Exchange Agreement Between ASCONI S.R.L. and Subsidiaries

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Summary

This document is an exchange agreement involving ASCONI S.R.L., a limited liability company in Moldova, and its subsidiaries. It includes audited consolidated financial statements for the years ended December 31, 2000 and 1999, and details a transaction where members contributed assets from PLUS-ASCONI S.R.L. to ASCONI S.R.L. The agreement outlines the financial position, operations, and changes in equity, as well as the terms of the asset contribution, which was partly non-cash. The document also includes the auditor's report and key financial disclosures.

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EX-2.1 3 dex21.txt EXCHANGE AGREEMENT Exhibit 2.1 "ASCONI" S.R.I. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Pages ----- Report of Independent Auditors F-2 Consolidated Statement of Financial Position F-3 Consolidated Statements of Operations and Comprehensive Income F-4 Consolidated Statements of Changes in Members' Equity F-5 Consolidated Statements of Cash Flows F-6 to F-7 Notes to Consolidated Financial Statements F-8 to F-13 Pro Forma Financial Statement F-14 to F-16
F-1 REPORT OF INDEPENDENT AUDITORS To the Members of "ASCONI" S.R.L. We have audited the accompanying statements of financial position of "ASCONI" S.R.L. (a Republic of Moldova limited liability company) and subsidiaries as of December 31, 2000 and 1999, and the related statements of operations and comprehensive income, members' equity and cash flows for the two years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United of States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of "ASCONI " S.R.L. and subsidiaries as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the two years then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Thomas Leger & Co., L.L.P. Thomas Leger & Co., L.L.P. Houston, Texas June 16, 2001 F-2 "ASCONI" S.R.L. (A LIMITED LIABILITY COMPANY) CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNITED STATES DOLLARS)
ASSETS December 31, --------------------------------- 2000 1999 ------------ ------------ CURRENT ASSETS Cash and bank balances $ 43,142 $ 18 Trade receivables 1,211,994 469,121 Inventories 2,747,721 609,113 Refundable taxes 67,831 81,932 Advance payments 201,136 18,242 Other 9,891 663 ------------ ------------ TOTAL CURRENT ASSETS 4,281,715 1,179,089 FIXED ASSETS 2,228,174 1,313,943 DEFERRED TAXES 27,129 - OTHER 2,374 508 ------------ ------------ TOTAL ASSETS $ 6,539,392 $ 2,493,540 ============ ============ LIABILITIES AND MEMBERS' EQUITY CURRENT LIABILITIES Accounts payable $ 2,125,647 $ 721,706 Current portion of long-term debt 262,782 - Short-term borrowings 170,000 219,180 Taxes payable 381,891 239,364 Accrued liabilities 216,321 5,250 ------------ ------------ TOTAL CURRENT LIABILITIES 3,156,641 1,185,500 LONG-TERM LIABILITIES Long-term debt 739,562 - Deferred taxes 126,674 18,236 ------------ ------------ TOTAL LIABILITIES 4,022,877 1,203,736 MINORITY INTEREST 150,000 - MEMBERS' EQUITY 2,366,515 1,289,804 ------------ ------------ TOTAL LIABILITIES AND MEMBERS' EQUITY $ 6,539,392 $ 2,493,540 ------------ ------------
The accompanying notes are an integral part of these consolidated financial statements. F-3 "ASCONI" S.R.L. (A LIMITED LIABILITY COMPANY) CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNITED STATES DOLLARS)
Year Ended December 31, ------------------------ 2000 1999 ------------------------ SALES $ 4,934,423 $ 951,466 COST OF SALES 3,124,326 506,369 ------------ ---------- GROSS PROFIT 1,810,097 445,097 DEPRECIATION 325,836 17,723 SELLING AND ADMINISTRATIVE EXPENSES 332,626 151,695 ------------ ---------- INCOME FROM OPERATIONS 1,151,635 275,679 INTEREST EXPENSE 98,251 9,607 OTHER (INCOME) LOSS (126,405) 12,302 ------------ ---------- INCOME BEFORE TAX PROVISION 1,179,789 253,770 PROVISION FOR INCOME TAXES 331,770 71,908 ------------ ---------- NET INCOME 848,019 181,862 OTHER COMPREHENSIVE LOSS Foreign currency translation, net of tax of $46,403 121,308 - ------------ ---------- $ 726,711 $ 181,862 ============ ==========
The accompanying notes are an integral part of these consolidated financial statements. F-4 "ASCONI" S.R.L. (A LIMITED LIABILITY COMPANY) CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY Years Ended December 31, 2000 and 1999 (UNITED STATES DOLLARS)
Accumulated Other Members' Statutory Capital Earnings Comprehensive Equity Capital Contributed (Deficit) (Loss) (Deficit) ---------- ------------- ---------- ------------- ---------- Balance at December 31, 1998 $ 753 $ - $ (1,538) $ - $ (785) Capital contributions - 1,108,747 - - 1,108,747 Increase in statutory capital 311 (311) - - - Earnings - - 181,842 - 181,842 ---------- ------------ ---------- ----------- ----------- Balance December 31, 1999 1,064 1,108,436 180,304 - 1,289,804 Capital contributions - 350,000 - - 350,000 Increase in statutory capital 155,230 (155,230) - - - Comprehensive income: Earnings - - 848,019 - 848,019 Foreign currency translation - - - (121,308) (121,308) ---------- ------------ ---------- ----------- ----------- Balance at December 31, 2000 $ 156,294 $ 1,303,206 $1,028,323 $ (121,308) $ 2,366,515 ========== ============ ========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. F-5 "ASCONI" S.R.L. (A LIMITED LIABILITY COMPANY) CONSOLIDATED STATEMENTS OF CASH FLOW (UNITED STATES DOLLARS)
Year Ended December 31, ------------------------------------ 2000 1999 ------------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 726,711 $ 181,842 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 325,836 17,723 Deferred income taxes 108,438 18,236 (Increase) decrease in assets: Trade receivables (719,736) (469,121) Inventories (1,250,735) (273,056) Refundable taxes 14,101 (81,932) Advance payments (182,894) (18,242) Other (9,228) (663) Increase (decrease) in liabilities Accounts payable 1,019,943 448,426 Taxes payable 119,726 164,649 Accrued liabilities 66,510 5,250 ------------- ------------ Net cash provided (used) by operating activities 218,672 (6,888) ------------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets (621,385) (75,961) Other (4,982) (508) ------------- ------------ Cash used for investing activities $ (626,367) (76,469) ------------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES Short-term borrowings (net) (49,181) 58,915 Proceeds from long-term debt 500,000 - Repayment of long-term debt - - Contribution of capital - 24,421 Other - - ------------- ------------ Cash provided by financing activities 450,819 83,336 ------------- ------------ NET INCREASE (DECREASE) IN CASH AND BANK BALANCES 43,124 (21) Cash and bank balances, at beginning of period 18 39 ------------- ------------ Cash and bank balances, at end of period $ 43,142 $ 18 ============= ============
The accompanying notes are an integral part of these consolidated financial statements. F-6 "ASCONI" S.R.L. CONSOLIDATED STATEMENTS OF CASH FLOW (continued) Years Ended December 31, 2000 and 1999 (UNITED STATES DOLLARS) SUPPLEMENTARY CASH FLOWS DISCLOSURES
Year Ended December 31, ------------------------------------ 2000 1999 ------------- ------------ 1. Interest paid $ 98,270 $ 9,038 ============= ============ Taxes paid $ 164,685 $ - ============= ============
2. On October 18, 1999 the Members of "ASCONI" S.R.L. contributed their assets from "PLUS-ASCONI" S.R.L. to "ASCONI" S.R.L. The following amounts represent the non-cash portion of this transaction: Inventory $ 336,057 Fixed assets 1,255,705 Accounts payable (272,456) Short-term debt (160,265) Taxes payable (74,715) ------------ $ 1,084,326 ============
3. During October and December, 2000 the Members of "ASCONI" S.R.L. acquired controlling interest of SA Fabrica de vinuri din Puhoi and SA Orhei-vin and contributed said interest to "ASCONI" S.R.L. The following amounts represent the non-cash portion of these transactions: Accounts receivable $ 23,137 Inventory 887,873 Fixed assets 618,682 Deferred taxes 24,013 Accounts payable (383,998) Taxes payable (22,801) Accrued expenses (144,561) Long-term debt (502,345) Minority interest (150,000) ------------ $ 350,000 ============
The accompanying notes are an integral part of these consolidated financial statements. F-7 "ASCONI" S.R.L. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 2000 NOTES 1. ORGANIZATION AND PRINCIPAL ACTIVITIES "ASCONI" S.R.L. (a limited liability company), (the "Company") was formed in the Republic of Moldova in 1994. The Company commenced operations in 1999. The Company acquired controlling interest (70%) of SA Fabria de vin uri din Puhoi and (72%) of SA Orhei-vin, the subsidiaries, during October and December 2000, which were recorded as a purchase. The consolidated financial statements include the accounts of the Company, SA Fabria de vin uri din Puhoi, and SA Orhei-vin (collectively together with the Company referred to as the ("Group"). The Group produces, markets, and sells premium Moldavian wines. The Group sells approximately 95% of its wines in the Russian Federation. 2. BASIS OF PRESENTATION The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP"). This basis of accounting differs from that used in the statutory financial statements of the Group which are prepared in accordance with the accounting principles generally accepted in Moldova. The following material adjustments were made to present the consolidated financial statements to conform with US GAAP: the subsidiaries financial statements were restated to reflect the purchase price. This resulted in a write down approximately of $6,660,000. No charge to income is reflected since this write down occurred at the time of acquisition; and the subsidiaries did not have any material operations subsequent to the acquisitions and December 31, 2000. 3. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES Basis of consolidation ---------------------- The consolidated financial statements of the Group included the Company and its subsidiaries. All material Intercompany balances and transactions have been eliminated. Economic and political risks ---------------------------- The Group faces a number of risks and challenges since its operations are in the Republic of Moldova and its primary market is in the Russian Federation. The financial statements have been prepared assuming the Group will continue as a going concern. F-8 "ASCONI" S.R.L. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 2000 Cash and cash equivalents - ------------------------- The Group considers cash and cash equivalents to include cash on hand and demand deposits with banks. The Company maintains no bank accounts in the United States of America. Inventory - --------- Inventories are stated at the lower of cost or market on the first-in, first-out basis, and includes finished goods, raw materials, packaging material and product merchandise. Finished goods include costs of raw materials (grapes and bulk wine), packaging, labor used in wine production, bottling and warehousing on winery facilities and equipment. In accordance with general practice in the wine industry, wine inventories are included in current assets, although a portion of such inventories may be aged for periods longer than one year. Property, plant and equipment - ----------------------------- Property, plant and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. In accordance with Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of", the Group examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. There were no impairments. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. The percentages applied are: . Buildings 2% - 4.0% . Machines and equipment 5% - 10% . Vehicles 10% . Office equipment 20% - 33% Income taxes - ------------ Taxes are calculated in accordance with taxation principles currently effective in the Republic of Moldova. Minority Interest - ----------------- Minority interest is based on the net book value of the subsidiaries financial statements used in the consolidation. F-9 "ASCONI" S.R.L. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 2000 Foreign currency translation ---------------------------- Translation of amounts from Republic of Moldova dollars ("MDL$") into United States dollars ("US$") has been made at the respective applicable rates of exchange. Monetary assets and liabilities denominated in foreign currencies are translated into US$ at the applicable rate of exchange at the balance sheet date. Translation of amounts from MDL$ into US$ has been made at the rate of exchange on December 31, 2000 and 1999: at US$1.00 : MDL$12.3833; and US$1.00 : MDL$11.5902. No representation is made that the MDL$ amounts could have been, or could be, converted into US$ at that rate. Income and expense items were translated at the average rates. Use of estimates ---------------- The preparation of financial statements in conformity with GAAP 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 revenue and expenses during the reporting period. Actual results when ultimately realized could differ from those estimates. Revenue recognition ------------------- Revenue is recognized when merchandise is shipped and title passes to the customer. Employees' benefits ------------------- Mandatory contributions are made by the Group to the Government's health, retirement benefit and unemployment schemes at the statutory rates in force during the period, based on gross salary payments. The cost of these payments is charged to the statement of income in the same period as the related salary cost. Statements of cash flow ----------------------- Cash flow statements have been compiled using the indirect method. 4. TRADE RECEIVABLES December 31, ------------------------- 2000 1999 ----------- --------- Foreign $ 1,188,857 $ 462,370 Domestic 71,863 6,751 Less: allowance for doubtful accounts (48,726) - ----------- --------- $ 1,211,944 $ 469,121 =========== ========= Foreign receivables are primarily from a single company. 5. INVENTORIES Inventories are summarized as follows: F-10 "ASCONI" S.R.L. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 2000 December 31, ------------------------ 2000 1999 ----------- --------- Raw materials $ 281,675 $ - Bulk wine 2,450,186 606,019 Bottled wine 78,860 3,094 ----------- --------- $ 2,747,721 $ 609,113 =========== ========= Certain raw materials are pledged as collateral for a short-term loan. 6. REFUNDABLE AND TAXES PAYABLE Refundable taxes are Value Added Taxes (VAT) which arise from exports to the Russian Federation which are exempt from VAT. Taxes payable are comprised primarily of income taxes, VAT, and excise taxes payable. The Group has been granted permission by the taxing authority to net these taxes. However, there is no assurance this will be allowed in the future. December 31, ------------------------ 2000 1999 --------- --------- Taxes payable: Income tax $ 306,243 $ 145,498 VAT 18,357 10,428 Excise tax 56,719 67,550 Other 572 15,888 --------- --------- $ 381,891 $ 239,364 ========= --------- 7. PROPERTY, PLANT AND EQUIPMENT December 31, -------------------------- 2000 1999 ----------- ----------- Land and buildings $ 618,682 $ - Machinery and equipment 1,811,613 1,234,588 Other 141,438 97,078 ----------- ----------- 2,571,733 1,331,666 Less accumulated depreciation (343,559) (17,723) ----------- ----------- $ 2,228,174 $ 1,313,943 =========== =========== 8. LONG-TERM DEBT Long-term debt is summarized as follows: F-11 "ASCONI" S.R.L. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 2000
December 31, ---------------------------------- 2000 1999 ------------ ----------- Note to "VininVest" S.R.L., Moldvoa. Note originally dated July 6, 1995 in the original sum of $454,660 and amended December 2000. The loan was made by Orhei-Vin S.A. and is secured by various equip- ment and inventory. Interest rate is based on LIBOR + 2.5% (11.6% at December 31, 2000) $ 502,344 $ - Notes to Universal Bank, Moldova. Notes originally to PLUS-"ASCONI" S.R.L. in 1994 and 1999 amended in 1999 and 2000. Interest at 18%. Secured by equipment and inventory. Refinanced in 2001. 170,000 219,180 Note to Universal Bank, Moldova originally dated October, 1994 and amended. In 2000 advances under the amended agreement were $500,00 Interest rate is 17%. The note is secured by equipment. Refinanced 2001. 500,000 - ------------ --------- 1,172,344 219,180 Less short-term loan (170,000) (219,180) Less current portion of Long-term debt (262,782) - ------------ --------- Long-term debt $ 739,562 $ - ============ =========
9. INCOME TAXES The nominal statutory corporate tax rate for the year 2000 is 28%. Taxes are calculated in accordance with Moldovan regulations and are paid on a yearly basis. The provision for income taxes is as follows: Fiscal year ended December 31, ------------------------------ 2000 1999 ------------------------------ Current tax expense $ 204,058 $ 51,892 Deferred tax expense 81,309 20,016 ----------- --------- $ 285,367 $ 71,908 =========== ========= F-12 "ASCONI" S.R.L. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 2000 Deferred income taxes are provided for the temporary differences between the financial reporting and tax bases of the Group's assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are comprised of the following:
December 31, ------------------------------------ 2000 1999 ------------ ------------- Deferred tax assets: Basis difference in inventory $ 8,169 $ - Basis difference in accounts receivable 13,643 - Basis difference in accruals 5,317 - ------------ ------------- 27,129 - Deferred tax liabilities: Depreciation and amortization (126,674) (18,236) ------------ ------------- Net deferred tax asset (liability) $ (99,545) $ (18,236) ============ =============
A reconciliation of income tax computed at the nominal statutory corporate tax rate to the provision for income taxes follows:
Fiscal year ended December 31, ------------------------------------------------------ 2000 1999 ------------------------ ---------------------- Amount % Amount % ----------- --------- ---------- --------- Income taxes at nominal rate $ 329,785 32.5 % $ 71,050 28.0% Tax on foreign currency translation (46,403) (4.5)% Permanent differences: Other 1985 0.2 % 858 0.4% ----------- --------- ---------- --------- $ 285,367 28.2 % $ 71,908 28.4% =========== ========= ========== =========
10. MAJOR CUSTOMERS The Group sells approximately 95% of their products to one Company employees. Company A 95% 11. COMMITMENT AND CONTINGENTCY The Company guarantees $300,000 of personal debt of Company employees. 12. SUBSEQUENT EVENTS The Company was acquired by Asconi Corporation (formerly Grand Slam Treasures, Inc.) through its wholly owned British Virgin Islands subsidiary pursuant to an exchange agreement dated April 12, 2001. F-13 ASCONI CORPORATION AND SUBSIDIARIES; and GRAND SLAM TREASURES, INC. PRO FORMA CONSOLIDATED BALANCE SHEET
4/12/2001 3/31/2001 GRAND SLAM ASCONI PRO FORMA ASSETS (Unaudited) (Unaudited) ADJUSTMENTS PRO FORMA - ----------------------- ----------------- ---------------- ------------------- ----------------- CURRENT ASSETS Trade receivables $ - $ 1,669,134 $ - $ 1,669,134 Inventories - 2,087,065 - 2,087,065 Other 504,177 478,373 (504,177) 3 478,373 ----------------- ---------------- ------------------- ----------------- Total Current assets 504,177 4,234,572 (504,177) 4,234,572 PROPERTY AND EQUIPMENT, NET - 2,179,949 - 2,179,949 OTHER - 2,120 - 2,120 ----------------- ---------------- -------------------- ----------------- $ 504,177 $ 6,416,641 $ (504,177) $ 6,416,641 ================= ================ ==================== ================= LIABILITIES AND MEMBERS' EQUITY CURRENT LIABILITIES Accounts payable $ 137,637 $ 1,910,262 $ (137,637) 4 $ 1,910,262 Other - 1,110,476 1,110,476 ----------------- ---------------- ------------------- ----------------- Total current liabilities 137,637 3,020,738 (137,637) 3,020,738 Long-term liabilities Long-term debt 589,868 589,868 Other 121,953 121,953 MINORITY INTEREST 136,361 136,361 Shareholders' equity - - - - Members equity - 2,547,721 (2,547,721) 1 - Common stock 309 - 13,150 1 13,459 Paid-in capital 10,910,682 - (8,960,464) 1,4 1,950,218 Retained earings(deficit) (10,544,451) - 11,128,495 1,3 584,044 ----------------- ---------------- -------------------- ----------------- $ 504,177 $ 6,416,641 $ (504,177) $ 6,416,641 ================= ================ ==================== =================
Notes to Pro Forma Financial Statements 1. Adjustment to record changes for additional stock issued and recapitalize Grand Slam with the capital structure of Asconi. 2. Eliminate loss from discontinued operations. 3. Expense deferred acquisition cost. 4. The Company disputes these accounts payable and believes it has meritorious defenses to the payment thereof. F-14 ASCONI CORPORATION AND SUBSIDIARIES; and GRAND SLAM TREASURES, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS TWELVE MONTH PERIOD ENDED DECEMBER 31, 2000
GRAND SLAM ASCONI PRO FORMA PRO (Unaudited) ADJUSTMENTS FORMA ------------ ----------- ------------ ------------ Gross revenue $ - $ 4,934,423 $ - $ 4,934,723 Cost of sales - 3,124,326 - 3,124,326 ------------ ----------- ------------ ------------ Gross profit - 1,810,097 - 1,810,397 Selling, general and administrative expenses - 332,626 - 325,836 Depreciation - 325,836 - 332,626 Minority interest - - - - Other - 139,557 504,177 3 643,734 Provision for taxes - 285,367 - 285,367 ------------ ----------- ------------ ------------ Net income from continuing operations - 726,711 504,177 222,834 Less from discontinued operations (3,019,956) - 3,019,956 2 - ------------ ----------- ------------ ------------ Net income $ (3,019,956) $ 726,711 $ 2,515,779 $ 222,834 ============ =========== ============ ============ Income (loss) per common share Basic Income from continuing operations $ - $ 0.02 Loss from discontinued operations (17.35) - ------------ ------------ Net income $ (17.35) $ 0.02 ============ ============ Average number of common shares outstanding Basic 174,091 13,459,079
Notes to Pro Forma Financial Statements 1. Adjustment to record changes for additional stock issued and recapitalize Grand Slam with the capital structure of Asconi 2. Eliminate loss from discontinued operations. 3. Expense deferred acquisition cost. 4. The Company disputes these accounts payable and believes it has meritorious defenses to the payment thereof. F-15 ASCONI CORPORATION AND SUBSIDIARIES; and GRAND SLAM TREASURES, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTH PERIOD ENDED MARCH 31, 2001
GRAND SLAM ASCONI PRO FORMA (Unaudited) (Unaudited) ADJUSTMENTS PRO FORMA ------------- ------------- --------------- ------------- Gross revenue $ - $ 1,780,549 - $ 1,780,549 Cost of sales - 1,165,128 - 1,165,128 Gross profit - 615,421 - 615,421 Selling, general and administrative expenses - 199,150 - 199,150 Depreciation - 76,990 - 76,990 Minority interest - (13,639) - (13,639) Other - 101,244 - 101,244 Provision for taxes - 70,470 - 70,470 ------------- ------------- --------------- ------------- Net income from continuing operations - 181,206 - 181,206 Loss from discontinued operations (778,797) - 778,797/2/ - ------------- ------------- --------------- ------------- Net income $ (778,797) $ 181,206 $ 778,797 $ 181,206 ============= ============= ============== ============= Income ( loss) per common share Basic Income from continuing operations $ - $ 0.013 Loss from discontinued operations (2.99) ------------- ------------- --------------- ------------- Net income $ (2.99) $ 0.013 ============= ============= Average number of common shares outstanding Basic 259,774 13,459,079
Notes to Pro Forma Financial Statements 1. Adjustment to record changes for additional stock issued and recapitalize Grand Slam with the capital structure of Asconi 2. Eliminate loss from discontinued operations. 3. Expense deferred acquisition cost. 4. The Company disputes these accounts payable and believes it has meritorious defenses to the payment thereof. F-16