FORM 10QSB/A
Table of Contents
 
 
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
AMENDMENT NO. 1
to
FORM 10-QSB
 
x
  
Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2002
      
or
      
   
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from              to             
 
Commission File No:    000-23712
 
 
ASCONI CORPORATION
(Exact name of Small Business Issuer as Specified in Its Charter)
 
Nevada
(State or Other Jurisdiction of
Incorporation or Organization)
      
91-1395124
(I.R.S. Employer
Identification No.)
   
160  International Parkway, Suite 280
Heathrow, Florida 32746
(407) 833-8000
(Address of Principal Executive Offices)
    
 
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act 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  
 
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
 
Class
  
Outstanding as of August 12, 2002
Common Stock, $.001 par value
  
14,586,689
 
Transitional Small Business Disclosure Format (check one):     Yes    xNo
 

Table of Contents
 
ASCONI CORPORATION
 
EXPLANATORY NOTE
 
THIS AMENDMENT NO. 1 (THIS "AMENDMENT") TO THE QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002, WHICH WAS FILED ON NOVEMBER 14, 2002 (FILE NO. 333-23712), OF ASCONI CORPORATION (THE "FORM 10-QSB") IS BEING FILED SOLELY FOR THE PURPOSE OF INCLUDING THE CERTIFICATIONS REQUIRED UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002, WHICH WERE TO BE INCLUDED IMMEDIATELY AFTER THE SIGNATURE BLOCK AT THE END OF THE FORM 10-QSB, BUT WERE INADVERTENTLY OMITTED. THIS AMENDMENT AMENDS AND MODIFIES ONLY THAT PORTION OF THE FORM 10-QSB STATED ABOVE. ALL OTHER STATEMENTS AND PROVISIONS IN THE FORM 10-QSB REMAIN UNCHANGED.
 
INDEX
            
Page No.
PART I.    FINANCIAL INFORMATION
     
   
Item 1.
  
Financial Statements
     
          
2
          
3
          
4
          
5
   
Item 2.
     
6-7
 
PART II.    OTHER INFORMATION
     
   
Item 1.
     
8
   
Item 2.
     
8
   
Item 3.
     
8
   
Item 4.
     
8
   
Item 5.
     
9
   
Item 6.
     
9
  
10

Table of Contents
 
Cautionary Note Regarding Forward-Looking Statements
 
This quarterly 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, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this quarterly report 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 quarterly 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 quarterly report.
 
 
o
 
the timing, impact and other uncertainties related to pending and future acquisitions by us;
 
 
o
 
the impact of new technologies;
 
 
o
 
changes in laws or rules or regulations of governmental agencies; and
 
 
o
 
currency exchange rate fluctuations.
 
These factors are not necessarily all of the important factors that could cause our actual results to differ materially from those expressed in the forward-looking statements in this quarterly report. Other unknown or unpredictable factors also could have material adverse effects on our future results. The forward-looking statements in this quarterly report are made only as of the date of this quarterly report, and we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. Investors are advised to consult any further disclosures by us on the subject in our filings with the Securities and Exchange Commission, especially on Forms 10-KSB, 10-QSB and 8-K (if any), in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risk, and certainties or potentially inaccurate assumptions. We cannot assure you that projected results will be achieved.

1

Table of Contents
 
PART I.    FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS
 
ASCONI CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2002 (Unaudited) AND DECEMBER 31, 2001
(UNITED STATES DOLLARS)
 
ASSETS
    
SEPTEMBER 30,
2002
     
DECEMBER 31,
2001
  
CURRENT ASSETS
                  
Cash and bank balances
   
$
983,133
 
   
$
15,244
 
Trade receivables
   
 
1,803,537
 
   
 
2,128,975
 
Inventories
   
 
5,020,154
 
   
 
2,762,943
 
Advance payments
   
 
853,905
 
   
 
694,843
 
Other
   
 
763,181
 
   
 
602,148
 
    
  
TOTAL CURRENT ASSETS
   
 
9,423,910
 
   
 
6,204,153
 
FIXED ASSETS
   
 
4,537,599
 
   
 
2,547,614
 
INVESTMENT
   
 
-  
 
   
 
689,988
 
GOODWILL
   
 
335,003
 
   
 
-  
 
OTHER
   
 
78,878
 
   
 
79,196
 
    
  
TOTAL ASSETS
   
$
14,375,390
 
   
$
9,520,951
 
    
  
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
                  
Accounts payable
   
$
2,357,998
 
   
$
2,509,355
 
Short-term debt
   
 
3,536,398
 
   
 
1,004,716
 
Taxes payable
   
 
247,498
 
   
 
314,565
 
Accrued and other liabilities
   
 
1,240,608
 
   
 
395,248
 
    
  
TOTAL CURRENT LIABILITIES
   
 
7,382,503
 
   
 
4,223,884
 
    
  
LONG-TERM LIABILITIES
                  
LONG-TERM DEBT
   
 
1,247,880
 
   
 
1,720,579
 
DEFERRED GRANT INCOME
   
 
309,617
 
   
 
-  
 
DEFERRED TAXES
   
 
281,487
 
   
 
198,560
 
MINORITY INTEREST
   
 
1,570,021
 
   
 
184,181
 
SHAREHOLDERS' EQUITY
                  
Common stock $.001 par value 100,000,000 authorized and 14,586,689 issued
   
 
14,587
 
   
 
14,587
 
Paid in capital
   
 
5,508,627
 
   
 
5,508,627
 
Retained earnings (deficit)
   
 
(1,564,060
)
   
 
(2,072,651
)
Accumulated other comprehensive loss
   
 
(375,271
)
   
 
(256,816
)
    
  
                   
Total Shareholders' Equity
   
 
3,583,883
 
   
 
3,193,747
 
    
  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
   
$
14,375,390
 
   
$
9,520,951
 
    
  
 
The accompanying notes are an integral part of these consolidated financial statements.

2

Table of Contents
 
ASCONI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNITED STATES DOLLARS)
(Unaudited)
 
    
For Quarter Ended
   
For Nine Months Ended
  
    
SEPTEMBER 30, 2002
   
SEPTEMBER 30, 2001
   
SEPTEMBER 30, 2002
     
SEPTEMBER 30, 2001
  
SALES
   
$
3,229,625
   
$
1,875,065
   
$
8,778,393
 
   
$
6,588,907
 
COST OF SALES
   
 
2,333,044
   
 
1,221,542
   
 
6,130,548
 
   
 
3,943,340
 
    
  
  
  
GROSS PROFIT
   
 
896,581
   
 
653,523
   
 
2,647,845
 
   
 
2,645,567
 
EXPENSES
                                
Consulting
   
 
-  
   
 
-  
   
 
-  
 
   
 
4,000,000
 
Merger Costs
   
 
-  
   
 
-  
   
 
-  
 
   
 
504,177
 
Minority interest expense
   
 
152,742
   
 
-  
   
 
378,215
 
   
 
-  
 
Depreciation
   
 
109,423
   
 
9,909
   
 
247,595
 
   
 
182,844
 
Selling and Administration expenses
   
 
302,984
   
 
331,216
   
 
1,015,748
 
   
 
1,224,191
 
Interest expense
   
 
101,078
   
 
68,561
   
 
334,354
 
   
 
170,359
 
    
  
  
  
TOTAL EXPENSES
   
 
666,227
   
 
409,686
   
 
1,975,912
 
   
 
6,081,571
 
    
  
  
  
INCOME BEFORE OTHER ITEMS
                                
AND TAX PROVISION
   
 
230,354
   
 
243,837
   
 
671,933
 
   
 
(3,436,004
)
OTHER INCOME-GRANT
   
 
5,666
   
 
-  
   
 
5,666
 
         
PROVISION FOR INCOME TAXES
   
 
59,008
   
 
68,808
   
 
169,008
 
   
 
295,372
 
    
  
  
  
NET INCOME (LOSS)
   
 
177,012
   
 
175,029
   
 
508,591
 
   
 
(3,731,376
)
OTHER COMPREHENSIVE INCOME (LOSS)
                                
FOREIGN CURRENCY TRANSLATION
   
 
48,269
   
 
-  
   
 
(118,455
)
   
 
-  
 
    
  
  
  
COMPREHENSIVE INCOME (LOSS)
   
$
225,281
   
$
175,029
   
$
390,136
 
   
$
(3,731,376
)
    
  
  
  
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
                                
OUTSTANDING
                                
BASIC AND DILUTED
   
 
14,586,689
   
 
14,217,459
   
 
14,586,689
 
   
 
13,936,140
 
    
  
  
  
BASIC NET PER SHARE
                                
(BASIC AND DILUTED)
   
$
0.02
   
$
0.01
   
$
0.03
 
   
$
(0.27
)
    
  
  
  
 
The accompanying notes are an integral part of these consolidated financial statements.

3

Table of Contents
 
ASCONI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNITED STATES DOLLARS)
(Unaudited)
 
    
SEPTEMBER 30,
  
    
2002
     
2001
  
CASH FLOWS FROM OPERATING ACTIVITIES
                  
Comprehensive income
   
$
390,136
 
   
$
(3,731,376
)
Adjustments to reconcile net income to net cash provided by operating activities:
                  
Depreciation
   
 
247,595
 
   
 
182,844
 
Deferred income taxes
   
 
82,927
 
   
 
(4,721
)
Other income-grant
   
 
-  
 
         
Issuance of common stock for services
   
 
-  
 
   
 
4,000,000
 
Issuance of common stock for merger
   
 
-  
 
   
 
366,540
 
Minority interest expense
   
 
378,215
 
   
 
-  
 
Effect of exchange rate changes on cash
   
 
66,663
 
   
 
-  
 
(Increase) decrease in assets:
                  
Trade receivables
   
 
768,339
 
   
 
(722,147
)
Advance payments
   
 
(159,062
)
   
 
-  
 
Inventories
   
 
(411,143
)
   
 
508,496
 
Other
   
 
(161,034
)
   
 
(663,763
)
Increase (decrease) in liabilities
                  
Accounts payable
   
 
(313,690
)
   
 
(535,417
)
Taxes payable
   
 
(67,067
)
   
 
4,628
 
Accrued liabilities
   
 
724,151
 
   
 
147,145
 
    
  
Net cash provided (used) by operating activities
   
 
1,546,030
 
   
 
(447,771
)
    
  
CASH FLOWS FROM INVESTING ACTIVITIES
                  
Purchase of fixed assets
   
 
(306,027
)
   
 
(512,663
)
Investment
   
 
(703,707
)
   
 
-  
 
Other
   
 
319
 
   
 
(8,524
)
    
  
Cash used for investing activities
   
 
(1,009,415
)
   
 
(521,187
)
    
  
CASH FLOWS FROM FINANCING ACTIVITIES
                  
Short-term borrowings (net)
   
 
1,523,348
 
   
 
1,216,088
 
Decrease in long-term debt (net)
   
 
(1,120,152
)
   
 
285,530
 
    
  
Cash provided by financing activities
   
 
403,196
 
   
 
1,501,618
 
    
  
NET INCREASE (DECREASE) IN CASH AND BANK BALANCES
   
 
939,811
 
   
 
532,660
 
Cash and bank balances, at beginning of period
   
 
15,244
 
   
 
43,142
 
Cash purchased
   
 
28,078
 
   
 
-  
 
    
  
Cash and bank balances, at end of period
   
$
983,133
 
   
$
575,802
 
    
  
 
The accompanying notes are an integral part of these consolidated financial statements.

4

Table of Contents
 
ASCONI CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE 1-BASIS OF PRESENTATION
 
The condensed consolidated financial statements have been prepared by Asconi Corporation (formerly Grand Slam Treasures, Inc.) (the "Company") without audit and include: the Company; Asconi Holding Company Limited, its wholly-owned subsidiary; and Asconi S.R.L., its wholly-owned subsidiary. Asconi S.R.L. acquired controlling interest (70%) of SA Fabria de Vinuri din Puhoi and (74%) of SA Orhei-vin during October and December, 2000, which were recorded as a purchase. Asconi S.R.L. acquired controlling interest (51%) of Vitis Hincesti S.A. as of June 12, 2002, which was recorded as a purchase. The condensed consolidated financial statements also include the accounts of these three majority owned subsidiaries. The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America.
 
The condensed consolidated financial statements do not include any operations of Grand Slam Treasures, Inc. The condensed consolidated balance sheets, the condensed consolidated statements of income, and the condensed consolidated statements of cash flow include, in the opinion of management, all the adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of these periods and the financial condition as of that date. Historical interim results are not necessarily indicative of results that may be expected for any future period.
 
NOTE 2-TAXES
 
Income taxes are provided on foreign operations in accordance with taxation principles currently effective in the Republic of Moldova.
 
NOTE 3-CASH FLOW ADDITIONAL INFORMATION
 
The Company acquired controlling interest of Vitis Hincesti S.A. during June 2002. The following amount represents the non-cash portion of the transaction:
 
Accounts receivable
   
$
442,901
 
Inventory
   
 
1,846,068
 
Fixed Assets
   
 
1,701,948
 
Goodwill
   
 
335,003
 
Accounts payable
   
 
(162,333
)
Short-term debt
   
 
(1,008,334
)
Accrued expenses
   
 
(121,209
)
Long-term debt
   
 
(647,453
)
Minority Interest Liability
   
 
(1,020,974
)
    
    
$
1,365,617
 
    
 
NOTE 4-GRANT
 
The Company received an equipment grant valued at approximately $315,000. The Company recorded the equipment as an asset and recognized deferred income in the balance sheet. The asset and the deferred income will be amortized over the life of the equipment.

5

Table of Contents
 
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
Results Of Operation
 
The following is derived from, and should be read in conjunction with, our unaudited condensed consolidated financial statements, and related notes, as of and for the three and nine months ended September 30, 2002 and 2001.
 
Three Months Ended September 30, 2002 As Compared To Three Months Ended September 30, 2001
 
Revenues.    Revenues increased by $1,354,560 or 72% to $3,229,625 for the three months ended September 30, 2002 from $1,875,065 for the three months ended September 30, 2001. This increase was primarily due to increased production and sales resulting from acquisitions in 2000 through 2002.
 
Cost of sales.    Cost of sales increased by $1,111,502 or 91% to $2,333,044 for the three months ended September 30, 2002 from $1,221,542 for the three months ended September 30, 2001. This increase was primarily due to increased production volume and price costs.
 
Selling and Administrative.    Selling and administrative expenses decreased by $28,232 or 9% to $302,984 for the three months ended September 30, 2002 from $331,216 for the three months ended September 30, 2001. This decrease was primarily due to decreased professional fees as well as operational efficiencies due to the integration of processes between subsidiaries.
 
Income from Operations.    As a result of the foregoing, our income excluding interest expense other than minority interest expense and before income taxes increased by $19,034 or 6% to $331,432 for the three months ended September 30, 2002 from $312,398 for the three months ended September 30, 2001. This increase was primarily due to a combination of revenue growth and increased production costs.
 
Interest Expense.    Interest expenses increased by $32,517 or 47% to $101,078 for the three months ended September 30, 2002 from $68,561 for the three months ended September 30, 2001. This increase was primarily due to increased borrowings and interest expense related to the increased scale of harvest in 2002.
 
Income Taxes.    Income taxes decreased by $9,800 or 14% to $59,008 for the three months ended September 30, 2002 from $68,808 for the three months ended September 30, 2001. This decrease was primarily due to a decrease in the effective tax rate in the country of operation of our subsidiaries.
 
Net Income.    Our net income increased by $1,983 or 1% to $177,012 for the three months ended September 30, 2002 from $175,029 for the three months ended September 30, 2001.
 
Nine Months Ended September 30, 2002 As Compared To Nine Months Ended September 30, 2001
 
Revenues.    Revenues increased by $2,189,486 or 33% to $8,778,393 for the nine months ended September 30, 2002 from $6,588,907 for the nine months ended September 30, 2001. This increase was primarily due to increased production and sales resulting from acquisitions in 2000 through 2002.
 
Cost of sales.    Cost of sales increased by $2,187,208 or 55% to $6,130,548 for the nine months ended September 30, 2002 from $3,943,340 for the nine months ended September 30, 2001. This increase was primarily due to increased production volume and price costs.
 
Consulting and merger costs.    Consulting and merger costs decreased by $4,000,000 and $504,177 respectively to zero for the nine months ended September 30, 2002 from $4,000,000 and $504,177 respectively for the nine months ended September 30, 2001. This decrease was due to the non-recurring nature of consulting and merger costs incurred during the nine months ended September 30, 2001.

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Table of Contents
 
Selling and Administrative.    Selling and administrative expenses decreased by $208,442 or 17% to $1,015,749 for the nine months ended September 30, 2002 from $1,224,191 for the nine months ended September 30, 2001. This decrease was primarily due to decreased professional fees as well as operational efficiencies due to the integration of processes between subsidiaries.
 
Income from Operations.    As a result of the foregoing, our income excluding interest expense other than minority interest expense and before income taxes increased by $4,271,932 or 130% to $1,006,287 for the nine months ended September 30, 2002 from a loss of $3,265,645 for the nine months ended September 30, 2001. This increase was primarily due to the non-recurring nature of consulting and merger costs incurred during the nine months ended September 30, 2001.
 
Interest Expense.    Interest expenses increased by $163,995 or 96% to $334,354 for the nine months ended September 30, 2002 from $170,359 for the nine months ended September 30, 2001. This increase was primarily due to increased borrowings and interest expense related to our acquisition of a controlling interest in Vitis Hincesti S.A. as well the increased scale of harvest in 2002.
 
Income Taxes.    Income taxes decreased by $126,364 or 43% to $169,008 for the nine months ended September 30, 2002 from $295,372 for the nine months ended September 30, 2001. This decrease was primarily due to a decrease in the effective tax rate in the country of operation of our subsidiaries.
 
Net Income.    Our net income increased by $4,239,967 or 113% to $508,591 for the nine months ended September 30, 2002 from a net loss of $3,731,376 for the nine months ended September 30, 2001. This increase was primarily due to the non-recurring nature of consulting and merger costs incurred during the nine months ended September 30, 2001.
 
Liquidity and Capital Resources.
 
For the past few months, we have funded capital requirements through operations as well as through bank loan financing. As of September 30, 2002, we had a cash balance of $983,133 and a working capital surplus of $2,041,407. This compares with a cash balance of $15,244 and a working capital surplus of $1,980,269 at December 31, 2001.
 
Net cash provided by operating activities increased by $2,459,682 to $1,546,030 for the nine months ended September 30, 2002 from $(913,652) for the nine months ended September 30, 2001. This increase in cash provided by operations resulted primarily from a decrease in trade receivables of $768,339, an increase in minority interest liability of $378,215 and increase in accrued liabilities of $724,151.
 
Cash flows used in investing activities for the nine months ended September 30, 2002 increased by $488,228 or 93% as the current period used $1,009,415 for investing activities as opposed to $521,187 used for investing activities for the nine months ended September 30, 2001. This change was due primarily to the additional investment in the acquisition of Vitis Hincesti S.A. in the amount of $703,707.
 
Critical Accounting Policies.
 
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, collection of accounts receivable and valuation of inventories. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. A description of our critical accounting policies and related judgments and estimates that affect the preparation of our financial statements is set forth in our Annual Report on Form 10-KSB for the year ended December 31, 2001.

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Table of Contents
 
PART II-OTHER INFORMATION
 
ITEM 1.    LEGAL PROCEEDINGS
 
Other than as set forth below, we are not a party to any pending legal proceedings or are aware of any pending legal proceedings against us that, individually or in the aggregate, would have a material adverse affect on our business, results of operations or financial condition.
 
We filed a complaint on July 17, 2001, in the Circuit Court of the Ninth Judicial circuit in and for Orange County, Florida, against Vadim Enikeev, an individual; Serguei Melnick, an individual; La-Sal Capital, Inc., a Florida corporation; Icara, Inc. a Florida corporation, Stoneside Development Limited, a personal services corporation, Goldberg Law Group, PA., a Florida corporation; Glenn E. Goldberg, an individual; Alan S. Lipstein, an individual; George Carapella, an individual; Thomas L. Tedrow, an individual; Larry Eastland, an individual; Robert Klosterman, an individual; and John Does and Jane Does, fictitious parties, the true parties intended to be those individuals or entities liable to plaintiff.
 
The amended complaint seeks damages for breach of contract (defendants Enikeev, La-Sal, Icara, Goldberg Law Group, Stoneside); rescission (defendants La-Sal, Icara, Goldberg Law Group, Stoneside); breach of fiduciary duty (defendants Enikeev, Melnick, Goldberg Law Group, Goldberg, Eastland and Klosterman); aiding and abetting breach of fiduciary duty (defendants Stoneside, La-Sal, Icara, Goldberg Law Group, Goldberg, Carapella, Lipstein and Tedrow); declaratory relief (defendants Klosterman and Eastland); civil conspiracy (defendants Enikeev, Melnick, Goldberg, Goldberg Law Group, La-Sal, Icara, Stoneside, Lipstein, Carapella, Tedrow, Eastland and Klosterman); violation of Florida Securities Investors Protection Act (defendants La-Sal, Goldberg Law Group, Stoneside and Icara); fraudulent inducement (defendants Stoneside, La-Sal, Icara, Goldberg Law Group, Goldberg, Carapella, Lipstein and Tedrow).
 
We allege that defendants Melnick and Enikeev abused limited authority given to them to act as corporate promoters and entered into a civil conspiracy with the remaining defendants to issue corporate stock without our approval for their individual and collective profit. We further allege that many of the defendants entered into, or facilitated entry into, unapproved "consulting agreements" as a vehicle to justify issuance of the stock, and that the "consultants" provided little or no services to Asconi but received stock valued at as much as $11,200,000. The complaint seeks monetary damages, rescission and return of the stock still possessed by any of the defendants, and other relief.
 
Defendant Enikeev has been defaulted and we obtained an entry of final judgment against him on July 8, 2002, in the amount of $12.8 million. The remaining defendants have in some instances answered the amended complaint while also filing motions to dismiss, or have moved to dismiss only. Defendants Klosterman and Eastland have filed "General Denials" but have raised no defenses. No counterclaims have been filed against us at this time.
 
ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS
 
(a)    None.
 
(b)    None.
 
(c)    None.
 
(d)    None.
 
ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
None.

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Table of Contents
 
ITEM 5.    OTHER INFORMATION
 
None.
 
ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K
 
(a)    Exhibits
 
Exhibit
   
Description of Exhibit
3.1
   
Restated Articles of Incorporation.(1)
3.2
   
Amended and Restated Bylaws.(1)
99.1
   
Certification by Constantin Jitaru, Chief Executive Officer, and Anatolie Sirbu, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(2)
(1)
 
Incorporated by reference to our Quarterly Report on Form 10-QSB, filed on August 20, 2001, file no. 0-23712.
 
(2)
 
Filed Herewith.
 
(b)    Reports on Form 8-K.
 
On August 26, 2002, we filed a Current Report on Form 8-K/A to amend the Current Report on Form 8-K filed on June 27, 2002, pursuant to Item 2, regarding our acquisition, through our wholly owned subsidiary Asconi S.R.L., of a controlling interest in Vitis Hincesti S.A., a Republic of Moldova entity.

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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
Date:
  
April 16, 2003
  
/S/    CONSTANTIN JITARU
       
Constantin Jitaru, President and Chief
Executive Officer
Date:
  
April 16, 2003
  
/S/    ANATOLIE SIRBu
       
Anatolie Sirbu, Chief Financial Officer
 
 

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CERTIFICATION



I, Constantin Jitaru, certify that:


1.

I have reviewed this quarterly report on Form 10-QSB of Asconi Corporation;


2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly  report;


3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;


4.

The registrant’s other certifying officer and I are responsible for establishing and maintain disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


a.

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;


b.

evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and


c.

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):


a.

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal

controls; and


b.

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


6.

The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were any significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



Date: April 16, 2003


/s/ CONSTANTIN JITARU

¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯

Constantin Jitaru,

President and Chief Executive Officer



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CERTIFICATION


I, Anatolie Sirbu, certify that:


1.

I have reviewed this quarterly report on Form 10-QSB of Asconi Corporation;


2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly  report;


3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;


4.

The registrant’s other certifying officer and I are responsible for establishing and maintain disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


a.

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;


b.

evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and


c.

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):


a.

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and


b.

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


6.

The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were any significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



Date: April 16, 2003


/s/ ANATOLIE SIRBU

¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯

Anatolie Sirbu,

Chief Financial Officer





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EXHIBIT INDEX
 
Exhibit
   
Description of Exhibit
3.1
   
Restated Articles of Incorporation.(1)
3.2
   
Amended and Restated Bylaws.(1)
99.1
   
Certification by Constantin Jitaru, Chief Executive Officer, and Anatolie Sirbu, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(2)
(1)
 
Incorporated by reference to our Quarterly Report on Form 10-QSB, filed on August 20, 2001, file no. 0-23712.
(2)
 
Filed Herewith.