SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
Commission File No.
0-23712
ASCONI CORPORATION
Nevada 91-1395124
- ------------------------ ------------------
State of Incorporation IRS Employer
Identification No.
1221 West Colonial Drive, Ste. 205, Orlando, Florida 32804
Address of Principal Executive Offices
Registrant's Telephone Number: (407) 849-7764
Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve (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 ninety (90) days.
X YES NO
----- -----
As of May 14, 2001, there were 13,459,079 shares of the issuer's Common Stock,
$.001 par value, outstanding
Asconi Corporation
Index
Page No.
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Part I. Financial Information
Item 1. Financial Statements
Condensed Balance Sheets - March 31, 2001
and June 30, 2000 3
Condensed Statements of Operations - three
Months and Nine Months
Ended March 31, 2001 and 2000 4
Condensed Statements of Cash Flows - Nine Months
ended March 31, 2001
and 2000 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 10
Part I . Financial Statements
Item 1. Financial Statements
GRAND SLAM TREASURES, INC.
(now Asconi Corporation)
(A Development Stage Company)
Balance Sheet
at March 31, 2001 and June 30, 2000
ASSETS
3/31/01 6/30/00
----------- ------------
(UNAUDITED)
Current Assets:
Cash $ 199 $2,682
Accounts Receivable - affiliate 24,450 24,450
Inventory - sports memorabilia 225,000 225,000
Prepaid expenses 789,375 2,070,000
--------- -----------
Total current assets 1,039,024 2,322,132
--------- -----------
Property and Equipment, at cost
Furniture, fixtures and equipment 83,870 81,547
Less: Accumulated Depreciation and amortization (47,830) (36,418)
--------- -----------
Net property and equipment 36,040 45,129
--------- -----------
Other Assets:
Deposits 34,170 34,170
Capitalized project development costs 93,323 93,323
Investment in treasure 2,984,250 2,984,250
Deferred Costs of Mergers and Acquisitions 563,542 0
Intangibles, net of accumulated amortization 496,930 523,555
--------- -----------
Total other assets 4,172,215 3,635,298
--------- -----------
TOTAL ASSETS $ 5,247,279 $ 6,002,559
--------- -----------
LIABILITIES & MEMBER INTERESTS
Current Liabilities:
Loans payable - related parties $ 102,119 $ 53,030
62,022 72,535
Accounts payable 265,194 212,764
Deficit in investment in affiliate ---------- -----------
Total Current Liabilities 429,335 338,329
---------- -----------
Stockholders' Equity
Common stock - $.001 par value per share
100,000,000 shares authorized, 309,079
and 175,511 shares respectively,issued and
outstanding 3,091 1,755
Additional paid-in capital 10,907,900 9,726,538
Losses accumulated during development stage (6,093,047) (4,064,063)
------------ -----------
Total stockholders' equity 4,817,944 5,664,230
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,247,279 6,002,559
------------ -----------
See Notes to Financial Statements
3
GRAND SLAM TREASURES, INC.
(now Asconi Corporation)
(A Development Stage Company)
Consolidated Statements of Operations
For the Three Months Ended March 31, 2001 and 2000
(Unaudited) (Unaudited)
2001 2000
---- ----
REVENUE
Rent and other $ 7,050 $ -
--------- ----------
Total revenue $ 7,050 $ -
--------- ----------
EXPENSES
Research and marketing 630,625 0
General and administrative 132,599 62,269
--------- ----------
Total Expenses 763,224 62,269
--------- ----------
NET (LOSS) BEFORE
INTEREST IN LOSS OF EQUITY INVESTEE (756,174) (62,269)
Interest in (loss) in Equity Investee (22,623) 0
--------- ----------
NET (LOSS) $(778,797) $ (62,269)
--------- ----------
NET LOSS PER SHARE OF
COMMON STOCK - BASIC AND DILUTED $ (3.00) $ (0.36)
--------- ----------
WEIGHTED AVERAGE SHARES OUTSTANDING 259,774 170,840
--------- ----------
See Notes to Financial Statements
4
GRAND SLAM TREASURES, INC.
(now Asconi Corporation)
(A Development Stage Company)
Consolidated Statements of Operations
For the Nine Months Ended March 31, 2001 and 2000
Cumulative
From
Nine Months Ended Inception to
March 31, (Unaudited) 31-March -01
2001 2000 (Unaudited)
------ ------ ---------------
REVENUE
Gain on sale of land $ 0 $ 0 $ 379,857
Gain on sale of assets 54,942 0 54,942
Gain on transfer of interest in
equity investee - 50,082
Other revenue 16,056 0 20,618
---------- ------- ---------
Total revenue $ 70,998 $ - $ 505,499
---------- ------- ---------
EXPENSES
Research and marketing 1,665,625 0 3,790,561
General and administrative 384,927 326,431 2,056,193
Interest 0 290 485,646
Loss on sale of land 0 0 117,265
---------- ---------- ---------
Total Expenses 2,050,552 326,721 6,449,665
---------- ---------- ----------
NET (LOSS) BEFORE
INTEREST IN LOSS OF EQUITY INVESTEE (1,979,554) (326,721) (5,944,166)
Interest in (Loss) of Equity Investee (49,430) 0 (148,881)
---------- ---------- ----------
NET (LOSS) $(2,028,984) $ (326,721) $ (6,093,047)
----------- ---------- ----------
NET LOSS PER SHARE OF
COMMON STOCK - BASIC AND DILUTED $ (9.91) $ (1.91)
----------- -----------
WEIGHTED AVERAGE SHARES OUTSTANDING 204,712 170,840
----------- ------------
See Notes to Financial Statements
5
GRAND SLAM TREASURES, INC.
(now Asconi Corporation)
(A Development Stage Company)
Consolidated Statements of Cash Flows
For the Nine Months Ended March 31, 2001 and 2000
Cumulative
From
Inception to
2001 2000 31-Mar-01
---- ----- ---------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (Loss) $ (2,028,984) $ (326,721) $ (6,093,047)
-------------- ------------ -------------
Net cash used by operating activities (52,249) (155,091) (1,194,809)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided (used) by investing activities 677 211,435
(12,436)
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities 49,089 114,280 983,573
-------------- ------------ -------------
NET INCREASE (DECREASE) IN CASH (2,483) (53,247) 199
CASH AT BEGINNING OF PERIOD $ 2,682 $ 60,266 0
-------------- ------------ -------------
CASH AT END OF PERIOD $ 199 $ 7,019 $ 199
-------------- ------------ -------------
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest $ - $ - $ 377,896
-------------- ------------ -------------
See Notes to Financial Statements
6
GRAND SLAM TREASURES, INC.
(now Asconi Corporation)
(A Development Stage Company)
Notes to Financial Statements
March 31, 2001 and 2000
1. INTERIM FINANCIAL PRESENTATION
The financial statements have been prepared by the Company without audit
and are subject to year-end adjustment. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange Commission.
These interim statements should be read in conjunction with the most recent
audited financial statements filed by the Company on Form 10-K with the
Securities and Exchange Commission. The financial statements reflect all
adjustments (which include only normal recurring adjustments) which, in the
opinion of management are necessary to present fairly the Company's financial
position, results of operations and cash flows.
Results of operations for the three months and nine months ended March 31,
2001 and 2000, are not necessarily indicative of results to be achieved for the
full fiscal year.
2. BASIS OF PRESENTATION
The acquisition by Grand Slam Treasures, Inc. (formerly Parks America!
Inc., and formerly Wincanton Corporation) on December 8, 1999 of Northwest Parks
LLC has been treated as a reverse acquisition since Northwest Parks LLC and its
subsidiaries are the continuing entities as a result of the recapitalization and
restructuring. On this basis, the financial statements prior to December 8, 1999
represent the financial statements of Northwest Parks LLC and subsidiaries. The
shareholders equity accounts of the Company have been retroactively adjusted to
reflect the issuance of the 12,000,000 shares of common stock (after the effect
of the reverse stock split of 1:100 on December 13, 1999).
Due to a reverse stock split of 1:100 on April 5, 2001, common stock
amounts are shown in post-split amounts.
3. SUBSEQUENT EVENT
On April 12, 2001, the Company concluded an acquisition agreement with
Asconi Corporation. The finalization of the transaction is expected to complete
in May, 2001 To conclude the agreement, the Company instituted a reverse stock
split of 1:100 effective April 5, 2001. The Company, also, changed its name to
ASCONI CORPORATION. Its new trading symbol is ASCS.
Asconi is a major independent wine producer in the country of Moldova, with
net profits approximating US$1 million for the past year.
Asconi shareholders will receive 12,600,000 post-reverse shares of common
stock, or approximately 70% of the Company's outstanding shares. As part of the
arrangement, the Company will sell most of the current assets and liabilities to
Hannibal Corporation, a wholly owned company of the previous management. In
return Hannibal has conveyed 10,834 trading shares of the Company to various
consultants who assisted in the transaction.
7
4. COMMON STOCK
a) On January 10, 2001, the Company issued 3,750 shares of its common
stock valued at $18,750, based upon the quoted market price, discounted for any
restriction, of the Company's stock at the end of the quarter. These shares were
issued for services, and were expensed.
b) On January 10, 2001, the Company issued 3,000 shares of its common
stock valued at $15,000, based upon the quoted market price, discounted for any
restriction, of the Company's stock at the end of the quarter. These shares were
issued to Larry Eastland and Robert Klosterman for past services, and were
expensed.
c) On January 26, 2001, the Company issued 43,308 shares of its common
stock valued at $216,542, based upon the quoted market price, discounted for any
restriction, of the Company's stock on the date issued, for payment of past
services, and for services related to acquisitions. These shares were issued to
Hannibal Corporation, a wholly owned company of Eastland and Klosterman; and
were capitalized as a deferred costs of the acquisition, pending the final
disposition.
d) On January 26, 2001, the Company issued 60,350 shares of its common
stock valued at $301,750, based upon the quoted market price, discounted for any
restriction, of the Company's stock on the date issued. Of the amounts issued,
$50,000 was for services and were expensed; $251,750 were capitalized as a
deferred acquisition cost.
e) On January 26, 2001, the Company issued 3,000 restricted shares to
First Capital Corporation as an additional payment on purchased treasure in May,
2000.
f) On March 15, 2001, the Company issued 15,600 shares of its common
stock valued at $94,000, based upon the quoted market price, discounted for any
restriction of the Company's stock on the date issued, for payment of services
and commission pertaining to the Asconi acquisition. These amounts were
capitalized as deferred acquisition costs.
g) On March 15, 2001, the Company reinstated 5,979 shares of its common
stock that were earlier rescinded for non-performance of services. The dispute
was resolved. There is no monetary value associated with these shares as they
were already incorporated into the financial statements.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Three Months Ended March 31
Revenues increased $7,050 or 100% from $0 for the three months ended
March 31, 2001 as compared to the corresponding period of the prior year. This
increase was attributed to rental and fee income. The primary activity of the
Company was the acquisition, consolidation, and development of product for sale.
Research and marketing expenses increased by $630,625 or 100% for the
three months ended March 31, 2001, as compared to $0 in the corresponding period
of the prior year. This increase resulted from the demands of a public company
for research, marketing, promotion, public relations and various consultations
that were not present in the corresponding period a year ago.
General and administrative expenses increased by $70,330 or 113% to
$132,599 for the three months ended March 31, 2001 from $62,269 for the
corresponding period of the prior year. This increase is attributed primarily to
outside fees, and to a $20,000 provision for doubtful accounts.
As a result of the foregoing, the Company's net loss before its share
of the loss of an equity investee, increased by $693,905 or 1,114% to $756,174
for the three months ended March 31, 2001 from $62,269 for the corresponding
period of the prior year.
8
The interest in the loss of an equity investee (investment in
Crossroads Convenience Center) amounted to $22,623 for the three months ended
March 31, 2001, which is a 100% increase over the corresponding period of the
prior year which was estimated at $0. The center opened in mid-August, 1999.
As a result of the foregoing, the Company's net loss increased by
$716,528 or 1,151% to $778,797 for the three months ended March 31, 2001 from
$62,269 for the corresponding period of the prior year.
Nine Months Ended March 31
Revenues increased $70,998 or 100% from $0 for the nine months ended
March 31, 2001 as compared to the corresponding period of the prior year. This
increase was attributed primarily to gain on sale of assets ($54,942) and rental
income. The primary activity of the Company was the acquisition, consolidation,
and development of product for sale.
Research and marketing expenses increased by $1,665,625 or 100% for the
nine months ended March 31, 2001, as compared to $0 in the corresponding period
of the prior year. This increase resulted from the demands of a public company
for research, marketing, promotion, public relations and various consultations
that were not present in the corresponding period a year ago.
General and administrative expenses increased by $58,496 or 17.92% to
$384,927 for the nine months ended March 31, 2001 from $326,431 for the
corresponding period of the prior year. The increase is attributed to outside
fees.
As a result of the foregoing, the Company's net loss before its share
of the loss of an equity investee, increased by $1,652,833 or 506% to $1,979,554
for the nine months ended March 31, 2001 from $326,721 for the corresponding
period of the prior year.
The interest in the loss of an equity investee (investment in
Crossroads Convenience Center) amounted to $49,430 for the nine months ended
March 31, 2001, which is a 100% increase over the corresponding period of the
prior year which was estimated at $0. The center opened in mid-August, 1999.
As a result of the foregoing, the Company's net loss increased by
$1,702,263 or 521% to $2,028,984 for the nine months ended March 31, 2001 from
$326,721 for the corresponding period of the prior year.
CHANGES IN FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
For the past months, the Company has funded its operating losses and
capital requirements through the issuance or sale of stock and loans from its
shareholders. As of March 31, 2001, the Company had a cash balance of $199 and a
working capital surplus of $609,689. This compares with cash of $7,019 and a
working capital deficit of $308,351 for the corresponding period of the prior
year.
Net cash used in operating activities decreased to $52,249 from
$155,091 for the nine months ended March 31, 2001 and 2000, respectively. This
decrease in cash used in operations resulted primarily from the issuance of
common stock to satisfy obligations.
Cash flows used in investing activities for the nine months ended March
31, 2001 decreased by $13,113 as the current period provided $677 in investing
activities as opposed to $12,436 used in investing activities for the
corresponding period of the prior year. This change was due primarily to the
payments of development costs, and the purchase of equipment, land options, and
investment in subsidiary in the prior year that were negligible in the current
year.
Net cash provided by financing activities decreased by 57% to
$49,089 from $114,280 for the corresponding period of the prior year.
The Company has experienced significant operating losses throughout its
history, and the continued development of its business will require substantial
funds. Therefore, the Company's ability to survive is dependent upon its ability
to raise capital through the issuance of stock or the borrowing of additional
funds. Without the success of one of these options, the Company will not have
sufficient cash to satisfy its working capital and investment requirements for
the next twelve months.
9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereto duly authorized.
ASCONI CORPORATION
May 15, 2001 /s/ Constantin Jitaru
---------------------------------------------
Constantin Jitaru, Chief Executive Officer
May 15, 2001 /s/ Anatolie Sirbu
---------------------------------------------
Anatolie Sirbu, Chief Financial Officer