August 18, 2008 14:00 ET

Fortress Financial Group, Inc. - Statement

Company Issues Statement on Its Future Direction and Disposal of Its Assets

NEW YORK, NY--(Marketwire - August 18, 2008) - Fortress Financial Group, Inc. (PINKSHEETS: FFGO) announced on Friday August 15, 2008 that it was in advanced discussions, which if successful, would lead to a very substantial and immediate shift in the Company's strategy.

The Company confirms that a number of substantial and extraordinary changes within the Company are be enacted and with immediate effect.

--  Company to distribute all of its Gold assets (through the Goldco
    shares) to its stockholders in the form on an Enlarged Extraordinary
    Dividend now valued at US$0.0178 (US$500 million) per share of the
    Company's Common Stock. This is a substantial increase in the Extraordinary
    payment as previously announced.
--  Outstanding shares of the Company's stock now reduced to an amount of
    28,167,377,817 shares of Common Stock.
--  Alan Santini to resign as CEO of the Company to pursue his ambitions
    to build a diversified Consumer Financial Services Group in another
    Company; and to include this Company's stockholders in that Company. Alan
    Santini will remain involved with this Company for as long as is required
    to ensure that all Stock Dividends are paid to our stockholders and to
    ensure that all outstanding issues are resolved.
--  Company to realize the remainder of its assets; these to be paid as
    another Dividend to its Stockholders.
--  Company attempting to pay a further Dividend to its stockholders in
    cash; this being primarily dependant on the disposal of its "free trading"
    stock in Hunt Gold Corporation and certain other assets for cash.

The major reasons for the decisions that have been reached are as follows:

1. The Company, its CEO and one of its influential stockholders have been subjected to continual harassment by third parties through the use of E Mail and Internet Message Boards. These third parties have sought to spread lies, doubts and disinformation about the Company and its CEO. These third parties have gone so far as to launch vicious unprecedented personal attacks on the Company's CEO, even on social networking web sites; a situation he is no longer prepared to tolerate, nor accept as normal business practice. These parties are succeeding in their quest to damage this Company and to severely hamper its ability to grow through acquisition.

2. The Company's CEO has tried his utmost to address and to rectify all outstanding issues facing the Company, all of which were created prior to his appointment to this Company's Board of Directors.

Despite Alan Santini's resolution of these issues, his declaration of an extraordinary dividend to stockholders of the Company's surplus capital, his Transparency to stockholders, his repurchase and cancellation of circa 54% of the Company's outstanding shares and his appointment of an Investor Relations firm to inform and assist his stockholders; he and the Company continue to remain under constant personal attack from these third parties.

In short, he has decided that this fight is not worth his time and effort; and severely hampers his abilities to serve his stockholders to the best of his abilities. Alan Santini, Peter Bezzano and other influential stockholders are of the opinion that these people will not rest until they have succeeded in destroying the Company's reputation, undoubtedly for their own personal gain. The Company has no provable motives as to the reason for these third parties viciously pursuing this campaign against the Company.

3. This has resulted in the Company being severely handicapped in its ability to consummate acquisitions in order to grow its business and to hire skilled professional Executives, all of whom have no desire to be subjected to this abuse by these third parties.

4. Certain very influential stockholders have clearly indicated that are not comfortable in supporting the business financially, going forward, due to these unprecedented attacks on the Company. One of the very influential stockholders who has been subjected to this abuse is now in all likelihood; commencing legal action against certain of these identified parties; charges which we understand will include slander, defamation, libel and tortuous interference. These actions by this stockholder are not considered to be of any assistance to the Company's reputation and will only serve to further distract Management time and attention.

5. The Company's CEO has grown tired of being forced to address these issues on an hourly basis as raised by concerned stockholders who read this misinformation posted on the Message Forums. The issue of Short Selling has now become a major distraction for the Company's Management and is not conducive to their ambitious growth plans. The Company has no intention of addressing the issue of Naked Short Selling again; and should there be a short position in the market, those of whom are short in our stock will be obviously be required to cover their short positions through purchases of our stock in the market.

Based upon the above-mentioned statements, The Company and its CEO have now accepted a third party proposal; as follows:

6. The Company will no longer continue with its stated objectives to grow the Company in the Consumer Finance Sector due to the reasons stated above. The Company to all intensive purposes will now be "broken up" with the sole objective of enriching its stockholders.

7. The Company's CEO Alan Santini has decided to resign as the CEO and as a Director of the Company and within a fairly short space of time. Alan Santini will be leaving this Company to assume the position of CEO of another publicly quoted company with substantial funding; where he will be in a position to grow that business in the Consumer Finance Sector as had planned to do for this Company. Alan Santini will be making full disclosure to his stockholders as to his plans over the next few weeks. Alan Santini will be including this Company's stockholders in his new Company as outlined in this Announcement.

Alan Santini will be consummating all of his planned acquisitions through his new Company. He has consulted with all those parties, who are 100% supportive of his decisions and agree that the continual attacks upon this Company do not make them feel comfortable in selling their businesses to this Company. They too, fear this incessant harassment, attacks upon themselves, their employees and upon their businesses.

8. Mr Peter J Bezzano, the Non Executive Chairman of the Company, will oversee the Company's activities on a day to day basis upon Alan Santini's departure.

9. The Board of Directors of the Company has sought Counsel from the Executives of the Companies who were in the process of being acquired by the Company, from substantial stockholders and from experienced players in the broking community; prior to reaching the decisions as outlined below.

The Company will now be enacting the following steps :-

10. All of the Company's holdings in Goldco; expected to be received by the Company on Friday August 29, 2008 and in the amount of US$498,422,955 are to be distributed to the Company's stockholders in full. This means that the Extraordinary Dividend will be substantially increased in size as the Company will no retaining any of these Goldco shares of Common Stock whatsoever.

11. The Company will now focus on setting a "Record Date" and "Pay Date" for this enlarged Extraordinary Dividend. Stockholders will be advised as to these dates ahead of time; in order to be eligible for the receipt this enlarged Extraordinary Dividend; and all other Stock Dividends. Stockholders will be required to be registered as stockholders by the "Record Dates" as they are published by the Company.

12. The value of this Extraordinary Dividend will now be valued in the amount of US$0.0178 per share. A detailed Form 8-K will be filed with the SEC today to this effect.

13. Alan Santini will be returning his signing bonus of 1,500,000,000 restricted shares of the Company's shares of Common Stock to the Company; for cancellation and returning another signing bonus in the amount of 1,500,000,000 shares of the Company's restricted stock given to a third party; for cancellation.

This will increase the value of the stock dividend being paid to our stockholders as the shares of the Company's outstanding stock are now in the amount of 28,167,377,817.

Alan Santini continues and will continue to hold an amount of 2,400,000,000 "free trading" shares of the Company's stock purchased by himself; and will be eligible for the enlarged Extraordinary Dividend.

The Company will not be effecting any Reverse Split of its stock.

14. The Company will be retaining its stockholdings in Hunt Gold Corporation for the time being, as the Company's Management is confident that this could remain a very profitable investment for the immediate term. These holdings have a market value of US$6,474,470, but Management remains confident that the "free trading" shares held in Hunt Gold Corporation by this Company, will fetch a substantial premium to that Company's current stock price. The Company announced on August 13, 2008 that should the Company obtain a price of US$0.03 per share for the "free trading" shares, that being at the last bid price for Hunt Gold Corporation; this will result in a cash injection of US$14,490,000. Should this be achieved; this will result in cash dividend for this Company's stockholders.

Fortress Financial Group, Inc. has directly acquired an additional amount of 42,569,020 "free trading" shares of Hunt Gold Corporation Common Stock at a price of no higher US$0.003 per share. Fortress Financial Group, Inc. holds a further and an indirect amount of 483,750,099 shares "free trading" shares of Hunt Gold Corporation Stock. As outlined below (and filed with the SEC in a Form 8-K), the Company is transferring an amount of 40,059,532 shares of Hunt Gold Corporation shares of "free trading" Common Stock to ensure no further delays in the balance of that Stock distribution. Fortress Financial Group, Inc. holds an additional amount of 1,363,588,873 restricted shares of Hunt Gold Corporation's shares of Common Stock and holds an additional net amount of 486,259,587 "free trading" shares of Hunt Gold Common Stock.

Fortress Financial Group, Inc. and its Transfer Agent calculated that the number of Hunt Gold Corporation Common Stock due to these holders in "Street Names" was in the amount of 27,681,135 shares of Hunt Gold Common Stock. These shares were placed in a "Reserve Account" at the Transfer Agent to Hunt Gold Corporation. The DTCC has advised the Company that they calculate that an amount of 67,740,667 shares of Hunt Gold Corporation is required to complete the payment of this Stock Dividend by Fortress Financial Group, Inc.

Fortress Financial Group, Inc. has undertaken to and is transferring the difference; that being in the amount of 40,059,532 shares of Hunt Gold Corporation, to the "Reserve Account" held at the Transfer Agent to Hunt Gold Corporation. Fortress Financial Group, Inc. is effecting this transfer of Hunt Gold Corporation shares of Common Stock to ensure that all its eligible stockholders receive their shares in Hunt Gold Corporation and to prevent any further delays in the payment of these Stock Dividend shares of Hunt Gold Corporation Common Stock.

15. The Company is discussing a fair market price for certain of the Company's subsidiary companies which Alan Santini's new Company intends to purchase from this Company. The stock received in Alan Santini's new company, by this Company, in settlement of these purchases; will be distributed to stockholders at a later date, and as a separate Stock Dividend Payout. Alan Santini is of the opinion that is only fair and just that his stockholders, many of whom have shown him tremendous support; benefit from his endeavors in his new Company.

16. The Company is addressing the issue of the value and disposal of all of the other assets held by the Company and will update stockholders once a decision on these assets has been reached.

17. The Company intends to bring its outstanding filings with the SEC up to date and to resolve all outstanding issues. Once this has been achieved, the Company will be seeking acquisitions; but with a new Management Team and Directors. This will result in the Company undergoing a name, CUSIP Number and Trading Symbol change, at that time.

18. The Company will continue to retain its Investor Relations firm, Financial Insights, who can elaborate on the Company's change in strategy and keep stockholders informed on a daily basis.

19. The Company will ensure that all stock repurchases by the Company are cancelled by its Transfer Agent well before the "Record Date" of any of these Stock Dividends; and that the Transfer Agent's records match those of the Company's following these stock repurchases by the Company.

20. The valuations of the Goldco transaction; and through the sale of the Company's interests of the "Bouse" and "South Copperstone" Gold Mining & Exploration assets were calculated by professional independent experts. The Company stands by these valuations despite the temporary fall in the price of Gold over the last month.

21. The Company is confident that it will reach an accommodation with Goldco over the restrictions of these shares of Goldco Common Stock; being distributed to our stockholders. This accommodation would be in the interests all parties, including Goldco stockholders.

22. The Company can confirm that it is negotiating with Goldco over their acquiring the minority stockholdings in "Bouse" and in "South Copperstone" as these are Stock Dividends due to Company stockholders for a long period of time; that being in excess of two years. The Company is of the opinion that not only is this fair and just, but is absolutely necessary for this Company on a "going forward" basis and prior to it acquiring other companies as stated in paragraph 17 of this Announcement. Failure to achieve this goal will result in negative publicity for the Company forever.

Alan Santini, the CEO Of Fortress Financial Group, wishes to clearly state that he will not let his stockholders down, that he will ensure that all outstanding stock dividend issues are resolved and that the enlarged Extraordinary Dividend as well as the additional Stock Dividend of shares of his new Company's Common Stock are distributed in full to all eligible stockholders. He added that he hoped and trusted that his stockholders would understand his rationale for this move and he was honored to be the man whom was able to distribute this substantial Dividend, coupled with further Dividends; to his stockholders, thereby rectifying the losses suffered by stockholders prior to his appointment as the CEO and as a Director of this Company."

Alan Santini added, "Fortress Financial Group, Inc. would now become a value play in the market; until such time as the 'Pay Date' of this enlarged Extraordinary Dividend." Alan Santini bases this statement upon the vast difference in the break-up value of the Company and its current stock price given that this Company is now effectively being broken up in order to divulge all of its accumulated assets to its stockholders.

About Fortress Financial Group, Inc.

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such a "may," "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the SEC.

Contact Information

  • Contact:

    Investor Insights (Dick Granieri/Gordon Otter)
    E Mail : Email Contact
    Telephone : 1-800-530-3545

    Fortress Financial Group, Inc.
    Alan Santini
    Chief Executive Officer

    Email Contact

    Tel: (954) 840-6961