SOURCE: Fortified Holdings Corp.

September 14, 2007 08:00 ET

Fortified Holdings Finalizes Acquisition of Z5 Technologies

Company Announces Formation of Subsidiary and Appoints Executive Leadership

ROCKVILLE, MD--(Marketwire - September 14, 2007) - Fortified Holdings Corp. (OTCBB: FFDH) ("Fortified Holdings," "we" or the "Company") is pleased to announce effective September 13, 2007 that it has completed its acquisition of Z5 Technologies LLC (the "Z5"). The Company's agreement to acquire Z5 was originally announced on May 31, 2007.

Z5 develops and sells a line of man-portable Emergency Operations Centers and other types of "Command and Control, Communications and Computer (C4)" solutions for field-based incident management and emergency operations support. Z5's products are marketed under the NOMAD™ brand, and are principally used by the military, first responders, relief workers and high risk industries. Z5's current customers include, among others, the U.S. Army Joint Task Force for Civilian Support, the Federal Emergency Management Agency, the City of New Orleans, and the Department of Homeland Security.

In connection with the acquisition of Z5 (the "Acquisition"), the Company formed a new wholly owned subsidiary, Fortified Data Communications, Inc., or "Fortified DataCom," and effected the Acquisition through the merger of Z5 into Fortified DataCom, which will conduct the former Z5 business going forward.

Dennis Mee, Fortified Holdings' Interim President until the closing of the Acquisition, said, "We set out early this year on our goal of transforming Fortified Holdings into a multi-line provider of products and solutions that enhance the ability of the military, the intelligence community, first responders, humanitarian workers and similar personnel to collaborate, to provide improved security services, and to respond to individuals and communities in need at times of crisis. We are very excited to have acquired Z5 and its NOMAD™ line as our first operating company in this space, both because of its excellent product set and customer base, because it provides an excellent platform for our further expansion, and because the Acquisition brings with it a high-caliber management team with deep experience in this market who will drive the Company going forward."

In connection with the Acquisition, Brendan T. Reilly (Z5's Founder and President) was appointed as the Company's Chief Executive Officer, Chairman and President, and Alan D. Hurwitz (Z5's Chief Financial Officer) was appointed as the Company's Executive Vice President and Chief Financial Officer.

Brendan Reilly, newly appointed Chief Executive Officer of the Company, added, "As the market continues to grow for technologies and solutions that truly improve organizations' ability to successfully prepare for and respond to emergencies and disasters throughout the world, it has become apparent that the successful players will be those companies that can merge the elements of technology, business, tactical positioning, and quality of service to form new and dynamic solutions and services. This Acquisition allows us to expand on recent successes, and continue Fortified Holdings on a path of growth to meet the needs of customers on a global basis. We could not be more pleased with what this means to the stakeholders of Fortified Holdings today and into the future as we try to capitalize on this multi-billion dollar marketplace."

Thomas Keenan Ventures LLC ("TKV") owned 100% of Z5's outstanding equity until the Acquisition. Mr. Reilly holds a controlling interest in TKV, and may be deemed to control the Company's common stock now held by TKV.

The principal terms of the Acquisition were described on a Form 8-K filed on June 7, 2007, and the Agreement and Plan of Merger (the "Merger Agreement") between the parties, together with various ancillary agreements entered into pursuant to the Merger Agreement, were filed previously as exhibits to that filing. A letter agreement signed by the parties at closing amended the Merger Agreement and some of those previously disclosed terms. Under the final terms of the Acquisition, at closing we issued to TKV 5,000,000 shares of the Company's common stock and a promissory note in the amount of $5,000,000. In addition, we have agreed to issue to TKV another 10,000,000 shares in two future tranches: 5,000,000 shares will be issued on January 15, 2008 or upon raising $2.75 million in new capital, if earlier; and the final 5,000,000 shares will be issued on February 15, 2008 or upon raising a total of $6 million in new capital (including the prior $2.75 million), if earlier. The promissory note issued to TKV will be payable in five payments on specified dates between October 2007 and March 2008. In the Acquisition, the Company also granted replacement stock options to pre-closing holders of Z5 options, entitling them to purchase up to an additional 5,000,000 shares of the Company's common stock. The Merger Agreement contains customary indemnification provisions, under which Fortified Holdings and TKV, respectively, have agreed to indemnify one another with respect to certain matters, subject to specified limitations and conditions.

As a condition to the Acquisition, our majority stockholder tendered back to the Company an aggregate of 41,200,000 shares of Company common stock, for cancellation, without payment. As a result of the Acquisition and the cancellation of those shares, TKV now owns 9% of the Company's issued and outstanding common stock, excluding the stock to be issued in the future. When the additional shares described above are issued (and assuming no other shares have been issued by such time), TKV will own 23% of the Company's issued and outstanding common stock.

Full details of the Acquisition will be provided in a Form 8-K filing to be made with the SEC by the Company within the next four business days.

Fortified Holdings Corporation (OTCBB: FFDH)

Fortified Holdings Corporation aims to become a diversified internationally focused holding company with a planned portfolio of dynamic and rapidly expanding industry leading subsidiaries. The proposed subsidiaries and the portfolio companies within them will all share a common goal of designing, developing, manufacturing and globally marketing products and solutions designed to enhance the ability of military, intelligence, first responder, humanitarian and law enforcement personnel to collaborate, to provide improved security services, and to respond to individuals and communities in need at times of crisis.

Forward-Looking Statements

Except for statements of historical fact, this news release contains certain "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995, including, without limitation, expectations, beliefs, plans and objectives regarding future activities. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Fortified Holdings to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop future assets, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Fortified Holdings Corp., Z5 Technologies, LLC or any affiliates, has little or no control.

On Behalf of the Board

Fortified Holdings Corp.
Brendan Reilly, President & CEO

Contact Information