SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-QSB/A
 Amendment
Number 1
 
 [X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 For the
Quarterly Period Ended: March 31, 2005
 
 
 [ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
 OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
transition period from __________ to _______________
 
 
 Commission
File Number: 2-76219-NY
 
 VICTORY
CAPITAL HOLDINGS CORPORATION
 (Name of
small business issuer in its charter)
 
 
 
 Nevada        87-0564472
 (State or other
jurisdiction of       (I.R.S.
Employer Identification No.)
 incorporation
or organization)
 
 
 27762
Antonio Parkway, Suite L1-497
 Ladera
Ranch, CA 92694
 (Address
of principal executive offices)
 
 Registrant's
telephone number, including area code: (866) 279-9257
 Securities
registered pursuant to Section 12(b) of the Act: None
 
 Securities
registered pursuant to Section 12(g) of the Act:
 Common
Stock, $.001 par value
 (Title of
class)
 
 
 Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to file such
reports), and (2) has been subject to the filing requirements for at least the
past 90 days.
 Yes [X]
No [ ]
 
 At May
17, 2005, 22,100,258 shares of common stock were outstanding.
 
 Transitional
Small Business Disclosure Format: Yes [X] No [ ]
  
  
 EVPLANATORY
NOTE
 
 
 This
Quarterly Report on Form 10-QSB/A amends our previously filed Quarterly Report
on Form 10-QSB for the fiscal quarter ended March 31, 2005. This amendment is
being filed to include the certifications of the Chief Executive Officer and
Chief Financial Officer pursuant to the Sarbanes-Oxley Act, which were
inadvertently left out of the filing of the Form 10-QSB Quarterly Report filed
with the Commission on May 23, 2005.
 
   VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 INDEX TO
FORM 10-QSB
 MARCH 31,
2005
 
 
  **PART
I**           **** **PAGE**
 
 Item
      1.
    Financial
      StatementsConsolidated
      Balance Sheet - March 31, 2005 (unaudited)
    1Consolidated
      Statements of Operations (unaudited) - Three Months EndedMarch
      31, 2005 and 2004 and for the Period of Inception,January
      7, 1982 through March 31, 2005
    2Consolidated
      Statements of Stockholders’ Equity (Deficit) for the Period from
      Inception, January 7, 1982 through March 31, 2005
    3Consolidated
      Statements of Cash Flows (unaudited) - Three Months EndedMarch 31, 2005
      and 2004 and for the Period of Inception, January 7, 1982 through March
      31, 2005
    3Notes
      to Consolidated Financial Statements (unaudited)
    5Item
      2
    Management’s
      Discussion and Analysis ofFinancial Condition and Results of
      Operations
    13Item
      3
    Controls
      and Procedures
    18**PART
      II**Item
      1.
    Legal
      Proceedings
    19Item
      2.
    Changes
      In Securities
    19Item
      3.
    Defaults
      Upon Senior Securities
    19Item
      4.
    Submission
      of Matters to a Vote of Security Holders
    19Item
      5.
    Other
      Information
    19Item
      6.
    Exhibits
    19Signatures
    20
 
 
 
   
   VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 CONSOLIDATED
BALANCE SHEET
 (UNAUDITED)
 AS OF
MARCH 31, 2005
 
 **ASSETS**CURRENT
      ASSETS:Cash
    $
      63Total
      current assets
    63Property
      and equipment, net of accumulated depreciation of $484
    1,809Total
      assets
    $
      1,872**LIABILITIES
      AND STOCKHOLDERS' DEFICIT**CURRENT
      LIABILITIES:Accounts
      payable
    $
      23,721Payable
      - related party
    158,400Accrued
      expenses and liabilities
    148,968Accrued
      liability - related party
    110,000Loan
      payable
    10,000Total
      current liabilities
    451,089Total
      liabilities
    451,089Commitments
      and contingencies (Notes 6 and 8)Stockholders'
      deficit:Common
      stock, $.001 par value; 100,000,000 share authorized;22,100,258
      issued and outstanding
    22,100Additional
      paid-in-capital
    1,977,463Accumulated
      deficit
    (2,448,780)Total
      stockholders' deficit
    (449,217)Total
      liabilities and stockholders' deficit
    $
      1,872
 The
accompanying notes are an integral part of these consolidated financial
statements
   1
   VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (UNAUDITED)
 
 For
      the periodof
      Inception,For
      the three
    For
      the three
    from
      January 7,months
      ended
    months
      ended
    1982
      throughMarch
      31,
    March
      31,
    March
      31,2005
    2004
    2005Revenues
    $ -
    $ -
    $ -Costs
      and expenses:General
      and administrative expenses
    26,421
    12,188
    456,854Consulting
    -
    965,450
    1,697,482Wages
      and salaries
    -
    144,000
    248,000Total
      costs and expenses
    26,421
    1,121,638
    2,402,336Operating
      loss
    (26,421)
    (1,121,638)
    (2,402,336)Other
      income (expenses):Loss
      from reduction in debt
    -
    (48,363)
    (48,363)Interest
      expense
    (177)
    -
    (177)Other
      income
    -
    -
    2,096Total
      other income (expense)
    (177)
    (48,363)
    (46,444)Net
      loss
    $
      (26,598)
    $
      (1,170,001)
    $
      (2,448,780)Basic
      and dilutive net loss per share
    $
      (0.00)
    $
      (0.07)Weighted
      average numberof
      shares outstanding
    22,100,258
    17,574,324
 The
accompanying notes are an integral part of these consolidated financial
statements
   2
   VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
 
 
 AccumulatedDeficitCommon
    Stock
    Additional
    DuringPaid-in
    DevelopmentShares
    Amount
    Capital
    Stage
    TotalBalances
      at January 7, 1982
    -
    $ -
    $ -
    $ -
    $ -Common
      stock issued for cash at $7.50 per share
    6,000
    6
    45,000
    -
    45,006Common
      stock issued for cash at $0.39 per share
    168,503
    169
    65,819
    -
    65,988Net
      loss from inception on January 7, 1982through
      December 31, 1982
    -
    -
    -
    (39,597)
    (39,597)Balances
      at December 31, 1982
    174,503
    175
    110,819
    (39,597)
    71,397Net
      loss for the year ended December. 31, 1983
    -
    -
    -
    (71,397)
    (71,397)Balances
      at December 31, 1983
    174,503
    175
    110,819
    (110,994)
    -Common
      stock issued for cash at $25.00 per share
    57
    -
    1,425
    -
    1,425Common
      stock issued for cash at $25.00 per share
    3
    -
    75
    -
    75Common
      stock issued for cash at $0.025 per share
    1,580,000
    1,580
    38,373
    -
    39,953Net
      loss for the year ended December 31, 1984
    -
    -
    -
    -
    -Balances
      at December 31, 1984
    1,754,563
    1,755
    150,692
    (110,994)
    41,453Cancellation
      of common stock
    (1,296,132)
    (1,297)
    -
    -
    (1,297)Net
      loss for the year ended December 31, 1985
    -
    -
    -
    -
    -Balances
      at December 31, 1985
    458,431
    458
    150,692
    (110,994)
    40,156Net
      loss for the year ended December 31, 1986
    -
    -
    -
    -
    -Balances
      at December 31, 1986
    458,431
    458
    150,692
    (110,994)
    40,156Net
      loss for the year ended December 31, 1987
    -
    -
    -
    -
    -Balances
      at December 31, 1987
    458,431
    458
    150,692
    (110,994)
    40,156Net
      loss for the year ended December 31, 1988
    -
    -
    -
    -
    -Balances
      at December 31, 1988
    458,431
    458
    150,692
    (110,994)
    40,156Net
      loss for the year ended December 31, 1989
    -
    -
    -
    -
    -Balances
      at December 31, 1989
    458,431
    458
    150,692
    (110,994)
    40,156Net
      loss for the year ended December 31, 1990
    -
    -
    -
    -
    -Balances
      at December 31, 1990
    458,431
    458
    150,692
    (110,994)
    40,156Net
      loss for the year ended December 31, 1991
    -
    -
    -
    -
    -Balances
      at December 31, 1991
    458,431
    458
    150,692
    (110,994)
    40,156Net
      loss for the year ended December 31, 1992
    -
    -
    -
    -
    -Balances
      at December 31, 1992
    458,431
    $
      458
    $
      150,692
    $
      (110,994)
    $
      40,156
 The
accompanying notes are an integral part of these consolidated financial
statements
  5
 3
  VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
 CONTINUED
 
 AccumulatedDeficitAdditional
    DuringCommon
      Stock
    Paid-in
    DevelopmentShares
    Amount
    Capital
    Stage
    TotalBalances
      at December 31, 1992
    458,431
    $
      458
    $
      150,692
    $
      (110,994)
    $
      40,156Net
      loss for the year ended December 31, 1993
    -
    -
    -
    -
    -Balances
      at December 31, 1993
    458,431
    458
    150,692
    (110,994)
    40,156Cancellation
      of common stock
    (316,000)
    (316)
    -
    -
    (316)Net
      loss for the year ended December 31, 1994
    -
    -
    -
    (6,656)
    (6,656)Balances
      at December 31, 1994
    142,431
    142
    150,692
    (117,650)
    33,184Common
      stock issued for cash at $0.001 per share
    2,357,895
    2,358
    -
    -
    2,358Net
      loss for the year ended December 31, 1995
    -
    -
    -
    (49,097)
    (49,097)Balances
      at December 31, 1995
    2,500,326
    2,500
    150,692
    (166,747)
    (13,555)Common
      stock issued for cash at $0.001 per share
    120,000
    120
    -
    -
    120Net
      loss for the year ended December 31, 1996
    -
    -
    -
    (1,681)
    (1,681)Balances
      at December 31, 1996
    2,620,326
    2,620
    150,692
    (168,428)
    (15,116)Net
      loss for the year ended December 31, 1997
    -
    -
    -
    (3,517)
    (3,517)Balances
      at December 31, 1997
    2,620,326
    2,620
    150,692
    (171,945)
    (18,633)Net
      loss for the year ended December 31, 1998
    -
    -
    -
    (2,479)
    (2,479)Balances
      at December 31, 1998
    2,620,326
    2,620
    150,692
    (174,424)
    (21,112)Net
      loss for the year ended December 31, 1999
    -
    -
    -
    (6,307)
    (6,307)Balances
      at December 31, 1999
    2,620,326
    2,620
    150,692
    (180,731)
    (27,419)Net
      loss for the year ended December 31, 2000
    -
    -
    -
    (9,011)
    (9,011)Balances
      at December 31, 2000
    2,620,326
    2,620
    150,692
    (189,742)
    (36,430)Net
      loss for the year ended December 31, 2001
    -
    -
    -
    (19,461)
    (19,461)Balances
      at December 31, 2001
    2,620,326
    2,620
    150,692
    (209,203)
    (55,891)Contributed
      capital for rent and other compensation
    -
    -
    1,950
    -
    1,950Net
      loss for the year ended December 31, 2002
    -
    -
    -
    (13,960)
    (13,960)Balances
      at December 31, 2002
    2,620,326
    $
      2,620
    $
      152,642
    $
      (223,163)
    $
      (67,901)
 The
accompanying notes are an integral part of these consolidated financial
statements
  5
 4
  VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
 CONTINUED
 
 AccumulatedDeficitCommon
    Stock
    Additional
    DuringPaid-in
    DevelopmentShares
    Amount
    Capital
    Stage
    TotalBalances
      at December 31, 2002
    2,620,326
    $
      2,620
    $
      152,642
    $
      (223,163)
    $
      (67,901)Contributed
      capital for rent and officer compensation
    -
    -
    488
    -
    488Capital
      contributed by shareholders through forgiveness of accounts payable and
      interest
    
    -
    77,415
    -
    77,415Common
      stock issued for services at $0.025 per share
    13,389,932
    13,390
    321,358
    -
    334,748Common
      stock issued for legal services at $0.61 per share
    100,000
    100
    60,900
    -
    61,000Common
      stock issued for consulting services at $0.47 per share
    10,000
    10
    4,690
    -
    4,700Net
      loss for the year ended December 31, 2003
    -
    -
    -
    (592,962)
    (592,962)Balances
      at December 31, 2003
    16,120,258
    16,120
    617,493
    (816,125)
    (182,512)Common
      stock issued for services at $0.16 per share
    1,000,000
    1,000
    159,000
    -
    160,000Common
      stock issued for services at $0.17 per share
    1,800,000
    1,800
    304,200
    -
    306,000Common
      stock issued for services at $0.165 per share
    800,000
    800
    131,200
    -
    132,000Common
      stock issued for services at $0.215 per share
    30,000
    30
    6,420
    -
    6,450Common
      stock issued for debt at $0.45 per share
    150,000
    150
    67,350
    -
    67,500Common
      stock issued for services at $0.40 per share
    300,000
    300
    119,700
    -
    120,000Common
      stock issued for services at $0.34 per share
    700,000
    700
    237,300
    -
    238,000Common
      stock issued for services at $0.41 per share
    300,000
    300
    122,700
    -
    123,000Common
      stock issued for services at $0.27 per share
    300,000
    300
    80,700
    -
    81,000Common
      stock issued for services at $0.22 per share
    600,000
    600
    131,400
    -
    132,000Net
      loss for the year ended December 31, 2004
    
    
    
    (1,606,057)
    (1,606,057)Balances
      at December 31, 2004
    22,100,258
    22,100
    1,977,463
    (2,422,182)
    (422,619)Net
      loss for the three months ended March 31, 2005 (unaudited)
    -
    -
    -
    (26,598)
    (26,598)Balances
      at March 31, 2005 (unaudited)
    22,100,258
    $22,100
    $1,977,463
    $(2,448,780)
    $
      449,217)
 The
accompanying notes are an integral part of these consolidated financial
statements
 
   5
   
 VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
 For
      the periodof
      Inception,from
      January 7,For
      the three months
    
    1982
      throughEnded
      March 31,
    
    March
      31,2005
    
    2004
    
    2005Cash
      flows from operating activities:Net
      loss
    $
      (26,598)
    
    $
      (1,170,001)
    
    $
      (2,448,780)Adjustments
      to reconcile net loss to net cash
      Used
      in operating activities:Depreciation
      and amortization
    115
    
    30
    
    484Loss
      from reduction of debt
    -
    
    48,363
    
    48,363Common
      stock issued for services rendered
    -
    
    1,085,450
    
    1,701,436Contributed
      capital for rent and officer compensation
    -
    
    -
    
    2,438Changes
      in operating assets and liabilities:Increase
      in prepaid expenses
    247
    
    -
    
    -Increase
      in accounts payable and payable - related
    16,122
    
    10,322
    
    282,673Increase
      in accrued liabilities and accrued liabilites - related
    177
    
    25,836
    
    254,969Net
      cash used in operating activities
    (9,937)
    
    -
    
    (158,417)Cash
      flows from investing activities:Purchases
      of fixed assets
    -
    
    -
    
    (2,293)Net
      cash used in investing activities
    -
    
    -
    
    (2,293)Cash
      flows from financing activities:Proceeds
      from sale of common stock
    -
    
    -
    
    150,773Proceeds
      from loans
    10,000
    
    
    
    10,000Net
      cash provided by financing activities
    10,000
    
    -
    
    160,773Net
      increase in cash
    63
    
    -
    
    63Cash
      at beginning of period
    -
    
    -
    
    -Cash
      at end of period
    $
      63
    
    $ -
    
    $
      63SUPPLEMENTAL
      DISCLOSURE OFCASH
      FLOW INFORMATION:Interest
      Paid
    $ -
    
    $ -
    
    $ -Taxes
    $ -
    
    $ -
    
    $ -Stock
      issued for services
    $ -
    
    $
      1,085,450
    
    $
      1,701,436Contributed
      capital for rent and officer compensation
    $ -
    
    $ -
    
    $
      2,438Contributed
      capital by shareholders
    $ -
    
    $ -
    
    $
      77,415
 The
accompanying notes are an integral part of these consolidated financial
statements
   6
   VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 March 31,
2005
 
 NOTE 1 -
BUSINESS AND CONTINUED OPERATIONS
 
 The
consolidated financial statements presented are those of Victory Capital
Holdings Corporation and subsidiaries (the Company). The Company was
incorporated as All Things, Inc. under the laws of the State of Nevada on
January 7, 1982. On March 21, 1985, the Company changed its name to New
Environmental Technologies Corporation. On April 28, 2003 the Company changed
its name to Victory Capital Holdings Corporation. The Company was organized for
the purpose of engaging in any activity or business not in conflict with the
laws of the State of Nevada or of the United States of America.
 
 On
October 3, 2001, the Company formed a wholly owned subsidiary named Papadog,
Inc. Papadog has since changed its name to Global Card Services, Inc and then to
Global Card Incorporated (Global). As of the date of this report, there has been
no activity for this subsidiary.
 
 On
November 12, 2003, the Company formed a wholly owned subsidiary named On Demand
Communications (On Demand). As of the date of this report, there has been no
activity for this subsidiary.
 
 NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Unaudited
Interim Financial Statements
 
 The
interim financial data as of March 31, 2005, and for the three months ended
March 31, 2005 and 2004 are unaudited; however, in the opinion of management,
the interim data includes all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the Company’s financial position as of
March 31, 2005, and the results of its operations for the three months and cash
flows for the three months ended March 31, 2005 and 2004. These results are not
necessarily indicative of the results expected for the year ending December 31,
2005. These financial statements and notes thereto do not reflect all
disclosures necessary for preparation under accounting principles generally
accepted in the United States. Refer to the Company’s Annual Report on Form
10-KSB for the year ended December 31, 2004.
 
 Going
Concern
 
 The
Company’s financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going concern
which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. The Company has not yet established an ongoing
source of revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. In addition, the Company has a working capital
deficit of $451,026 and a stockholders’ deficit of $449,217 at March 31, 2005.
The ability of the Company to continue as a going concern is dependent on the
Company obtaining adequate capital to fund operating losses until it becomes
profitable. If the Company is unable to obtain adequate capital, it could be
forced to cease development of operations.
 
 In order
to continue as a going concern, develop a reliable source of revenues, and
achieve a profitable level of operations the Company will need, among other
things, additional capital resources. Management’s plans to continue as a going
concern include raising additional capital through sales of common stock. It is
the intent of the Company to seek a merger with an existing, operating company.
In the interim, shareholders of the Company are committed to meeting its minimal
operating expenses. However, management cannot provide any assurances that the
Company will be successful in accomplishing any of its plans.
  7
  
 
 VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 March 31,
2005
 
 The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and
 attain
profitable operations. The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
 
 Development-Stage
Company
 
 The
Company is considered a development-stage company, with no operating revenues
during the periods presented, as defined by Statement of Financial Accounting
Standards (“SFAS”) No. 7. SFAS No. 7 requires companies to report their
operations, shareholders deficit and cash flows since inception through the date
that revenues are generated from management’s intended operations, among other
things. Management has defined inception as January 7, 1982. Since inception,
the Company has incurred operating losses totaling $2.4 million, much of which
relates to stock-based compensation to officers, directors and consultants as a
means to preserve working capital. The Company’s working capital has been
generated through the sales of common stock, and loans made by officers of the
Company. Management has provided financial data since January 7, 1982
“Inception” in the financial statements, as a means to provide readers of the
Company’s financial information to make informed investment
decisions.
 
 Use of
Estimates
 
 The
preparation of the financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of expenses during the reporting period. Actual results
could differ from those estimates.
 
 Principles
of Consolidation
 
 The
consolidated financial statements include those of Victory Capital Holdings
Corporation and its wholly owned subsidiaries, Global Card Services, Inc. and On
Demand Communications. All material inter-company activity has been
eliminated.
 
 Loss
Per Share
 
 Basic
earnings per share (“Basic EPS”) is computed by dividing net loss available to
common stockholders by the weighted average number of common shares outstanding
during the period. Diluted earnings per share (“Diluted EPS”) gives effect to
all dilutive potential common shares outstanding during a period. In computing
Diluted EPS, the treasury stock method is used in determining the number of
shares assumed to be purchased from the conversion of common stock equivalents.
Securities that could potentially dilute Basic EPS in the future, that were not
included in the computation of Diluted EPS because to do so would have been
anti-dilutive for the periods presented, consist of options, warrants,
convertible notes and debentures.
  8
  
 VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 March 31,
2005
 
 The
following is a reconciliation of the numerators and denominators of the basic
and diluted earnings per share computations for the three months ended March 31,
2005 and 2004 :
 
 
 
 2005
    
    2004Basic
      and diluted net loss per share:Numerator:Net
      loss
    $
      (26,598)
    
    $
      (1,170,001)Denominator:Basic
      and diluted weighted averagenumber
      of common shares outstanding
    22,100,258
    
    17,574,324Basic
      and diluted net loss per share
    $
      (0.00)
    
    $
      (0.07)
 
 
 
 Equipment
and Fixtures
 
 Equipment
and fixtures are recorded at cost. Depreciation is provided using accelerated
and straight-line methods over the estimated useful lives of the related assets
as follows:
 
 Description  Years
 
 Furniture
and fixtures 7
 Computer
hardware and software 3-5
 
 Recent
Accounting Pronouncements
 
 In March
2004, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No.
03-1, “The Meaning of Other-Than-Temporary Impairment and its Application to
Certain Investments.” The EITF reached a consensus about the criteria that
should be used to determine when an investment is considered impaired, whether
that impairment is other-than-temporary, and the measurement of an impairment
loss and how that criteria should be applied to investments accounted for under
SFAS No. 115, “ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES.”
EITF 03-01 also included accounting considerations subsequent to the recognition
of other-than-temporary impairment and requires certain disclosures about
unrealized losses that have not been recognized as other-than-temporary
impairments. Additionally, EITF 03-01 includes new disclosure requirements for
investments that are deemed to be temporarily impaired. In September 2004, the
Financial Accounting Standards Board (FASB) delayed the accounting provisions of
EITF 03-01; however, the disclosure requirements remain effective for annual
reports ending after June 15, 2004. The Company will evaluate the impact of EITF
03-01 once final guidance is issued.
  9
  VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 March 31,
2005
 
 In
December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment, an
Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R requires
companies to recognize in the statement of operations the grant- date fair value
of stock options and other equity-based compensation issued to employees. FAS
No. 123R is effective beginning in the Company's second quarter of fiscal 2006.
The Company is evaluating the effects adoption of SFAS 123R will have on its
financial statements.
 
 In
December 2004, the FASB issued SFAS Statement No. 153, "Exchanges of
Non-monetary Assets." The Statement is an amendment of APB Opinion No. 29 to
eliminate the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance. The Company believes that the adoption of
this standard will have no material impact on its financial
statements.
 
 
 Stock
Based Compensation
 
 The
Company has elected to follow Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (“APB 25”), and related interpretations
in accounting for its employee stock options because the alternative fair value
accounting provided under FASB Statement No. 123, Accounting for Stock-Based
Compensation, (“SFAS 123”) requires the use of option valuation models that were
not developed for use in valuing employee stock options. As permitted, the
Company adopted the disclosure alternative of SFAS 123 and SFAS 148, which
require pro forma disclosure of net income and earnings per share as if the fair
value method of accounting had been applied. Since the Company has no
significant stock options outstanding, the pro forma financial data is not
meaningful.
 
 Under APB
25, when the exercise price of the Company’s stock options equals or exceeds the
fair value of the underlying stock on the date of grant, no compensation expense
is recorded.
 
 There
were no options granted during the three months ended March 31, 2005 and
2004.
 
 NOTE 3 -
RELATED PARTY TRANSACTIONS
 
 During
the year ended December 31, 2004, the Company’s former president and CEO paid a
total of $92,324 on behalf of the Company towards the payment of certain
accounts payable. This amount has been included in accounts payable - related
party. The balance owed to the former officer was $134,927 as of March 31, 2005.
This amount is due on demand and does not accrue any interest.
 
 During
the quarter ended March 31, 2005, the current president and CEO of the Company
incurred $10,473 in reimbursable expenses on behalf of the Company. This amount
is included in accounts payable - related party. The balance owed to this
officer was $23,473 as of March 31, 2005. In addition, $110,000 in accrued
liabilities for services rendered to the Company was recorded for this officer
during the quarter ended December 31, 2004. This amount is due on demand and
does not accrue any interest. Under the terms of the employment agreement, the
employee may at his election convert any and all funds due to him into shares of
the Company’s common stock at a conversion price of $0.01 per
share.
  10
  VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 March 31,
2005
 
 
 NOTE 4 -
COMMITMENTS AND CONTINGENCIES
 
 The
company formed a wholly owned subsidiary named Papadog, Inc. Papadog since
changed its name to Global Card Services, Inc., and then to Global Card
Incorporated (Global). In October 2003, Global entered into an employment
agreement with an individual to serve as its Chief Executive Officer. The annual
salary was to be $96,000 per annum beginning October 7, 2003. Additionally, the
Company was to issue the CEO 1,000,000 free trading shares of the Company’s
common stock on the date of six months from when employment commenced. In
addition the CEO was granted options to purchase 1,000,000 freely traded shares
at an exercise price of $0.50 per share on a date that is 12 months from the
date that employment commenced and options to purchase 1,000,000 freely trades
shares at an exercise price of $1.00 per share 18 months after employment
commenced. Global was to grant to the CEO common stock equal to 5% of the
outstanding shares of Global with said shares to be vested 12 months from the
date the employment commenced, additionally Global was to grant to the CEO,
options to purchase an additional 5% of the outstanding shares of Global at an
exercise price of $0.10 per share. These options were to vest 18 months after
the employment commenced. In March 2004, the employment agreement was terminated
and all related stock options were cancelled. The Company has accrued $48,000 in
wages payable and $3,672 in related taxes payable for the term of the
employment.
 
 On March
8, 2005, the Company entered into a Share Exchange Agreement with Union Media
News (“Union”), a Nevada corporation whereby the Company exchanged 20% of the
outstanding shares of its wholly-owned subsidiary Victory Communication
Services, Inc. for 100% of the outstanding shares of Union. After the close of
the agreement, Union would become a wholly-owned subsidiary of the Company. The
agreement calls for Union and the Company to cooperate in various joint
ventures. If any joint ventures are launched, the agreement requires Union to
pay the Company the greater of (i) fifteen-percent (15%) of Union’s net revenues
or (ii) ten thousand dollars ($10,000) per month beginning the third month after
the formation of any joint ventures. The agreement also requires the Company to
assist in obtaining $300,000 in financing for Union within sixty days of the
closing. In the event, the Company is unable to obtain the necessary financing
the agreement is cancelled. At the date of this report, the agreement had not
been closed nor any financing obtained for Union.
 
 NOTE 5 -
STOCKHOLDERS’ DEFICIT
 
 Common
Stock Transactions During the Three Months Ended March 31, 2004
 
 In
February 2004, the Company issued a total of 3,600,000 shares of its common
stock to various consultants for services rendered. The shares were valued using
the closing price of the stock at the date of issuance at a total of $598,000 or
an average of $0.17 per share.
 
 On March
16, 2004, the Company issued 150,000 shares of its common stock in payment of
amounts owed to a vender. The shares were valued using the closing price of the
stock at the date of issuance of $67,500 or $0.45 per share. In connection with
this, a loss on extinguishment of debt of $48,363 was recorded.
 
 On March
23, 2004, the Company issued 300,000 shares of its common stock for services
rendered in accordance with an employment agreement. The shares were valued
using the closing price of the stock at the date of issuance of $120,000 or
$0.40 per share.
 
 In March,
2004, the Company issued a total of 1,030,000 shares of its common stock to a
various consultants for services rendered. The shares were valued using the
closing price of the stock at the date of issuance of $367,450 or an average of
$0.36 per share.
  11
  VICTORY
CAPITAL HOLDINGS CORPORATION
 AND
SUBSIDIARIES
 (A
DEVELOPMENT-STAGE COMPANY)
 March 31,
2005
 
 
 Common
Stock Transactions During the Three Months Ended March 31, 2005
 
 On
January 5, 2005, the Company authorized the issuance of shares of the Company’s
common stock owed under an employment agreement to the current president and
CEO. As of the date of this report, the shares have not been
issued.
 
 Additional
Common Stock
 
 As of
March 31, 2005, there were 40,666,667 shares of common stock that had been
issued in a prior period in anticipation of a proposed transaction which was
never consummated. The shares are being held in the Company’s name. Since the
shares were issued without consideration nor as a result of an economic
transaction, they have no basis in value and are not being shown as issued and
outstanding or treasury shares in the accompanying financial
statements.
 
 NOTE 6 -
LITIGATION
 
 On
November 19, 2004 RingCentral, Inc. filed a complaint for breach of contract
against the Company asserting they were owed by the Company $10,000 due to under
the terms of their contract. On February 15, 2005, the Company reached a
settlement with the plaintiff and agreed to pay RingCentral a total of $11,000
in several installments. This amount has been recorded as an accrued liability
in the accompanying consolidated financial statements.
 
 On
December 28, 2004, the Company was served with an action for breach of contract
with a former independent contractor The complaint seeks damages in excess of
$200,000 plus punitive damages in an unstated amount. The Company denies any
liability on this claim and is vigorously defending itself against
it.
 
 
 
 
 
 
 
   12
   **ITEM
2.**  **MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS** ****
 
 The
following discussion is intended to assist in an understanding of the Company's
financial position and results of operations for three months ended March 31,
2005.
 
 Forward-Looking
Information.
 
 This
report contains certain forward-looking statements and information relating to
the Company that is based on the beliefs of its management as well as
assumptions made by and information currently available to its management. When
used in this report, the words "anticipate", "believe", "estimate", "expect",
"intend", "plan", and similar expressions as they relate to the Company or its
management, are intended to identify forward-looking statements. These
statements reflect management's current view of the Company with respect to
future events and are subject to certain risks, uncertainties and assumptions.
Should any of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described in this report as anticipated, estimated or expected. The Company's
realization of its business aims could be materially and adversely affected by
any technical or other problems in, or difficulties with, planned funding and
technologies, third party technologies which render the Company's technologies
obsolete, the unavailability of required third party technology licenses on
commercially reasonable terms, the loss of key research and development
personnel, the inability or failure to recruit and retain qualified research and
development personnel, or the adoption of technology standards which are
different from technologies around which the Company's business ultimately is
built. The Company does not intend to update these forward-looking
statements.
 
 Plan
of Operation
 
 Our
Company has not engaged in any material operations during the three months
ending March 31, 2005 and 2004.
 
 Our
Company’s plan of operation for the next year is to execute the current business
plans of our subsidiary companies in the technology and media sectors. Victory’s
business objective is to increase net operating income and net asset value by
focusing its efforts and assets in companies and industries with high potential
growth, equity appreciation and overall return. The Company is principally
engaged in the formation of subsidiary companies to operate in emerging markets,
and incubating them from their initial stages to maturity and
independence.
 
 Critical
Accounting Policies
 
 Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
("GAAP"). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, and expense amounts reported. These estimates can also
affect supplemental information contained in the external disclosures of the
Company including information regarding contingencies, risk and financial
condition. We believe our use of estimates and underlying accounting assumptions
adhere to GAAP and are consistently and conservatively applied. Valuations based
on estimates are reviewed for reasonableness and conservatism on a consistent
basis throughout the Company. Primary areas where our financial information is
subject to the use of estimates, assumptions and the application of judgment
include our evaluation of impairments of intangible assets, and the
recoverability of deferred tax assets, which must be assessed as to whether
these assets are likely to be recovered by us through future operations. We base
our estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances. Actual results may differ
materially from these estimates under different assumptions or conditions. We
continue to monitor significant estimates made during the preparation of our
financial statements.
 
 Valuation
Of Long-Lived And Intangible Assets
 
 The
recoverability of these assets requires considerable judgment and is evaluated
on an annual basis or more frequently if events or circumstances indicate that
the assets may be impaired. As it relates to definite life intangible assets, we
apply the impairment rules as required by SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Assets to Be Disposed Of" which requires
significant judgment and assumptions related to the expected future cash flows
attributable to the intangible asset. The impact of modifying any of these
assumptions can have a significant impact on the estimate of fair value and,
thus, the recoverability of the asset.
 
 Income
Taxes
 
 We
recognize deferred tax assets and liabilities based on the differences between
the financial statement carrying amounts and the tax bases of assets and
liabilities. We regularly review our deferred tax assets for recoverability and
establish a valuation allowance based upon historical losses, projected future
taxable income and the expected timing of the reversals of existing temporary
differences. During 2004, we estimated the allowance on net deferred tax assets
to be one-hundred percent of the net deferred tax assets.
 
 Results
of Operations
 
 Quarter
Ended March 31, 2005 Compared to Quarter Ended March 31, 2004
 
 Victory
has not had any revenues since inception (January 7, 1982) through March 31,
2005. Accordingly, Victory has, and continues to be, a development-stage
company. With any development-stage company of this nature, there are inherent
risks, which may prohibit Victory from reaching commercial viability. Until one
of our subsidiaries begins operations, we will have no operating revenues but
will continue to incur substantial expenses.
 
 General
and administrative expenses were $26,421 in the current quarter compared to
$12,188 in the comparable period last year. For the three months ended March 31,
2005 and 2004, consulting expenses were $0 and $965,450. The increase is mainly
due to stock issued to consultants in the prior period. There were no consulting
contracts outstanding during the current period.
 
 Liquidity
and Capital Resources
 
 The
Company continues to incur operating losses as a result of being a
development-stage company. The Company had cash of approximately $63 at March
31, 2005.
 
 For the
three months ended March 31, 2005 and 2004, Victory incurred net losses of
$26,598 and $1,170,001, respectively. As of March 31, 2005, the Company had a
stockholders’ deficiency and a working capital deficiency of approximately
$449,217 and $451,026, respectively. The report of Victory’s independent
certified public accountants on the Company’s December 31, 2004 financial
statements notes that Victory is a development-stage company with no revenues
from its intended operations, has recurring losses and has a working capital
deficiency and stockholders’ deficiency at December 31, 2004 and these
conditions raise substantial doubt about Victory’s ability to continue as a
going concern.
 
 Net cash
used by operating activities was $9,937 compared to $0 for the three months
ended March 31, 2005 and 2004, respectively.
 
 
 Net cash
provided by financing activities was $10,000 for the current three months
compared to $0 for the comparable period last year from the proceeds of a loan.
 
 Victory
is exploring additional sources of working capital including borrowing, sales of
securities, joint ventures and acquisition of subsidiaries. Management believes
that Victory can raise adequate capital to keep the Company functioning at a
minimum level of operation in the next fiscal year. However, there can be no
assurances that management will be successful in obtaining adequate funding.
 
 The
Company has no current commitments for capital expenditures or additional equity
or debt financing.
 
 **Item
3 -- Controls and Procedures**
 
 (a)  As of the
end of the period covered by this report, the Chief Executive Officer and the
Chief Financial Officer made an evaluation of the company's disclosure controls
and procedures (as defined in ss.240.13a-15(e) or 240.15d-15(e) of the
Securities Exchange Act). Based on the evaluation of these controls and
procedures required by paragraph (b) of Rule 13a-15 or 15d-15 under the Exchange
Act, in their opinion, the disclosure controls and procedures are
effective.
 
 (b)
During the most recent fiscal year, there have not been any significant changes
in our internal controls over financial reporting or in other factors that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.
 
 
 **PART
II:**  **OTHER
INFORMATION**
 
 **Item
1.**  **Legal
Proceedings**
 
 None
 
 **Item
2.**  **Changes
in Securities**
 
 None
 
 **Item
3.**  **Defaults
Upon Senior Securities**
 
 None
 
 **Item
4.**  **Submission
Of Matters To A Vote Of Security Holders**
 
 None
 **Item
5.**  **Other
Information**
 
 None
 
 **Item
6.**  **Exhibits**
 
 Exhibit
      31.1
    Certification
      of the Chief Executive Officer of Victory Capital Holdings Corporation
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002Exhibit
      31.2
    Certification
      of the Chief Financial Officer of Victory Capital Holdings Corporation
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002Exhibit
      32.1
    Certification
      of the Chief Executive Officer of Victory Capital Holdings Corporation
      pursuant to Section 906 of the Sarbanes Oxley Act of
  2002Exhibit
      32.2
    Certification
      of the Chief Financial Officer of Victory Capital Holdings Corporation
      pursuant to Section 906 of the Sarbanes Oxley Act of
  2002
 
 
 
   13
   SIGNATURES
 
 In
accordance with the requirements of the Securities Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 VICTORY
CAPITAL HOLDINGS CORPORATION
 Registrant
 
 
 
 Date:
June 6, 2005
  By:
/s/ Jon Fullenkamp
 Jon Fullenkamp
 Chief Executive Officer, President and Director