Renovo 10QSB 2005 Q1 Quarterly report (small business)

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

For the quarterly period ended: March 31, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-49634

RENOVO HOLDINGS

(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)

100 Candace Drive, Suite 100
Maitland, Florida	32751
(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, 2005, was 265,260,520 shares.

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

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

RENOVO HOLDINGS

(A Development Stage Company)

BALANCE SHEET

ASSETS

	March 31, 2005 (unaudited)
CURRENT ASSETS
Cash	$ 40,032
TOTAL CURRENT ASSETS	40,032

Fixed assets, net	53,210

TOTAL ASSETS	$ 93,242

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES
Other Current liabilities
Payroll taxes payable	$ 23,102
Accrued interest payable	8,800
Accrued auto allowance	14,000
Accrued reimbursement to officer	2,157
Accrued salary - officer	381,667
Secured convertible debenture	220,000
TOTAL CURRENT LIABILITIES	649,726

STOCKHOLDERS' (DEFICIT)
Preferred stock, $0.001 par value, authorized 5,000,000 shares; no shares issued and outstanding at March 31, 2005	-

Common stock, $0.001 par value, 500,000,000 shares authorized, 265,260,520 shares issued and outstanding at March 31, 2005	265,261

Additional paid-in capital	796,200
Subscriptions receivable	-
(Deficit) accumulated during development stage	(1,617,945)

TOTAL STOCKHOLDERS' (DEFICIT)	(556,484)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)	$ 93,242

The accompanying notes are an integral part of these financial statements.

RENOVO HOLDINGS

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended March 31,		For the Period October 18, 2000,(Inception) to March 31, 2005
	2005	2004

REVENUE	$ -	$ -	$ -

EXPENSES
General and administrative expenses	40,381	3,000	310,120
Advertising	39,750	-	286,900
Depreciation	3,850	-	9,720
Stock issued for services - related party	-	-	72,500
Consulting services	20,500	93,200	409,500
Stock issued for legal services	-	-	71,710
Officer donated services	-	-	13,231
Auto allowance	2,100	-	14,000
Other expenses	-	-	540
Accrued salary	62,500	62,500	416,667

TOTAL EXPENSES	169,081	160,800	1,604,888

Other income (expense)
Interest expense	(5,098)	-	(13,056)

NET (LOSS)	$ (174,180)	$ (160,800)	$ (1,617,945)

Weighted average number of common shares outstanding basic and fully diluted	178,158,333	67,701,793

Net (loss) per weighted shares-basic and fully diluted	$ (0.00)	$ (0.00)

The accompanying notes are an integral part of these financial statements.

RENOVO HOLDINGS

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended March 31, 2005	Three Months Ended March 31, 2004	For the Period October 18, 2000, (Inception) to March 31, 2005

Cash Flows from Operating Activities
Net (loss)	$ (174,180)	$ (160,800)	$ (1,617,945)
Shares issued for services-related party	4,306	93,200	311,506
Donated services	-	-	13,230
Depreciation	3,850	-	9,720
Adjustment to reconcile net (loss) to net cash (used) by operations
(Decrease) in accounts payable	(2,516)	-	-
Increase in accrued auto allowance	2,100	2,100	14,000
Increase in accrued expenses	5,104	-	24,005
Increase in accrued interest	2,048	-	8,800
Increase in accrued salary -officer	37,500	62,500	381,667
Net cash (used) by operating activities	(121,788)	(3,000)	(855,017)

Cash Flows from Investing Activities
Purchase of fixed assets	(1,254)	-	(62,930)
Net cash (used) by investing activities	(1,254)	-	(62,930)

Cash Flows from Financing Activities
Opening balance equity	-	100	-
Proceeds from secured convertible debenture	100,000	-	400,000
Issuance of common stock	47,000	-	557,980
Net cash provided by financing activities	147,000	-	957,980

Net increase (decrease) in cash	12,508	(5,020)	40,032
Cash, beginning of period	16,075	6,286	-
Cash, end of period	$ 40,032	$ 3,386	$ 40,032
Supplemental Disclosure
Interest Paid	$ -	$ -	$ -
Taxes Paid	$ -	$ -	$ -

The accompanying notes are an integral part of these financial statements.

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

Note 1 - Basis of presentation

The accompanying unaudited condensed financial statements at March 31, 2005 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, 2005 and results of operations and cash flows for the three months ended March 31, 2005. 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, 2004.

On July 14, 2003, the Company amended their Articles of Incorporation to change their name from First Impressions to Fortis Enterprises and have subsequently changed their name to Renovo Holdings effective June 14, 2004.

Note 2 - Going concern

The accompanying financial statements at March 31, 2005 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 - Notes payable

On April 14, 2004, the Company entered into a "Standby Equity Distribution Agreement" with Cornell Capital Partners, LP (the "Investor"), wherein the Company agreed to issue and sell to the Investor and the Investor agreed to purchase from the Company $5,000,000 of $0.001 par value common stock. Additionally, the Company entered into a secured convertible debenture agreement with the Investor in order to provide the Company with expedited access to $300,000 of the total funding amount. The Company received $100,000 during the three-month period ended March 31, 2005.

Note 4 - Commitments and contingencies

On April 14, 2004, the Company executed a Securities Purchase Agreement with Cornell, wherein it agreed to issue and sell to Cornell up to $300,000 of secured convertible debentures, which will be convertible into shares of the Company's $0.001 par value common stock. $300,000 has been received during the three-months ended March 31, 2005.

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

Note 4 - Commitments and contingencies (continued)

On April 27, 2004, the Company entered into a Consulting Agreement with Digital Niche Marketing, LLC, wherein the Consultant agrees to assist us with general advertising and marketing services for a fee of $4,300 per month.

On June 4, 2004, the Company executed a Commercial Lease with Jack Seay ("Lessor"), wherein the Lessor agreed to lease to the Company the premises situated in 2237 W. 24th Street, Panama City, Florida (approximately 1,450 square feet). The term of the lease is for one year beginning on July 1, 2004 and terminating on September 30, 2005.

On October 26, 2004, the Company executed a Lease Agreement with The John Price Trust, c/o Carter & Associates LLC, ("Lessor") wherein the Company agreed to lease the property located at 100 Candace Drive, Suite 100, Maitland, Florida 32751. The property is approximately 3,600 square feet. The term of the lease is for 24 months beginning November 1, 2004 with lease payments of $2,850.00 per month together with applicable Florida State Sales Tax. Upon execution of the Lease Agreement the Company paid the Lessor $5,889.50 which represents the first month's rent, applicable sales tax and a security deposit of $2,850.00.

Note 5 - Stockholders' equity

On April 30, 2004, the Company issued 10,000 shares of its $0.001 par value common stock to Newbridge Securities Corporation for placement agent fees in the amount of $200.

On April 30, 2004, the Company issued 1,490,000 shares of its $0.001 par value common stock to Cornell Capital Partners, LP as a commitment fee towards a "Standby Equity Distribution Agreement" which is valued at $29,800.

On May 11, 2004, the Company filed a Form S-8 registering 15,625,000 shares of its common stock under the 2004 Consultant and Employee Stock Compensation Plan.

On May 14, 2004, the Company issued 1,475,000 shares of its $0.001 par value common stock for consulting agreements valued at $71,000.

On June 14, 2004, the Company amended its Articles of Incorporation to increase its authorized capital to 500,000,000 shares of common stock, $0.001 par value per share.

On June 17, 2004, the Company issued 1,575,000 shares of its $0.001 par value common stock pursuant to a Consulting Agreement valued at $31,000.

On June 30, 2004, the Company filed a registration statement, registering 368,687,500 shares of its common stock for the resale by all investors who purchase convertible debentures and to cover the $5,000,000 equity line under the Equity Distribution Agreement. The selling stockholders consist of Cornell Capital Partners, who intends to sell up to 368,687,500 shares of common stock, 250,000,000 of which are under the Equity Distribution Agreement, 117,187,500 are under secured convertible debentures.

On September 8, 2004, the Company converted $20,000 of the secured convertible debenture in exchange for 3,571,428 shares of its $0.001 par value common stock.

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

Note 5 - Stockholders' equity (continued)

On September 14, 2004, the Company converted $20,000 of the secured convertible debenture in exchange for 4,166,666 shares of its $0.001 par value common stock.

On September 23, 2004, the Company issued 125,000 shares of its $0.001 par value common stock to a related party in exchange for services valued at $1,000.

On September 23, 2004, the Company issued 2,500,000 shares of its par value common stock to a related party in exchange for services valued at $20,000.

During the nine-month period ended September 30, 2004, the Company issued 21,300,000 shares of its par value common stock to an escrow agent on behalf of Cornell Capital pursuant to the Equity Distribution Agreement entered into on June 30, 2004. The Company recorded a subscription receivable as of September 30, 2004 in the amount of $200,000.

During the three-months ended March 31, 2005, the Company issued 72,000,000 shares of its $0.001 par value common stock to an escrow agent on behalf of Cornell Capital pursuant to the Equity Distribution Agreement entered into on June 30, 2004 (Note - 3).

During the three-months ended March 31, 2005, the Company issued 21,637,426 shares of its $0.001 par value common stock for debt conversion pursuant to the an equity distribution agreement (Note - 3).

There were no other issuances of stock for the three-month period ended March 31, 2005.

Subsequent events

On April 21, 2005, the Company issued 9,950,000 shares of its common stock to Evan Weybright for consulting services valued at $2,985, the fair value of the underlying shares. The shares issued were unrestricted pursuant to the S-8 Registration filed with the SEC on August 26, 2003.

On April 29, 2005, the Company issued 10,268,696 shares of its common stock to the Escrow Agent pursuant to the Equity Distribution Agreement, to hold on behalf of Cornell pending receipt of funds, at which time the shares will be delivered to Cornell. The shares were registered in the Company's SB-2 Registration Statement declared effective by the SEC on July 14, 2004.

FORWARD-LOOKING STATEMENTS

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words "may," "could," "estimate," "intend," "continue," "believe," "expect" or "anticipate" or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

increased competitive pressures from existing competitors and new entrants;
increases in interest rates or our cost of borrowing or a default under any material debt agreements;
deterioration in general or regional economic conditions;
adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
loss of customers or sales weakness;
inability to achieve future sales levels or other operating results;
the unavailability of funds for capital expenditures; and
operational inefficiencies in distribution or other systems.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see "Factors That May Affect Our Plan of Operation" in this document and "Risk Factors" in our Registration Statement on Form SB-2 filed on June 30, 2004.

Item 2. Plan of Operation

Overview

Renovo Holdings is a Development Stage Company that intends to capitalize upon the niche market opportunities within the commercial and residential restoration service markets. We were incorporated in the State of Nevada on October 18, 2000 under the name First Impressions.

As a company in an early development stage, our ability to proceed with our plan of operation has continuously been a function of our ability to raise sufficient capital to continue our operations. At the end of March 31, 2005 we had cash available of $40,032. Our cash requirements on a monthly basis are approximately $4,500, excluding exceptional expenses that are related to capital raising and securities registration expenses.

We have continuously incurred losses since inception. For the quarter ended March 31, 2004 we had a net loss of $160,800 as compared to a net loss of $174,180 for the quarter ended March 31, 2005.

Plan of Operation

During the next 12 months we plan to focus our efforts on positioning Renovo to provide complete loss management and restoration services to residential, commercial, industrial, and institutional properties. Initially, we are seeking to establish Renovo in the Florida market, with the ability to expedite the recovery process, with the eventual capability of responding to loss and restoration across the United States.

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 complete an acquisition and can generate substantial revenues, which may take the next few years to fully realize, if ever. 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.

In the first quarter ended March 31, 2005, we sold a total of 72,000,000 shares under the Equity Distribution Agreement with Cornell Capital Partners, LP ("Cornell"), valued at $80,000.

In the first quarter ended March 31, 2005, we sold $20,000 of secured convertible debentures, which converted into 21,637,426 shares of our common stock and issued to Cornell Capital Partners on March 4, 2005.

Liquidity and Capital Resources

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. We filed a registration statement (declared effective by the SEC on July 14, 2004) registering 368,687,500 shares of our common stock for the resale by all investors who purchase convertible debentures and to cover the $5,000,000 equity line under the Equity Distribution Agreement. 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. When, and if, we commence operational activities, we may continue to experience net negative cash flows from operations, and may 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 our operations 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, locate suitable acquisition targets, obtain a customer base, implement and successfully execute our business and marketing strategy, 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.

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.

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 businesses.

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 anticipated to be needed 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, 2005, 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.

FACTORS THAT MAY AFFECT OUR PLAN OF OPERATION

Renovo has historically lost money and losses may continue in the future, which may cause us to curtail operations.

Since our inception we have not been profitable and have lost money on both a cash and non-cash basis. For the quarters ended March 31, 2005 and March 31, 2004 we incurred net losses of $174,180 and $160,800 respectively. Our accumulated deficit at the end of March 31, 2005 was $1,617,945. Future losses are likely to occur, as we are dependent on spending money to pay for our operations. No assurances can be given that we will be successful in reaching or maintaining profitable operations. Accordingly, we may experience liquidity and cash flow problems. If our losses continue, our ability to operate may be severely impacted.

Renovo may need to raise additional capital or debt funding to sustain operations.

Unless we can become profitable with the existing sources of funds we have available and our operations, we will require additional capital to sustain operations and we may need access to additional capital or additional debt financing to grow our sales. In addition, to the extent that we have a working capital deficit and cannot offset the deficit from profitable sales or the Cornell line of credit we may have to raise capital to repay the deficit and provide more working capital to permit growth in revenues. We cannot be assured that financing, whether from external sources or related parties, will be available if needed or on favorable terms. Our inability to obtain adequate financing will result in the need to reduce the pace of business operations and the search for acquisition candidates. Any of these events could be materially harmful to our business and may result in a lower stock price.

We have been the subject of a going concern opinion for the years ended December 31, 2004 and December 31, 2003 from our independent auditors, which means that we may not be able to continue operations unless we can become profitable or obtain additional funding.

Our independent auditors have added an explanatory paragraph to their audit opinions issued in connection with our financial statements for the years ended December 31, 2004 and December 31, 2003, which states that the financial statements raise substantial doubt as to our ability to continue as a going concern. Our ability to make operations profitable or obtain additional funding will determine our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. We expect to be able to continue operations for twelve months with the cash currently on hand, and from the Securities Purchase Agreement and the Equity Distribution Agreement entered into by the Company and Cornell Capital Partners, executed on April 14, 2004.

We are subject to a working capital deficit, which means that our current assets on December 31, 2004 and March 31, 2005, were not sufficient to satisfy our current liabilities and, therefore, our ability to continue operations is at risk.

We had a working capital deficit for the year ended December 31, 2004 and quarter ended March 31, 2005, which means that our current liabilities exceeded our current assets on December 31, 2004 by $608,161 and $609,694. Current assets are assets that are expected to be converted to cash within one year and, therefore, may be used to pay current liabilities as they become due. Our working capital deficit means that our current assets on December 31, 2004 and March 31, 2005, were not sufficient to satisfy all of our current liabilities on those dates. If our ongoing operations do not begin to provide sufficient profitability to offset the working capital deficit, we may have to raise capital or debt to fund the deficit or curtail future operations.

Our common stock may be affected by limited trading volume and may fluctuate significantly, which may affect our stockholders' ability to sell shares of our common stock.

Prior to this filing, there has been a limited public market for our common stock and there can be no assurance that a more active trading market for our common stock will develop. An absence of an active trading market could adversely affect our stockholders' ability to sell our common stock in short time periods, or possibly at all. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to enter the market from time to time in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our stock will be stable or appreciate over time. These factors may negatively impact our stockholders' ability to sell shares of our common stock.

Our common stock is deemed to be a low priced "Penny Stock," which may make it more difficult for investors to sell their shares due to suitability requirements.

Our common stock is deemed to be a "penny stock" as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline. Penny stocks are stock:

With a price of less than $5.00 per share;
That are not traded on a "recognized" national exchange;
Whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ listed stock must still have a price of not less than $5.00 per share); or
In issuers with net tangible assets less than $2.0 million (if the issuer has been in continuous operation for at least three years) or $10.0 million (if in continuous operation for less than three years), or with average revenues of less than $6.0 million for the last three years.

Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor.

We could fail to attract or retain key personnel, which could be detrimental to our operations.

Our success largely depends on the efforts and abilities of Stephen W. Carnes, our sole Officer and Director. The loss of the services of Mr. Carnes could materially harm our business because of the cost and time necessary to find a successor. Such a loss would also divert management attention away from operational issues. We do not presently maintain key-man life insurance policies on Mr. Carnes. We do not have other key employees who manage our operations. To the extent that we are smaller than our competitors and have fewer resources, we may not be able to attract a sufficient number and quality of staff, when required.

We may acquire assets or other businesses in the future.

We may consider acquisitions of other assets or other business. Any acquisition involves a number of risks that could fail to meet our expectations and adversely affect our profitability. For example:

The acquired assets or business may not achieve expected results;
We may incur substantial, unanticipated costs, delays or other operational or financial problems when integrating the acquired assets;
We may not be able to retain key personnel of an acquired business;
Our management's attention may be diverted; or
Our management may not be able to manage the acquired assets or combined entity effectively or to make acquisitions and grow our business internally at the same time.

If these problems arise we may not realize the expected benefits of an acquisition.

Our limited operating history makes it difficult to forecast our future results.

As a result of our limited operating history, our historical financial and operating information is of limited value in predicting our future operating results. We may not accurately forecast customer behavior and recognize or respond to emerging trends, changing preferences or competitive factors facing us, and, therefore, we may fail to make accurate financial forecasts. Our current and future expense levels are based largely on our investment plans and estimates of future revenue. As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which could force us to curtail or cause us to terminate our business operations.

Risks Associated with the Standby Equity Distribution Agreement with Cornell Capital Partners, L.P.

Our obligations under the secured convertible debentures are secured by all of our assets.

Our obligations under the secured debentures, issued to Cornell Capital Partners are secured by all of our assets. As a result, if we default under the terms of the secured debentures, Cornell Capital Partners could foreclose its security interest and liquidate all of the assets of the Company. This would cease operations.

Existing stockholders will experience significant dilution from our sale of shares under the Equity Distribution Agreement.

The sale of shares pursuant to the Equity Distribution Agreement will have a dilutive impact on our stockholders. As a result our net income per share could decrease in future periods, and the market price of our common stock could decline. In addition, the lower our stock price, the more shares of common stock we will have to issue in order to receive the maximum cash advance allowed under the Equity Distribution Agreement. If our stock price is lower, then our existing stockholders would experience greater dilution.

The sale of our stock under our equity distribution agreement could encourage short sales by third parties, which could contribute to the future decline of our stock price.

In many circumstances the provision of financing based on the distribution of equity for companies that are traded on the Over-the-Counter Bulletin Board has the potential to cause a significant downward pressure on the price of common stock. This is especially the case if the shares being placed into the market exceed the market's ability to take up the increased stock or if the Company has not performed in such a manner to show that the equity funds raised will be used to grow the Company. Such an event could place further downward pressure on the price of common stock. Under the terms of our Equity Distribution Agreement, we may request numerous cash advances. Even if we use the cash advances to grow our revenues and profits or invest in assets that are materially beneficial to us, the opportunity exists for short sellers and others to contribute to the future decline of our stock price. If there are significant short sales of stock, the price decline that would result from this activity will cause the share price to decline more so which in turn may cause long holders of the stock to sell their shares thereby contributing to sales of stock in the market. If there is an imbalance on the sell side of the market for the stock the price will decline. It is not possible to predict if the circumstances whereby short sales could materialize or to what the share price could drop. In some companies that have been subjected to short sales the stock price has dropped to near zero. This could happen to our stock.

We may not be able to access sufficient funds under the Equity Line of Credit when needed.

We are dependent on external financing to fund our operations. Our financing needs are expected to be partially provided from the Equity Distribution Agreement and the additional secured convertible debentures to be purchased by Cornell Capital Partners. No assurances can be given that such financing will be available in sufficient amounts or at all when needed, in part, because we are limited to a maximum cash advance of $200,000 during any seven trading day period. In addition, based on an assumed offering price of $0.016 per share, we will only be able to draw a total net amount of $3,667,500 under the Equity Distribution Agreement. This net amount will utilize all of the 250,000,000 shares of our common stock registered for the Equity Distribution Agreement under our registration statement filed on June 30, 2004. If the actual average price at which we sell shares of common stock under the Equity Distribution Agreement is less than $0.016 per share, we would need to register additional shares to fully utilize the funds available under the Equity Distribution Agreement. Based on the assumed offering price of $0.016 per share, we would have to issue to Cornell Capital Partners 315,565,566 shares in order to receive the entire $5,000,000 available to us under the Equity Distribution Agreement.

We may not be able to obtain a cash advance under the equity distribution agreement if Cornell Capital Partners holds more than 9.9% of our common stock.

In the event Cornell Capital Partners holds more than 9.9% of our then-outstanding common stock, we will be unable to obtain a cash advance under the Equity Distribution Agreement. A possibility exists that Cornell Capital Partners may own more than 9.9% of our outstanding common stock at a time when we would otherwise plan to make an advance under the Equity Distribution Agreement. In that event, if we are unable to obtain additional external funding or generate revenues from operations, we could be forced to curtail or cease our operations.

Item 3. Controls and Procedures.

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, Steven W. Carnes, our Chief Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, Mr. Carnes, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

In the three months ended March 31, 2005, we issued 72,000,000 shares of our common stock to the Escrow Agent pursuant to the Equity Distribution Agreement, to hold on behalf of Cornell pending receipt of funds, at which time the shares will be delivered to Cornell. The 72,000,000 shares were registered in our SB-2 Registration Statement declared effective by the SEC on July 14, 2004.

In the three months ended March 31, 2005, we sold $20,000 of secured convertible debentures which converted to 21,637,426 shares of our common stock to Cornell. As of March 31, 2005 the 21,637,426 shares were issued. The shares were registered in our SB-2 Registration Statement declared effective by the SEC on July 14, 2004.

Subsequent Issuances

On April 21, 2005, we issued 9,950,000 shares of our common stock to Evan Weybright for consulting services valued at $2,985. The shares issued were unrestricted pursuant to the S-8 Registration filed with the SEC on August 26, 2003.

On April 29, 2005, we issued 10,268,696 shares of our common stock to the Escrow Agent pursuant to the Equity Distribution Agreement, to hold on behalf of Cornell pending receipt of funds, at which time the shares will be delivered to Cornell. The shares were registered in our SB-2 Registration Statement declared effective by the SEC on July 14, 2004.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

31.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act
32.1*	Certification pursuant to Section 906 of the Sarbanes-Oxley Act

* Filed herewith

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.

RENOVO HOLDINGS

(Registrant)

By: /s/Steve W. Carnes

Stephen W. Carnes, President

(On behalf of the registrant and as

principal accounting officer)

Date: June 21, 2005

Renovo (RNVO) Inactive 10QSB2005 Q1 Quarterly report (small business)