SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment # 3 to FORM 10-KSB (Mark One) [ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended ______________ OR [x] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from July 1, 2000 to December 31, 2000 000-23712 (Commission File No.) ASCONI CORPORATION (formerly, Grand Slam Treasures, Inc.) (Name of Small Business Issuer in Its Charter) NEVADA 91-1395124 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 160 International Parkway, Suite 280 32746 Heathrow, Florida (Zip Code) (Address of principal executive offices) Issuer's Telephone Number, including area code: (407) 833-8000 Securities registered under Section 12(b) of the Securities Exchange Act of 1934: None Securities registered under Section 12(g) of the Securities Exchange Act of 1934: Common Stock, par value $.001 per share Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ] Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained herein, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] Issuer's revenues for the six month transition period ended December 31, 2000: $43,948. As of November 23, 2001, the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the closing price of the registrant's common stock as reported on the OTC Bulletin Board was $4,250,547. As of November 23, 2001, there were 14,586,689 shares of issuer's common stock outstanding. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] Documents incorporated by reference: None. EXPANATORY NOTE This Amendment No. 3 (the "Amendment") to the Transition Report on Form 10-KSB filed on October 12, 2001 (File No. 333-23712) of ASCONI CORPORATION (the "Form 10-KSB") is being filed for the purpose of correcting and replacing Amendment No. 2 to the Form 10-KSB filed on October 16, 2001 ("Amendment No. 2"). Amendment No. 2 contained a qualified opinion from the registrant's independent auditor regarding the financial statements of the registrant as set forth in Amendment No. 2. The independent auditor's report in the Amendment is not qualified and the independent auditor has opined that the financial statements of the registrant, as set forth in the Amendment, present fairly, in all material respects, the financial position of the registrant as of December 31, 2000. TABLE OF CONTENTS Page ---- PART I ------ ITEM 1. DESCRIPTION OF BUSINESS......................................... 3 ITEM 2. DESCRIPTION OF PROPERTY......................................... 5 ITEM 3. LEGAL PROCEEDINGS............................................... 5 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............. 5 PART II ------- ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........ 6 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................................... 7 ITEM 7. FINANCIAL STATEMENTS............................................ 8 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE........................................ 8 PART III -------- ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT............... 9 ITEM 10. EXECUTIVE COMPENSATION.......................................... 9 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.. 9 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................. 9 PART IV ------- ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K................................ 9 Introductory Comment Throughout this transition report on Form 10-KSB, the terms "we," "us," "our" and "our company" refer to Asconi Corporation (formerly known as Grand Slam Treasures, Inc.), a Nevada corporation. On April 12, 2001, we acquired, through a wholly-owned subsidiary, all of the outstanding stock of a Republic of Moldova company in a share-exchange transaction. The name of the Moldovan company was Asconi Ltd and it is a producer and distributor of wine. In connection with the share-exchange transaction, we changed our name from Grand Slam Treasures, Inc. to Asconi Corporation, we reverse split our capital stock 100 to 1, and the two individuals who were serving as our only officers and directors resigned on April 12, 2001. The two shareholders of the acquired entity, Asconi Ltd., were elected as our only directors on and as of April 12, 2001, and were appointed as our current officers sometime thereafter. On June 29, 2001, our board of directors decided to change our fiscal year-end from June 30th to December 31st, which required us to file this transition report on Form 10-KSB for the transition period from July 1, 2000 to December 31, 2000. The information in this transition report reflects events that occurred between July 1, 2000 and December 31, 2000. The current officers and directors who signed this report on our behalf have no knowledge of any events that occurred during the transition period from July 1, 2000 to December 31, 2000. The individuals who were our officers and directors during the transition period from July 1, 2000 to December 31, 2000 resigned after December 31, 2000 but prior to the filing of this transition report. These former officers and directors, as well as our former legal counsel and auditors, were contacted by our current officers, legal counsel and auditors in an attempt to obtain old records and files and any information regarding the events that occurred during the transition period from July 1, 2000 to December 31, 2000. We were unable to obtain reliable records or information from these individuals and firms which would enable us to appropriately and adequately disclose the information required by this transition report. Since our current officers, directors, legal counsel and auditors had no knowledge of the events that occurred during the transition period, and our former officers, directors, legal counsel and auditors were unable or unwilling to disclose material information to us regarding events that occurred during the transition period, in certain Items we have included information is this transition report from our annual report for fiscal year ended June 30, 2000, quarterly report for the quarter ended September 30, 2000, and quarterly report for the quarterly period ended December 31, 2000. However, these reports were prepared on our behalf by our former officers, directors, legal counsel and auditors and our current officers and directors could not verify the accuracy of the information disclosed in these reports. No additional material information other than that contained in the previous three reports discussed above has been incorporated into this transition report for the transition period from July 1, 2000 to December 31, 2000. We have noted in the appropriate Items in this report where we were unable to disclose information required by this transition report on Form 10-KSB due to the lack of reliable records or information from our former officers, directors, legal counsel and auditors. Because the current officers and directors could not verify the accuracy of the information contained in the previous annual and quarterly reports filed by us, nor could they obtain reliable records or information from the former officers, directors, legal counsel or auditors on events that occurred in the transition period from July 1, 2000 to December 31, 2000, we cannot and do not, nor do the individuals who signed this report on our behalf, make any representation or give any opinion as to the accuracy of the information disclosed in this transition report for the transition period from July 1, 2000 to December 31, 2000. Due to the foregoing, we are investing all available legal remedies to protect the interests of our shareholders. 1 Forward-Looking Statements This report contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this prospectus are not based on historical facts, but rather reflect the current expectations of our management concerning future results and events. The forward-looking statements generally can be identified by the use of terms such as "believe," "expect," "anticipate," "intend," " plan," "foresee," "likely," "will" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals are or may be forward- looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be different from any future results, performance and achievements expressed or implied by these statements. You should review carefully all information, including the financial statements and the notes to the financial statements included in this report. The following important factors could affect future results, causing the results to differ materially from those expressed in the forward-looking statements in this prospectus. . the timing, impact and other uncertainties related to pending and future acquisitions by us; . the impact of new technologies; . changes in laws or rules or regulations of governmental agencies, governing the Internet; . changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations; and . interest rate fluctuations and other capital market conditions. These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in the forward-looking statements in this report. Other unknown or unpredictable factors also could have material adverse effects on our future results. The forward-looking statements in this report are made only as of the date of this report, and we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. We cannot assure you that projected results will be achieved. 2 PART I ------ ITEM 1. DESCRIPTION OF BUSINESS General As of December 31, 2000, we were engaged in the purchase and marketing of sports memorabilia and recovered sunken treasure. In addition, we were developing various entertainment properties within the United States. Our operations were located in Eagle, Idaho. History and Development Our history begins with the formation of Northwest Parks LLC ("NWP") on March 28, 1996 in the State of Idaho. On March 28, 1996, NWP acquired a 16.67% interest in BW Partners LLC (BWP) and certain other assets and rights valued at $48,014, based upon the amounts recorded by BWP from a member in exchange for a 25% interest in NWP. The company from whom the BWP interest was acquired is a corporation in which a managing member of NWP held a 20% interest at the time of the acquisition. On January 8, 1998, NWP acquired the remaining 83.33% interest in BWP in exchange for an 8.75% interest in NWP. NWP formed Sweetwater Holdings LLC ("SWH") on January 9, 1997, for the purposes of acquiring approximately 12 acres of land and a dwelling in Canyon County, Idaho, known as The Idaho Center property. NWP acquired a 99% interest in SWH, with the remaining 1% held by a minority member of NWP. In April 1999, SWH transferred approximately 1.5 acres of the property to NWP and NWP sold SWH and the remaining land of approximately 10.5 acres to a third party. NWP participated in the formation of Crossroads Convenience Center LLC ("CCC") on June 18, 1998. Based upon the operating agreement, we owned a 10% interest in CCC, after transferring a 15% interest in CCC to an individual who is a minority member in the company in partial satisfaction of interest accrued on a note that was owed to the individual by NWP. NWP's interest in CCC was acquired in exchange for 1.5 acres of property acquired from SWH and certain development costs incurred on CCC's behalf. At December 31, 2000, we owned a 40.75% interest in the Crossroads Convenience Center LLC (CCC) which is located on "The Idaho Center" property in Canyon County, Idaho. Our 10% ownership interest at June 30, 1999 was increased by 30.75% to 40.75% during fiscal year 2000 in exchange for an equity interest in NWP, which was subsequently exchanged for 11,090 shares of our common stock. Prior to fiscal year 2000, CCC had been developing the construction of an automobile service center and convenience store and had no significant operations. We served as the construction manager for the center for which we received fees of approximately $181,000 and $165,000 for the fiscal years ended June 30, 2000 and 1999, respectively. The service center and convenience store commenced operations in August 1999. In January 1999, NWP, along with its two managing members, formed Magic Valley Parks LLC (MVP), with NWP acquiring a 98% ownership interest. In April 1999, NWP sold a 4.25% interest in MVP to two members of NWP for $145,000. On December 16, 1999, this 4.25% minority interest in MVP was exchanged for interests totaling 1.45% of NWP, at which time MVP terminated operations. On December 17, 1999, the members of NWP exchanged 100% of their member interests for 80% of the outstanding common stock of Parks America! Inc. ("Parks") (formerly Wincanton Corporation), a public company. Parks had ceased operations at the time of the exchange. Under the terms of the exchange, NWP is considered the acquiring entity. On June 24, 2000, Parks changed its name to Grand Slam Treasures, Inc. On April 12, 2001, we acquired, through a wholly-owned subsidiary, all of the outstanding stock of a Republic of Moldova company in a share-exchange transaction. The name of the Moldovan company was Asconi, Ltd. and it is a producer and distributor of wine. In connection with the share-exchange transaction, we changed our name to Asconi Corporation, we reverse split our capital stock 100 to 1 and we ceased all operations relating to the purchase and marketing of recovered sunken treasure and sports memorabilia, and the development of entertainment properties. As of April 12, 2001, our only operations related to the production and sale of wine. 3 This description of our Products, Sales and Marketing and Competition relates to information about us for the interim transition period from July 1, 2000 to December 31, 2000. Products Through the end of the six month interim period, we were a development stage company. During the twelve months ended December 31, 2000, our main activity was developing and accumulating inventory to be resold through auctions and through Internet sites. We worked closely with a software developer to establish a consumer-friendly web site for the marketing and sale of products. Our intention was to market products that are of historical, cultural, and artistic value. Some of the products we acquired include: Recovered Sunken Treasure During the fiscal year ended June 30, 2000, we acquired a substantial portion of the artifacts and treasure of a Spanish galleon that sank in deep water South of the Dry Tortugas in the Florida Keys in 1622. We acquired the artifacts and treasure in exchange for shares of our common stock with the value based upon an appraisal of the treasure and negotiations between the parties. This recovered treasure is unique in that it was a deep-water recovery (nearly 1,500 ft.) and, as such, contained certain artifacts that are not found in other treasure recoveries. As of December 31, 2000, we were considering our options for maximizing the value to be realized from the treasure. We attempted to secure additional treasures or artifacts, either by acquisition or by acting as a sales agent for commission. To this end, during the six month interim period, management negotiated with other treasure owners. Sports Memorabilia Through the end of the six month interim period, we acquired a sizable collection of sports memorabilia from an active collector and reseller of these products. The collection included a wide range of articles such as jerseys, shoes and uniforms as well as approximately 50,000 sports cards. The sports memorabilia was acquired in exchange for our common stock and was valued at the estimated value of the inventory on the date of acquisition. As of December 31, 2000, the inventory was held for sale by us. Regional Theme Parks Through the end of the six month interim period, we were actively engaged in negotiations to secure the purchase of three regional theme parks. These parks are individually owned and range in attendance from 250,000 to 300,000 visitors per year. We were unsuccessful in securing financing for the purchase of these parks. 4 Sales and Marketing As of December 31, 2000, our marketing and sales activities were in the formation stages. Because of our limited funds and developmental stage, in several instances we issued shares of our common stock to individuals as both compensation and an incentive to assist us in our sales and marketing efforts. We engaged Market Management International, Inc. to develop marketing plans and materials, press releases and promotional releases. We secured these multi-year services through the issuance of shares of our common stock. Competition The competition for the treasure articles was quite fragmented. Most of the outlets were local retailers located in Florida. There were various web sites that were maintained by treasure owners, but they were poorly marketed and difficult to find. From time to time, some of the auction retailers would include certain items within the items that they offer for sale. For theme parks, the competition was intense on a national level. However, because the parks that were targeted by us were local or regional parks, the competition was limited to the other types of entertainment, rather than any direct competition from other parks. Employees As of December 31, 2001, we employed a total of two (2) persons on a full-time basis. In addition, depending on client demand, we contracted with persons on a temporary, part-time basis. None of our employees were represented by a labor union. We believed that our relations with our employees were good. ITEM 2. DESCRIPTION OF PROPERTY As of December 31, 2000, we leased approximately 2,500 square feet of office space in Eagle, Idaho for use as our corporate headquarters. The lease is a five year lease which runs from March 1, 2000, and expires on February 28, 2005. The monthly rental for the first year is $2,550 and increases by 5% for each subsequent year. The lease contains an option to us for renewal for an additional five year period under similar terms and conditions. ITEM 3. LEGAL PROCEEDINGS As of December 31, 2000, we were not involved in any legal proceedings. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 5 PART II ------- ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Market Information Our shares of common stock are traded over-the-counter on the OTC Bulletin Board under the symbol "ASCS." Prior to April, 2001, they were traded under the symbol "GRST." The following table sets forth, for the periods indicated, the high and low bid prices of our common stock, as reported in published financial sources. Quotations reflect inter-dealer prices, without retail mark-up, mark-down, commission, and may not represent actual transactions. High Low ----------------- Fiscal Year Ended December 31, 2001 Quarter Ended December 31, 2001(2)(3).............. 2.10 0.27 Quarter Ended September 30, 2001(2)................ 3.80 1.02 Quarter Ended June 30, 2001(2) .................... 17.19 2.50 Quarter Ended March 31, 2000....................... .875 .109 Transition Period Ended December 31, 2000 Quarter Ended December 31, 2000.................... 2.625 .562 Quarter Ended September 30, 2000................... 2.750 1.000 Fiscal Year Ended June 30, 2000 Fourth Quarter..................................... 13.250 1.750 Third Quarter...................................... 15.000 12.000 Second Quarter(1).................................. N/A N/A First Quarter(1)................................... N/A N/A ------------------ (1) Prior to January 1, 2000, Trading in our common stock was limited and sporadic, and we were unable to obtain reliable quotation. (2) Share prices reflect reverse spilt of 100 to 1 on April 5, 2001. (3) As of November 23, 2001. Holders As of November 23, 2001, there were 902 holders of record of our common stock. Dividends We have never declared or paid any cash dividends on our common stock, and we do not anticipate paying cash dividends in the foreseeable future. Our current policy is to retain any earnings to finance our future development and growth. We may reconsider this policy from time to time in light of conditions then existing, including our earnings performance, financial condition and capital requirements. Any future determination to pay cash dividends will be at the discretion of our board of directors and will depend upon our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors deems relevant. Recent Sales of Unregistered Securities Set forth below in chronological order is information regarding the numbers of shares of common stock sold, the number of options and warrants granted and the principal amount of debt instruments issued by us from July 1, 2000 to December 31, 2000, and the consideration received by us for such shares, options, warrants and debt instruments. None of these securities was registered under the Securities Act. In our opinion, all offers and sales of our securities were exempt from registration by virtue of Section 4(2) of the Securities Act and the rules promulgated therewith. All purchasers of our securities represented their intention to acquire our securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof. Appropriate legends were affixed to the certificates representing the securities issued in such transactions. All purchasers of our securities had adequate access to information about us and were "accredited investors," as defined in Section 501 of Regulation D promulgated under the Securities Act. Except as otherwise indicated, no sales of securities involved the use of an underwriter and no commissions were paid in connection with the sale of any securities. 6 On August 25, 2000, we issued 52,500 shares of our common stock valued at $68,906, based upon the quoted market price, discounted for restriction, of our common stock on that date, for payment of services. The entire amount was expensed. In November, 2000, we issued 492,500 shares of our common stock valued at $373,750 based upon the quoted market price, discounted for any restriction, of our common stock on the dates issued, for payment of services. The entire amount was expensed as of December 31, 2000. On November 17, 2000, we issued 188,000 shares of our common stock with a value of $94,000 as payment of payables owed by us for services. On November 20, 2000, we issued 125,000 shares to correct initial calculations of issued shares at December 17, 1999. No monetary value is attached. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations On June 29, 2001, our board of directors approved the change of our year end from a fiscal year ending on June 30th to a calendar year ending on December 31st in order to conform to standard industry practice. This change in our fiscal year end gives rise to a six month transition period from July 1, 2000 to December 31, 2000. The financial statements for the six month period ended December 31, 2000 have been audited by our independent auditors. The financial information for the six month period ended December 31, 1999 are unaudited. Furthermore, as to the reliability of any information set forth in this Item, please refer to our statements in the Introductory Comment section on page 1 and the Report of our Independent Auditor on page F-2 of this transition report. Six Month Period Ended December 31, 2000 Compared to Six Month Period Ended December 31, 1999. Revenues increased $43,948 or 100% to $43,948 for the six months ended December 31, 2000 from $0 for the six months ended December 31, 1999. This increase was attributed to gain on sale of assets. Our primary activity was the acquisition, consolidation, and development of product for sale. Research and marketing expenses remained unchanged at $0 for the six months ended December 31, 2000, as compared to $0 for the six months ended December 31, 1999. General and administrative expenses decreased by $28,210 or 10.68% to $235,952 for the six months ended December 31, 2000 from $264,162 for the six months ended December 31, 1999. As a result of the foregoing, our net loss after expenses and before other items decreased by $47,998 or 18.15% to $216,454 for the six months ended December 31, 2000 from $264,452 for the six months ended December 31, 1999. Losses due to impairment of our treasure and sports memorabilia, prepayment of contract costs, abandoned intellectual properties and abandoned capitalized marketing costs amounted to $6,292,798 for the six months ended December 31, 2000, which is a 100% increase as compared to the losses for these items for the six months ended December 31, 1999, which was estimated at $0. As a result of the foregoing, our net loss increased by $6,244,800 or 2,361% to $6,509,252 for the six months ended December 31, 2000 from $264,452 for the six months ended December 31, 1999. 7 Fiscal Year Ended June 30, 2000 Compared to Fiscal Year Ended June 30, 1999 Revenues for the fiscal year ended June 30, 2000, decreased by $426,563 or 99.1% to $3,376 from $429,939 for the fiscal year ended June 30, 1999. This decrease was due to one time property transactions that occurred in the prior fiscal year. During both fiscal years we were a development stage company with no sales. Research and marketing expenses for the fiscal year ended June 30, 2000 increased $2,124,936 or 100% from $0 for the fiscal year ended June 30, 1999. This increase was due to expenses incurred regarding the acquisition of Wincanton Corporation. These expenses are primarily comprised of public relations expenses, market research and materials expenses, and investor relations expenses. General and administrative expenses for the fiscal year ended June 30, 2000 increased $773,744 or 434% to $952,017 from $178,273 for the fiscal year ended June 30, 1999. This increase resulted from the expanded activities of the development and acquisition of products and includes large increases in costs for legal, travel and professional services. Interest expense decreased by $103,595 or 97.4% to $3,680 for the fiscal year ended June 30, 2000 from $107,275 for the fiscal year ended June 30, 1999. This decrease was a direct result of land sales in the prior year. Liquidity and Capital Resources For the past months, we have funded our operating losses and capital requirements through the issuance or sale of stock and loans from our shareholders. For the six months ended December 31, 2000, we had a cash balance of $597 and a working capital deficit of $132,446. This compares with cash of $4,504 and a working capital deficit of $261,625 for the six months ended December 31, 1999. Net cash used in operating activities decreased by $307,182 or 99.1% to $2,762 for the six months ended December 31, 2000 from $309,944 for the six months ended December 31, 1999. Net cash used in investing activities for the six months ended December 31, 2000 decreased by $218,825 or 98.9% to $2,323 for the six months ended December 31, 2000 from $221,148 for the six months ended December 31, 1999. 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 $30,034 or 90.9% to $3,000 for the six months ended December 31, 2000 from $33,034 for the six months ended December 31, 1999. We have experienced significant operating losses throughout our history, and the continued development of our business will require substantial funds. Therefore, our ability to survive is dependent upon our ability to raise capital through the issuance of stock or the borrowing of additional funds. Without the success of one of these options, we will not have sufficient cash to satisfy its working capital and investment requirements for the next twelve months. ITEM 7. FINANCIAL STATEMENTS Our financial statements are set forth on pages F-1 through F-14 of this transition report. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 8 PART III -------- ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT We are unable to provide the information called for by this Item as explained in our Introductory Comment on page 1 of this transition report. The most recent information available for this Item is set forth under the same Item number in our Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000 which was filed with the SEC on October 13, 2000. ITEM 10. EXECUTIVE COMPENSATION We are unable to provide the information called for by this Item as explained in our Introductory Comment on page 1 of this transition report. The most recent information available for this Item is set forth under the same Item number in our Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000 which was filed with the SEC on October 13, 2000. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT We are unable to provide the information called for by this Item as explained in our Introductory Comment on page 1 of this transition report. The most recent information available for this Item is set forth under the same Item number in our Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000 which was filed with the SEC on October 13, 2000. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS We are unable to provide the information called for by this Item as explained in our Introductory Comment on page 1 of this transition report. The most recent information available for this Item is set forth under the same Item number in our Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000 which was filed with the SEC on October 13, 2000. PART IV ------- ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit Description ------- ----------- 2.1* Articles of Merger of Parks America! Inc. (Washington Parent) into Parks America! Inc. (Nevada Subsidiary) 3.1* Articles of Incorporation - Parks America! Inc. 3.2* Restated Articles of Incorporation 3.3* Bylaws 10.1* Office Lease in Eagle, Idaho _________________________ * Incorporated by reference and filed as an exhibit to our Annual Report on Form 10-KSB, filed with the Securities and Exchange Commission on October 13, 2000. (b) Reports on Form 8-K: 9 None. 10 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ASCONI CORPORATION Date: November 27, 2001 BY: /s/ Constantin Jitaru ------------------------------------------ Constantin Jitaru, Chief Executive Officer In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: November 27, 2001 BY: /s/ Constantin Jitaru ------------------------------------------ Constantin Jitaru, President, Chief Executive Officer and Director BY: /s/ Anatol Sirbu ------------------------------------------ Anatol Sirbu, Secretary and Director INDEX TO FINANCIAL STATEMENTS GRAND SLAM TREASURES, INC. (A DEVELOPMENT STAGE COMPANY) TABLE OF CONTENTS Page ---- Independent Auditor's Report........................ F-2 Audited Financial Statements Balance Sheet..................................... F-3 Statement Of Loss For The Six Months Ended December 31, 2000, The Year Ended June 30, 2000 And For The Period March 28, 1996 (Inception) To December 31, 2000.................. F-4 Statement Of Shareholders' Equity For The Six Months Ended December 31, 2000 And The Year Ended June 30, 2000.................. F-5 Statement Of Cash Flows For The Six Months Ended December 31, 2000, The Year Ended June 30, 2000 And For The Period March 28, 1996 (Inception) To December 31, 2000... F-6 -- F-7 Notes To Financial Statements....................... F-8 -- F-14 F-1 INDEPENDENT AUDITORS' REPORT To the Shareholders of Grand Slam Treasures, Inc. We have audited the accompanying balance sheet of Grand Slam Treasures, Inc., a development stage company, as of December 31, 2000, and the related statements of loss and shareholders' equity, and cash flows for the six months then ended. These financial statements are the responsibility of Grand Slam's management. The Company's financial statements as of and for the year ended June 30, 2000 and for March 28, 1996 (date of inception) through June 30, 2000 were audited by other auditors whose report, September 29, 2000, expressed an unqualified opinion on those statements. The financial statements for the period March 28, 1996 (date of inception) through June 30, 2000 reflect total revenues and net loss of $434,501 and $4,064,063, respectively, of the related totals. The other auditors' report has been furnished to us, and our opinion, insofar as it relates to the amounts included for such prior period, is based solely on the report of such other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluation of the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Grand Slam Treasures, Inc. as of December 31, 2000, and the related statements of loss and shareholders' equity, and cash flows for the six months then ended, and for the period from March 28, 1996 (date of inception) to December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. As discussed in paragraph two of Note 10 to the financial statements, certain errors resulting in overstatement of previously reported investment in treasure were discovered by current management of the Company during November 2001. Accordingly, the December 31, 2000 financial statements have been restated to correct the error. /s/ Thomas Ledger & Co., L.L.P. Thomas Ledger & Co., L.L.P. Houston, Texas September 30, 2001, except for note 10, paragraph two, as to which the date is November 20, 2001. F-2 GRAND SLAM TREASURES, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET AS OF DECEMBER 31, 2000 ASSETS Current assets Cash $ 597 Inventory-sports memorabilia 225,000 Reserve for inventory valuation (225,000) ------------ Total Current Assets 597 ------------ Property, plant and equipment Property, plant and equipment 83,870 Accumulated depreciation (44,026) ------------ Total Property, Plant and Equipment 39,844 ------------ Other assets Treasure 2,984,250 Reserve for asset valuation (2,984,250) ------------ Total Other Assets - ------------ Total Assets $ 40,441 ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable - trade $ 58,297 Payable to related parties 74,746 ------------ Total Current Liabilities 133,043 ------------ Investment in affiliates 215,763 ------------ Shareholders' Equity Common stock - par value $.0001 per share 17 Additional paid-in capital 10,264,932 Deficit accumulated during development stage (10,573,315) ------------ Total Shareholders' Equity (308,366) ------------ Total Liabilities and Shareholders' Equity $ 40,441 ============ See accompanying summary of accounting policies and notes to financial statements. F-3 GRAND SLAM TREASURES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF LOSS FOR THE SIX MONTHS ENDED DECEMBER 31, 2000, THE YEAR ENDED JUNE 30, 2000 AND FOR THE PERIOD MARCH 28, 1996 (INCEPTION) TO DECEMBER 31, 2000 Cumulative From Six Months Ended Inception to December 31, June 30, December 31, 2000 2000 2000 --------------- ---------- ----------- Revenue Gain on sale of assets $ 43,948 $ - $ 423,805 - Gain on transfer of interest in equity investee - - 50,082 Miscellaneous - 3,376 4,562 ---------- ---------- ----------- Total Sales Revenue 43,948 3,376 478,449 ---------- ---------- ----------- Expenses Research and marketing - 2,124,936 2,124,936 Administrative expenses 235,952 952,017 1,907,218 Bad debt expense 24,450 - 24,450 Interest - 3,680 485,646 ---------- ---------- ----------- Loss on sale of land - - 117,265 ---------- ---------- ----------- Total Expenses 260,402 3,080,633 4,659,515 ---------- ---------- ----------- Net Loss Before Other Items 216,454 3,077,257 4,181,066 ---------- ---------- ----------- Other Items Impairment of treasure 2,784,250 - 2,984,250 Impairment of sports memorabilia 225,000 - 225,000 Prepaid contract cost 2,432,500 - 2,432,500 Abandoned intellectual properties 523,555 - 523,555 Abandoned capitalized marketing cost 127,493 - 127,493 Interest in loss of equity investees - 62,465 99,451 ---------- ---------- ----------- Total Other Items 6,292,798 62,465 6,392,249 ---------- ---------- ----------- Net Loss $6,509,252 $3,139,722 $10,573,315 ========== ========== =========== Basic Loss Per Share of Common Stock $ 36.65 $ 20.16 ========== ========== Basic Weighted Average Shares 177,618 155,725 ========== ========== See accompanying summary of accounting policies and notes to financial statements F-4 GRAND SLAM TREASURES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF SHAREHOLDERS' EQUITY FOR THE SIX MONTHS ENDED DECEMBER 31, 2000 AND THE YEAR ENDED JUNE 30, 2000 Deficit Accumulated Common Stock Additional During --------------------- Paid-In Contributed Development Shareholders' Shares Amount Capital Capital Stage Equity ------- ------ ----------- ----------- ------------- ------------- Member's equity, June 30, 1998 - $ - $ - $ 961,416 $ (1,068,732) $ (107,316) Members' contributions in cash - - - 18,000 - 18,000 Net income for the year ended June 30, 1999 - - - - 144,391 144,391 ------- --- ----------- ----------- ------------ ----------- Members' equity June 30, 1999 - - - 979,416 (924,341) 55,075 Members' contribution in cash - - - 112,717 - 112,717 Exchange of capital for a 30.75% interest in equity - - - - - - investee (Crossroads Convenience Center LLC) - - - 50,000 - 50,000 Exchange of capital for a 4.25% minority interest in - - - - - - equity investee (Magic Valley Parks LLC) 145,000 - 145,000 Exchange of members' equity for common stock 151,133 15 1,287,118 (1,287,133) - - Shares issued for sports memorabilia inventory 530 - 225,000 - - 225,000 Shares issued for treasure 8,650 1 2,984,249 - - 2,984,250 Shares issued for $100,000 cash and intellectual - - - - - - property rights 5,521 1 1,904,644 - - 1,904,645 Shares issued for services 2,178 - 739,765 - - 739,765 Shares issued for consulting 7,500 1 2,587,499 - - 2,587,500 Net loss for the year ended June 30, 2000 - - - - (3,139,722) (3,139,722) ------- --- ----------- ----------- ------------ ----------- Shareholders' Equity June 30, 2000 175,511 18 9,728,275 - (4,064,063) 5,664,230 Shares issued for services 525 - 68,906 - - 68,906 Shares issued for services 4,925 - 373,750 - - 373,750 Shares issued for discharge of debt 1,880 - 94,000 - - 94,000 Adjustment (8,750) (1) 1 - - - Net loss for the six months ended December 31, 2000 - - - - (6,509,252) (6,509,252) ------- --- ----------- ----------- ------------ ----------- Shareholders' Equity December 31, 2000 174,091 $17 $10,264,932 $ - $(10,573,315) $ (308,366) ======= === =========== =========== ============ =========== See accompanying summary of accounting policies and notes to financial statements F-5 GRAND SLAM TREASURE, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 2000, THE YEAR ENDED JUNE 30, 2000 AND FOR THE PERIOD MARCH 28, 1996 (INCEPTION) TO DECEMBER 31, 2000 Cumulative Six Month Ended From Inception December 31, June 30, to December 31, 2000 2000 2000 --------------- -------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(6,509,252) $(3,139,722) $(10,573,315) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 7,608 24,391 78,229 Common stock issued for services 442,656 2,504,132 2,946,788 Common stock issued for discharge of debt 94,000 - 94,000 Reserve for asset impairment 3,209,250 - 3,209,250 Gain on sale of land, net - - (262,592) Loss on sale of property and equipment - 6,712 6,712 Building transferred in settlement of an operating lease - - 92,250 Write-off of abandoned development cost - 36,941 64,158 Abandoned land options - 91,000 91,000 Interest in loss of equity investee - 62,465 99,451 Rent cancellation upon acquistion of LLC and joint venture interest - - 50,526 Gain on sale of interest in equity investee - - (50,082) (Increase) decrease in accounts receivable 24,450 - 24,450 (increase) decrease in prepaid expense and other current assets 2,070,000 - 2,070,000 (Increase) decrease in other assets 651,048 - 651,048 Increase (decrease) accounts payable, accrued expenses, etc. (14,238) 55,313 130,339 Increase (decrease) in accrued interest - (79,683) 110,750 Increase (decrease) other liabilities 21,716 - 21,716 ----------- ----------- ------------ Net Cash Used In Operating Activities (2,762) (438,451) (1,145,322) ----------- ----------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES Loan to equity investee - (24,450) (24,450) Purchase of land and building - - (1,011,216) Purchase of property and equipment (2,323) (23,275) (97,934) Increase in deposits, net - (12,150) (35,170) Payment for capitalized project development costs - (7,841) (109,721) Loans to members - (56,396) (287,542) Repayment of members' loans - 86,996 287,542 Payment from equity investee for construction fee - 180,993 180,993 Proceeds from sale of land - - 1,391,935 Proceeds from sale of property & equipment - 5,243 5,243 Purchase of other assets - - (245) Payment of land options - (34,000) (91,000) ----------- ----------- ------------ Net Cash (Used In) Provided By Investing Activities (2,323) 115,120 208,435 ----------- ----------- ------------ See accompanying summary of accounting policies and notes to financial statements F-6 GRAND SLAM TREASURE, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 2000, THE YEAR ENDED JUNE 30, 2000 AND FOR THE PERIOD MARCH 28, 1996 (INCEPTION) TO DECEMBER 31, 2000 Cumulative Six Month Ended From Inception December 31, June 30, to December 31, 2000 2000 2000 --------------- -------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES Loans from members and related parties - 53,030 682,239 Proceeds from sale of common stock - 100,000 100,000 Contribution to members' equity - 112,717 609,858 Investment in affiliates 3,000 - 3,000 Proceeds from equity investee - - 26,596 Proceeds from minority interest investment - - 145,000 Repayment of loans from member and related parties - - (629,209) Proceeds from notes payable - - 350,000 Repayment of notes payable - - (350,000) -------- -------- ---------- Net Cash Provided By Financing Activities 3,000 265,747 937,484 -------- -------- ---------- NET INCREASE (DECREASE) IN CASH (2,085) (57,584) 597 CASH - BEGINNING OF PERIOD 2,682 60,266 - -------- -------- ---------- CASH - ENDING OF PERIOD $ 597 $ 2,682 $ 597 -------- -------- ---------- SUPPLEMENTAL DISCLOSURES Cash paid during the period for: Income tax - - Interest $ - $ 83,363 $ 377,896 -------- -------- ---------- Supplemental Schedule of Non-Cash Investing and Financing Activities: Capital contributions 1,885,750 shares of common stock issueed for services, invnetory and treasure - - 6,536,515 522,071 shares of common stock issued for $100,000 cash and intellectual property rights - - 1,904,645 Exchange of capital for a 30.75% interest in equity investee - - 50,000 Exchange of capital for a 4.25% minority interest in equity investee - - 145,000 Land - - 300,000 16.67% interest in limited liability company - - 36,986 Capital development costs by members of LLC, included as part of fair value of LLC - - 48,014 83.33% interest in an LLC and a 25% interest in a joint venture in which the LLC was a 75% joint venturer for 12.25 interest in the Company - - 97,275 Interest due to a member exchanged for a 15% interest in the equity investee - - (110,750) Exchange of land for a 25% interest in an equity investee - - 67,958 492,500 Shares issued for services 442,656 - 442,656 188,000 Shares issued for discharge of debt 94,000 - 94,000 See accompanying summary of accounting policies and notes to financial statements F-7 Grand Slam Treasure, Inc (A DEVELOPMENT STAGE COMPANY) Notes to Financial Statements December 31, 2000 and June 30, 2000 (continued) NOTE 1 - BASIS FOR PRESENTATION On April 5, 2001 the Company instituted a "reverse stock split" whereby each shareholder received one share of common stock for every 100 shares held as of that date. The issued and outstanding shares at December 31, 2000 were reduced form 17,409,088 common shares to 174,091 common shares. The par value of the common stock was not changed. All references to common stock, common outstanding, and per share amounts in these financial statements have been restated to retroactively reflect the decrease in the shares outstanding. NOTE 2 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (A) Organization and principles of consolidation Northwest Parks LLC (NWP) was formed as a limited liability company on March 28, 1996 under the laws of the State of Idaho for the purpose of constructing, owning and operating multi-faceted theme parks along with the related entertainment, retail, hospitality and recreational facilities. On March 28, 1996, NWP acquired a 16.67% interest in BW Partners LLC (BWP) and certain other assets and rights valued at $48,014, based upon the amounts recorded by BWP from a member in exchange for a 25% interest in NWP. The company from whom the BWP interest was acquired is a corporation in which a managing member of NWP held a 20% interest at the time of the acquisition. On January 8, 1998, NWP acquired the remaining 83.33% interest in BWP in exchange for an 8.75% interest in NWP. NWP formed Sweetwater Holdings LLC (SWH) on January 9, 1997, for the purpose of acquiring approximately 12 acres of land and a dwelling in Canyon County, Idaho, known as The Idaho Center property. NWP acquired a 99% interest in SWH, with the remaining 1% held by a minority member of NWP. This transaction was accounted for as a purchase. In April 1999, SWH transferred approximately 1.5 acres of the property to NWP and NWP sold SWH with the remaining approximately 10.5 acres to a third party. NWP participated in the formation of Crossroads Convenience Center LLC (CCC) on June 18, 1998. Based upon the operating agreement, the Company owned a 10% interest in CCC, after transferring a 15% interest in CCC to an individual who is a minority member in the Company in partial satisfaction of interest accrued on a note that was owed to the individual by NWP. NWP's interest in CCC was acquired in exchange for the 1.5 acres of property acquired from SWH and certain development costs incurred on CCC's behalf. In January 1999, NWP, along with its two managing members, formed Magic Valley Parks LLC (MVP), with NWP acquiring a 98% ownership interest. This transaction was accounted for as a purchase. In April 1999, NWP sold a 4.25% interest in MVP to two members of NWP for $145,000. On December 16, 1999 this 4.25% minority interest in MVP was exchanged for interests totaling 1.45% of NWP, at which time MVP terminated operations. On December 17, 1999, the members of NWP exchanged 100% of their member interests for 80% of the outstanding common stock of Parks America! Inc. (Parks) (formerly Wincanton Corporation), a company whose shares are registered with the U.S. Securities and Exchange Commission. Parks had ceased operations at the time of the exchange. NWP is considered the acquiring entity in the exchange and has recorded the transaction as a purchase with $14,985 of goodwill recognized as a result of the assumption of certain liabilities of Parks. On June 24, 2000, Parks changed its name to Grand Slam Treasures, Inc. On April 12, 2001, the Company concluded an acquisition agreement with Asconi Corporation. 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. F-8 Grand Slam Treasure, Inc (A DEVELOPMENT STAGE COMPANY) Notes to Financial Statements December 31, 2000 and June 30, 2000 (continued) The accompanying financial statements include all of the accounts and activities of the Company and its subsidiaries for the period in which the majority ownership rested with the Company. This includes BWP, SWH, MVP and Parks. CCC has been accounted for by the equity method of accounting. All significant intercompany transactions and balances have been eliminated in the consolidated financial statements. B) Use of accounting estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (C) Cash and cash equivalents For purposes of financial statement presentation, the Company considers all highly liquid debt instruments with initial maturities of ninety days or less to be cash equivalents. From time to time, the Company maintains cash balances, which may exceed federally insured limits. The Company does not believe that this results in any significant credit risk. (D) Inventory of sports memorabilia The sports memorabilia was acquired in exchange for stock in the Company (Note 9) and is valued at the estimated value of the inventory on the date of acquisition. The memorabilia was not available for an appraisal. See paragraph two of Note 10 - Subsequent Events for additional information. (E) Property and equipment Property and equipment are recorded at original cost to the Company and are depreciated over the estimated useful lives using the straight-line method. (F) Financial instruments The fair value of all financial instruments included in these financial statements is estimated by management to approximate their recorded carrying amounts. (G) Income taxes Deferred income taxes are provided on a liability method whereby deferred tax assets and liabilities are established for the difference between the financial reporting and income tax basis of assets and liabilities as well as operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax law and rates on the date of enactment. (H) Operating segments The Company has been in a development stage since its inception and considers itself to operate in only one business segment. F-9 Grand Slam Treasure, Inc (A DEVELOPMENT STAGE COMPANY) Notes to Financial Statements December 31, 2000 and June 30, 2000 (continued) (I) Capitalized project development costs The Company has capitalized and deferred direct costs incurred for feasibility, market and site studies, promotional materials and preliminary site development costs including design, engineering and architectural drawings related to specific projects. When it is determined that a project is not suitable or the project is abandoned, the capitalized development costs are charged to expense. During the six months ended December 31, 2000 and the year ended June 30, 2000, costs totaling $93,323 and $27,217 respectively, were written-off. All costs were written off as of December 31, 2000. (J) Intangible assets Intangible assets consist primarily of intellectual property rights, including copyrighted concepts, and goodwill acquired in the Company's acquisition of Parks America, Inc. All intangibles were written off as of December 31, 2000. (K) Loss per share of common stock The basic net loss per share of common stock is computed by dividing the loss available to common shareholders by the weighted average number of shares of common stock outstanding during the six months ended December 30, 2000 and the year ended June 30, 2000. Diluted loss per share is the same as the basic loss per share. (L) Investment in treasure During the year ended June 30, 2000, the Company acquired a substantial portion of the artifacts and treasure of a Spanish galleon that sank in deep water south of the Dry Trotugas in the Florida Keys in 1622. The Company acquired the treasure in exchange for common stock of the Company (Note 9) with the value based upon an appraisal of the treasure and negotiations between the parties. A current appraisal has not been obtained for the treasure. See paragraph two of Note 10 - Subsequent Events for additional information. NOTE 3 - LAND OPTIONS On April 2, 1998, the Company acquired an option for $50,000 to purchase 68 acres of land in Canyon County, Idaho. Under the terms of the option, the Company had the right to purchase the land for $2,400,000 million during the one-year period expiring April 2, 1999. The option was extended for a one-year period with a purchase price of $2,640,000 million by payment of an additional $50,000, payable $3,000 per month for six months, $4,000 per month for five months and $12,000 as a balloon payment in April 2000. The agreement provided for an additional one-year extension period for $50,000, payable monthly, with the option price increased to $2,900,000 million. The amounts paid for the option and all extensions were non-refundable and were to be applied against the purchase price upon settlement. On April 20, 2000, prior to the balloon payment, the Company entered into a settlement agreement whereby the Company was released from any and all remaining obligations under the option. As a result, all amounts that had previously been paid under the option along with the related capitalized project development costs (Note 2) were charged to general and administrative expense during the year ended June 30, 2000. In September 1998, the Company acquired an option to purchase 32 acres of land in Burley, Idaho, at a purchase price of $1,500,000 million for $1,000. The option expired in May 1999. In August 1999, the Company obtained F-10 Grand Slam Treasure, Inc. (A DEVELOPMENT STAGE COMPANY) Notes to Financial Statements December 31, 2000 and June 30, 2000 (continued) an extension of the option period to May 30, 2000 for an additional $1,000. The amounts paid for the option and all extensions were non-refundable and were to be applied against the purchase price upon settlement. During the year ended June 30, 2000, the Company abandoned the project to which the land option was related. Consequently, all amounts that had previously been paid under the option along with the related capitalized project development costs (Note 2) were charged to general and administrative expense during the year ended June 30, 2000. NOTE 4 - LOANS PAYABLE - RELATED PARTIES The principal stockholders and members of the Company, who are also officers of the Company, and a company owned by them have advanced funds to or on the behalf of the Company in the form of either direct cash advances or payments of expenses. These advances have no specific repayment terms, though they are expected to be paid as funds become available. The balance due to the stockholders and the related company was $74,746 and $53,030 as of December 31, 2000 and June 30, 2000, respectively. NOTE 5 - INVESTMENT IN AFFILIATE At December 31, 2000, the Company owns a 40.75% interest in the Crossroads Convenience Center LLC (CCC), which is located on "The Idaho Center" property in Canyon County, Idaho. The Company's original interest in CCC was 25%. In April 1999, the Company transferred a 15% interest in CCC to a member of the Company in partial payment of interest accrued on a previously paid note payable. The amount of accrued interest considered paid by the transfer was $110,750 and the apportioned basis of the interest in CCC was $60,668, resulting in a gain on the transfer to the Company of $50,082. The Company's 10% ownership interest at June 30, 1999 was increased by 30.75% to 40.75% during 2000 in exchange for an equity interest in NWP, which was subsequently exchanged for 11,090 shares of the Company's common stock. Prior to fiscal year 2000, CCC had been developing and constructing an automobile service center and convenience store and had no significant operations. The Company served as the construction manager for the center for which it received fees of approximately $181,000 for the year ended June 30, 2000. The service center and convenience store commenced operations in August 1999. The Company did not receive any fees for the six months ended December 31, 2000. The Company's investment in CCC has been reduced by construction management fees paid by CCC to the Company, which, along with the Company's share of CCC's losses, resulted in a deficit in the Company's investment in CCC at December 31, 2000 of $215,763. The Company lacks access to the records of CCC and therefore cannot evaluate the appropriateness of the negative investment nor can it determine the Company's share of the investment's income or loss as of December 31, 2000. NOTE 6 - LEASES The Company is obligated, as lessee, under a noncancellable-operating lease effective, March 1, 2000 for office space in Eagle, Idaho, which expires in February 2005. The lease provides for fixed minimum annual rent increases of 5% each lease year which are considered to be part of the total minimum lease amount and are recognized as rent expense over the term of the lease on a pro rata basis. The lease contains an option for renewal for an additional term of five years at a rental rate that increases 5% each year over the previous year's rent. As of December 31, 2000, the Company has abandoned this lease. The Company is also obligated, as lessee, under noncancellable operating leases for two vehicles, which expire in November 2000 and November 2001. These leases are in the names of the two principal executive officers of the Company acting as nominee for the Company. As of December 31, 2000, the Company has abandoned these leases. Rent expense for the six months ended December 31, 2000 and the year ended June 30, 2000 was $8,817 and $8,453, respectively. F-11 Grand Slam Treasure, Inc. (A DEVELOPMENT STAGE COMPANY) Notes to Financial Statements December 31, 2000 and June 30, 2001 (continued) NOTE 7 - INCOME TAXES The benefit for income taxes for the six months ended December 31, 2000 and for the year ended June 30, 2000 varies from the amount which would have been computed using statutory rates as follows: Six Months Ended December 31, June 30, 2000 2000 ------------ ----------- Loss before income taxes $ 6,509,252 $ 3,139,722 =========== =========== Federal income tax benefit at the maximum statutory rate $ 2,213,145 $ 1,067,500 State income benefit, net of Federal tax effect 344,215 165,800 Income tax attributable to the period the Company was a limited liability company - (103,900) Valuation allowance (2,557,360) (1,129,400) ----------- ----------- Benefit for income taxes $ - $ - ----------- ----------- For income tax purposes, the Company has a net operating loss carryforward of approximately $2,875,000 at June 30, 2000, that, subject to applicable limitations, may be applied against future taxable income. If not utilized, the operating loss carryforward will start expiring on June 30, 2020. NOTE 8 - MEMBER INTERESTS The Company was formed as a limited liability company in March 1996. During the year ended June 30, 1999, members contributed $18,000 to the capital of the Company in exchange for an aggregate .18% interest in the Company. During the period from August to December 1999, two members acquired an additional 1.13% interest in the Company for $112,717 in cash. Effective September 1, 1999, the Company increased its interest in CCC by 30.75% in exchange for a .50% member interest in the Company (Note 4). This exchange was valued at $50,000 by agreement of the parties to the exchange. On December 16, 1999, the Company granted a 1.45% percentage interest in the Company to two members in exchange for their aggregate 4.25% interest in MVP. The exchange was valued at $145,000 by agreement of the parties to the exchange. NOTE 9 - COMMON STOCK The Company has authorized 100,000,000 share of common stock with 17,409,156 issued before the 100 to 1 reverse stock split which was effective as of April 5, 2000. After the reverse stock split, 174,091 common shares were outstanding. F-12 Grand Slam Treasure, Inc. (A DEVELOPMENT STAGE COMPANY) Notes to Financial Statements December 31, 2000 and June 30, 2000 (continued) Effective December 17, 1999, the members of NWP exchanged 100% of their member interests for 80% of the outstanding common stock of Parks. The exchange was recorded in a manner similar to a pooling of interests with NWP being the surviving entity as a corporation. The members of NWP acquired 12,000,000 shares of Parks in the exchange and 3,000,000 shares of Parks were issued to other parties for services in connection with the exchange. The Company recorded the shares issued for services at par value. At the time of the exchange there were 113,267 shares of Parks outstanding. On March 16, 2000, the Company issued 53,000 shares of its common stock to an unrelated party for an inventory of sports memorabilia that was valued at $225,000, based upon the approximate fair value of the inventory at the date of the transaction. On March 24, 2000, the Company issued 865,000 shares of its common stock to acquire the recovered treasure of a Spanish galleon that sank in 1622. The value of the exchange recorded by the Company of $2,984,250 was based upon original appraisals of the treasure and negotiations between the parties based upon management's estimates of the value of the treasure. On April 1, 2000, the Company issued 150,000 shares of its common stock to acquire an Internet site, Skreem.com, from an unrelated party. The acquisition was valued based upon the approximate quoted market price of the shares on the date of the transaction, which was $517,500. In addition, on May 12, 2000, the Company issued 402,071 shares of its common stock to an entity that assisted it in acquiring Skreem.com and in settling various other transactions and for $100,000 that the entity had previously loaned to the Company. This transaction was valued at $1,387,145 based upon the market value of the Company stock at the date of the transaction. These two transactions represented an aggregate of 552,071 shares issued valued at $1,904,645. During April and May 2000, the Company settled certain outstanding obligations by the issue of 217,750 shares of its common stock to the vendors. The transactions were valued at the average quoted price of the Company's stock during the period of the issuance, which totaled $739,765. On May 11, 2000, the Company issued 750,000 shares of its common stock valued at $2,587,500, based upon the quoted market price of the Company's stock on that date, for a consulting service contract covering the period April 20, 2000 to June 30, 2001. Of the value recorded, the amount of $517,500 was expensed as marketing and research and $2,070,000 is reported as prepaid expense at June 30, 2000. The prepaid amount was written off at December 31, 2000. On August 25, 2000 the Company issued 52,500 shares of its common stock valued at $68,906, based upon the quoted market price, discounted for restriction, of the Company's stock on that date, for payment of services. The entire amount was expensed. In November, 2000 the Company issued 492,500 shares of its common stock valued at $373,750 based upon the quoted market price, discounted for any restriction, of the Company's stock on the dates issued, for payment of services. The entire amount was expensed as of December 31, 2000. On November 17, 2000, the Company issued 188,000 shares of common stock with a value of $94,000 as payment of payables owed by the Company for services. On November 20, 2000 the Company issued 125,000 shares to correct initial calculations of issued shares at December 17, 1999. No monetary value is attached. On December 30, 2000, the Company rescinded 1,000,000 restricted shares to correct the issuance of excess shares on December 17, 1999. No monetary value was attached. F-13 Grand Slam Treasure, Inc. (A DEVELOPMENT STAGE COMPANY) Notes to Financial Statements December 31, 2000 and June 30, 2000 (continued) NOTE 10 - SUBSEQUENT EVENTS On April 12, 2001, the Company concluded an acquisition agreement with Asconi Corporation, whereby the companies merged under the terms of the agreement and changed its name to Asconi Corporation. As a result of the merger approximately 12,600,000 shares of common stock will be issued to the shareholders of Asconi. November 20, 2001 - The management of the Company, prior to April 12, 2001, assumed financial responsibility of certain assets and liabilities of the Company including the sports memorabilia and treasure. The sports memorabilia was returned to the original seller during August 2001. The prior management of the Company agreed to return the treasure to the bankruptcy estate of the original seller in November 2001. The Company will receive no value for the return of their sports memorabilia or the treasure. F-14