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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
FORTUNE FINANCIAL, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.025 PER SHARE
(Title of Class of Securities)
607235504
(CUSIP Number)
James L. Main, Esq.
Holland & Knight LLP
50 North Laura Street, Suite 3900
Jacksonville, Florida 32202
(904) 798-7319
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
NOVEMBER 15, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box / /.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 7 pages)
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<TABLE>
<CAPTION>
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CUSIP No. 607235504 Page 2 of 8
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<S> <C> <C> <C>
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Names of Reporting Person:
1 R. Lee Smith
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I.R.S. Identification No. of Above Person (entity only)
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2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /x/
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SEC use only
3
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Source of Funds*
4
PF
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Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
5
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Citizenship or Place of Organization
6
United States Citizen
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Sole voting power
7 1,453,232
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Number of shares Shared voting power
beneficially 8 -0-
owned by each
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Reporting person with Sole dispositive power
9 1,453,232
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Shared dispositive power
10 -0-
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Aggregate Amount Beneficially Owned by Each Reporting Person
11 1,453,232
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Check box if the Aggregate Amount in Row (11) Excludes Certain Shares* / / /x/
12
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Percent of Class Represented by Amount in Row (11)
13 17.9%
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Type of Reporting Person*
14
IN
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- SEE INSTRUCTIONS BEFORE FILLING OUT!
</TABLE>
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<TABLE>
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CUSIP No. 607235504 Page 3 of 8
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<S> <C> <C> <C>
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Names of Reporting Person:
1 Allan J. McCorkle
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I.R.S. Identification No. of Above Person (entity only)
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2 Check the Appropriate Box if a Member of a Group*
(a) / /
(b) /x/
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SEC use only
3
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Source of Funds*
4
Not Applicable
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Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
5
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Citizenship or Place of Organization
6
United States Citizen
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Sole voting power
7 -0-
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Number of shares Shared voting power
beneficially 8 2,872,110
owned by each
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Reporting person with Sole dispositive power
9 -0-
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Shared dispositive power
10 2,872,110
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Aggregate Amount Beneficially Owned by Each Reporting Person
11 2,872,110
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Check box if the Aggregate Amount in Row (11) Excludes Certain Shares* /x/
12
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Percent of Class Represented by Amount in Row (11) / /
13 38.5%
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Type of Reporting Person*
14
IN
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SEE INSTRUCTIONS BEFORE FILLING OUT!
</TABLE>
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CUSIP No. 607235504 Page 4 of 8
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This Amendment No. 2 amends the Statement on Schedule 13D filed by R. Lee
Smith and Allan J. McCorkle relating to the common stock, $.025 par value, of
Fortune Financial, Inc., a Florida corporation.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Item No. 3 of this Schedule 13D is hereby amended by adding the following
paragraph:
"The amount of funds used in the acquisition of the Warrant and the
Note (each as defined below) to which this Amendment No. 2 relates is
$800,000 derived from Mid-Ohio Securities Corp., FBO R. Lee Smith (Acct.
15051), a retirement account for Mr. Smith's benefit."
ITEM 4. PURPOSE OF TRANSACTION.
Item No. 4 of this Schedule 13D is hereby amended by adding the following
paragraphs:
"As of November 15, 2000, Mr. Smith and another investor entered into
a certain Securities Purchase Agreement (the "Securities Purchase
Agreement") with the Issuer. Pursuant to the Securities Purchase Agreement,
as of that date Mr. Smith acquired in exchange for $800,000 in cash (i) the
Issuer's 9% Convertible Note (the "Note") and (ii) the Issuer's Warrant for
330,579 shares of Common Stock with an initial exercise price of $2.42 per
share, subject to adjustment in certain events (the "Warrant"). The Note is
convertible (on a dollar for dollar basis, subject to adjustment in certain
events) at the option of the holder into shares of a to-be-created class of
the Issuer's preferred stock (the "Preferred Stock"), which in turn is
contemplated to be convertible into shares of the Issuer's Common Stock at
an initial conversion price of $2.42 per share, subject to adjustment in
certain events.
"In connection with the Securities Purchase Agreement, Mr. Smith and
the other investor entered into a letter agreement (the "Letter Agreement")
with the Issuer that permits Mr. Smith and the other investor, in the event
that the Issuer fails to complete by December 31, 2000 an issuance of
equity securities on substantially the terms being discussed by the Issuer
with a third party, to acquire up to an additional $13 million of Notes and
Warrants on the substantially the same terms as those relating to the
acquisition of the Note and the Warrant pursuant to the Securities Purchase
Agreement
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CUSIP No. 607235504 Page 5 of 8
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or on such other terms and conditions as may be agreed upon at the time.
Also in connection with the Securities Purchase Agreement, certain
shareholders (including McCorkle) of the Issuer agreed, among other things,
to vote their shares (constituting a majority of the shares of Common Stock
outstanding) in favor of the transactions described above, provided that
the Issuer's Board of Directors shall have received with respect to such
transactions a fairness opinion or opinions satisfactory to the Board in
its sole discretion. The acquisition by Mr. Smith of the Note and the
Warrant was approved by the disinterested members of the Issuer's Board of
Directors and was the subject of a fairness opinion issued
contemporaneously with the transactions reported hereby. Mr. Smith may be
requested to sell a portion of the Note and the Warrant to certain insiders
of the Issuer and has indicated a willingness to do so."
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item No. 5 of this Schedule 13D is hereby amended by adding the following
paragraphs:
"Mr. Smith may be deemed to beneficially own 1,453,232 shares, or
approximately 17.9%, of the outstanding Common Stock, through his direct
ownership of 754,824 shares and of presently exercisable stock option for
37,250 shares and through the ownership by a retirement account for his
benefit of the Note and the Warrant, each of which are presently
convertible into or exercisable for 330,579 shares.
"The following table lists the transactions Mr. McCorkle has effected
in the securities of the Issuer since September 1, 2000:
<TABLE>
<CAPTION>
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Date Price Per Share No. of Shares Transaction
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<S> <C> <C> <C>
09/11/00 $2.75 2,000 Sale
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09/13/00 $2.75 10,000 Sale
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09/28/00 $2.75 100 Sale
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11/18/00 $2.00 8,250 Gift
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</TABLE>
Mr. Smith has effected no other transactions in the securities of the
Issuer in the last sixty days, except as disclosed in Item 4 hereof."
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CUSIP No. 607235504 Page 6 of 8
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Item No. 6 of this Schedule 13D is hereby amended by adding the following
paragraphs:
"The Reporting Persons have entered into a Joint Filing Agreement, a
copy of which is filed as Exhibit 1 hereto and is incorporated by
reference, regarding the filing of this Schedule and future amendments
hereto.
"In addition to the Securities Purchase Agreement, the Note, the
Warrant, the Letter Agreement, and the Shareholders' Agreement (each of
which is described in Item 4 hereof), in connection with the Securities
Purchase Agreement Mr. Smith and the other investor entered into a
Registration Rights Agreement dated November 15, 2000 with respect to
certain demand and piggyback registration rights under the Securities Act
of 1933, as amended, with respect to shares of Common Stock acquirable
under the Securities Purchase Agreement.
Except as described in this Schedule 13D, neither Mr. Smith nor Mr.
McCorkle has any other contracts, arrangements, understandings or
relationships with any persons with respect to any securities of the
Company."
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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<S> <C>
Exhibit 1 Joint Filing Agreement, dated December 14, 2000, between Smith and
McCorkle
Exhibit 2 Promissory Note, dated November 15, 2000, of the Issuer to Mid-Ohio
Securities Corp., FBO R. Lee Smith (Acct. 15051)
Exhibit 3 Warrant, dated November 15, 2000 issued by the Issuer to Mid-Ohio
Securities Corp., FBO R. Lee Smith (Acct. 15051)
Exhibit 4 Letter Agreement, dated November 15, 2000, between the Issuer,
Hawkeye, Inc., and Mid-Ohio Securities Corp., FBO R. Lee Smith (Acct.
15051)
Exhibit 5 Registration Rights Agreement, dated November 14, 2000, between the
Issuer, Hawkeye, Inc., and Mid-Ohio Securities Corp., FBO R. Lee Smith
(Acct. 15051)
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CUSIP No. 607235504 Page 7 of 8
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<TABLE>
<S> <C>
Exhibit 6 Shareholders' Agreement, dated November 15, 2000, between the
shareholders of the Issuer, Hawkeye, Inc., and Mid-Ohio Securities Corp.,
FBO R. Lee Smith (Acct. 15051)
Exhibit 7 Securities Purchase Agreement, dated November 15, 2000, between the
Issuer, Hawkeye, Inc., and Mid-Ohio Securities Corp., FBO R. Lee Smith
(Acct. 15051)
</TABLE>
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CUSIP No. 607235504 Page 8 of 8
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: December 14, 2000
<TABLE>
<S> <C>
/s/ R. Lee Smith
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R. Lee Smith
/s/ Allan J. McCorkle
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Allan J. McCorkle
</TABLE>
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of and any title of each person who signs the statement shall be typed
or printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
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CUSIP No. 607235504
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EXHIBIT LIST
<TABLE>
<S> <C>
Exhibit 1 Joint Filing Agreement, dated December 14, 2000, between Smith and
McCorkle
Exhibit 2 Promissory Note, dated November 15, 2000, of the Issuer to Mid-Ohio
Securities Corp., FBO R. Lee Smith (Acct. 15051)
Exhibit 3 Warrant, dated November 15, 2000 issued by the Issuer to Mid-Ohio
Securities Corp., FBO R. Lee Smith (Acct. 15051)
Exhibit 4 Letter Agreement, dated November 15, 2000, between the Issuer,
Hawkeye, Inc., and Mid-Ohio Securities Corp., FBO R. Lee Smith (Acct.
15051)*
Exhibit 5 Registration Rights Agreement, dated November 14, 2000, between the
Issuer, Hawkeye, Inc., and Mid-Ohio Securities Corp., FBO R. Lee Smith
(Acct. 15051)*
Exhibit 6 Shareholders' Agreement, dated November 15, 2000, between the
shareholders of the Issuer, Hawkeye, Inc., and Mid-Ohio Securities Corp.,
FBO R. Lee Smith (Acct. 15051)*
Exhibit 7 Securities Purchase Agreement, dated November 15, 2000, between the
Issuer, Hawkeye, Inc., and Mid-Ohio Securities Corp., FBO R. Lee Smith
(Acct. 15051)*
</TABLE>
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* Incorporated by reference to the corresponding exhibit to the statement
on Schedule 13D filed on November 28, 2000 by Arthur L. Cahoon and Hawkeye, Inc.
