U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File No. 2-76219-NY
-----------------------------------------
VICTORY CAPITAL HOLDINGS CORPORATION
Fka New Environmental Technologies Corporation
------------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 87-0564472
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
7860 Mission Center Court, Suite 100
San Diego, California 92108
-----------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (866) 570-6992
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 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 such filing
requirements for the past 90 days.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date:
April 22, 2004
61,866,925 (40,666,667 is held in Treasury)
21,200,258
----------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
VICTORY CAPITAL HOLDINGS CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004 AND DECEMBER 31, 2003
VICTORY CAPITAL HOLDINGS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
------
March 31, December 31,
2004 2003
------------ ------------
(Unaudited)
CURRENT ASSETS
Cash $ -- $ --
------------ ------------
Total Current Assets -- --
------------ ------------
FIXED ASSETS, NET 490 520
------------ ------------
TOTAL ASSETS $ 490 $ 520
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 7,468 $ 28,472
Accounts payable - related party 54,793 42,604
Accrued payroll and payroll taxes 137,792 111,956
------------ ------------
Total Liabilities 200,053 183,032
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock authorized 100,000,000 shares at
$0.001 par value; 21,200,258 and 16,120,258 shares
issued and outstanding, respectively 21,200 16,120
Additional paid-in capital 1,765,363 617,493
Deficit accumulated during the development stage (1,986,126) (816,125)
------------ ------------
Total Stockholders' Equity (Deficit) (199,563) (182,512)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 490 $ 520
============ ============
The accompanying notes are an integral part of these
consolidated financial statements
3
VICTORY CAPITAL HOLDINGS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
From
For the Inception on
Three Months Ended January 7,
March 31, 1982 Through
--------------------------------------- March 31,
2004 2003 2004
------------------- ------------------- -------------------
REVENUES $ - $ - $ -
EXPENSES
Consulting 965,450 - 1,358,482
Salaries and Wages 144,000 - 248,000
General and administrative 12,188 5,775 325,381
------------------- ------------------- -------------------
Total Expenses 1,121,638 5,775 1,931,863
------------------- ------------------- -------------------
LOSS FROM OPERATIONS (1,121,638) (5,775) (1,931,863)
OTHER INCOME (EXPENSE)
Loss on extinguishments of debt (48,363) - (48,363)
Interest expense - (1,900) (5,900)
------------------- ------------------- -------------------
Total Other Income (Expense) (48,363) (1,900) (54,263)
------------------- ------------------- -------------------
NET LOSS $ 1,170,001 $ (7,675) $ (1,986,126)
=================== =================== ===================
BASIC NET LOSS PER SHARE OF
COMMON STOCK $ (0.07) $ (0.00)
=================== ===================
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 17,574,324 2,620,326
=================== ===================
The accompanying notes are an integral part of these
consolidated financial statements
4
VICTORY CAPITAL HOLDINGS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Common Stock Additional During the
------------------------------------- Paid-in Development
Shares Amount Capital Stage
----------------- ----------------- ------------------ ------------------
Balance, January 7, 1982 - $ - $ - $ -
Common stock issued for cash
at $7.50 per share 6,000 6 45,000 -
Common stock issued for cash
at $0.39 per share 168,503 169 65,819 -
Net loss from inception on
January 7, 1982 through
December 31, 1982 - - - (39,597)
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1982 174,503 175 110,819 (39,597)
Net loss for the year ended
December 31, 1983 - - - (71,397)
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1983 174,503 175 110,819 (110,994)
Common stock issued for cash
at $25.00 per share 57 - 1,425 -
Common stock issued for cash
at $25.00 per share 3 - 75 -
Common stock issued for cash
at $0.25 per share 1,580,000 1,580 38,373 -
Net loss for the year ended
December 31, 1984 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1984 1,754,563 1,755 150,692 (110,994)
Retired common stock, (1,296,132) (1,297) - -
Net loss for the year ended
December 31, 1985 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1985 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1986 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1986 458,431 $ 458 $ 150,692 $ (110,994)
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1986 458,431 $ 458 $ 150,692 $ (110,994)
Net loss for the year ended
December 31, 1987 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1987 458,431 $ 458 $ 150,692 $ (110,994)
----------------- ----------------- ------------------ ------------------
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 Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Common Stock Additional During the
------------------------------------- Paid-in Development
Shares Amount Capital Stage
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1987 458,431 $ 458 $ 150,692 $ (110,994)
Net loss for the year ended
December 31, 1988 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1988 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1989 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1989 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1990 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1990 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1991 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1991 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1992 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1992 458,431 458 150,692 (110,994)
Net loss for the year ended
December 31, 1993 - - - -
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1993 458,431 458 150,692 (110,994)
Canceled common stock (316,000) (316) - -
Net loss for the year ended
December 31, 1994 - - - (6,656)
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1994 142,431 142 150,692 (117,650)
Common stock issued for
services at $0.001 per share 2,357,895 2,358 - -
Net loss for the year ended
December 31, 1995 - - - (49,097)
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1995 2,500,326 $ 2,500 $ 150,692 $ (166,747)
----------------- ----------------- ------------------ ------------------
The accompanying notes are an integral part of these
consolidated financial statements
6
VICTORY CAPITAL HOLDINGS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Common Stock Additional During the
------------------------------------- Paid-in Development
Shares Amount Capital Stage
----------------- ----------------- ------------------ ------------------
Balance, December 31, 1995 2,500,326 $ 2,500 $ 150,692 $ (166,747)
Common stock issued for
services at $0.001 per share 120,000 120 - -
Net loss for the year ended
December 31, 1996 - - - (1,681)
---------------- ---------------- ----------------- ----------------
Balance, December 31, 1996 2,620,326 2,620 150,692 (168,428)
Net loss for the year ended
December 31, 1997 - - - (3,517)
---------------- ---------------- ----------------- ----------------
Balance, December 31, 1997 2,620,326 2,620 150,692 (171,945)
Net loss for the year ended
December 31, 1998 - - - (2,479)
---------------- ---------------- ----------------- ----------------
Balance, December 31, 1998 2,620,326 2,620 150,692 (174,424)
Net loss for the year ended
December 31, 1999 - - - (6,307)
---------------- ---------------- ----------------- ----------------
Balance, December 31, 1999 2,620,326 2,620 150,692 (180,731)
Net loss for the year ended
December 31, 2000 - - - (9,011)
---------------- ---------------- ----------------- ----------------
Balance, December 31, 2000 2,620,326 2,620 150,692 (189,742)
Net loss for the year ended
December 31, 2001 - - - (19,461)
---------------- ---------------- ----------------- ----------------
Balance, December 31, 2001 2,620,326 2,620 150,692 (209,203)
Contributed capital for rent and
officer compensation - - 1,950 -
Net loss for the year ended
December 31, 2002 - - - (13,960)
---------------- ---------------- ----------------- ----------------
Balance, December 31, 2002 2,620,326 2,620 152,642 (223,163)
Contributed capital for rent and
officer compensation - - 488 -
Capital contributed by shareholders
through forgiveness of
accounts payable and interest - - 77,415 -
---------------- ---------------- ----------------- ----------------
Balance forward 2,620,326 $ 2,620 $ 230,545 $ (223,163)
---------------- ---------------- ----------------- ----------------
The accompanying notes are an integral part of these
consolidated financial statements
7
VICTORY CAPITAL HOLDINGS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Common Stock Additional During the
------------------------------------- Paid-in Development
Shares Amount Capital Stage
----------------- ----------------- ------------------ ------------------
Balance forward 2,620,326 $ 2,620 $ 230,545 $ (223,163)
Common stock issued for services
at $0.025 per share 13,389,932 13,390 321,358 -
Common stock issued for
services at $0.61 per share 100,000 100 60,900 -
Common stock issued for
services at $0.47 per share 10,000 10 4,690 -
Net loss for the year ended
December 31, 2003 - - - (592,962)
---------------- ---------------- ----------------- ----------------
Balance, December 31, 2003 16,120,258 16,120 617,493 (816,125)
Common stock issued for
services at $0.16 per share
(unaudited) 1,000,000 1,000 159,000 -
Common stock issued for
services at $0.17 per share
(unaudited) 1,800,000 1,800 304,200 -
Common stock issue for services
at $0.165 per share (unaudited) 800,000 800 131,200 -
Common stock issued for
services at $0.215 per share
(unaudited) 30,000 30 6,420 -
Common stock issued for debt
at $0.45 per share (unaudited) 150,000 150 67,350 -
Common stock issued for services
at $0.40 per share (unaudited) 300,000 300 119,700 -
Common stock issued for services
at $0.34 per share (unaudited) 700,000 700 237,300 -
Common stock issued for services
at $0.41 per share (unaudited) 300,000 300 122,700 -
Net loss for the three months
ended March 31, 2004 (unaudited) - - - (1,170,001)
---------------- ---------------- ----------------- ----------------
Balance, March 31, 2004
(unaudited) 21,200,258 $ 21,200 $ 1,765,363 $ (1,986,126)
================ ================ ================= ================
The accompanying notes are an integral part of these
consolidated financial statements
8
VICTORY CAPITAL HOLDINGS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
From
For the Inception on
Three Months Ended January 7,
March 31, 1982 Through
---------------------------------------- March 31,
2004 2003 2004
------------------- ------------------- -------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (1,170,001) $ (7,675) $ (1,986,126)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 30 - 110
Loss on extinguishment of debt 48,363 - 48,363
Stock issued for services 1,085,450 - 1,488,436
Contributed capital for rent and officer
compensation - 488 2,438
Increase in accounts payable
and accounts payable - related party 10,322 7,187 162,814
Increase to accrued liabilities 25,836 - 133,792
------------------- ------------------- -------------------
Net Cash Used by Operating Activities - - (150,173)
------------------- ------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets - - (600)
------------------- ------------------- -------------------
Net Cash Used by Investing Activities - - (600)
------------------- ------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash - - 150,773
------------------- ------------------- -------------------
Net Cash Provided by Financing Activities - - 150,773
------------------- ------------------- -------------------
NET DECREASE IN CASH - - -
CASH AT BEGINNING OF PERIOD - - -
------------------- ------------------- -------------------
CASH AT END OF PERIOD $ - $ - $ -
=================== =================== ===================
CASH PAID FOR:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
SCHEDULE OF NON CASH
FINANCING ACTIVITIES
Stock issued for services $ 1,085,450 $ - $ 1,488,436
Contributed capital for rent and officer
Compensation $ - $ 488 $ 2,438
Contributed capital by shareholders $ - $ - $ 77,415
The accompanying notes are an integral part of these
consolidated financial statements
9
VICTORY CAPITAL HOLDINGS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2004 and December 31, 2003
NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been
prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and cash flows at March 31, 2004 and 2003
and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have
been condensed or omitted. It is suggested that these consolidated
financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's
December 31, 2003 audited consolidated financial statements. The
results of operations for the period ended March 31, 2004 and 2003
are not necessarily indicative of the operating results for the
full years.
NOTE 2 - GOING CONCERN
The Company's consolidated 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
allow it to continue as a going concern. 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 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 seeking opportunities to merge with an existing operating
company. In the interim, the shareholders of the Company will
cover all operating expenses. Management cannot provide any
assurances that the Company will be successful in accomplishing
any of its plans.
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 consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to
continue as a going concern.
10
Item 2. Management's Discussion and Analysis or Plan of Operation.
-------------------------------------------------------------------
Plan of Operation.
------------------
Our Company has not engaged in any material operations during the
quarter ending March 31, 2004.
Our Company's plan of operation for the next year is to execute the
current business plans of our subsidiary Companies in the following
sectors: (a) Technology, (On Demand Communications Corp.)(b) Finance,
(Global Card, Inc.)and Media. 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 for
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.
The following will outline our business plan:
Victory Capital Holdings Corporation, (VTYC) is a Publicly Traded,
Nevada Corporation, formed primarily to achieve long-term growth in
its shareholders' equity through appreciation in value of the
Company's equity interests.
The Company is principally engaged in the formation of emerging market
companies. The Company's primary business objectives are to increase
its net operating income and net asset value by investing its assets
in companies with high potential for equity appreciation. The Company
generally acquires equity interests in the companies with the goal of
enhancing its overall return. The Company is prepared to be a
long-term partner to its portfolio companies, and in most cases, the
Company also receives the right to representation on the businesses'
board of directors.
Victory makes available significant managerial assistance to its
portfolio companies. Such assistance typically involves closely
monitoring the operations of the company, hiring additional senior
management, if needed, being available for consultation with its
officers, assisting in the development of the business plan, and
providing financial guidance and participating on the company's board
of directors. Providing assistance to its portfolio companies serves
as an opportunity for the Company to assist in maximizing the value of
the portfolio company.
The Company has established an extensive referral network comprised of
private equity funds, investment bankers, attorneys, accountants,
commercial bankers, and business brokers.
MANAGEMENT AND OPERATIONAL ROLES
Harold Gregg, Director and CEO. Since April 2003, a member of the Ohio
State Bar is a graduate of Syracuse University in 1966, with a BS in
business administration. Mr. Gregg is a graduate of the Law School of
Case Western Reserve University, Cleveland, Ohio, with a Juris Doctor
degree.
Victory Capital Corporate Websites
Http://www.vtyc.com
-------------------
Http://www.victoryholding.com
-----------------------------
Http://www.victoryholdings.com
------------------------------
PORTFOLIO COMPANY #1
Global Card, Inc., ("GlobalCard" or "the Company") was incorporated in
Nevada in 2003, as a majority owned subsidiary of Victory Capital
Holdings Corporation ("VTYC"). GlobalCard's mission is to be the
leading provider of pre-paid debit card solutions for affinity retail
markets, including sports, celebrity, and corporate brands. Using a
revenue sharing strategy, GlobalCard is creating recurring revenue
growth and increased portfolio value to its shareholders. GlobalCard
differentiates itself from the traditional bank debit card model in
three main areas:
11
Traditional Model GlobalCard Model
----------------- ----------------
REVENUE SHARING Modest per card payment Aggressive partner revenueshare
CUSTOMIZATION Slow to market / Off-the-shelf Fast / Customized / Turnkey
FLEXIBILITY Can service large companies Target midsize & large companies
GlobalCard's focus over the next eighteen to twenty-four months will
be, primarily, to build a portfolio of stored value and payroll debit
cardholders in particular niche markets. In addition, GlobalCard will
evaluate potential acquisition targets that are either accretive to
earnings or provide a strategic competitive advantage to the Company.
Management is projecting consistent enrollment of a significant number
of cardholders on a monthly basis, beginning in the first quarter of
2004.
AS RECURRING REVENUE PER ACCOUNT GROWS, PORTFOLIO AND ENTERPRISE VALUE
ALSO INCREASES. In the industry, residual income portfolios are
typically valued at a multiple of monthly recurring revenues ("MRR").
Global Card will model itself after several Open Exchange electronic
transaction companies that have maintained shareholder value over the
last three years despite a severe downturn in stock market values.
STRATEGY
GlobalCard has identified three key markets that Management believes
are under-served: 1. The corporate payroll market, targeting companies
with a high number of hourly and labor-intensive positions, 2. The
private-label and affinity debit card market - targeting sports,
celebrity, and corporate brands, and 3. The market for the processing
of data and electronic transactions associated with prepaid products
ranging from prepaid debit cards to prepaid Internet to prepaid
telephony.
Sales and marketing efforts will be directed toward mid to large
employers seeking to give employees a no-cost (or low-cost) benefit by
providing them with a payroll debit card, as well as toward mid to
large affinity groups, celebrity brands, and sports organizations
seeking to leverage their loyal fan bases. Sales calls will be made
through a call center, and sales will be closed with outside sales
representatives. GlobalCard will contract independently with existing
telemarketing call centers on an as needed basis. Sales leads will
also be generated through direct relationships with trade associations
and membership associations. Endorsements from national associations
will provide GlobalCard with leverage to open doors and secure
significant employer and affinity business.
Additional marketing will include publicity through press releases
targeted to specific markets such as the International Franchise
Association and National Federation of Independent Businesses. The
Company also will seek national endorsements and print media coverage.
In addition, GlobalCard will provide STORED VALUE CARD PRODUCTS to
companies with specific needs, such as insurance companies seeking to
pay claims or annuities. Companies also use stored value cards to make
expense reimbursements, pay independent contractors/sales commissions,
pay seasonal employees or final payroll to terminated employees.
Global Card, Inc. Websites
Http://www.globalcardinc.com
----------------------------
SERVICE OFFERINGS
WageWire
WageWire will design and implement a user-friendly corporate payment
system that will help you reduce costs associated paper checks, as
well as the re-issuance of replacement checks in cases of loss or
theft. According to the *American Payroll Association, the potential
cost savings alone for lost paycheck replacement is estimated at $48
million annually.
By leveraging a core service model that is Internet-based, with
comprehensive payment tracking and customized reporting systems,
WageWire has positioned itself to be a leader in stored value payroll
solutions. Our stored value smart cards with the Visa(R) or
MasterCard(R) emblem, coupled with outstanding customer service,
ensure that our payroll payment solution provides your company with
immediate convenience and value to your employees, while creating new
efficiencies within your organization, resulting in significant cost
savings and increased productivity.
Today only *61% of U.S. consumer spending involves the use of checks
or other paper-based payment options, down from 81% in 1990. The trend
is clear; paper-based payment options are quickly becoming a thing of
the past. If you are still issuing paper-based checks to pay your
employees, let WageWire show you how to cut payroll costs, while
enhancing employee convenience and loyalty.
Http://www.wagewire.com
-----------------------
12
Turbo Card
Acquiring new clients and users is not an easy proposition these days.
Building long-term client relationships is even harder in a
marketplace that offers your clients more choices at cheaper prices
every day. One of the primary characteristics of any successful
business is building repeat business from loyal customers that
recognize and trust their corporate brand.
You don't need to spend millions on focus groups and high priced brand
consultants with a Madison Avenue advertising agency to begin
extending your brand image immediately. In fact, with TurboCard
private label stored value cards, your organization will not only put
your corporate brand in the hands of thousands of your best customers,
but you will also immediately begin generating a significant monthly
revenue stream from every transaction. Now that's brand management!
*Statistics quoted 2003 American Payroll Association
Our affinity card programs are turnkey packages, so you don't have to
spend time trying to figure out how to integrate our software systems,
or maximize your card profit, or market your cards, or even distribute
your private label cards. We do it all, so you can focus on what you
do best - growing your business!
Http://www.Turbocard.com
------------------------
MARKET OPPORTUNITY
GlobalCard generates revenue from three main sources: CARD ISSUANCE,
TRANSACTION FEES from active cardholders, and PROCESSING FEES from
active payment processing clients. The Company sells cards and
processing services to employers, retail individuals, financial
institutions and affinity groups who desire to enter the prepaid space
either as a strategic partner or as an indirect competitor wishing to
utilize GlobalCard's processing services.
The market for PREPAID DEBIT CARDS is primarily to affinity markets
that have the ability to leverage their loyal base of members into
active card members, and to corporations with employees who are
without a bank account and/or employees who incur considerable expense
in either cashing checks or transferring cash to dependents,
domestically or internationally. The market for PAYMENT PROCESSING is
primarily to financial organizations, banks, and card retailers that
have a need for cost-effective, flexible payment processing solutions.
The GlobalCard growth model is based upon the accumulation of residual
monthly transaction fees. These transaction fees are generated from
monthly maintenance fees, ATM withdrawal fees, load fees, POS purchase
fees, card-to-card and card-to-account fees, and data processing fees.
In most instances, revenue will be derived initially from issuance of
ATM, PIN-based debit cards. Employees and retail consumers will have
the opportunity to upgrade to a signature-based debit
MasterCard(R)/VISA(R) cards that will replace the ATM, PIN-based debit
card. The upgrade to a MasterCard(R)/VISA(R) card will afford the
company additional card issuance revenue, and (in some instances)
increased transaction revenues.
STRATEGIC PARTNERS
To eliminate a costly infrastructure and achieve speed to market,
GlobalCard has strategically aligned itself with service providers
that provide payroll cards and stored value cards at cost effective
rates. A service provider selected by GlobalCard must provide both
front-end processing of the financial transactions and back-end
processing that reports both program revenue and individual cardholder
reports via Internet access. In addition to having the ability to
supplement GlobalCard's internal processing capabilities, the service
provider must have a sponsoring bank that is substantial enough to
qualify in due diligence for the largest employers.
Global Card is presently evaluating additional service providers that
will provide flexibility for the company's diverse product mix. The
Company executes Reseller/Master Service Agreements that provide
GlobalCard and its customers with the following products and services:
13
ATM Debit and prepaid MasterCard(R)/VISA(R) cards
Employer direct fulfillment and/or cardholder direct fulfillment
$5,000 maximum funding based upon proper registration of cardholder
per the Patriot Act
Separate Program I.D.'s (BIN) per Association or employer group
Flexibility in changes to cardholder fees via BIN I.D. based upon
customer group
Customer Service 7 days a week, 365 days a year
Balance inquiry via Internet and IVR ACH loading
Alternate loading capability (retail, Internet, Western Union, STAR
terminals)
ATM withdrawal and POS available worldwide
Easily accessed account activation
Card-to-card transfer capability
MANAGEMENT AND OPERATIONAL ROLES
Thomas "TJ" Culbertson - CEO
----------------------------
Mr. Culbertson has extensive experience in both investment banking and
international business development. Immediately prior to joining
Global Card, Mr. Culbertson served as Co-founder and Chief Operating
Officer of revenue7, Inc., an Internet services boutique providing
outsourced business development, advertising sales, and investment
capital services to new media companies focused on niche markets.
revenue7 was developed in partnership with Mediaturf Worldwide, giving
revenue7 the largest network of South Asian websites in North America.
revenue7's Internet properties and clients include companies such as
Yahoo India, MTV India, Rediff.com, Satyam Infoway and Best Buy.
Previously, Mr. Culbertson served of as Vice President of
International Business Development for Mediaturf Worldwide US (a
Softbank company), India's largest Internet Advertising & Marketing
Agency. In that capacity, he led sales teams in both the US and
European markets, where he was responsible for providing leadership
and strategic partnership direction for the Mediaturf business
development team.
Prior to that, he was Director of Business Development for PlanetOut
Partners, parent company of the Gay.com network of sites, where he
focused on merger and acquisition transactions, as well as the
development of strategic partnerships with companies such as Excite,
Ameritrade and Wells Fargo. Having raised nearly $100 million in
venture capital with offices in 11 countries, PlanetOut Partners is
the largest GLBT media company worldwide.
Mr. Culbertson made the transition from investment banking to
corporate business development, while working at Minneapolis-based
investment banking/venture capital firm Cherry Tree & Co. As an
Institutional Sales Executive, he specialized in raising private
equity capital for early-stage technology companies and was
instrumental in developing a pipeline of qualified private placement
candidates, as well as high net-worth investors.
Mr. Culbertson has a Master of International Management from the
University of St. Thomas in Minneapolis and a BS in Applied Economics
from the University of Minnesota in Minneapolis.
PORTFOLIO COMPANY #2
On Demand Communications Corp., ("On Demand") was incorporated in
Nevada in 2003, as a majority owned subsidiary of Victory Capital
Holdings Corporation ("VTYC"). On Demand is a centralized, unified,
global communications service provider that makes available increased
communication services and products, via telephone, wireless devices
(PDA) or computers, via the Internet, in markets with significant
growth potential. The company's goal is to become the recognized
leader in the Technology, Communications and ISO/OSO/OEM industries.
On Demand will be the "SIMPLIFIED SOLUTIONS PROVIDER".
BUSINESS
On Demand is at the confluence where telephony and technology converge
to meet the specific needs of the consumer. On Demand derives revenue
from a variety of sources, the primary one being through the operation
of a UNIFIED COMMUNICATIONS service provider, a customizable,
cafeteria style, real-time "Suite" of communications tools and
services for business professionals and individuals, including Virtual
Office, Conferencing, Meeting On Demand, Fax, Personal Assistant,
Follow Me and One Number capability (toll-free and local#)("subscriber
functionalities").
SUBSCRIBER SERVICES
On Demand provides products and services that distinguish it in the
market by enabling subscribers to manage real-time communications via
the telephone or the Internet, to access business-critical messaging
information via fixed wire and wireless telephones over toll free
telephone lines and/or web based browser access via the Internet on
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Internet connected devices. Each subscriber may access the various
types of messages that are most important to them (voice mail, email,
faxes and pages), conduct telephone conferencing, and connect people
throughout the world across product, geography, participants and
platforms. An additional feature available only to subscribers is a
customizable "virtual assistant"/"virtual secretary". This feature
enables the subscribers, through a proprietary voice-recognition
technology, to set appointments through the subscriber's virtual
address book, to have important emails read to them over any telephone
through text-to-speech capability, and to otherwise perform the usual
and customary functions which an assistant would perform. A 24/7
toll-free telephone Subscriber Support Service and online Subscriber
Support Service on our website, will answer any and all questions,
technical or otherwise, which may be posed by Subscribers.
BENEFITS
Subscribers will benefit from a global, Internet-based, centralized
communication network and have access to a broad array of products and
services as a result of better pricing, lower fees and costs, enhanced
capability and long-term customer retention. All that is required is
"a few clicks of a mouse", to initiate and complete the subscription
process. No downloading required. On Demand's motto says it all:
"COMMUNICATE THE WAY YOU WANT TO."
SUMMARY OF THE OPPORTUNITY
The subscriber/customer bases of On Demand's partners will be used as
the launching pad for the bundle of products and services presently
offered. The first subscriber functionalities offered include unified
messaging, unified communications and conferencing capabilities.
Unified messaging, an emerging market expected to explode from
near-zero penetration to over twelve (12) million mailboxes by the end
of 2004, is expected to generate over ten (10) billion dollars in
annual worldwide revenue by 2006( according to a research report by
Emmaus Road Research).
The Company plans on growing On Demand" services by a conservative
growth rate of 20,000 new active subscribers per month. Those
committed customers provide a subscriber base and an initial "critical
mass" to achieve sustainable business operations during the launch of
the business operations. Expanding the number of EXISTING subscribers
will add new customers ready, willing and able to take advantage of
the Company's bundle of products and services, thereby becoming
members of the "On Demand" family.
STRATEGY
On Demand will accomplish its mission by acquiring and developing
assets in the form of companies and/or technologies that:
a. Compliment existing product lines and communications networks.
b. Offer additional valued added products and services to the current
customer base.
c. Provide low cost of entry using existing infrastructure.
d. Make available value added features, advantages and benefits.
e. Address the needs of our clientele.
f. Enable expansion Outside North America.
g. Expand the customer base to aggregate a worldwide membership.
h. Extend globally the distribution of products and services.
i. Increase profit margins and long-term customer retention.
j. Accrete profits to the bottom line.
All of the operations of On Demand will be conducted through
subsidiaries and affiliates in each of the specified geographic
regions and countries. Each region/country has certain rules and
regulations regarding communications and telecommunications, all of
which will be addressed by the on site subsidiary/affiliate(s).
INITIAL MARKET FOCUS AND SUBSCRIBER POTENTIAL
The potential "On Demand" Communications market is very large.
Initially, the Subscriber Functionalities offered include unified
messaging, unified communications and conferencing capabilities. With
Unified Messaging, subscribers can access their email, voice mail, and
faxes either by telephone, wireless device (PDA), or computer via the
internet. Therefore, anyone with a telephone, a mobile phone or a
computer can access the "cafeteria selection" of On Demand services.
Unified Communications extends the Unified Messaging functionality by
adding features that support the management of real-time
communications via the telephone or the internet through the use of an
issued "One Number".
15
According to the Census Bureau, in the year 2001, more than 50% of the
households in the United States had computers, and more than 80% of
those households had at least one member using the Internet. More than
65 million residences or nearly 61% of all households had at least one
mobile phone.
Additional customers include corporations, affinity groups, the
hospitality industry, MLM's, inside and outside sales organizations,
colleges and universities, home-based entrepreneurs and many others.
There are over 7.8 million small and medium sized businesses in the
U.S. today. Firms of all sizes recognize the need to have Unified
Messaging, Unified Communications and other subscriber functionalities
in order to achieve company goals and better communicate in the
fast-paced world.
Outside of the United States, the potential number of subscribers
easily could exceed the U.S. subscriber base. See chart below.
During its first full year of operation, it is the goal of On Demand
to enroll more than FOUR HUNDRED AND FIFTY THOUSAND (450,000) NEW
SUBSCRIBERS in a grass roots national marketing campaign. Four hundred
and fifty thousand subscribers should generate FIRST YEAR'S REVENUE in
excess of THIRTY SIX MILLION TWO HUNDRED AND THIRTY SEVEN THOUSAND TWO
HUNDRED FIFTY DOLLARS ($36,237,250.00).
MARKETING AND SALES
The On Demand Communications value proposition will be presented to
prospective subscribers through extensive high-end advertising,
including targeted direct mail, telemarketing programs, targeted
emails, website affiliation programs, link exchanges, placement on
leading search engines, and through other effective advertising
channels.
The sales campaign is expected to include direct sales and the
formation of strategic relationships with local and regional service
providers and targets key accounts. Service providers will welcome the
opportunity to offer a simple, cutting-edge service that will create a
new source of revenue. Several major service provider and Fortune 500
organizations have already expressed an interest in partnering with On
Demand to co-market service to their subscriber bases. The On Demand
business model allows for a monthly recurring revenue with excellent
profit margins. On Demand, its investors and partners will enjoy
tremendous revenue and profit growth moving forward.
COMPETITION
On Demand believes that no competition presently exists that offers
the ease of use, the simplicity of not having to download anything
onto the customer's computer and the broad array of products and
services supplied by On Demand. However, there is the potential for
significant competition as the scope of On Demand's operations becomes
known throughout the world.
Significant potential competition, and the significant potential for
extensive cooperation, exists from various categories of service
providers, including tier one and government-regulated communications
carriers, online firms, internet sites that host primary
communications services and products and other portals. In addition,
software vendors and resellers that offer web-enabled communications
such as "B2B" and "B2C" may become competitors.
MANAGEMENT AND OPERATIONAL ROLES
DAVID G. MPOJEANNIS, CEO
David Mpojeannis has a 15-year record of demonstrated success in
sales, marketing, business development and corporate management at the
executive level. David is recognized as a savvy entrepreneur with
equal passions for marketing and technology.
In addition to having held key, executive level positions with market
leaders including IBM, 3Com, Cisco Systems, and NCD, he has co-founded
several successful technology companies. In 1999, David helped
co-found Uniexchange Corporation; a privately-held, Toronto-based
software development company focused on telephony and unified
communications. Serving as President, the company quickly became
successful and developed innovative communications technologies for
service provider clients worldwide. In December, 2000, he was
instrumental in co-founding Emphasys Communications, a joint-venture
company offering a high-tech business marketing and unified
communications services bureau based in San Diego, California. The
company became profitable in just its 13th month of operation.
16
David co-founded and was CEO of Rapid Technologies Group, Inc., which
operated several technology companies, including uFax Corporation, an
Internet FaxMail service provider, Alliance Consulting Group, Inc., a
high-end technology consulting firm, and Rapid Telco Systems, a vendor
of enhanced communications solutions to service providers worldwide.
OnDemand Communications Websites
Http://www.ondemandcommunications.com
-------------------------------------
Http://Web.ondemandcommunications.com
-------------------------------------
SERVICE OFFERINGS
As of May 20, 2004, the Company launched "UnityVoice", a B2B and B2C
virtual office application specific to the Entertainment, Real Estate
and Multi-Level Marketing Sectors.
Http://www.unityvoice.com
-------------------------
Our Company has entered into the following contractual relationships:
a.) Cybacom, Inc. - Joint Venture Agreement with Global Card, Inc.
Pursuant to said Agreement, Cybacom will provide to
GlobalCard access to its Universal Cash Card, issued by Bank First and
processed though Wildcard. The fee sharing arrangement is split net
50-50 between Cybacom and GlobalCard.
b.) RingCentral, Inc. - Branded Affiliate Agreement with OnDemand
Communications Corp.
Pursuant to said Agreement, RingCentral will provide
OnDemand Communications Corp. Web based deliverables under an OEM with
Toll Free and Local access.
c.) Freedom Voice Systems, Inc, - OEM Agreement with OnDemand
Communications, Corp.
Pursuant to said Agreement, Freedom Voice Systems will
provide OnDemand Communications Corp. a Web based deliverable under an
OEM with Toll Free and Local access and enhanced ad tracking
capabilities.
d.) HG Media Group - Marketing Agreement with Radio Air Time for On
Demand Communications Corp.
Pursuant to said Agreement, in exchange for 5% of the
net proceed realized from the internet radio campaign, HG Media will
provide and manage 96 30-second add spots daily.
e.) Carlos Cuevas - Marketing Agreement with Keller Williams Realty
Pursuant to said Agreement, in exchange for 5% of the
net proceeds realized from his client(s), Carlos Cuevas is to manage
and maintain the deployment of the Keller Williams enrollment and
installation with the proposed expansion roll out of more than 29,000
agents in over 300 US markets.
f.) Rex Enterprises - Marketing Alliance with VTYC
Pursuant to said Agreement, in exchange for 5% of the
net proceeds realized from the VTYC products placed, Rex Enterprises
shall provide to its growing client base current and proposed VTYC
products and services.
g.) iVoice, Inc. - Distribution Agreement with OnDemand Communications
Corp.
Pursuant to said Agreement, VTYC shall purchase at
wholesale rates from iVoice various proprietary Speech Enabled
products and Services so as to offer these products and services to
the Victory client base.
h.) nTera Inc. - Carrier Services Agreement with OnDemand
Communications Corp.
Pursuant to said Agreement, OnDemand shall purchase
telecommunications traffic from nTera at wholesale rates, and nTera
shall terminate OnDemand's international and domestic
telecommunications traffic (DDDD/IDDD type) through nTera's
interconnection locations in the United States. Domestic Termination
Wholesale rates range from .005 and .0195 per minute.
i.) Asgard Holdings, Inc. - Joint Marketing Program with VTYC
Pursuant to said Agreement, in exchange for 10% of the
net proceeds realized from the VTYC products placed, Asgard Holdings,
Inc. shall provide to its growing client base current and proposed
VTYC products and services.
Our Company's only foreseeable cash requirements during the next
quarter will relate to our continued employee expenses, maintaining
our Company in good standing in the State of Nevada, as well as legal
fees, accounting fees, and general and administrative expenses in
connection with the adoption of its business plan. Management is in
final negotiation with the US branch of a globally recognized
17
International Financial Institution to purchase under Regulation "S",
2,500,000 shares of the Company's common stock with the proposed
proceeds equaling $1,250,000 USD to be realized by the Company. Upon
execution of the Regulation "S" Share Purchase Agreement, management
does not anticipate the need to raise additional funds during the next
year.
On May 9, 2003 the Company issued 12,500,000 shares of common stock
issued under Rule 144 of the Securities and Exchange Act. These shares
were issued for services rendered April 28, 2003. No monetary value
was received by the Company for the issuance of these shares. Further,
on May 9, 2003, the Company issued 40,666,667 shares of common stock
in the name of the Company under Rule 144.
Item 3. Controls and Procedures.
--------------------------------
(a) Evaluation of Disclosure Controls and Procedures
Victory Capital Holdings Corporation's President and
Secretary/Treasurer have evaluated the company's disclosure controls
and procedures as of May 24, 2004, and they concluded that these
controls and procedures are effective.
(b) Changes in Internal Controls
There are no significant changes in internal controls or in
other factors that could significantly affect these controls
subsequent to May 24, 2004.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
----------------------------
The Company has been a named defendant in an unlawful
detainer action filed in Los Angeles County, California. This action
is regarding a lease that the Company signed for services rendered
with an outside consultant of the Company. The Company's legal
representation is in final negotiations to settle the matter without
further proceedings.
Item 2. Changes in Securities.
--------------------------------
None; not applicable.
Item 3. Defaults Upon Senior Securities.
------------------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
--------------------------------------------------------------
None; not applicable.
Item 5. Other Information.
----------------------------
On November 17, 2003 the Company relieved Jersey Transfer
and Trust Company of the duties as the Company's Transfer Agent and
engaged Mellon Investor Services to fill these duties and
responsibilities.
Harold Gregg, the Company's Chairman and Interim CEO, owns
0% of the Company's common stock, is eligible under the Performance
Agreement dated January 1, 2004, which is valid through December 31,
2004, to be issued 10% of the Company's common stock at a .10 share
price. These shares will be issued in the event that the business plan
referenced above in item 2. is either met or exceeded.
Mr. Gregg, also serves as General Counsel for Ascot
Investments, Inc., which holds 4.0% of the Company's common stock. In
addition, Mr. Gregg serves as General Counsel of Ascot Aviations, Inc.
and CTSO, Inc., which both hold 4.0% of the Company's common stock.
Mr. Gregg currently holds a seat on the Board of Directors of Ascot
Investments, Inc. Both Ascot Aviations, Inc. and CTSO, Inc. are
portfolio holdings of Ascot Investments, Inc.
18
Item 6. Exhibits and Reports on Form 8-K.
-------------------------------------------
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Victory Capital Holdings Corporation
fka New Environmental Technologies Corporation
Date: 05/24/04 By: /s/Harold Gregg
-------------- -------------------------------------
Harold Gregg
Director and CEO
Secretary and Treasurer
19
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Harold Gregg, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Victory Capital
Holdings Corporation fka New Environmental Technologies Corporation.
The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. Based on my knowledge, this quarterly 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 quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report. Date: May 24, 2004
/s/ Harold Gregg
-------------------------------------
Harold Gregg
Chairman of the Board and Treasurer
(principal executive officer)
(principal financial officer