|
News, Articles and Releases
Asconi Announces That Its Periodic
Public Reports for the Quarters Ended June 30, 2003 and September
30, 2003 Will Be Restated; Company Cautions That Those Financial
Statements and Certain Other Publicly Released Information Should
Not Be Relied Upon
TUESDAY, MARCH 23, 2004 12:28 PM
ORLANDO, Florida, March 23, 2004 - /PRNewswire-FirstCall/
-- Asconi Corporation (Amex: ACD), an Eastern European producer
of wines and spirits, today announced that it will restate the results
of its operations for the quarters ended March 31, June 30 and September
30, 2003, and that the previously issued interim financial statements
for those periods should not be relied upon.
The restatement will change, among other things, the accounting
for the Company's issuance of ten million shares issued during 2003
to Constantian Jitaru and Anatolie Sirbu. The issuance of those
shares was disclosed in the Company's December 4, 2003 proxy statement.
On March 5, 2004 Asconi received a letter from the U.S. Securities
and Exchange Commission (SEC) containing the SEC Division of Corporation
Finance staff's comments relating the Company's financial and non-financial
disclosures contained in its Registration Statement on Form S-3
filed with the SEC on February 6, 2004, the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 2002 and its
proxy statement (Schedule 14A) filed December 4, 2003. The SEC staff
inquired, among other things, into the Company's accounting treatment
of the share issuance. The March 5, 2004 SEC staff letter followed
an informal inquiry from the SEC's Denver regional office requesting
voluntary production of documents relating to the Company's accounting
and financial policies, practices and procedures in 2001, 2002 and
2003, including accounting treatment of certain related-party transactions.
An SEC investigation is ongoing.
The subject issuances previously were treated as if they were equity
transactions. As the result of dialogues with the SEC staff subsequent
to the receipt of the staff's letters, and consultations with legal
and accounting advisers, the Company has determined that the market
value of the ten million shares of Common Stock issued during 2003
should have been charged against the Company's income statement.
The 2003 operating results reported to date do not reflect any such
charge.
However, the Company has not yet determined which 2003 quarter
should be charged, nor has it determined the dollar amount of the
charge. Additionally, the Company is still in discussions with the
SEC staff concerning whether the charge will be presented as an
operating expense or in other expenses. The accounting for the share
issuance will be based on the market value of the shares, and will
reflect an expense and an offsetting increase in paid-in capital,
as a result of which it is anticipated that this item of restatement
will not substantially affect the reported stockholders' equity.
The SEC staff's March 5, 2004 letter also inquired about other
accounting, presentation and disclosure issues in the Company's
December 31, 2001 and 2002 and interim 2003 financial statements.
The Company, under the supervision of its Audit Committee, is inquiring
into the concerns raised by the SEC staff in its correspondence
to the Company. Due to the ongoing nature of this investigation,
the Company is unable to assess definitively the impact such inquiry
may have upon its prior public reports. Once the ongoing inquiry
is completed and the results are finalized, the Company will restate
its financial statements, as may be appropriate. The Company has
not yet determined what changes, if any, may be required to the
previously reported results of operations or financial position
in response to those other inquiries. However, the Company does
anticipate that, even if that assessment does not indicate a need
to restate other items for material affects on the results of operations
or financial condition, the previously issued financial statements
will be revised to change certain presentations and clarify or amplify
certain disclosures. The Company is hopeful that it will be able
to publish its restated financial statements by April 14, 2004.
On October 6, 2003 the Company issued a press release containing
its earnings guidance for the year ended December 31, 2003, which
press release was filed with the SEC in a Current Report on Form
8-K. That guidance did not anticipate a charge to earnings for the
issuance of the ten million shares as discussed above.
The Company urges the marketplace not to rely on the Company's
previously disclosed financial statements nor on any earnings guidance
previously released by the Company with respect to the 2003 fiscal
year until the publication of the restated financial statements
by the Company.
About Asconi Corporation
Asconi Corporation (AMEX: ACD) is one of the largest producers
and distributors of wines and spirits in Eastern Europe. Asconi
currently markets its products in seventeen countries worldwide
and offers an extensive portfolio of over 350 items in fifty product
lines. The Company is involved in every aspect of wine and spirits
production and distribution, from grape processing to sales of alcoholic
beverages.
For more information, please visit www.asconi.com.
Forward-Looking Statements
Certain statements contained herein constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current expectations, estimates and projections about the Company's
industry, management's beliefs and certain assumptions made by management.
Readers are cautioned that any such forward-looking statements are
not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict.
Because such statements involve risks and uncertainties, the actual
results and performance of the Company may differ materially from
the results expressed or implied by such forward-looking statements.
Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. Unless otherwise required
by law, the Company also disclaims any obligation to update its
view of any such risks or uncertainties or to announce publicly
the result of any revisions to the forward-looking statements made
here; however, readers should review carefully reports or documents
the Company files periodically with the Securities and Exchange
Commission.
Contact: Mr. Serguei Melnik,
Asconi Corporation Chief Operations Officer
Phone: 407 679-9463
Email: info@asconi.com
|
