method prescribed by Accounting Principals
Board Opinion No. 25 (AAPB 25").

         Under the fair value-based method prescribed by SFAS 123, all employee
stock option grants are considered compensatory. Compensation cost is measured
at the date of grant based on the estimated fair value of the options determined
using an option pricing model. The model takes into account the stock price at
the grant date, the exercise price, the expected life of the option, the
volatility of the stock, expected dividends on the stock and the risk-free
interest rate over the expected life of the option. Under APB 25, generally only
stock options that have intrinsic value at the date of grant are considered
compensatory. Intrinsic value represents the excess, if any, of the market price
of the stock at the grant date over the exercise price of the options.

         As permitted by SFAS 123, the Company accounts for these plans under
APB 25, under which no compensation cost has been recognized.

         The following table discloses the Company's proforma net income (loss)
and net income (loss) per share assuming compensation cost for employee stock
options and warrants had been determined using the fair value- based method
prescribed by SFAS 123.

             The Notes to Consolidated Financial Statements are an integral part
of these statements.

                                       16

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





<TABLE>
<CAPTION>
                                                      2002                        2001
                                             -----------------------    ----------------------
Net income (loss):

<S>                                          <C>                        <C>
As reported                                  $             (86,867)     $           1,046,492

Pro forma                                                 (110,042)                 1,033,760

Earnings (loss) per share:

Basic:

As reported                                                 (0.010)                     0.119

Pro forma                                                   (0.012)                     0.117

Diluted:

As reported                                                 (0.010)                     0.119

Pro forma                                                   (0.012)                     0.117
</TABLE>


         The fair value of each award under the stock option plan is estimated
on the date of grant using the Black- Scholes option pricing model. The
following range of assumptions were used to estimate the fair value of the
options for the year ended June 30, 2002:


<TABLE>
<CAPTION>
                                                                           Stock Option Plan
                                                                    --------------------------------
<S>                                                                 <C>
Expected stock price volatility                                                                 210%

Expected option lives (years)                                                                      4

Expected dividend yield                                                                           --

Risk-free interest rates                                                                       5.05%

Weighted-average fair value of options granted during year                                     $0.13
</TABLE>



13.      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, 2002,
the cash held in trust was $108,717, and the trust receivable was $0. The
related trust liability was $108,717 at June 30, 2002. The trust assets and
liabilities are not recorded on the balance sheet of the Company at June 30,
2002.

14.      Loans serviced for others:

     The Company  services loans for others,  which are not shown on the balance
sheets. The face amount of

                                       17

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


these loans at June 30, 2002  approximated  $18,429,000.  The Company receives a
servicing fee for the services rendered.

15.      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>
                                                 2002                           2001
                                                 ----------------------------   ------------------------
Revenues:

<S>                                              <C>                            <C>
Realty division                                  $                  454,816     $             1,829,099

Mortgage division                                                 1,101,957                     994,642

Rental property division                                             99,105                          --
                                                 ----------------------------   ------------------------
                                                 $                1,655,878     $             2,823,741
                                                 ============================   ========================
Operating income (loss):

Realty division                                  $                   86,985     $             1,406,478

Mortgage division                                                   397,386                     488,780

Rental property division                                             38,183                          --

Corporate                                                          (641,455)                   (378,826)
                                                 ----------------------------   ------------------------
                                                 $                 (118,901)    $             1,516,432
                                                 ============================   ========================
Identifiable assets:

Realty division                                  $                   79,009     $                19,231

Mortgage division                                                   306,495                       8,338

Rental property division                                          6,325,472                          --

Development division                                              1,825,948                          --

Corporate                                                         1,278,563                   2,039,078
                                                 ----------------------------   ------------------------
                                                 $                9,815,487     $             2,066,647
                                                 ============================   ========================
Capital expenditures:

Corporate                                        $                   32,109     $               178,371
                                                 ============================   ========================
Depreciation and amortization:

Rental property division                         $                   16,388     $                    --

Corporate                                                            43,892                      25,899
                                                 ----------------------------   ------------------------
                                                 $                   60,280     $                25,899
                                                 ============================   ========================
</TABLE>

There were no intersegment sales during 2002 and 2001.

16. Non-Monetary exchange:

         On June 1, 2002, OneCap entered into a non-monetary exchange with PPD.
OneCap gave up its 25% interest in MF Devco-Carlsbad LLC ("MF Devco") and
received a 99% interest in Stonegate .

         Management believed that the operations and activities of Stonegate fit
better in the scope and business plans of OneCap than MF Devco. Stonegate owns
and operates 172 units in an apartment complex in Southern Nevada. The rental
property is well established. MF Devco owns a parcel of land in Carlsbad,
California which it


                                       18

<PAGE>


         OneCap
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


plans to develop into a multi-family housing project.

         In the consolidated financial statements, the transaction has been
reported at the basis of the asset given up which exceeded Stonegate's net book
value. The increase was added to the basis of the rental property.

         Following is a summary of the transaction:


<TABLE>
<CAPTION>
<S>                                                                       <C>
OneCap's cost basis of investment in MF Devco given up                    $                    225,000
                                                                          -----------------------------


Book value of Stonegate at the time of transfer:

Land                                                                                            850,000

Rental property buildings                                                                     5,501,300

Furniture and equipment                                                                          12,700

Accumulated depreciation                                                                      (165,375)

Accounts receivable                                                                              22,169

Prepaid expenses                                                                                 28,701

Other assets                                                                                     42,820

Notes payable                                                                               (6,234,755)

Accounts payable and accrued liabilities                                                      (186,417)
                                                                          -----------------------------
Members' deficit                                                                              (128,857)
                                                                          -----------------------------
Excess cost basis of asset relieved over assets acquired                  $                    353,857
                                                                          =============================


Basis of rental property on date of transfer                              $                  5,501,300

Excess cost basis added to reflect cost of transferred asset                                    353,857
                                                                          -----------------------------
Adjusted basis in rental property reported in consolidated financial      $                  5,855,157
statements
                                                                          =============================
</TABLE>

         No gain or loss was recorded on the transaction. The results of
operations of Stonegate for the month of June, 2002 have been included in the
consolidated statement of operations for the year ended June 30, 2002.

         Upon the sale of the rental property owned by Stonegate, a prior owner
of the complex is entitled to receive 60% of the net proceeds from any such sale
after all debts and liabilities of the entity are paid in full. No accruals have
been made since such liability can only be determined at the time of sale and
will only be incurred if the fair market value exceeds net book value at the
time of sale.


17. Subsequent event:

         On July 19, 2002, the Company entered into a purchase agreement to
acquire a commercial office building in Las Vegas, Nevada for $5,000,000. As of
the date of the financial statements, the Company has made an initial deposit of
$50,000 into escrow and financing for the transaction has not been secured.




                                       19