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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended **July 31,
2007.**

[   ] TRANSITION REPORT UNDER SECTION 13 OR
  15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from __________ to ______________

Commission File Number: **000-51936**

FORTIFIED HOLDINGS CORP.(formerly Aegis Industries Inc.)(Exact name of small
business issuer as specified in its charter)

|Nevada                                           | 98-0420577                       
|------------------------------------------------ | ---------------------------------
|(State or other jurisdiction of incorporation or | (IRS Employer Identification No.)
|organization)                                    |                                  

125 Elm Street, New Canaan, Connecticut 06840(Address of principal executive offices)

(203)594-1686(Issuers telephone
number)

**Formerly located at 75200 Shady Grove Road, Suite
202, Rockville, Maryland 20850**(Former name, former address and
former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
past 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 [   ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).

Yes [   ]    No [X]

As of September 19, 2007, the registrant had outstanding
55,600,000 shares of common stock, par value $0.001 per share, of which
there is only a single class.

Transitional Small Business Disclosure Format (Check one):[   ] Yes   [X] No

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PART I  FINANCIAL INFORMATION













Fortified Holdings Corp.(formerly Aegis Industries, Inc.) (A Development Stage Company)









Interim Financial Statements July 31, 2007
(Stated in US Dollars) 
  (Unaudited)

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Fortified Holdings
Corp.(formerly Aegis Industries, Inc.)(A
Development Stage Company) Interim Balance Sheets July 31, 2007 and
October 31, 2006 (Stated in US Dollars)(Unaudited)

|                                                  |   | July 31, 2007 |   |   | October 31, 2006 |  
|------------------------------------------------- | - | ------------- | - | - | ---------------- | -
|ASSETS                                            |   |               |   |   |                  |  
|                                                  |   |               |   |   |                  |  
|Current                                           |   |               |   |   |                  |  
|Cash                                              | $ | 136,983       |   | $ | -                |  
|Prepaid expenses                                  |   | 11,250        |   |   | -                |  
|Notes receivable (notes 4 and 9)                  |   | 1,817,047     |   |   | -                |  
|                                                  |   |               |   |   |                  |  
|                                                  |   | 1,965,280     |   |   | -                |  
|                                                  |   |               |   |   |                  |  
|Inventory                                         |   | 23,598        |   |   | 23,598           |  
|Equipment,net                                     |   | 8,987         |   |   | 11,279           |  
|Web site development,net                          |   | -             |   |   | 1,500            |  
|                                                  |   |               |   |   |                  |  
|                                                  | $ | 1,997,865     |   | $ | 36,377           |  
|                                                  |   |               |   |   |                  |  
|LIABILITIES                                       |   |               |   |   |                  |  
|                                                  |   |               |   |   |                  |  
|Current                                           |   |               |   |   |                  |  
|Accounts payable and
      accrued liabilities    | $ | 234,239       |   | $ | 25,444           |  
|Convertible notes, net of discount
      (note 6) |   | 977,025       |   |   | -                |  
|Loans payable (notes 5 and 9)                     |   | 1,421,809     |   |   | 19,723           |  
|                                                  |   |               |   |   |                  |  
|                                                  |   | 2,633,073     |   |   | 45,167           |  
|                                                  |   |               |   |   |                  |  
|STOCKHOLDERS' DEFICIT                             |   |               |   |   |                  |  
|Capital stock (note 7)                            |   |               |   |   |                  |  
|Common $0.001 par value                           |   |               |   |   |                  |  
|200,000,000 shares authorized;                    |   |               |   |   |                  |  
|50,600,000
      shares issued and outstanding    |   | 50,600        |   |   | 91,800           |  
|Additional paid in capital                        |   | 817,900       |   |   | 26,700           |  
|Deficit accumulated during development stage      |   | (1,503,708    | ) |   | (127,290         | )
|                                                  |   |               |   |   |                  |  
|                                                  |   | (635,208      | ) |   | (8,790           | )
|                                                  |   |               |   |   |                  |  
|                                                  | $ | 1,997,865     |   | $ | 36,377           |  

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

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Fortified Holdings
Corp.(Formerly Aegis Industries, Inc.)(A
Development Stage Company)Interim Statements of
OperationsFor the three and nine months ended July 31, 2007 and 2006and for the period from February 5, 2004 [Date of Inception]to July 31, 2007 (Stated in US Dollars)(Unaudited)

Cumulative fromFebruary 5, 2004For the three months ended
      
      
      For the nine months ended
      
      
      (Date ofJuly 31,
      
      
      July 31,
      
      
      Inception) to July2007
      
      
      2006
      
      
      2007
      
      
      2006
      
      
      31, 2007ExpensesAmortization
      $
      764
      
      $
      930
      
      $
      2,292
      
      $
      1,228
      
      $
      4,451Consulting fees
      
      -
      
      
      -
      
      
      -
      
      
      4,341
      
      
      4,341Insurance
      
      56,672
      
      
      -
      
      
      56,672.00
      
      
      
      
      
      56,672Interest expense
      
      311,315
      
      
      -
      
      
      849,837
      
      
      -
      
      
      849,959Management fees
      
      28,355
      
      
      -
      
      
      49,555
      
      
      -
      
      
      49,555Marketing and promotion
      
      74,876
      
      
      -
      
      
      179,607
      
      
      20,707
      
      
      201,212Office and administrative
      
      13,866
      
      
      49
      
      
      37,498
      
      
      10,740
      
      
      52,147Organizational costs
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      1,189Professional fees
      
      176,896
      
      
      6,923
      
      
      253,502
      
      
      18,490
      
      
      331,138Write-down of inventory
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      5,589Write-off of website development
      
      -
      
      
      -
      
      
      1,500
      
      
      -
      
      
      1,500Loss
      
      (662,745
      )
      
      (7,902
      )
      
      (1,430,464
      )
      
      (55,506
      )
      
      (1,557,754
      )Interest income
      
      37,928
      
      
      -
      
      
      54,046
      
      
      -
      
      
      54,046Net loss
      $
      (624,817
      )
      $
      (7,902
      )
      $
      (1,376,418
      )
      $
      (55,506
      )
      $
      (1,503,708
      )Net loss per share - basic and diluted
      $
      (0.01
      )
      $
      (0.00
      )
      $
      (0.02
      )
      $
      (0.00
      )Weighted Average Shares Outstanding
      
      77,021,739
      
      
      149,673,924
      
      
      86,819,780
      
      
      161,268,120


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

---

Fortified Holdings
Corp.(formerly Aegis Industries, Inc.)(A
Development Stage Company)Interim Statements of Stockholders' Equity
(Deficit)For the period from February 5, 2004 [Date of Inception] to
July 31, 2007 (Stated in US Dollars)(Unaudited)

AccumulatedDeficit during
      
      
      TotalCommon Stock
      
      
      Additional Paid-
      
      
      Development
      
      
      Stockholders'Shares
      
      
      Amount
      
      
      in Capital
      
      
      Stage
      
      
      Equity (Deficit)Balance, at inception
      
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -Stock issued for cash at $0.000027778
      
      72,000,000
      
      
      72,000
      
      
      (70,000
      )
      
      -
      
      
      2,000Stock issued for cash at $0.000277778
      
      77,400,000
      
      
      77,400
      
      
      (55,900
      )
      
      -
      
      
      21,500Net loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      (7,025
      )
      
      (7,025
      )Balance, October 31, 2004
      
      149,400,000
      
      
      149,400
      
      
      (125,900
      )
      
      (7,025
      )
      
      16,475Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      (15,064
      )
      
      (15,064
      )Balance, October 31, 2005
      
      149,400,000
      
      
      149,400
      
      
      (125,900
      )
      
      (22,089
      )
      
      1,411Stock issued for cash at $0.002777778
      
      34,200,000
      
      
      34,200
      
      
      60,800
      
      
      -
      
      
      95,000Stock returned to treasury
      
      (91,800,000
      )
      
      (91,800
      )
      
      91,800
      
      
      -
      
      
      -Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      (105,201
      )
      
      (105,201
      )Balance, October 31, 2006
      
      91,800,000
      
      
      91,800
      
      
      26,700
      
      
      (127,290
      )
      
      (8,790
      )Convertible notes (note 6)
      
      
      
      
      
      
      
      750,000
      
      
      
      
      
      750,000Stock returned to treasury (note 7)
      
      (41,200,000
      )
      
      (41,200
      )
      
      41,200
      
      
      -
      
      
      -Net loss for the period
      
      
      
      
      
      
      
      
      
      
      (1,376,418
      )
      
      (1,376,418
      )Balance, July 31, 2007
      
      50,600,000
      
      $
      50,600
      
      $
      817,900
      
      $
      (1,503,708
      )
      $
      (635,208
      )


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

---

Fortified Holdings
Corp.(formerly Aegis Industries, Inc.)(A
Development Stage Company) Interim Statements of Cash FlowsFor
the nine months ended July 31, 2007 and 2006and for the period from
February 5, 2004 [Date of Inception]to July 31, 2007(Stated in US Dollars)(Unaudited)

|                                                    |   |                           |   |   |                    |   |   | Cumulative from  |  
|--------------------------------------------------- | - | ------------------------- | - | - | ------------------ | - | - | ---------------- | -
|                                                    |   |                           |   |   |                    |   |   | February 5, 2004 |  
|                                                    |   | For the nine months ended |   |   | (Date of           |  
|                                                    |   | July 31,                  |   |   | Inception) to July |  
|                                                    |   | 2007                      |   |   | 2006               |   |   | 31, 2007         |  
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Cash Flows from (used in)                           |   |                           |   |   |                    |   |   |                  |  
|Operating Activities                                |   |                           |   |   |                    |   |   |                  |  
|Net loss for the period                             | $ | (1,376,418                | ) | $ | (55,506            | ) | $ | (1,503,708       | )
|Items not affecting cash:                           |   |                           |   |   |                    |   |   |                  |  
|- amortization                                      |   | 2,292                     |   |   | 1,228              |   |   | 4,451            |  
|- interest accruals                                 |   | 44,788                    |   |   | -                  |   |   | 44,911           |  
|- Interest accrued for convertible
      debentures |   | 750,000                   |   |   | -                  |   |   | 750,000          |  
|- write-down of inventory                           |   | -                         |   |   | -                  |   |   | 5,589            |  
|- write-off of website development                  |   | 1,500                     |   |   | -                  |   |   | 1,500            |  
|Change in non-cash working capital balance          |   |                           |   |   |                    |   |   |                  |  
|related to operations:                              |   |                           |   |   |                    |   |   | -                |  
|- prepaid expenses                                  |   | (11,250                   | ) |   | -                  |   |   | (11,250          | )
|- accounts payable and accrued liabilities          |   | 208,795                   |   |   | 1,237              |   |   | 208,795          |  
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Cash Flows - Operating Activities                   |   | (380,293                  | ) |   | (53,041            | ) |   | (474,268         | )
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Cash flows used in                                  |   |                           |   |   |                    |   |   |                  |  
|Investing Activities                                |   |                           |   |   |                    |   |   |                  |  
|Acquisition of equipment                            |   | -                         |   |   | (12,938            | ) |   | (12,938          | )
|Web site development                                |   | -                         |   |   | (2,000             | ) |   | (2,000           | )
|Notes receivable                                    |   | (1,763,001                | ) |   | -                  |   |   | (1,763,001       | )
|Acquisition of inventory                            |   | -                         |   |   | (29,187            | ) |   | (29,187          | )
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Cash Flows - Investing
      Activities             |   | (1,763,001                | ) |   | (44,125            | ) |   | (1,807,126       | )
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Cash flows from Financing Activities                |   |                           |   |   |                    |   |   |                  |  
|Proceeds from loans payable                         |   | 1,330,277                 |   |   | -                  |   |   | 1,349,877        |  
|Proceeds from convertible debentures                |   | 950,000                   |   |   | -                  |   |   | 950,000          |  
|Proceeds from issue of common stock                 |   | -                         |   |   | 95,000             |   |   | 118,500          |  
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Cash Flows - Financing Activities                   |   | 2,280,277                 |   |   | 95,000             |   |   | 2,418,377        |  
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Net Increase in Cash                                |   | 136,982                   |   |   | (2,166             | ) |   | 136,982          |  
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Cash, Beginning of Period                           |   | -                         |   |   | 5,811              |   |   | -                |  
|                                                    |   |                           |   |   |                    |   |   |                  |  
|Cash, End of Period                                 | $ | 136,982                   |   | $ | 3,645              |   | $ | 136,982          |  

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

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Fortified Holdings Corp.(formerly Aegis Industries,
Inc.) (A Development Stage Company) Notes to the Interim Financial
Statements July 31, 2007 and October 31, 2006 (Stated in US Dollars)
(Unaudited)

|1. | Interim Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The accompanying unaudited interim financial statements
      have been prepared by the Company pursuant to the rules and regulations of
      the United States Securities and Exchange Commission. Certain information
      and disclosures normally included in annual financial statements prepared
      in accordance with accounting principles generally accepted in the United
      States of America have been condensed or omitted pursuant to such rules
      and regulations. In the opinion of management, all adjustments and
      disclosures necessary for a fair presentation of these financial
      statements have been included. Such adjustments consist of normal
      recurring adjustments. These interim financial statements should be read
      in conjunction with the Companys October 31, 2006, audited financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The results of operations for the three and nine months
      ended July 31, 2007, are not indicative of the results that may be
      expected for the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | Nature and Continuance of Operations(note
    9)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Fortified Holdings Corp. (the Company) was incorporated
      in the State of Nevada, United States of America, on February 5, 2004
      under the name Major Creations Incorporated. On December 5, 2006, the
      Company changed its name to Aegis Industries, Inc. On June 5, 2007, the
      Company incorporated a wholly-owned subsidiary, Fortified Holdings Corp.
      in the State of Colorado, for the purpose of facilitating a name change.
      On June 6, 2007, the Company merged with Fortified Holdings Corp. and
      changed its name to Fortified Holdings Corp. The Company is quoted on the
      Over-the-Counter Bulletin Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company has had limited operations as a retailer of
      vintage style compact diesel tractors. The Company intends to engage in
      the business of designing, developing and manufacturing intermediate force
      options for military, law enforcement and security forces. To facilitate
      this change in business, on November 30, 2006, and as amended on January
      25, 2007, the Company signed a letter of intent whereby the Company was to
      acquire substantially all the assets of Aegis Industries, Inc. (AI Inc.)
      for the issuance of 15,000,000 shares of common stock (see note 9). On May
      22, 2007, the Company incorporated a wholly-owned corporation, Fortified
      Data Communications (FDC) (then Aegis Merger Corp.) in the State of
      Delaware. By amending agreement dated January 25, 2007 and March 8, 2007,
      a definitive agreement was to be entered into on or before April 30, 2007.
      The Company and AI Inc. did not enter into a definitive agreement by April
      30, 2007, and, accordingly, the agreement lapsed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On May 31, 2007 and amended September 12, 2007, the Company
        agreed to acquire Z5 Technologies LLC (Z5) for the issuance
        of a promissory note totaling $5,000,000 and the issuance of 5,000,000
        common shares of the Company. On September 13, 2007, the Company completed
        the acquisition of Z5 (see note 9f).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Z5 is in the business of developing and selling a line of
      man-portable Command and Control, Communications and Compute (C4)
      solutions for field-based incident management and emergency operations
      support. The Companys products are marketed under the NOMAD brand,
      principally for use by the military, first responders, relief workers and
      high-risk industries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which assumes that the Company will be able to meet its
      obligations and continue its operations for its next twelve months.
      Realization values may be substantially different from carrying values as
      shown and these financial statements do not give effect to adjustments
      that would be necessary to the carrying values and classification of
      assets and liabilities should the Company be unable to continue as a going
      concern. At July 31, 2007, the Company had not yet achieved profitable
      operations, has accumulated losses of $1,503,708 since its inception, has
      a working capital deficiency of $667,793 and expects to incur further
      losses in the development of its business, all of which casts substantial
      doubt about the Companys ability to continue as a going concern. The
      Companys ability to continue as a going concern is dependent upon its
      ability to generate future profitable operations and/or to obtain the
      necessary financing to meet its obligations and repay its liabilities
      arising from normal business operations when they come due. Management has
      no formal plan in place to address this concern but considers that the
      Company will be able to obtain additional funds by equity financing and/or
      related party advances, however there is no assurance of additional
      funding being available.

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|3. | Additional Significant Accounting Policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Convertible Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | When the Company issues convertible instruments with detachable instruments, the proceeds of the issuance are allocated between the convertible instrument and other detachable instruments based on their relative fair values
pursuant to Emerging Issues Task Force (EITF) Issue No. 00-27 Application of Issue No. 98-5 to Certain Convertible Instruments. The resulting discount of the convertible instrument is amortized into income as interest expense
over the term of the convertible instrument.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | When the Company issues convertible debt securities with a non-detachable conversion feature that provides for an effective rate of conversion that is below market value on the commitment date, it is known as a beneficial
conversion feature (BCF) and pursuant to EITF Issue No. 98-5 Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios and EITF Issue No. 00-27, the conversion
feature of the security that has characteristics of an equity instrument is measured at its intrinsic value at the commitment date and is recorded as additional paid in capital. A portion of the proceeds of the security issued is allocated to the
conversion feature equal to its intrinsic value to a maximum of the amount allocated to the convertible instrument. The resulting discount of the debt instrument is amortized into income as interest expense over the conversion features vesting
period.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4. | Notes Receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | d.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | e.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | f.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | g.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | h.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | i.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

---

| | j. | On August 31, 2007, the Company loaned $50,000 to Z5,
      accruing interest at 12% per annum, calculated annually. The loan is
      unsecured and is due upon the occurrence of either (i) the consummation of
      one or more related transactions pursuant to which no less than
      $15,000,000 of equity securities of the Company are sold for cash, or (ii)
      October 31, 2007;   
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                    
| | k. | On September 5, 2007, the Company loaned $100,000 to Z5,
      accruing interest at 12% per annum, calculated annually. The loan is
      unsecured and is due upon the occurrence of either (i) the consummation of
      one or more related transactions pursuant to which no less than
      $15,000,000 of equity securities of the Company are sold for cash, or (ii)
      October 31, 2007.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                    
| | l. | On September 6, 2007, the Company loaned $100,000 to Z5,
      accruing interest at 12% per annum, calculated annually. The loan is
      unsecured and is due upon the occurrence of either (i) the consummation of
      one or more related transactions pursuant to which no less than
      $15,000,000 of equity securities of the Company are sold for cash, or (ii)
      October 31, 2007.

|5. | Loans Payable
|-- | -------------
|   |              
|   | a.           
|   |              
|   | b.           
|   |              
|   | c.           
|   |              
|   | d.           
|   |              
|   | e.           
|   |              
|   | f.           
|   |              
|   | g.           
|   |              
|   | h.           
|   |              
|   | i.           
|   |              
|   | j.           

---

|6. | Convertible notes
|-- | -----------------
|   |                  
|   | a.               
|   |                  
|   | b.               
|   |                  
|   | c.               
|   |                  
|   | d.               
|   |                  
|   | e.               
|   |                  
|   | f.               
|   |                  
|   |                  

---

| | g. | On September 5, 2007, the Company received convertible
      loan proceeds of $300,000. The amount is unsecured and matures on
      September 5, 2008. The principal amount bears interest at 12% per annum
      and any payments in arrears bear interest at 18% per annum. The principal
      and interest are mandatorily and automatically convertible upon
      consummation, before the maturity date, of subsequent financing
      transactions in which the Company raises a minimum of $500,000 through the
      sale and issuance of its equity or equity-linked securities. This
      convertible loan will be converted at the price determined for the
      contemplated private placement (see note 9c).
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | h. | On September 6, 2007, the Company received convertible
      loan proceeds of $200,000. The amount is unsecured and matures on
      September 6, 2008. The principal amount bears interest at 12% per annum
      and any payments in arrears bear interest at 18% per annum. The principal
      and interest are mandatorily and automatically convertible upon
      consummation, before the maturity date, of subsequent financing
      transactions in which the Company raises a minimum of $500,000 through the
      sale and issuance of equity or equity-linked securities. This convertible
      loan will be converted at the price determined for the contemplated
      private placement (see note 9c).    

|7. | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Effective September 9, 2006, the Company forward split
      its issued common shares on the basis of thirty-six new shares for one old
      share. The number of shares referred to in these financial statements has
      been restated to give retrospective effect on the forward stock split. The
      retrospective restatement of the issued common shares is required by the
      Securities and Exchange Commissions Staff Accounting Bulletin, Topic
      4(c). The number of common shares outstanding pre-forward stock split was
      2,550,000, and after giving effect to the forward split, the outstanding
      common shares totaled 91,800,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In September 2006, the Company authorized the increase of
      its authorized capital stock from 75,000,000 common shares with a par
      value of $0.001 to 200,000,000 common shares with a par value of
      $0.001.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | On June 28, 2007, 41,200,000 common shares were returned
      to treasury for cancellation. The par value of these shares was
      transferred to additional paid-in capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|8. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | During the three and nine month periods ended July 31,
      2007, the Company paid management fees totaling $28,355 and $49,555,
      respectively, (2006 : $Nil) to a company controlled by a director and
      officer of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|9. | Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | d.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | e.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

| | f. | By agreement and plan of merger dated May 31, 2007 (the
        Merger Agreement) and amended September 12, 2007, Z5 has agreed
        to merge with and into FDC with FDC remaining as the surviving entity
        upon closing. Pursuant to the terms of the Merger Agreement, the Company
        acquired all of the issued and outstanding membership interests of Z5
        from its existing shareholders in exchange for the issuance of 5,000,000
        of the Companys common shares, the deferred issuance of 5,000,000
        additional shares to be issued upon the earlier of (i) a sale of equity
        or equity-linked securities resulting in our receiving not less than $2,600,000
        in gross proceeds, (ii) a change in control, as defined in the Note, or
        (iii) January 15, 2008, further deferred issuance of 5,000,000 additional
        shares to be issued upon the earlier of (i) a sale of equity or equity-linked
        securities resulting in our receiving not less than $6,000,000 in gross
        proceeds (inclusive of the Initial Financing), (ii) a change in control,
        as defined in the Note, or (iii) February 15, 2008, option to acquire
        an aggregate of 5,000,000 of the Companys common shares and a promissory
        note in the principal amount of $5,000,000 bearing interest at 5% per
        annum (increasing to lesser of 13% and the maximum rate per annum permitted
        by applicable law, if any, if not paid in full on or before March 31,
        2008) or upon the occurrence of certain default events as defined in the
        note and will be payable as follows:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | -      $500,000 on October 8, 2007;                                                                    
| |  | -------------------------------------------------------------------------------------------------------
| |  | -      $1,000,000 on November 15, 2007;                                                                
| |  | -      $1,000,000 on January 1, 2008;                                                                  
| |  | -      $1,250,000 on February 15, 2008;                                                                
| |  | -      Final installment in the amount equal to
      the then outstanding principal on March 31, 2008.

| |    | Additionally, the Company has represented and warranted
      in the Merger Agreement that, as of the date of the closing of the
      transaction contemplated thereby, the authorized capital stock of the
      Company will consist of 200,000,000 common shares, par value $0.001 per
      share, and that there will be no more than 50,600,000 shares of the
      Companys common stock issued and outstanding.                                                                                                                                                                                                                                                            
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | As of July 31, 2007, the Company has loaned $664,847
      (including accrued interest) to Z5 as working capital in anticipation of
      the closing of the merger.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | g. | On or about June 8, 2007, AI Inc. filed an action against
      the Company, two of its directors and other additional parties for breach
      of contract.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | The Company and its directors strongly dispute the alleged
        claims and shall vigorously defend the action and assert all appropriate
        counterclaims. Motions to Dismiss were filed by the Company and its directors
        in response to the Complaint. No trial date has been set.                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | The parties are negotiating a preliminary understanding
        to settle the litigation on terms that provide the Company a full release
        of all claims against it. Under the terms of the proposed settlement,
        the Company would assign to a third party certain promissory notes issued
        to us by AI, Inc. totaling approximately $1,100,000 in principal and accrued
        interest, in full satisfaction of notes that we have previously issued
        to that third party having a substantially similar total amount of principal
        and accrued interest. However, there can be no assurance that such settlement
        will be consummated.

|10. | Merger(note 9f)                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                               
|11. | Subsequent Events(notes 2, 4, 5 and 9)                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                               
|12. | Comparative Figures                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                               
|    | Certain of the prior periods comparative figures for the
      three and nine month period ended July 31, 2006 and for the period
      February 5, 2004 (Date of Inception) to July 31, 2007 have been
      reclassified to conform with the presentation used in the current
      period.

---

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-QSB, press releases and
certain information provided periodically in writing or verbally by our officers
or our agents contain statements which constitute forward-looking statements.
The words may, would, could, will, expect, estimate, anticipate,
believe, intend, plan, goal, and similar expressions and variations
thereof are intended to specifically identify forward-looking statements. These
statements appear in a number of places in this Form 10-QSB and include all
statements that are not statements of historical fact regarding the intent,
belief or current expectations of us, our directors or our officers, with
respect to, among other things: (i) our liquidity and capital resources; (ii)
our financing opportunities and plans; (iii) our ability to generate revenues;
(iv) market and other trends affecting our future financial condition or plan of
operation; and (v) our growth and operating strategy.

Investors and prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors. The factors that might cause such differences include, among others,
those set forth in Part I, Item 2 of this quarterly report on Form 10-QSB,
entitled Managements Discussion and Analysis or Plan of Operation, and
including, without limitation, the Risk Factors contained in our annual report
on Form 10-KSB for the fiscal year ended October 31, 2006. Except as required by
law, we undertake no obligation to update any of the forward-looking statements
in this Form 10-QSB after the date of this report.

The following discussion and analysis of our financial
condition, plan of operation and liquidity should be read in conjunction with
our unaudited interim financial statements and the notes thereto included in
Part I, Item 1 of this quarterly report on Form 10-QSB, and our audited
financial statements and the notes thereto and our Managements Discussion and
Analysis or Plan of Operation contained in our annual report on Form 10-KSB for
the fiscal years ended October 31, 2006 and 2005. Our financial statements have
been prepared in accordance with United State generally accepted accounting
principles (GAAP), contemplate that we will continue as a going concern, and
do not contain any adjustments that might result if we were unable to continue
as a going concern, however, our independent registered public accounting firm
has added explanatory paragraphs in Note 1 of each of our financial statements
for the fiscal years ended October 31, 2006 and 2005, respectively, raising
substantial doubt as to our ability to continue as a going concern.

OVERVIEW

We were incorporated under the laws of the State of Nevada on
February 5, 2004 as Major Creations Incorporated. At our inception we were
engaged in the business of selling new, small diesel tractors modified to have a
vintage-style appearance. We were never able to achieve sufficient financing to
fully develop our tractor business and, in November 2006, with the appointment
of new directors and officers, we ceased operations in this regard and began to
explore other business opportunities which might allow us to restart commercial
operations.

On September 21, 2006 we amended our Articles of Incorporation
to increase our authorized capital stock to 200,000,000 shares of common stock,
par value of $0.001. On September 26, 2006 we amended our Articles of
Incorporation to effectuate a thirty-six for one forward stock split.

On December 5, 2006, we merged with and into our wholly owned
subsidiary, Aegis Industries Inc., a Colorado corporation, and filed Articles of
Merger with the Secretary of State of the State of Nevada changing our name from
Major Creations Incorporated to Aegis Industries, Inc.

On May 22, 2007, we incorporated Aegis Merger Corporation as a
wholly owned subsidiary under the laws of the State of Delaware. On August 31,
2007 Aegis Merger Corporation filed an amendment to its Certificate of
Incorporation changing its name to Fortified Data Communications, Inc.

On June 6, 2007, our wholly owned subsidiary, Fortified Holdings
  Corp., a Colorado corporation, was merged with and into the Company and we filed
  Articles of Merger with the Secretary of State of the State of Nevada changing
  our name from Aegis Industries, Inc. to Fortified Holdings Corp.

On May 31, 2007, we entered into a definitive agreement to
acquire Z5 Technologies LLC, a Connecticut limited liability company (Z5),
pursuant to a certain agreement and plan of merger by and among ourselves, Z5,
Thomas Keenan Ventures LLC (TKV), and Fortified Data Communications, Inc.
(then Aegis Merger Corporation), a Delaware corporation and our wholly owned
subsidiary (FDC) (the Merger Agreement). Headquartered in Washington D.C.,
Z5 is in the business of developing and selling a line of man-portable Command
and Control, Communications and Compute (C4) solutions for field based incident
management and emergency operations support. The Companys products are marketed
under the NOMADTM brand, principally for use by the military, first
responders, relief workers and high risk industries.

On September 12, 2007, the parties to the Merger Agreement
executed a letter of amendment (the Amendment, and, together with the Merger
Agreement, the Amended Merger Agreement), pursuant to the terms of which it
was agreed, upon closing of the acquisition contemplated in the Merger Agreement
(the Acquisition), that we will acquire (through FDC) all of the outstanding
equity interests of Z5 from TKV, the sole owner of the Z5 equity, in
consideration of the immediate issuance of 5,000,000 shares of our common stock,
a promissory note in the principal amount of $5,000,000 (the Note), and the
deferred issuance of 10,000,000

---

additional share of common stock in two 5,000,000 share tranches, with the first to be issued upon the earlier of (i) a sale of equity or equity-linked securities resulting in our receiving not less than $2.6 million in gross proceeds (the
Initial Financing), (ii) a change in control, as defined in the Note, or (iii) January 15, 2008, and the second to be issued upon the earlier of (i) a sale of equity or equity-linked securities resulting in our receiving not less than
$6 million in gross proceeds (inclusive of the Initial Financing), (ii) a change in control, as defined in the Note, or (iii) February 15, 2008.

The Amended Merger Agreement also provides that, upon closing of the Acqusition, Brendan T. Reilly, currently Z5s President, will be appointed as our Chief Executive Officer and Chairman of the board of directors, and as FDCs President
and Chief Executive Officer, and that Alan Hurwitz, currently Z5s Chief Financial Officer, will be appointed as our Chief Financial Officer.

Effective September 13, 2007, we closed the Acquisition of Z5.

As of the quarterly period ended July 31, 2007, we have loaned
  $664,847 (including accrued interest) to Z5 for use as working capital in
  anticipation of the closing of the Acquisition.

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies, including the assumptions and judgments underlying those policies, are more fully described in the notes to our audited financial statements contained in our annual report on Form 10-KSB for the fiscal years ended
October 31, 2006 and 2005. We have consistently applied these policies in all material respects. Investors are cautioned, however, that these policies are not guarantees of future performance and involve risks and uncertainties, and that actual
results may differ materially. Set forth below are the accounting policies that we believe most critical to an understanding of our financial condition and liquidity.

Convertible Instruments

When we issue convertible instruments with detachable instruments, the proceeds of the issuance are allocated between the convertible instrument and other detachable instruments based on their relative fair values pursuant to Emerging Issues Task
Force (EITF) Issue No. 00-27,Application of Issue No. 98-5 Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Rations, to Certain Convertible Instruments.
The resulting discount of the convertible instrument is amortized into income as interest expense over the term of the convertible instrument.

When we issue convertible debt securities with non-detachable
  conversion features that provide for an effective rate of conversion that is
  below market value on the commitment date it is known as a beneficial conversion
  feature, and pursuant to EITF Issue No. 98-5,Accounting for Convertible
  Securities with Beneficial Conversion Features or Contingently Adjustable Conversion
  Ratios , and EITF Issue No. 00-27, the conversion feature of the security
  that has characteristics of an equity instrument is measured at its intrinsic
  value at the commitment date and is recorded as additional paid in capital.
  A portion of the proceeds of the security issued is allocated to the conversion
  feature equal to its intrinsic value to a maximum of the amount allocated to
  the convertible instrument. The resulting discount of the debt instrument is
  amortized into income as interest expense over the conversion features
  vesting period.

Development Stage Company

As defined by Statement of Financial Accounting Standard (SFAS) No. 7,Accounting and Reporting by Development Stage Enterprises we are, and have been from our inception on February 5, 2004, a development stage company, and, as of the date of
this quarterly report on Form 10-QSB for the quarter ended July 31, 2007, have not generated any revenues from our planned operations. At present, we are devoting substantially all of our efforts toward closing the Acquisition of Z5 in accordance
with the terms of the Merger Agreement.

PLAN OF OPERATIONS

As of the end of the period covered by this quarterly report on Form 10-QSB we had no meaningful operations or assets, and our future operations were dependent upon the closing of the Acquisition of Z5 as contemplated in the Amended Merger
Agreement. Throughout the period covered by this quarterly report on Form 10-QSB, we continued to operate with very limited administrative support, and our then-current officers and directors continued to be responsible for many duties.

Following the end of the period covered by this quarterly report on Form 10-QSB, on September 13, 2007, we closed the Acquisition of Z5. Z5 is in the business of developing and selling a line of man-portable Command and Control, Communications and
Compute (C4) solutions for field based incident management and emergency operations support. Z5s products are marketed under the NOMADTM brand, principally for use by the military, first responders, relief workers and high risk
industries.

Over the course of the next twelve months we intend to focus
  on Z5s business and the full implementation of its plan of operations.
  As a result of the Acquisition we expect to acquire a number of additional employees,
  and undertake product research and development in line with that of the business
  of Z5. We do not believe that our current financial resources are sufficient
  to meet our working capital needs over the next twelve months and, accordingly,
  we will need to secure additional external financing to continue even our limited
  operations. We are seeking to raise additional capital though private equity
  or debt financings. There can be no assurance that this funding will be available.

---

Off-Balance Sheet Arrangements

As of the date of this quarterly report on Form 10-QSB for the period ended July 31, 2007, we have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition.

LIQUIDITY AND CAPITAL RESOURCES

As of the quarterly period ended July 31, 2007, we had approximately $136,983 of cash on hand.

Our net loss increased $1,320,912, from a net loss of $55,506 for the nine months ended July 31, 2006 to a net loss of $1,376,418 for the nine months ended July 31, 2007, and our working capital deficiency increased from $45,167 at
October 31, 2006, to $667,793 at July 31, 2007. This increase in our working capital deficit is primarily attributable to increases in the outstanding balance of our current loans payable.

Net cash used in operating activities increased $327,252 from $53,041 for the nine months ended July 31, 2006 to $380,293 for the nine months ended July 31, 2007. This increase is primarily attributable to increases in our prepaid
expenses, amortization expenses and accrued interest, for which there were no comparable expenditures during the nine months ended July 31, 2006, as well as a $208,795 increase in our accounts payable.

Net cash provided by financing activities increased $2,185,277, from $95,000 for the nine months ended July 31, 2006 to $2,280,277 for the nine months ended July 31, 2007. This increase is attributable to increases in the total principal
amount of certain loan proceeds received for the nine months ended July 31, 2007 as compared to the same period in 2006.

Net cash used in investment activities increased $1,718,777,
  from $44,125 for the nine months ended July 31, 2006 to approximately $1,763,001
  for the nine months ended July 31, 2007. This increase is primarily attributable
  to total principal amount of certain loans made during the nine months ended
  July 31, 2007 as compared to the same period in 2006.

We do not believe that our current financial resources are
  sufficient to meet our working capital needs over the next twelve months and,
  accordingly, we will need to secure additional external financing to continue
  even our limited operations. As an initial step in our efforts to raise additional
  capital, in connection with the Merger with Z5, we entered into a Standby Financing
  Commitment with a third party, Clarus Capital Limited and one of its affiliates
  (collectively, Clarus), under which Clarus has committed to direct
  or indirect investments of up to an aggregate of $2.7 million in Fortified.
  Of this amount, $500,000 was funded during the two weeks preceding the Merger,
  and $2.2 million is committed to be funded between the closing of the Merger
  and November 2007. There can be no assurance, however, that we will be able
  to secure additional external financing beyond the funds that have been committed
  by Clarus, or, if we are able to secure such external financing, that it will
  be on terms favorable, or even acceptable, to us. If necessary, we may explore
  strategic alternatives, including a merger, joint venture or other comparable
  transactions. Any inability to secure external financing or locate a suitable
  alternative business opportunity would have a material adverse effect on our
  business, financial condition, and plan of operation, raising substantial doubts
  as to our ability to continue as a going concern.

ITEM 3. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that the information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded,
processed, summarized and reported in a timely manner as specified in the rules and forms set forth by the United States Securities and Exchange Commission. These controls and procedures are designed to ensure that the information required to be
disclosed in our reports is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or other persons performing similar functions, as appropriate, so as to allow timely decisions regarding
required disclosure.

In conjunction with the Companys interim President and Chief Financial Officer in office prior to the date of the Merger, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of
the period covered by this quarterly report on Form 10-QSB was carried out by our Chief Executive Officer and Chief Financial Officer. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the
end of the period covered by this quarterly report, our disclosure controls and procedures were effective and designed so as to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act, is
recorded, processed, summarized and reported within the requisite time periods.

During the course of this evaluation our Chief Executive Officer and Chief Financial Officer did not discover any fraud involving management or any other personnel who play a significant role in our disclosure controls and procedures. Furthermore,
because there were no significant deficiencies and/or material weaknesses discovered no remedial measures were necessary or taken during the period covered by this report to correct any such deficiencies.

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CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

No changes in our disclosure controls and procedures, internal
controls over financial reporting or other factors have occurred during the
fiscal quarter covered by this report that would materially affect or be
reasonably likely to materially affect our disclosure controls and procedures or
internal controls over financial reporting.

PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On or about June 8, 2007, Aegis Industries, Inc. (a Delaware
corporation) (AI), Ken Stethem, Paul Evancoe, Carl Sangree, Anthony Passante,
Mariella Marquez, Paul Archinard and Stan Hollaway (collectively, "Plaintiffs')
filed an action against Fortified Holdings Corp., two of its directors, David
Kirby and Dennis Mee, and other additional parties (collectively, Defendants)
in the Second Judicial District Court, County of Washoe, State of Nevada
(assigned Case No. CV 0701304). Plaintiffs allege claims for (1) Breach of
Contract; (2) Breach of the Implied Covenant of Good Faith and Fair Dealing; (3)
Unjust Enrichment; (4) Fraud/Fraudulent Misrepresentation; (5) Violation of
Nevada Revised Statute 207.400 (RICO); (6) Conversion; and (7) Conspiracy
against all defendants related to a non-binding letter of intent entered into
between AI and Fortified Holdings Corporation in November 2006. Fortified
Holdings Corporation and its directors strongly dispute the claims alleged by
Plaintiffs and shall vigorously defend the action and assert all appropriate
counterclaims. Motions to Dismiss were filed by Fortified Holdings Corporations
and its directors in response to the Complaint. No trial date has been set.

The parties have reached a preliminary understanding to settle
  the litigation on terms that provide Fortified a full release of all claims
  against it. Under the terms of the proposed settlement, we would assign to a
  third party certain promissory notes issued to us by AI totalling approximately
  $1,100,000 in principal and accrued interest, in full satisfaction of other
  notes that we have previously issued to that third party having a substantially
  similar total amount of principal and accrued interest. However, not all necessary
  parties to the settlement have executed a definitive settlement agreement as
  of the date of filing of this quarterly report on form 10-QSB, and accordingly
  there can be no assurance that such settlement will be consummated.

Except as otherwise disclosed above, there are no pending
material legal proceedings to which we are a party and we are not aware that any
are contemplated. There can be no assurance, however, that we will not be made a
party to litigation in the future. Any finding of liability imposed against us
is likely to have an adverse effect on our business, our financial condition,
including liquidity and profitability, and our plan of operation.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

There were no reportable events under this Item 2 during the
quarterly period ended July 31, 2007.

ITEM 3. DEFAULT UPON SENIOR SECURITIES.

There were no reportable events under this Item 3 during the
quarterly period ended July 31, 2007.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no matters submitted to a vote of our stockholders,
through the solicitation of proxies or otherwise, during the quarterly period
ended July 31, 2007.

ITEM 5. OTHER INFORMATION.

There were no reportable events under this Item 5 during the
quarterly period ended July 31, 2007.

ITEM 6. EXHIBITS.

|No.     | Description of Exhibit                                                                                                                                                                                                                                                                                                                      
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                             
|2.1     | Merger Agreement
        by and among Z5 Technologies LLC, Fortified Data Communications, Inc.
        (Aegis Merger Corporation), Fortified Holdings Corp. (formerly Aegis Industries,
        Inc.) and Thomas Kennan Ventures, LLC, dated May 31, 2007, incorporated
        by reference to Exhibit 10.1 on Form 8-K filed June 6, 2007.
|        |                                                                                                                                                                                                                                                                                                                                             
|3(i)(1) | Articles of
        Incorporation of Fortified Holdings Corp., filed February 5, 2004, incorporated
        by reference to the Exhibit 3.1 on Form SB-2 filed February 17, 2005.                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                             
|3(i)(2) | Certificate
        of Amendment to the Articles of Incorporation of Fortified Holdings Corp.,
        dated September 21, 2006, incorporated by reference to the Exhibit 3(i)(2)
        on form 10-QSB filed June 14, 2007.                                                                                                               

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|3(i)(3) | Certificate
        of Amendment to the Articles of Incorporation of Fortified Holdings Corp.,
        dated September 26, 2006, incorporated by reference to the Exhibit 3(i)(3)
        on form 10-QSB filed June 14, 2007.                                                                   
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                 
|3(i)(4) | Articles of
        Merger amending Articles of Incorporation of Fortified Holdings Corp.,
        dated December 5, 2006, incorporated by reference to Exhibit 2.1 on Form
        8-K filed January 3, 2007.                                                                                  
|        |                                                                                                                                                                                                                                                                                                 
|3(i)(5) | Articles of
        Merger amending Articles of Incorporation of Fortified Holdings Corp.,
        dated June 1, 2007, incorporated by reference to Exhibit 3(i)(1) on Form
        8-K filed July 3, 2007.                                                                                     
|        |                                                                                                                                                                                                                                                                                                 
|3(ii)   | By-laws of Fortified
        Holdings Corp., dated February 20, 2007, incorporated by reference to
        Exhibit 3.2 on Form SB- 2 filed February 17, 2005.                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                 
|10.1    | Business Consulting
        Agreement by and between Fortified Holdings Corp., and Part Time CFO Inc.,
        dated December 1, 2006, incorporated by reference to Exhibit 10.1 on Form
        8-K filed December 5, 2006.                                                                    
|        |                                                                                                                                                                                                                                                                                                 
|10.2    | Modification
        Agreement by and between Fortified Holdings Corp., and Part Time CFO Inc.,
        dated May 10, 2007, incorporated by reference to Exhibit 10.1 on Form
        8-K filed May 10, 2007.                                                                                   
|        |                                                                                                                                                                                                                                                                                                 
|31.1    | Certification
        of Fortified Holdings Corp. Chief Executive Officer, Brendan Reilly, required
        by Rule 13a-14(a) or Rule 15d-14(a), dated September 18, 2007. FILED HEREWITH                                                                                                       
|        |                                                                                                                                                                                                                                                                                                 
|31.2    | Certification
        of Fortified Holdings Corp. Chief Financial Officer Alan Hurwitz, required
        by Rule 13a-14(a) or Rule 15d- 14(a), dated September 18, 2007. FILED
        HEREWITH                                                                                                 
|        |                                                                                                                                                                                                                                                                                                 
|32.1    | Certification
        of Fortified Holdings Corp. Chief Executive Officer, Brendan Reilly, required
        by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of
        Title 18 of the United States Code (18 U.S.C. 1350), dated September 18,
        2007. FILED HEREWITH.
|        |                                                                                                                                                                                                                                                                                                 
|32.2    | Certification
        of Fortified Holdings Corp. Chief Financial Officer, Alan Hurwitz, required
        by Rule 13a-14(b) or Rule 15d- 14(b) and Section 1350 of Chapter 63 of
        Title 18 of the United States Code (18 U.S.C. 1350), dated September 18,
        2007. FILED HEREWITH. 

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Signatures

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date: September 19, 2007

FORTIFIED HOLDINGS CORP.

By:/s/ Brendan
ReillyBrendan Reilly         Chief
Executive Officer &

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