UNITED STATES
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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2004
Commission file number 000-49634
FORTIS ENTERPRISES
(Exact name of small business issuer as specified in its charter)
Nevada | 88-0475756 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification Number) |
|
1111 N. Orlando Ave. |
Winter Park, Florida | 32789 |
(Address of Principal Executive Offices) | (Zip Code) |
(407) 435-3959
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the last 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 ____
The number of shares of Common Stock, $0.001 par value, outstanding on March 31, 2004, was 67,701,793 shares.
Transitional Small Business Disclosure Format (check one):
Yes No X
ITEM 1. FINANCIAL STATEMENTS
FORTIS ENTERPRISES
(Formerly First Impressions)
(A Development Stage Company)
BALANCE SHEET
ASSETS
| March 31, 2004 (unaudited) | December 31, 2003 (audited) |
CURRENT ASSETS | | |
Cash | $ 3,385 | $ 6,285 |
TOTAL CURRENT ASSETS | 3,385 | 6,285 |
| | |
OTHER ASSETS | 0 | 0 |
TOTAL OTHER ASSETS | 0 | 0 |
| | |
TOTAL ASSETS | $ 3,385 | $ 6,285 |
| | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | | |
| | |
CURRENT LIABILITIES | | |
Other Current liabilities | | |
Accrued Auto Allowance | $ 5,600 | $ 3,500 |
Accrued Reimbursement to Officer | 640 | 540 |
Accrued Salary - Officer | 166,667 | 104,167 |
TOTAL CURRENT LIABILITIES | 172,807 | 108,207 |
| | |
Preferred stock, $.001 par value, authorized 5,000,000 shares; no shares issued and outstanding at March 31, 2004 and December 31, 2003 | 0 | 0 |
| | |
Common stock, $.001 par value, authorized 100,000,000 shares; 67,701,793 and 65,957,062 issued and outstanding at March 31, 2004 and December 31, 2003 | 67,702 | 65,957 |
| | |
Additional paid-in capital | 268,029 | 176,574 |
Opening Balance Equity | 100 | 0 |
Deficit accumulated during development stage | (505,252) | (344,452) |
| | |
TOTAL STOCKHOLDER'S DEFICIT | (169,421) | (101,921) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 3,385 | $ 6,285 |
The accompanying notes are an integral part of these financial statements
FORTIS ENTERPRISES
(Formerly First Impressions)
(A Development Stage Company)
STATEMENT OF OPERATIONS
(unaudited)
| Three Months Ended March 31, 2004 | Three Months Ended March 31, 2003 | For the Period October 18, 2000,(Inception) to March 31, 2004 |
| | | |
REVENUE | $ 0 | $ 0 | $ 0 |
| | | |
EXPENSES | | | |
Stock Issued for services-related party | 0 | 0 | 72,500 |
Stock Issued for consulting service | 93,200 | 0 | 170,000 |
Stock Issued for legal services | 0 | 0 | 40,000 |
General and Administrative | 3,000 | 2,000 | 36,714 |
Officer donated services | 0 | 1,500 | 13,231 |
Accrued Auto Allowance | 2,100 | 0 | 5,600 |
Accrued Reimbursement to Officer | 0 | 0 | 540 |
Accrued Salary - Officer | 62,500 | 0 | 166,667 |
| | | |
TOTAL EXPENSES | 160,800 | 3,500 | 505,252 |
| | | |
NET (LOSS) | $ (160,800) | $ (3,500) | $ (505,252) |
| | | |
Weighted average | | | |
number of common | | | |
shares outstanding | | | |
basic and fully diluted | 67,701,793 | 20,000,000 | |
| | | |
Net (loss) | | | |
per weighted shares-basic | | | |
and fully diluted | $ (0.00) | $ (0.00) | |
The accompanying notes are an integral part of these financial statements
FORTIS ENTERPRISES
(Formerly First Impressions)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(unaudited)
| Three Months Ended March 31, 2004 | Three Months Ended March 31, 2003 | For the Period October 18, 2000, (Inception) to March 31, 2004 |
| | | |
Cash Flows from | | | |
Operating Activities | | | |
Net loss | $ (160,800) | $ (3,500) | $ (505,252) |
Shares issued for services-related party | 0 | 0 | 72,500 |
Shares issued for consulting services | 93,200 | 0 | 170,000 |
Donated services | 0 | 1,500 | 13,230 |
| | | |
Adjustment to reconcile net loss to net cash used by operations | | | |
Accrued Auto Allowance | 2,100 | 0 | 5,600 |
Accrued Reimbursement | 0 | 0 | 540 |
Accrued Salary - officer | 62,500 | 0 | 166,667 |
| | | |
Net cash used in operating activities | (3,000) | (2,000) | (76,715) |
| | | |
Cash Flows from Investing Activities | 0 | 0 | 0 |
| | | |
Cash Flows from Financing Activities | | | |
Opening Balance Equity | 100 | 0 | 100 |
Issuance of common stock | 0 | 0 | 80,000 |
| | | |
Net increase (decrease) in cash | (2,900) | (2,000) | 3,385 |
| | | |
Cash, beginning of period | 6,285 | 24,305 | 0 |
Cash, end of period | $ 3,385 | $ 22,305 | $ 3,385 |
| | | |
Supplemental Disclosure | | | |
Interest Paid | $ 0 | $ 0 | $ 0 |
Taxes Paid | $ 0 | $ 0 | $ 0 |
The accompanying notes are an integral part of these financial statements
FORTIS ENTERPRISES
(Formerly First Impressions)
(a Development Stage Company)
Notes to Financial Statements
Note 1 - Basis of Presentation
The accompanying unaudited condensed financial statements at March 31, 2004 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of financial positions as of March 31, 2004 and results of operations and cash flows for the three months ended March 31, 2004. All such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative of the results expected for a full year. The statements should be read in conjunction with the financial statements and footnotes thereto included in the Company's Form 10-KSB for the year ended December 31, 2003.
Note 2 - Going concern
The accompanying financial statements at March 31, 2004 have been prepared on a going concern basis, which contemplated the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered losses from operations during its operating history. The ability of the Company to continue as a going concern is dependent upon obtaining future profitable operations. Management is in the process of implementing its business plan which would generate revenue to sustain the operations of the Company. 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 as a going concern.
Note 3 - Stockholders' Equity
On January 19, 2004, the Company issued 328,481 shares of its common stock to various individuals for consulting services in the amount of $29,500.
On February 10, 2004 the Company issued 140,000 shares of its common stock to Michael Manion for consulting services in the amount of $10,000.
On February 23, 2004 the Company issued 306,250 shares of its common stock to various individuals for consulting services in the amount of $24,500.
On March 30, 2004, the Company issued 970,000 shares of its common stock to various individuals for consulting services in the amount of $29,200.
FORTIS ENTERPRISES
(Formerly First Impressions)
(a Development Stage Company)
Notes to Financial Statements
Note 4 - - Subsequent Events
On April 30, 2004, the Company resolved to issue 1,490,000 shares of its common stock to Cornell Capital Partners, LP as a commitment fee towards a "Standby Equity Distribution Agreement" which is valued at $29,800. All shares will be issued and restricted pursuant to Rule 144.
On April 30, 2004, the Company resolved to issue 10,000 shares of its common stock to Newbridge Securities Corporation for placement agent fees in the amount of $200. All shares will be issued and restricted pursuant to Rule 144.
Item 2. Plan of Operation
With the exception of historical matters, the matters discussed herein are forward-looking statements that involve risks and uncertainties. Forward-looking statements include, but are not limited to, statements concerning anticipated trends in revenues and net income, projections concerning operations and available cash flow. Our actual results could differ materially from the results discussed in such forward-looking statements primarily as the result of insufficient cash to pursue production and marketing efforts. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto appearing elsewhere herein.
Overview
Fortis Enterprises is a Development Stage Company, originally incorporated in the State of Nevada on October 18, 2000 under the name First Impressions. We were initially 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.
On July 14, 2003, we amended our Articles of Incorporation changing our name from First Impressions to Fortis Enterprises. The Board of Directors determined that the name, "First Impressions" was limiting the Company's ability to pursue the expansion of our business into other marketing arenas and felt that the name Fortis Enterprises was more generic and allows for more flexibility in the future expansion of business opportunities. We also increased the total amount of authorized common stock from 50,000,000 shares to 100,000,000 shares.
On November 25, 2003, we received a letter from counsel for Fortis (NL) N.V. Corporation, wherein he requested we change our corporate name in order to avoid infringement on their trade name. We voluntarily decided to cease the use of the name within a reasonable period of time. Under Nevada law, we are required to have a stockholder vote in order to amend our Articles of Incorporation to change our name, which in turn causes us to comply with the proxy rules of section 14(a) of the 34 Act. We are currently in the process of filing a notice for our annual meeting and we intend to solicit proxies to change our corporate name.
Plan of Operation
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. We intend to achieve growth through mergers and acquisitions of small to mid-sized cleaning and restoration services companies throughout the United States.
We intend to focus on growth through acquisition. We believe that there can be "Economies of Scale" achieved by consolidating the "single owner" restoration companies into Fortis Enterprises. We believe that it can reduce combined overall overhead among the companies acquired by eliminating many duplicated everyday business nuisances for the small business owners such as accounting services, marketing and advertising costs, office staff and equipment, etc. We also believe that consolidating and focusing efforts on a combined marketing campaign will assist the various companies merged into Fortis Enterprises to achieve overall revenue growth.
On November 11, 2003, we executed a Letter of Intent with a privately held company based in Northern Florida that specializes in insurance restoration services. The Letter of Intent outlines the basic parameters under which the privately held company would agree to be acquired by us. We are working together with the acquisition candidate to perform the necessary due diligence that will allow both parties to sign a definitive agreement, which will provide the specific details regarding the terms and conditions of the acquisition. Upon completion of a definitive agreement we will file a Form 8-K. Two of the principals associated with the privately held company are currently consultants for us.
On April 14, 2004, we entered into a Standby Equity Distribution Agreement with Cornell Capital Partners, LP (the "Investor"), wherein we agreed to issue and sell to the Investor and the Investor agreed to purchase from the Company $5,000,000 of our common stock, par value $0.001 per share. Additionally, we entered into a secured convertible debenture agreement with the Investor in order to provide us with expedited access to $300,000 of the funding, $150,000 of which we have already received.
Satisfaction of our cash obligation for the next 12 months. We plan on satisfying our cash obligations over the next twelve months through additional equity and/or third party financing. We do not anticipate generating revenues sufficient enough to satisfy our working capital requirements within the next twelve months.
A critical component of our operating plan impacting our continued existence is the ability to obtain additional capital through additional equity and/or debt financing. We do not anticipate enough positive internal operating cash flow until such time as we can generate substantial revenues, which may take the next few years to fully realize. In the event we cannot obtain the necessary capital to pursue our strategic plan, we may have to cease or significantly curtail our operations. This would materially impact our ability to continue operations.
Our near term cash requirements are anticipated to be offset through the receipt of funds from the Cornell convertible debenture, private placement offerings and loans obtained through private sources. Once we file a registration statement for the $5,000,000 line of credit, we anticipate being able to use the line of credit to finance our operations. Since inception, we have financed cash flow requirements through debt financing and issuance of common stock for cash and services. As we expand operational activities, we may continue to experience net negative cash flows from operations, pending receipt of servicing or licensing fees, and will be required to obtain additional financing to fund operations through common stock offerings and bank borrowings to the extent necessary to provide working capital.
Over the next twelve months we believe that existing capital and anticipated funds from operations will not be sufficient to sustain operations and planned expansion. However, the line of credit is anticipated to satisfy our working capital needs, but if it is not available, we will be required to seek additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities. No assurance can be made that such financing would be available, and if available it may take either the form of debt or equity. In either case, the financing could have a negative impact on our financial condition and our Stockholders.
We anticipate incurring operating losses over the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks include, but are not limited to, an evolving
and unpredictable business model and the management of growth. To address these risks we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, continue to develop and upgrade technology and products, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.
Summary of any product and development that we will perform for the term of the plan. We do not anticipate performing any significant product research and development under our plan of operation. In lieu of product research and development we anticipate acquiring small renovation business.
Expected purchase or sale of plant and significant equipment. We do not anticipate the purchase or sale of any plant or significant equipment, as such items are not required by us at this time or in the next twelve months; however as the result of our plan for acquisitions of renovation businesses, we may acquire equipment, and in some cases plants, which relate to the renovation businesses.
Significant changes in the number of employees. As of March 31, 2004, we had 1 employee. We are dependent upon Steve W. Carnes our sole officer and director. We will need to hire full time operational staff as our operations commence and we complete anticipated acquisitions.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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 its intended business plan. 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.
Item 3. Controls and Procedures
We are a development stage company with no revenues and during the period covered by this quarterly report our sole officer and director, Stephen Carnes, had responsibility for our internal controls and procedures over our financial reporting.
We have implemented and maintain disclosure controls and procedures which consist of: the control environment, risk assessment, control activities, information and communication and monitoring. Our scope of internal control therefore extends to policies, plans procedures, processes, systems, activities, initiatives, and endeavors required of a company with our limited transactions, expenses, and operations. These controls and procedures are designed to ensure that the information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules.
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 the controls subsequent to the date of the evaluation referenced below.
Within 90 days prior to the date of this report, we carried out an evaluation, under the supervision of Mr. Carnes, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, Mr. Carnes concluded that, given the Company's limited operations, our disclosure controls and procedures were effective.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
On February 10, 2004, we have issued 140,000 shares of our $0.001 par value common stock to Michael M. Manion pursuant to a Consulting Agreement we entered into on February 5, 2004. The shares issued were unrestricted pursuant to an S-8 Registration filed with the SEC on August 26, 2003.
As of March 31, 2004, we have issued 108,529 shares of our $0.001 par value common stock to Cynthia Wainwright pursuant to a Consulting Agreement we entered into on October 1, 2003. The shares issued were unrestricted pursuant to an S-8 Registration filed with the SEC on August 26, 2003.
As of March 31, 2004, we have issued 845,394 shares of our $0.001 par value common stock to Loren Brown pursuant to a Consulting Agreement we entered into on October 1, 2003. The shares issued were unrestricted pursuant to an S-8 Registration filed with the SEC on August 26, 2003.
As of March 31, 2004, we have issued 570,808 shares of our $0.001 par value common stock to Matt Lettau pursuant to a Consulting Agreement we entered into on October 1, 2003. The shares issued were unrestricted pursuant to an S-8 Registration filed with the SEC on August 26, 2003.
On March 30, 2004, we have issued 80,000 shares of our $0.001 par value common stock to Florida Catastrophe Corp. pursuant to a Consulting Agreement we entered into on September 17, 2003. The shares issued were unrestricted pursuant to an S-8 Registration filed with the SEC on August 26, 2003.
Subsequent Issuances
On April 30, 2004, we issued 1,490,000 shares of our $0.001 par value common stock valued at $29,800 to Cornell Capital Partners, LP as part of a commitment fee pursuant to a Standby Equity Distribution Agreement. The shares were deemed to have been issued pursuant to an exemption provided by section 4 (2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering."
On April 30, 2004, we issued 10,000 shares of our $0.001 par value common stock to Newbridge Securities Corporation as compensation for Placement Agent fees. The shares were deemed to have been issued pursuant to an exemption provided by section 4 (2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering."
Item 3. Defaults by the Company upon its Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
We are in the process of filing for our annual meeting and we will solicit proxies to; (i) change our name, (ii) increase our authorized common stock to 500,000,000 shares of common stock; (iii) elect new director(s); and (iv) ratify our auditors.
Item 5. Other Information
Letter Agreement with Source Capital Group, Inc.
On January 21, 2004, we entered into a letter agreement with Source Capital Group, Inc. ("SCG") to confirm our understanding and agreement with SCG, regarding retaining SCG as our exclusive (for three weeks) financial advisor. SCG agreed to use its best efforts to provide us with an equity financing. We agreed to compensate SCG for its services in 8% cash and 8% "warrant" coverage on any funds raised during this engagement for investors introduced to us by SCG. The exercise price of the warrants shall be equal to the price of the stock at the time of the sale to an equity investor introduced to us by SCG and will be subject to adjustment in accordance with the terms of any adjustment provided for in the formal definitive Financing document. The warrants will be exercisable for five (5) years from the date of issuance. We will also reimburse SCG for any pre-approved expenses over $500 incurred in connection with the services provided to us. The term of SCG's engagement was from the date of the letter agreement through April 2004. A copy of the letter agreement was attached as an exhibit to Form 10-KSB filed on March 30, 2004.
SCG made the introduction with Cornell Capital Partners, LP, whom we've entered into a Standby Equity Distribution Agreement in the amount of $5,000,000. We have received $150,000 of the funding from Cornell. For the $150,000 raised, we compensated SCG $7,500.
Consulting Agreements
Michael M. Manion: On February 5, 2004, we entered into a Consulting Agreement with Michael M. Manion, wherein Mr. Manion agreed to serve as an independent contractor for the Company. Mr. Manion agreed to assist us with general consulting services such as assisting the Company and Company Management with various projects, business management services and other business related services. The term of the Agreement is for three months from the date of the Agreement. We agreed to compensate Mr. Manion 140,000 shares of free trading unrestricted shares of common stock for the first month, 70,000 free trading shares of stock for the second month and 70,000 free trading shares of stock for the third month.. On February 10, 2004, we issued 140,000 shares of common stock valued at $10,000 to Mr. Manion. The shares issued were unrestricted pursuant to an S-8 Registration filed with the SEC on August 26, 2003.
Subsequent Events
Mark Broersma: On April 29, 2004, we entered into a Consulting Agreement with Mark Broersma, wherein Mr. Broersma agreed to serve as an independent contractor for the Company. Mr. Broersma has various skills and abilities and an extensive background and knowledge in the Insurance Restoration industry. The term of the Agreement is for one month from the date of the Agreement and renewable on a month-to-month basis at our discretion. We agreed to compensate Mr. Broersma a total of $15,000 worth of free trading shares of common stock. Further, Mr. Broersma is a principal in a company we are seeking to acquire. Our management acknowledges and condones this potential conflict of interest. A copy of the consulting agreement is attached hereto as an exhibit.
Mike Barr: On April 29, 2004, we entered into a Consulting Agreement with Mike Barr, wherein Mr. Barr agreed to serve as an independent contractor for the Company. Mr. Barr has various skills and abilities and an extensive background and knowledge in the Insurance Restoration industry. The term of the Agreement is for one month from the date of the Agreement and renewable on a month-to-month basis at our discretion. We agreed to compensate Mr. Barr a total of $15,000 worth of free trading shares of common stock. Further, Mr. Barr is a principal in a company we are seeking to acquire. Our management acknowledges and condones this potential conflict of interest. A copy of the consulting agreement is attached hereto as an exhibit.
VBg Design: On April 29, 2004, we entered into a Consulting Agreement with VBg Design, wherein VBg agreed to serve as an independent contractor for the Company. VBg has various skills and abilities and an extensive background in and knowledge in Advertising & Marketing. The term of the Agreement is for one year. We agreed to compensate VBg $2,400 per month. A copy of the consulting agreement is attached hereto as an exhibit.
CORNELL CAPITAL FINANCING
On April 14, 2004, we entered into the following agreements with Cornell Capital Partners, LP ("Cornell").
Standby Equity Distribution Agreement and Placement Agent Agreement
On April 14, 2004, we entered into a Standby Equity Distribution Agreement with Cornell, wherein we agreed to issue and sell to Cornell $5,000,000 of our common stock. We have engaged Newbridge Securities Inc., to act as our exclusive placement agent in connection with the sale of our common stock to the Investor. We agreed to issue to Cornell 1,490,000 shares of our common stock upon execution of the agreement.
Pursuant to the Standby Equity Distribution Agreement, Cornell and the Company also entered into a Placement Agent Agreement with Newbridge Securities Corporation (Newbridge), wherein Newbridge will act as our exclusive placement agent in connection with the Standby Equity Distribution Agreement. Newbridge's services will consist of reviewing the terms of the Standby Equity Distribution Agreement and advising us with respect to those terms. We agreed to issue to Newbridge 10,000 shares of our common stock upon execution of the agreement.
Securities Purchase Agreement
We executed a Securities Purchase Agreement with Cornell, wherein we agreed to issue and sell to Cornell up to $300,000 of secured convertible debentures, which will be convertible into shares of our common stock. Of the $300,000, $150,000 has been received and the remaining $150,000 will be funded on the fifth (5th) business day following the date our authorized shares of common stock are validly increased to 500,000,000 shares and we file a registration statement, pursuant to the Registration Rights Agreement discussed above.
Registration Rights Agreements
In connection with the Securities Purchase Agreement and Standby Equity Distribution Agreement, we entered into two Registration Rights Agreements with Cornell, wherein we agreed to prepare and file, no later than sixty (60) days from the date of the agreements, with the SEC a registration statement on Form SB-2 under the 1933 Act for the registration for the resale by all Investors who purchased convertible debentures pursuant to the Securities Purchase Agreement 9,868,421 shares of our common stock issued upon conversion of the Convertible Debentures and the 1,490,000 shares of common stock issued to Cornell and enough shares to cover the $5,000,000 equity line. The Company shall cause the registration statement to remain effective until all of the registrable securities have been sold.
Escrow Agreements
In connection with the Securities Purchase Agreement and Standby Equity Distribution Agreement, pursuant to which we propose to sell secured convertible debentures, convertible into our common stock, we entered into two separate Escrow Agreements with the Investor listed on the Securities Purchase Agreement and Butler Gonzalez, LLP (the "Escrow Agent"). The Escrow Agent agreed to accept, hold, and disburse the funds deposited with it in accordance with the terms of the agreement.
Security Agreement
We executed a Security Agreement with Cornell wherein, in connection with the above financing documents, we agreed to grant to Cornell a security interest in and to the pledged property identified in Exhibit A of the Security Agreement until the satisfaction of all obligations described in the agreement are performed.
Press Release
On May 10, 2004, we issued a press release to announce that we entered into the agreements with Cornell. A copy of the press release is attached hereto as an exhibit.
Item 6. Exhibits and Reports of Form 8-K
(a) Exhibits
10.1** | Letter Agreement with Source Capital Group, Inc. |
10.2* | Consulting Agreement with Mark Broersma |
10.3* | Consulting Agreement with Mike Barr |
10.4* | Consulting Agreement with VBg Design |
31.1* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act |
32.1* | Certification pursuant to Section 906 of the Sarbanes-Oxley Act |
99* | Press Release dated May 10, 2004 |
* Filed herewith
** Filed in Form 10-KSB on 03/30/04
(b) Form 8-K
Form 8-K filed 02/12/04, Letter Agreement with Source Capital Group, Inc.
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.
FORTIS ENTERPRISES
(Registrant)
By: /S/Stephen W. Carnes
Stephen W. Carnes, President
(On behalf of the registrant and as
principal accounting officer)
Date: May 14, 2004
