UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

 

FORM10-QSB/A

 

[X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OFTHE SECURITIES EXCHANGE ACT OF 1934

 

[] TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

 

Forthe quarterly period ended: March 31, 2004

 

Commissionfile number 000-49634

 

FORTISENTERPRISES

(Exactname 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'stelephone number, including area code)

 

 

Checkwhether the issuer (1) filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the last 12 months (or forsuch 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.

 

YesX No ____

 

Thenumber of shares of Common Stock, $0.001 par value, outstanding on March 31,2004, was 67,701,793 shares.

 

TransitionalSmall Business Disclosure Format (check one):

 

YesNo X

 

 

ITEM1. FINANCIAL STATEMENTS

 

FORTISENTERPRISES

(FormerlyFirst Impressions)

(ADevelopment Stage Company)

BALANCESHEET

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
 

 

Theaccompanying notes are an integral part of these financial statements

 

 

FORTISENTERPRISES

(FormerlyFirst Impressions)

(ADevelopment Stage Company)

STATEMENTOF 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)
 

Theaccompanying notes are an integral part of these financial statements

 

 

FORTISENTERPRISES

(FormerlyFirst Impressions)

(ADevelopment Stage Company)

STATEMENTOF 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
 

Theaccompanying notes are an integral part of these financial statements

 

 
**FORTISENTERPRISES

(FormerlyFirst Impressions)

(aDevelopment Stage Company)

Notesto Financial Statements

 

Note1 - Basis of Presentation**
 

Theaccompanying unaudited condensed financial statements at March 31, 2004 havebeen prepared in accordance with generally accepted accounting principles forinterim financial information and with the instructions to Form 10-QSB andreflect all adjustments which, in the opinion of management, are necessary for afair presentation of financial positions as of March 31, 2004 and results ofoperations and cash flows for the three months ended March 31, 2004. All suchadjustments are of a normal recurring nature. The results of operations for theinterim period are not necessarily indicative of the results expected for a fullyear. The statements should be read in conjunction with the financial statementsand footnotes thereto included in the Company's Form 10-KSB for the year endedDecember 31, 2003.
** 

Note2 - Going concern**
 

Theaccompanying financial statements at March 31, 2004 have been prepared on agoing concern basis, which contemplated the realization of assets and thesatisfaction of liabilities in the normal course of business. The Company hassuffered losses from operations during its operating history. The ability of theCompany to continue as a going concern is dependent upon obtaining futureprofitable operations. Management is in the process of implementing its businessplan which would generate revenue to sustain the operations of the Company. Thefinancial statements do not include any adjustments relating to therecoverability and classification of recorded assets and classification ofliabilities that might be necessary should the Company be unable to continue asa going concern.

 
**Note3 - Stockholders' Equity

 **
OnJanuary 19, 2004, the Company issued 328,481 shares of its common stock tovarious individuals for consulting services in the amount of $29,500.

 

OnFebruary 10, 2004 the Company issued 140,000 shares of its common stock toMichael Manion for consulting services in the amount of $10,000.

 

OnFebruary 23, 2004 the Company issued 306,250 shares of its common stock tovarious individuals for consulting services in the amount of $24,500.

 

OnMarch 30, 2004, the Company issued 970,000 shares of its common stock to variousindividuals for consulting services in the amount of $29,200.

 

 
**FORTISENTERPRISES

(FormerlyFirst Impressions)

(aDevelopment Stage Company)

Notesto Financial Statements**
 
**Note 4- Subsequent Events

 **
OnApril 30, 2004, the Company resolved to issue 1,490,000 shares of its commonstock 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.

 

OnApril 30, 2004, the Company resolved to issue 10,000 shares of its common stockto Newbridge Securities Corporation for placement agent fees in the amount of$200. All shares will be issued and restricted pursuant to Rule 144.
** 

 

ExplanatoryNote: ***THIS AMENDMENT IS BEING FILED TO AMEND ITEM 2. CHANGES IN SECURITIES OF THEFORM 10-QSB ORIGINALLY FILED ON MAY 17, 2004, TO STATE THAT THE SHARES ISSUED TOFLORIDA CATASTROPHE CORP. ON MARCH 30, 2004 WERE RESTRICTED UNDER RULE 144.
** 

Item2. Plan of Operation**
 

       With the exception of historical matters, the matters discussed herein areforward-looking statements that involve risks and uncertainties. Forward-lookingstatements include, but are not limited to, statements concerning anticipatedtrends in revenues and net income, projections concerning operations andavailable cash flow. Our actual results could differ materially from the resultsdiscussed in such forward-looking statements primarily as the result ofinsufficient cash to pursue production and marketing efforts. The followingdiscussion of our financial condition and results of operations should be readin conjunction with our financial statements and the related notes theretoappearing elsewhere herein.

 
**Overview**
 

       Fortis Enterprises is a Development Stage Company, originally incorporated inthe State of Nevada on October 18, 2000 under the name First Impressions. Wewere initially organized to develop a business as an online retailer anddistributor of perfume fragrances, bath products and related products, with someitems specifically designed for First Impressions.

 

       On July 14, 2003, we amended our Articles of Incorporation changing our namefrom First Impressions to Fortis Enterprises. The Board of Directors determinedthat the name, "First Impressions" was limiting the Company's abilityto pursue the expansion of our business into other marketing arenas and feltthat the name Fortis Enterprises was more generic and allows for moreflexibility in the future expansion of business opportunities. We also increasedthe total amount of authorized common stock from 50,000,000 shares to100,000,000 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 avoidinfringement on their trade name. We voluntarily decided to cease the use of thename within a reasonable period of time. Under Nevada law, we are required tohave a stockholder vote in order to amend our Articles of Incorporation tochange our name, which in turn causes us to comply with the proxy rules ofsection 14(a) of the 34 Act. We are currently in the process of filing a noticefor our annual meeting and we intend to solicit proxies to change our corporatename.

 
**Planof Operation**
 

       Since our incorporation in October 2000, we have not been engaged in anysignificant operations nor have we had any significant revenues, as we are inthe development stage. We intend to achieve growth through mergers andacquisitions of small to mid-sized cleaning and restoration services companiesthroughout the United States.

 

       We intend to focus on growth through acquisition. We believe that there can be"Economies of Scale" achieved by consolidating the "singleowner" restoration companies into Fortis Enterprises. We believe that itcan reduce combined overall overhead among the companies acquired by eliminatingmany duplicated everyday business nuisances for the small business owners suchas accounting services, marketing and advertising costs, office staff andequipment, etc. We also believe that consolidating and focusing efforts on acombined marketing campaign will assist the various companies merged into FortisEnterprises to achieve overall revenue growth.

 

 

       On November 11, 2003, we executed a Letter of Intent with a privately heldcompany based in Northern Florida that specializes in insurance restorationservices. The Letter of Intent outlines the basic parameters under which theprivately held company would agree to be acquired by us. We are working togetherwith the acquisition candidate to perform the necessary due diligence that willallow both parties to sign a definitive agreement, which will provide thespecific details regarding the terms and conditions of the acquisition. Uponcompletion of a definitive agreement we will file a Form 8-K. Two of theprincipals associated with the privately held company are currently consultantsfor us.

 

       On April 14, 2004, we entered into a Standby Equity Distribution Agreement withCornell Capital Partners, LP (the "Investor"), wherein we agreed toissue and sell to the Investor and the Investor agreed to purchase from theCompany $5,000,000 of our common stock, par value $0.001 per share.Additionally, we entered into a secured convertible debenture agreement with theInvestor in order to provide us with expedited access to $300,000 of thefunding, $150,000 of which we have already received.

 

***       Satisfaction of our cash obligation for the next 12 months.*** We plan onsatisfying our cash obligations over the next twelve months through additionalequity and/or third party financing. We do not anticipate generating revenuessufficient enough to satisfy our working capital requirements within the nexttwelve months.

 

       A critical component of our operating plan impacting our continued existence isthe ability to obtain additional capital through additional equity and/or debtfinancing. We do not anticipate enough positive internal operating cash flowuntil such time as we can generate substantial revenues, which may take the nextfew years to fully realize. In the event we cannot obtain the necessary capitalto pursue our strategic plan, we may have to cease or significantly curtail ouroperations. This would materially impact our ability to continue operations.

 

       Our near term cash requirements are anticipated to be offset through the receiptof funds from the Cornell convertible debenture, private placement offerings andloans obtained through private sources. Once we file a registration statementfor the $5,000,000 line of credit, we anticipate being able to use the line ofcredit to finance our operations. Since inception, we have financed cash flowrequirements through debt financing and issuance of common stock for cash andservices. As we expand operational activities, we may continue to experience netnegative cash flows from operations, pending receipt of servicing or licensingfees, and will be required to obtain additional financing to fund operationsthrough common stock offerings and bank borrowings to the extent necessary toprovide working capital.

 

       Over the next twelve months we believe that existing capital and anticipatedfunds from operations will not be sufficient to sustain operations and plannedexpansion. However, the line of credit is anticipated to satisfy our workingcapital needs, but if it is not available, we will be required to seekadditional capital in the future to fund growth and expansion through additionalequity or debt financing or credit facilities. No assurance can be made thatsuch financing would be available, and if available it may take either the formof debt or equity. In either case, the financing could have a negative impact onour financial condition and our Stockholders.

 

       We anticipate incurring operating losses over the next twelve months. Our lackof operating history makes predictions of future operating results difficult toascertain. Our prospects must be considered in light of the risks, expenses anddifficulties frequently encountered by companies in their early stage ofdevelopment. Such risks include, but are not limited to, an evolving 

 

 

andunpredictable business model and the management of growth. To address theserisks we must, among other things, obtain a customer base, implement andsuccessfully execute our business and marketing strategy, continue to developand upgrade technology and products, respond to competitive developments, andattract, retain and motivate qualified personnel. There can be no assurance thatwe will be successful in addressing such risks, and the failure to do so canhave a material adverse effect on our business prospects, financial conditionand results of operations.

 

***       Summary of any product and development that we will perform for the term of theplan.*** We do not anticipate performing any significant product researchand development under our plan of operation. In lieu of product research anddevelopment we anticipate acquiring small renovation business.

 

***       Expected purchase or sale of plant and significant equipment.*** We do notanticipate the purchase or sale of any plant or significant equipment, as suchitems are not required by us at this time or in the next twelve months; howeveras the result of our plan for acquisitions of renovation businesses, we mayacquire equipment, and in some cases plants, which relate to the renovationbusinesses.

 

***       Significant changes in the number of employees.*** As of March 31, 2004, wehad 1 employee. We are dependent upon Steve W. Carnes our sole officer anddirector. We will need to hire full time operational staff as our operationscommence and we complete anticipated acquisitions.
** 

Off-BalanceSheet Arrangements

 

       We do not have any off-balance sheet arrangements that have or are reasonablylikely to have a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources that is material to investors.

 
**GoingConcern

 **
       The consolidated financial statements included in this filing have been preparedin conformity with generally accepted accounting principles that contemplate thecontinuance of the Company as a going concern. The Company's cash position maybe inadequate to pay all of the costs associated with its intended businessplan. Management intends to use borrowings and security sales to mitigate theeffects of its cash position, however no assurance can be given that debt orequity financing, if and when required will be available. The financialstatements do not include any adjustments relating to the recoverability andclassification of recorded assets and classification of liabilities that mightbe necessary should the Company be unable to continue existence.

 
**Item3. Controls and Procedures

 **
       We are a development stage company with no revenues and during the periodcovered by this quarterly report our sole officer and director, Stephen Carnes,had responsibility for our internal controls and procedures over our financialreporting.

 

 

       We have implemented and maintain disclosure controls and procedures whichconsist of: the control environment, risk assessment, control activities,information and communication and monitoring. Our scope of internal controltherefore 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 ensurethat the information required to be disclosed in our Exchange Act reports isrecorded, processed, summarized and reported within the time periods specifiedin the SEC's rules.

 

       There have been no significant changes (including corrective actions with regardto significant deficiencies or material weaknesses) in our internal controls orin other factors that could significantly affect the controls subsequent to thedate 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 andoperation of the Company's disclosure controls and procedures. Based on theforegoing, Mr. Carnes concluded that, given the Company's limited operations,our disclosure controls and procedures were effective.

 
**PARTII--OTHER INFORMATION

 

Item 1.Legal Proceedings

 **
       None

 
**Item 2.Changes in Securities**
 

       On February 10, 2004, we issued 140,000 shares of our $0.001 par valuecommon stock to Michael M. Manion pursuant to a Consulting Agreement we enteredinto on February 5, 2004. The shares issued were unrestricted pursuant to an S-8Registration filed with the SEC on August 26, 2003.

 

       As of March 31, 2004, we have issued 108,529 shares of our $0.001 par valuecommon stock to Cynthia Wainwright pursuant to a Consulting Agreement we enteredinto on October 1, 2003. The shares issued were unrestricted pursuant to an S-8Registration filed with the SEC on August 26, 2003.

 

       As of March 31, 2004, we have issued 845,394 shares of our $0.001 par valuecommon stock to Loren Brown pursuant to a Consulting Agreement we entered intoon October 1, 2003. The shares issued were unrestricted pursuant to an S-8Registration filed with the SEC on August 26, 2003.

 

       As of March 31, 2004, we have issued 570,808 shares of our $0.001 par valuecommon stock to Matt Lettau pursuant to a Consulting Agreement we entered intoon October 1, 2003. The shares issued were unrestricted pursuant to an S-8Registration filed with the SEC on August 26, 2003.

 

       On March 30, 2004, we issued 80,000 shares of our $0.001 par value commonstock to Florida Catastrophe Corp. pursuant to a Consulting Agreement we enteredinto on September 17, 2003. The shares issued are restricted under Rule 144 anddeemed to have been issued pursuant to an exemption provided by section 4 (2) ofthe Act, which exempts from registration "transactions by an issuer notinvolving any public offering."

 

 

SubsequentIssuances

 

       On April 30, 2004, we issued 1,490,000 shares of our $0.001 par value commonstock valued at $29,800 to Cornell Capital Partners, LP as part of a commitmentfee pursuant to a Standby Equity Distribution Agreement. The shares were deemedto have been issued pursuant to an exemption provided by section 4 (2) of theAct, which exempts from registration "transactions by an issuer notinvolving any public offering."

 

       On April 30, 2004, we issued 10,000 shares of our $0.001 par value common stockto Newbridge Securities Corporation as compensation for Placement Agent fees.The shares were deemed to have been issued pursuant to an exemption provided bysection 4 (2) of the Act, which exempts from registration "transactions byan 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 solicitproxies to; (i) change our name, (ii) increase our authorized common stock to500,000,000 shares of common stock; (iii) elect new director(s); and (iv) ratifyour auditors.

 
**Item 5.Other Information

 
*LetterAgreement with Source Capital Group, Inc.*
 **
       On January 21, 2004, we entered into a letter agreement with Source CapitalGroup, Inc. ("SCG") to confirm our understanding and agreement withSCG, regarding retaining SCG as our exclusive (for three weeks) financialadvisor. SCG agreed to use its best efforts to provide us with an equityfinancing. We agreed to compensate SCG for its services in 8% cash and 8%"warrant" coverage on any funds raised during this engagement forinvestors introduced to us by SCG. The exercise price of the warrants shall beequal to the price of the stock at the time of the sale to an equity investorintroduced to us by SCG and will be subject to adjustment in accordance with theterms of any adjustment provided for in the formal definitive Financingdocument. The warrants will be exercisable for five (5) years from the date ofissuance. We will also reimburse SCG for any pre-approved expenses over $500incurred in connection with the services provided to us. The term of SCG'sengagement was from the date of the letter agreement through April 2004. A copyof the letter agreement was attached as an exhibit to Form 10-KSB filed on March30, 2004.

 

       SCG made the introduction with Cornell Capital Partners, LP, whom we've enteredinto a Standby Equity Distribution Agreement in the amount of $5,000,000. Wehave received $150,000 of the funding from Cornell. For the $150,000 raised, wecompensated SCG $7,500.

 

 
**ConsultingAgreements**
 

*       Michael M. Manion:* On February 5, 2004, we entered into a ConsultingAgreement with Michael M. Manion, wherein Mr. Manion agreed to serve as anindependent contractor for the Company. Mr. Manion agreed to assist us withgeneral consulting services such as assisting the Company and Company Managementwith various projects, business management services and other business relatedservices. The term of the Agreement is for three months from the date of theAgreement. We agreed to compensate Mr. Manion 140,000 shares of free tradingunrestricted shares of common stock for the first month, 70,000 free tradingshares of stock for the second month and 70,000 free trading shares of stock forthe third month.. On February 10, 2004, we issued 140,000 shares of common stockvalued at $10,000 to Mr. Manion. The shares issued were unrestricted pursuant toan S-8 Registration filed with the SEC on August 26, 2003.

 
**SubsequentEvents**
 

*       Mark Broersma:* On April 29, 2004, we entered into a Consulting Agreementwith Mark Broersma, wherein Mr. Broersma agreed to serve as an independentcontractor for the Company. Mr. Broersma has various skills and abilities and anextensive background and knowledge in the Insurance Restoration industry. Theterm of the Agreement is for one month from the date of the Agreement andrenewable on a month-to-month basis at our discretion. We agreed to compensateMr. 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. Ourmanagement acknowledges and condones this potential conflict of interest. A copyof the consulting agreement is attached hereto as an exhibit.

 
*       Mike Barr: On April 29, 2004, we entered into a Consulting Agreement withMike Barr, wherein Mr. Barr agreed to serve as an independent contractor for theCompany. Mr. Barr has various skills and abilities and an extensive backgroundand knowledge in the Insurance Restoration industry. The term of the Agreementis for one month from the date of the Agreement and renewable on amonth-to-month basis at our discretion. We agreed to compensate Mr. Barr a totalof $15,000 worth of free trading shares of common stock. Further, Mr. Barr is aprincipal in a company we are seeking to acquire. Our management acknowledgesand condones this potential conflict of interest. A copy of the consultingagreement is attached hereto as an exhibit.

 
*       VBg Design: On April 29, 2004, we entered into a Consulting Agreement withVBg Design, wherein VBg agreed to serve as an independent contractor for theCompany. VBg has various skills and abilities and an extensive background in andknowledge in Advertising & Marketing. The term of the Agreement is for oneyear. We agreed to compensate VBg $2,400 per month. A copy of the consultingagreement is attached hereto as an exhibit.

 

CORNELLCAPITAL FINANCING

 

       On April 14, 2004, we entered into the following agreements with Cornell CapitalPartners, LP ("Cornell").

 
*StandbyEquity Distribution Agreement and Placement Agent Agreement*
 

       On April 14, 2004, we entered into a Standby Equity Distribution Agreement withCornell, wherein we agreed to issue and sell to Cornell $5,000,000 of our commonstock. We have engaged Newbridge Securities Inc., to act as our exclusiveplacement 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 uponexecution of the agreement.

 

 

       Pursuant to the Standby Equity Distribution Agreement, Cornell and the Companyalso entered into a Placement Agent Agreement with Newbridge SecuritiesCorporation (Newbridge), wherein Newbridge will act as our exclusive placementagent in connection with the Standby Equity Distribution Agreement. Newbridge'sservices will consist of reviewing the terms of the Standby Equity DistributionAgreement and advising us with respect to those terms. We agreed to issue toNewbridge 10,000 shares of our common stock upon execution of the agreement.

 
*SecuritiesPurchase Agreement*
 

       We executed a Securities Purchase Agreement with Cornell, wherein we agreed toissue 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 thefifth (5th) business day following the date our authorized shares ofcommon stock are validly increased to 500,000,000 shares and we file aregistration statement, pursuant to the Registration Rights Agreement discussedabove.

 
*RegistrationRights Agreements*
 

       In connection with the Securities Purchase Agreement and Standby EquityDistribution Agreement, we entered into two Registration Rights Agreements withCornell, wherein we agreed to prepare and file, no later than sixty (60) daysfrom the date of the agreements, with the SEC a registration statement on FormSB-2 under the 1933 Act for the registration for the resale by all Investors whopurchased convertible debentures pursuant to the Securities Purchase Agreement9,868,421 shares of our common stock issued upon conversion of the ConvertibleDebentures and the 1,490,000 shares of common stock issued to Cornell and enoughshares to cover the $5,000,000 equity line. The Company shall cause theregistration statement to remain effective until all of the registrablesecurities have been sold.

 
*EscrowAgreements*
 

       In connection with the Securities Purchase Agreement and Standby EquityDistribution Agreement, pursuant to which we propose to sell secured convertibledebentures, convertible into our common stock, we entered into two separateEscrow Agreements with the Investor listed on the Securities Purchase Agreementand Butler Gonzalez, LLP (the "Escrow Agent"). The Escrow Agent agreedto accept, hold, and disburse the funds deposited with it in accordance with theterms of the agreement.

 
*SecurityAgreement*
 

       We executed a Security Agreement with Cornell wherein, in connection with theabove financing documents, we agreed to grant to Cornell a security interest inand to the pledged property identified in Exhibit A of the Security Agreementuntil the satisfaction of all obligations described in the agreement areperformed.

 

 
**PressRelease**
 

       On May 10, 2004, we issued a press release to announce that we entered into theagreements with Cornell. A copy of the press release is attached hereto as anexhibit.

 
**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

***Filed in Form 10-QSB on 05/17/04 (New Certifications are not being filed as thefinancials were not amended)

 

(b)Form 8-K
       Form 8-K filed 02/12/04, Letter Agreement with Source Capital Group, Inc.

 

 

SIGNATURES

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

FORTISENTERPRISES

(Registrant)

 

 

By:/S/Stephen W. Carnes
StephenW. Carnes, President

(Onbehalf of the registrant and as

principalaccounting officer)

Date:May 20, 2004
** ******** |
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