UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 10-QSB/A
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
_________________________________________
For the quarter endedMarch 31, 2003 Commission file number000-49634
FORTIS ENTERPRISES
(Exact name of registrant as specified in its charter)
NEVADA &n bsp; 88-0475756
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1601 E. Flamingo Rd., Suite 18B
Las Vegas, Nevada 89119
(Address of principal executive offices) (Zip Code)
(702) 866-5834
(Registrant's telephone number, including area code)
First Impressions
(Former name, if changed since last report)
Indicate by check mark whether the registrant (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 such filing requirements for the past 90 days.
Yes ___X___ No _____
As of May 1, 2003 there were 20,000,000 shares of common stock outstanding.
Transitional Small Business Disclosure Format (check one)
Yes ______ No ___X__
FIRST IMPRESSIONS
MARCH 31, 2003
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of March 31, 2003 and December 31, 2002
Statement of Operations three months ended March 31, 2003 and 2002
Statement of Cash Flows three months ended March 31, 2003 and 2002
Notes to Unaudited Financial Statements
Item 3. Controls and Procedures
PART II - OTHER INFORMATION
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matter to a Vote of Security Holders
Item 6. Exhibits and Reports of Form 8-K
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*THIS AMENDMENT IS BEING FILED TO INCLUDE THE CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. THE CERTIFICATION IS ATTACHED HERETO AS EXHIBIT 32.
FIRST IMPRESSIONS
(a Development Stage Company)
BALANCE SHEET
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
March 31, 2003 | December 31, 2002 | |
ASSETS | ||
CURRENT ASSETS | ||
Cash | $ 22,305 | $ 24,305 |
TOTAL CURRENT ASSETS | 22,305 | 24,305 |
$ 22,305 | $ 24,305 | |
| ||
LIABILITIES AND STOCKHOLDERS' EQUITY |
| |
CURRENT LIABILITIES | $ 0 | $ 0 |
| ||
TOTAL CURRENT LIABILITIES | 0 | 0 |
| ||
STOCKHOLDERS' EQUITY |
| |
Preferred stock, $.001 par value authorized 5,000,000; | |
|
| ||
Common stock, $.001 par value, authorized 50,000,000 shares; | |
|
| ||
Additional paid-in capital | 36,731 | 35,231 |
(Deficit) accumulated during development stage | (34,426) | (30,926) |
TOTAL STOCKHOLDER'S EQUITY | 22,305 | 24,305 |
$ 22,305 | $ 24,305 |
The Accompanying Notes are an integral part of these financial statements.
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FIRST IMPRESSIONS
(a Development Stage Company)
STATEMENT OF OPERATIONS
UNAUDITED
Three Months Ended | Three Months Ended | For the Period October 18, 2000,(Inception) to March 31, 2003 | |
Revenue | $ 0 | $ 0 | $ 0 |
EXPENSES | |||
General and Administrative | 2,000 | 2,081 | 22,695 |
Officer services | 1,500 | 1,500 | 11,731 |
TOTAL EXPENSES | 3,500 | 3,581 | 34,426 |
NET (LOSS) | $ (3,500) | $ (3,581) | $ (34,426) |
Weighted average number of common |
|
| |
Net (loss) per weighted shares-basic and |
|
|
The Accompanying Notes are an integral part of these financial statements.
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FIRST IMPRESSIONS
(a Development Stage Company)
STATEMENT OF CASH FLOWS
UNAUDITED
Three Months Ended | Three Months Ended | For the Period October 18, 2000,(Inception) to March 31, 2003 | |
Cash Flows from | |||
Operating Activities | |||
Net loss | $ (3,500) | $ (3,581) | $ (34,426) |
Shares issued for services | -- | -- | 5,000 |
Donated services | 1,500 | 1,500 | 11,731 |
Adjustment to reconcile net loss to net cash used by operations | |||
Note Payable | -- | (1,500) | -- |
Payroll Liabilities | -- | -- | -- |
Net cash used in operating activities | (2,000) | (3,581) | (17,695) |
Cash Flows from Investing Activities | -- | -- | -- |
Cash Flows from Financing Activities | |||
Issuance of common stock | -- | 20,700 | 40,000 |
Net increase in cash | (2,000) | 17,119 | 22,305 |
Cash, beginning of period | 24,305 | 9,753 | 0 |
Cash, end of period | $ 22,305 | $ 26,872 | $ 22,305 |
Supplemental Disclouser | |||
Interest Paid | $ - -- | $ - -- | $ - -- |
Taxes Paid | $ - -- | $ - -- | $ - -- |
The Accompanying Notes are an integral part of these financial statements.
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FIRST IMPRESSIONS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these consolidated interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2002 and notes thereto included in the Company's 10-KSB annual report. The Company follows the same accounting policies in the preparation of interim reports.
Results of operation for the interim period are not indicative of annual results.
Note 2 - Going concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its product line, setting up its e-commerce website, and incurring substantial costs and expenses. As a result, the Company incurred accumulated net losses from October 18, 2000 (inception) through the period ended March 31, 2003 of $(34,426). In addition, the Company's development activities since inception have been financially sustained through equity financing.
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.
Note 3 - Related party transactions
The Company neither owns nor leases any real or personal property. An officer of the Company donated services at $50 an hour for 10 hours per month for a total of $500 per month. The total services donated for the three months ended March 31, 2003 were $1,500 and the total as of October 31, 2000 (Inception) to March 31, 2003 were $11,731. Both amounts have been expensed accordingly.
The officer and director of the Company is involved in other business activities and may in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such person may face a conflict in selecting between the Company and its other business interests. The Company has not formulated a policy for the resolution of such conflicts.
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The following discussion and analysis should be read in conjunction with the Company's unaudited financial statements and the notes thereto contained elsewhere in this filing.
Overview
First Impressions was organized October 18, 2000 as a Nevada corporation, and has a limited operation history. We were organized to develop a business as an online retailer and distributor of perfume fragrances, bath products and related products, with some items specifically designed for First Impressions.
Since our incorporation in October 2000, we have not been engaged in any significant operations nor have we had any significant revenues, as we are in the development stage. Our only recent activities include organization of the Company, the establishment of our website, research over the Internet to determine methods of acquiring market share presence without significant start up expenses, start up of our website, and establishment of our relationships with Desert Health and LinkShare. Our goal is to distribute a variety of products through Internet generated sales, at the most cost efficient method. In addition to these activities and goals, we have continually evaluated other opportunities that may enhance stockholder value, including the acquisition of products or technology or the pursuit of a merger or acquisition of other business entities with long term growth opportunities.
BUSINESS OF THE COMPANY
In December of 2002, we became an affiliate of LinkShare, which allows us to operate our website as a portal with various links to online suppliers of perfume products, bath products and various gift products. Although this affiliation with LinkShare allows us immediate online access to numerous vendors, we are highly dependent upon LinkShare to provide a link from our website to the website of our vendors. Additionally, we are highly dependent on LinkShare to track the traffic from our visitors and the sales from our customers.
First Impressions is an online retailer and distributor of perfume fragrances, bath products and related products and some products being specifically designed for First Impressions. Our goal is to operate an online store that specializes in the sale of fragrances, fragrance related products and bath and body products on a retail and wholesale basis. The business-to-business component of the online store is intended to offer products on a wholesale basis to the market of smaller specialty retailers. Users will be able to browse and locate products. The online store, domain name - - first2impress.com, will offer personalized customer service, secure ordering, numerous shipping options and fast delivery.
To effectuate the business plan of the Company, in addition to the Linkshare agreement, we executed an agreement on October 18, 2000 with Desert Health Products, Inc., which provides for the licensing, manufacturing and distribution of First Impressions' products until termination in December of 2010. The agreement provides for a price to be paid to Desert Health Products, of the cost of production, including a reasonable allowance for overhead, plus 30%, which also provides for a price increase every six (6) months. There were no up front licensing fees. The agreement further provides for termination prior to its expiration, by either party for the following reasons:
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Under the contract and relationship established between Desert Health Products and First Impressions, we have the ability to choose the fragrance desired by First Impressions, and utilize the fragrance in the various products, which Desert Health Products already produces with different fragrances, thus establishing an exclusive product for First Impressions. Under the agreement, the fragrance formula is a one of a kind specially formulated fragrance selected by First Impressions and to be utilized exclusively by First Impressions in various forms of perfumes and related products. Additionally, Desert Health Products has agreed to handle all packaging and shipping for First Impressions.
Industry Background
The Internet has emerged as a global medium, enabling millions of people to share information, communicate and conduct business electronically. This medium of communication and marketing represents an opportunity for businesses to advertise and sell products online to both consumers and businesses.
The traditional retail fragrance industry is fragmented with different competitive strategies used throughout. The industry includes upscale department stores which compete based on advertising and promotions not on price, specialty retailers which compete based on pricing, and mass-market retailers and drug stores which emphasize convenience purchasing.
We believe that traditional fragrance retailers face a number of challenges in providing a satisfying shopping experience for consumers:
In addition, we believe that many consumers find the fragrance shopping experience, especially at large department stores, to be time-consuming, inconvenient and unpleasant due to factors such as location, product selection, and high pressure sales tactics.
At the wholesale level, manufacturers of designer fragrances have restricted their direct sales primarily to upscale department stores and larger specialty stores. Smaller specialty retailers have traditionally obtained high demand fragrance products from secondary sources and direct distributors who principally resell products purchased directly from fragrance manufacturers and foreign sources.
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The characteristics of the Internet provide a number of advantages for retail and wholesale fragrance sellers. Online sellers are able to display a larger number of products than traditional store-based or catalog sellers at a lower cost. In addition, online sellers are able to frequently adjust their featured selections, editorial content and pricing, providing significant merchandising flexibility. Online sellers also benefit from the minimal cost to publish on the Web, the ability to reach a large group of customers from a central location, and the potential for low-cost customer interaction. Unlike traditional channels, online sellers do not have the burdensome costs of managing and maintaining a retail store infrastructure or the significant printing and mailing cost of catalogs. Online sellers can also easily obtain demographic and behavioral data about customers, increasing opportunities for direct marketing and personalized services. Our belief is that brand loyalty is a primary factor influencing a fragrance purchase, and a customer's presence at the point-of-sale and ability to physically sense the fragrance product is not deemed to be critical to the purchasing decision.
Markets And Marketing
First Impressions does not currently market any of its own products; however currently markets other products through its affiliation with LinkShare. Additionally we plan to implement a comprehensive campaign to market and promote First Impressions products based upon fragrances generated through our agreement with Desert Health Products. Our marketing and promotion strategy is designed to:
We intend to commence our targeted advertising and marketing campaign to increase awareness of First Impressions brand and to acquire customers through multiple channels, including traditional and online advertising, direct marketing acquired customer lists of various hair salons, and expanding the scope of our strategic relationships. We believe that the use of multiple marketing channels will reduce reliance on any one source of customers and maximize our brand awareness.
In addition to the specific strategies discussed below, we intend to maximize the lifetime value of our customers by focusing on customer care, satisfaction and retention.
Online Advertising. We plan to engage in targeted online advertising to promote First Impressions brand name and product offerings. We plan to pursue agreements with major portals, including AOL, AltaVista, Excite@Home, Lycos, MSN and Yahoo, to feature First Impressions in the shopping, beauty and other relevant areas on these portals. These agreements should provide us with a prominent position in the home-related shopping areas of these major portals and access to the majority of "fragrance" search keyword inventory. At this time we do not have any agreements or arrangements with these portals.
Traditional Advertising.We believe we will benefit by utilizing an offline advertising campaign. Offline campaigns are designed to not only increase awareness of First Impressions, but also increase the productivity of our online and direct marketing efforts as well. An integrated multimedia advertising campaign includes television, radio, print, outdoor and event-based advertising. As a result of the increase costs associated with this form of advertising, we do not anticipate utilizing the traditional advertising until either revenues are generated from other forms of advertising or additional equity or debt financing is achieved.
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Direct Marketing And Promotion. As an online retailer and distributor of a perfume fragrance and related products our customer database is anticipated to grow. We will continuously gather data about our customers' purchasing preferences and habits in an effort to increase repeat business. We intend to maximize the value of this information by delivering meaningful information and special offers to our customers via email and other means. The direct marketing effort occurs as the result of establishing a relationship with the customer, which has been acquired generally through non-direct means of advertising such as online advertising. Once the online advertising has assisted in establishing the customer, we intend to pursue direct marketing efforts to that customer through mail-outs and emails. These mail-outs and emails will provide steady customers with periodic specials, not otherwise offered to first time shoppers. Additionally, First Impressions may market through existing beauty salons on a wholesale basis. As a result of our present management's experience and connections through working in various beauty salons, we intend to take advantage of such connections and locate beauty salons willing to carry our products. We believe that we can establish a name recognition within the beauty salons, enabling us to continue to expand our markets.
To establish our business plan at the lowest possible cost, we have joined the affiliate program of LinkShare, a private company offering our company, on a non-exclusive basis, the ability to link with online merchant sites. LinkShare's affiliate program is a partnership between our site and online merchants (that is, a website that sells goods or services). Other than being a member of LinkShare's affiliate program, we have no other affiliation with LinkShare.
LinkShare's principal line of business is to create and operate online networks that enable businesses to form commercial relationships by linking their websites to the websites of other businesses. Businesses that join one of LinkShares networks can:
LinkShare's first network, The LinkShare Network™, brings together merchants selling products or services to consumers with website owners willing to promote those products and services on their websites. Merchants who join The LinkShare Network™ can establish promotional links on thousands of websites owned by independent website publishers who join the network as "affiliates." When a visitor to an affiliate's website clicks through a promotional link to a merchant's site and takes a prescribed action, such as buying a product or completing a form, that merchant pays a commission to that affiliate and to LinkShare.
LinkShare provides the software and operates the systems through which:
The LinkShare Network™ currently has over 600 merchants and hundreds of thousands of affiliates, according to LinkShare.
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As a result of our agreement with LinkShare we are able to join a merchant's program, providing us the opportunity to link directly to the merchant's site. LinkShare hosts a password-protected website that offers affiliates such as us to choose amongst some 600 merchants. Through the password-protected LinkShare site we can obtain detailed reports about how our links are performing and how much they have earned. Prior to linking to the merchant's site, each merchant must independently review our site and approve our link to their site. We incur no costs associated with either LinkShare or the online merchant, as their revenues, just like ours, are generated through the sale or in some cases traffic driven to the merchant's site.
Our source of revenues are generated from the visitors who enter our site as the result of our advertising. The visitors who link to one of our merchant's sites and make a purchase cause a chain of events as follows:
LinkShare's payment process is to pay commissions on an ongoing basis, whenever there are funds in an affiliate's account exceeding $25.00.
Our expenses in the transaction relate to our cost of advertising. We do not incur any costs associated with the link with either LinkShare or the merchant, as our proceeds are commissions net of any such costs.
When our visitors open our website a multitude of links to online affiliate merchants is displayed, which allows the visitor to access various different websites offering floral products, gifts, gourmet foods, etc. The visitor is free to browse all of the links to search and fulfill their individual shopping needs. Individual sales are processed directly by the merchant through their website with a commission paid to us for the link referral. When a visitor from our site clicks on a link and goes to a merchant's site, LinkShare keeps track of all of the transactions that the visitor makes. If that visitor buys something on the merchant's site, we receive a commission. In some cases, affiliates of LinkShare are compensated even if the visitor doesn't buy anything, just for having driven traffic to the merchant's site.
The transaction between our customer, our website, and the online affiliate merchant is tracked by software provided by LinkShare. The LinkShare Signature Technology provides us the ability to track and generate detailed reports on the commerce activity generated by our website. As a result of our having the ability to review reports on a daily basis we are able to audit activity daily. However, we are still vulnerable to the LinkShare tracking program; which requires random transactions by us to verify the accuracy of the LinkShare reports.
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To utilize the LinkShare Signature Technology, we have agreed to be bound by LinkShare's "Affiliate Membership Agreement," through an electronically stored agreement. As a result of our agreement with LinkShare we have been provided both a Username and Password to access LinkShare information including the reports generated by LinkShare through their website at www.linkshare.com.
Our Affiliate Membership Agreement with LinkShare has provided us the ability to accept link offers by several online merchants. As of the date of this offering, we have established and been approved for links with the following merchants: Avon, FragranceNet.com, Sephora, Stress Less, Inc., Yves Rocher, and Zirh. Our geographical limitations for visitors are limited only to having internet access; however our geographical limitations for merchant transactions are based upon limits of where merchants are willing to process and ship the orders for goods and services.
Although our Affiliate Membership Agreement with LinkShare does not prevent us from doing business with vendors or merchants whom are not members of the LinkShare program, we would not have the benefit of LinkShare Network™, which tracks our transactions. Additionally, our agreement with LinkShare does not allow us to deal direct with the LinkShare merchants without causing the transaction to go through the LinkShare Network™. Since we are allowed, under our agreement with LinkShare, to contract with other merchants, we are exploring the possibility of utilizing other companies who perform the same function as LinkShare.
The most direct benefit of our affiliation with LinkShare and the online merchant is our ability to focus our energy and limited finances on creating brand recognition. We can focus on brand recognition as a result of our not having the obligations of establishing a retail selling organization.
Comparison of Financial Condition at March 31, 2003 and December 31, 2002
The Company's total assets decreased by $2,000 during the three months ended March 31, 2003, from $24,305 at December 31, 2002 to $22,305 at March 31, 2003. This decrease in the Company's total assets resulted from audit expense incurred during the three months ended March 31, 2003.
The Company's total stockholders' equity decreased $2,000 from $24,305 at December 31, 2002 to $22,305 at March 31, 2003. This decrease resulted principally from net losses incurred during the three months ended March 31, 2003.
Comparison of Results of Operations for the Three months ended March 31, 2003 and 2002
The Three Months ended March 31, 2003 | The Three Months ended March 31, 2002 | |
Revenues | $ - -- | $ - -- |
Cost of Goods Sold | -- | -- |
Operating Expenses | 3,500 | 3,581 |
Other Income (Expense) | -- | -- |
Net Income (Loss) | $ 3,500 | $ 3,581 |
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General and Administrative expenses
| Increase/(decrease) | ||||
| 2003 | 2002 | $ | % | |
For the three months ended March 31: | ||||
General & Administrative expenses | $ 2,000 | $ 2,081 | $ (81) | (4%) |
General and administrative expenses were $2,000 for the three months ended March 31, 2003 versus $2,081 for the three months ended March 31, 2002, which resulted in an decrease of $81 or 4%.
Net Loss
| Increase/(decrease) | ||||
| 2003 | 2002 | $ | % | |
For the three months ended March 31: | ||||
Net loss | $ 3,500 | $ 3,581 | $ (81) | (2%) |
The net loss for the three months ended March 31, 2003 was $3,500, versus a net loss of $3,581 for the three months ended March 31, 2002, a decrease of $81 or 2%.
Off-Balance Sheet Arrangements
The Company does not maintain off-balance sheet arrangements nor does it participate in non-exchange traded contracts requiring fair value accounting treatment.
Liquidity and Capital Resources at March 31, 2003 Compared with December 31,2002.
The following table summarizes total assets, accumulated deficit and stockholders' equity.
March 31, 2003 | December 31, 2002 | ||||
Total Assets | $ | 22,305 | $ | 24,305 | |
Accumulated Deficit | $ | (34,426) | $ | (30,926) | |
Stockholders' Equity (Deficit) | $ | 22,305 | $ | 24,305 | |
Going Concern
The consolidated financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of the Company as a going concern. The Company's cash position may be inadequate to pay all of the costs associated with testing, production and marketing of products. Management intends to use borrowings and security sales to mitigate the effects of its cash position, however no assurance can be given that debt or equity financing, if and when required will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.
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Item 3. Controls and Procedures
(a) Under the supervision and with the participation of our management we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934, as amended, within 90 days prior to the filing date of this report. Based on their evaluation, our sole officer concluded that our disclosure controls and procedures are effective.
(b) There have been no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in paragraph (a) above.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking statements. These forward-looking statements are based largely on the Company's expectations and are subject to a number of risks and uncertainties, many of which are beyond the Company's control, including, but not limited to, economic, competitive and other factors affecting the Company's operations, markets, products and services, expansion strategies and other factors discussed elsewhere in this report and the documents filed by the Company with the Securities and Exchange Commission. Actual results could differ materially from these forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this report will in fact prove accurate. The Company does not undertake any obligation to revise these forward-looking statements to reflect future events or circumstances.
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PART II--OTHER INFORMATION
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matter to a Vote of Security Holders.
None
On April 23, 2003 the Company received a symbol "FIIM", from NASD allowing the Company's stock to be quoted on the OTC:BB. Currently there is no bid and ask price quoted.
Item 6. Exhibits and Reports on Form 8-K.
None.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FIRST IMPRESSIONS
By:/s/ Stephen W. Carnes
Stephen W. Carnes, President
Date: August 22, 2003
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