Traders Nation (tm) - Interview: Serguei Melnik, COO of Asconi Corporation (Amex: ACD)

Kurt Schemers Host - Interviews:
Serguei Melnik, COO of Asconi Corporation
(Amex: ACD)

Market Cap: $ 47.04M
Shares O/S: 11,759,135
52-week Range: $0.05- $5.00

CONTACT INFORMATION

Asconi Corporation
(Amex: ACD)

Corporate Headquarters
1211 Semoran Boulevard
Suite 141
Casselberry, FL 32707
P. (407) 679-WINE (9463)
F. (407) 679-FINE (3463)

Investor Relations
investor@asconi.com

Web Site
Asconi.com

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Interview Information:
Interview Date: 10.22.03
Run Time: 10:50

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The Company

About Asconi Corporation
ASCONI CORPORATION (Amex: ACD) is a leading producer of wines and spirits with production facilities located in Eastern Europe. ASCONI currently markets its products in 17 countries worldwide offering an extensive portfolio of over 350 items in 50 product lines. The Company is vertically integrated into every aspect of wine and spirits production and distribution, from processing of grapes to sales of alcoholic beverages. ASCONI has four core business functions:

- International and regional distribution of bottled wines and spirits;

- Grapes processing and production of a large variety of wines;

- Processing, storage and aging of wine;

- Production of spirits including vodka and brandy.

With revenues of approximately $13.95 million, income from operations of $1.78 million and net income of approximately $1 million in 2002 Asconi is the leader on the winemaking and wine export markets of the Republic of Moldova. Substantial revenue growth of 27% and 123% has been achieved in 2002 and 2001, with revenues growing from $4.9 million in 2000 to $13.95 million in 2002. Income from operations grew from $1.15 million in 2000 to $1.78 million in 2002. The Company expects to achieve further growth though expansion into new markets.

Asconi's critical mass, operating philosophy, and management strength build a strong foundation for outstanding growth and attractive returns in the winemaking and export sector in Moldova.

Production

Asconi is the largest independent wine producer in Moldova. Asconi has a number of well-established brands, under which Company-markets its products. Although not considered a main business function, the Company sells wine in bulk for custom rebranding and bottling by other companies.

Asconi operates ten winemaking, distilling, processing and storage plants located within approximately 40 miles of Chisinau, the capital of the Republic of Moldova. Vitis Hincesti Winery, which includes six plants, is almost 200 years old and is very well known worldwide. Overall grape processing capacity of Asconi owned facilities reaches approximately 50 thousand tons per harvest season, while total aging and storage capacity is over 20 million gallons. Bottling facilities ensure production of 36,000 bottles per hour. The four-column distillery produces 10 tons of high quality alcohol per day.

During the grape harvest of 2002, Asconi processed 27,000 tons of grapes, over 250% increase from 2000 when over 10,000 tons of grapes were processed. Russia is Moldova's largest wine purchaser, importing over 80% of the country's wine output. Asconi is the largest Moldovan exporter into Russia.

Location

Asconi is located in an excellent winemaking environment, due to a temperate climate and calcium-rich soils that surround Moldova. Asconi's high quality wines are consistently rated higher than wines from neighboring countries. In fact, the country's wines regularly receive prestigious awards in international wine competitions.

Quality

According to independent reviews, Asconi is the most familiar Moldovan brand in the Russian market. Asconi uses machinery from Italy, Germany and France that is on-par with high caliber western wine production facilities. The modern equipment allows Asconi to quickly adapt to changes in customer demands.

For instance, the machinery can be configured to create more expensive aged high-quality wines, or reconfigured for faster production for more affordable brands. According to Dionis Club magazine, Asconi is the most recognized Moldovan brand of wine in Russia, which is the main importer of Moldovan wines. Further, Asconi is the dominant imported brand of wine into the Russian market, regularly garnering over 10% of overall wine sales.

Management

Constantin Jitaru has served as our Chairman since April 2001, our Chief Executive Officer since June 2001 and our President since July 2001. From 1996 to April 2001, Mr. Jitaru was a Director, the Director General and one of two shareholders of the Moldovan Subsidiary.

Mr. Jitaru is engaged in overall management of the Company overseeing the operations of all entities within the group. Mr. Jitaru is on the Board of both S.A. Vitis Hincesti and S.A. Orhei Vin. Mr. Jitaru is also responsible for outlining strategies, goals and objectives for Asconi and ensuring their implementation.

From 1993 to 1996, Mr. Jitaru was the General Director of VinInvest, the first wine investment project in the Republic of Moldova initiated by the European Bank of Reconstruction and Development. Mr. Jitaru was responsible for managing VinInvest's portfolio, sales and marketing and wine production process. From 1989 to 1993, Mr. Jitaru worked in the viticulture and wine making department of the Ministry of Agriculture in the Republic of Moldova, ascending to the head of the department in late 1993. Mr. Jitaru earned a bachelor degree, with honors, from the National College of Viticulture and Wine Making and a master's degree, with honors, from the Technical University of Moldova, majoring in Wine Making Technology. Mr. Jitaru has received numerous awards as a businessman of the year and for his contribution to the development of the Republic of Moldova and for community service.

Anatolie Sirbu has served as a Director since April 2001 and our Chief Financial Officer, Secretary and Treasurer since June 2001. From 1994 to April 2001, Mr. Sirbu was the Finance Director of the Moldovan Subsidiary.

Mr. Sirbu is primarily responsible for strategic negotiations with buyers, suppliers, financial institutions and service providers. He is also involved in new product development, and oversees he quality control function at all plants.

From 1993 to 1994, Mr. Sirbu was the leading specialist at the Ministry of Agriculture of the Republic of Moldova where he was responsible for the operation and production of the scientific wine making plant in Gidighich. From 1990 to 1993, Mr. Sirbu served at the Ministry of Agriculture for the Republic of Moldova as the Quality Inspector of Alcohol Production and then as the leading wine specialist at the Department of Viticulture and Wine Making. During this time, Mr. Sirbu was responsible for the supervision of Moldova's wine industry and research. Mr. Sirbu earned a bachelor and a masters degree, both with honors, from the Technical University of Moldova, majoring in Wine Making Technology.

Serguei Melnik has served as a director and our Chief Operations Officer since June 2003 and as a Vice President since February 2003. Prior to joining Asconi, from July 2001 to February 2003, Mr. Melnik was the Associate Director of Market Management International, Inc. providing financial and legal advisory services for companies seeking to become publicly traded on the U.S. capital markets. During the period from October 1997 through July 2001 he had worked as financial advisor and financial analyst for the First Union Securities, International Media Solutions, Inc. and B.W. Beck, Inc. in Orlando, Florida.

Mr. Melnik possesses a Master's Degree in Applied Economics from the University of Central Florida as well as a Law Degree from the State University of Moldova. He also attended the Budapest University of Economics Science.

Alex Brinister has served as our Vice President for US Operations since August 2002 and as the International Liaison Director of the Moldovan Subsidiary since May 2002.

Mr. Brinister brings over 11 years of experience in accounting and finance. He worked as the audit supervisor with KPMG overseeing audit assignments at various clients including multinational companies in wine and spirits industry. Mr. Brinister also completed non-audit assignments such as due diligence, business valuation and business advisory services. Prior to joining KPMG Mr. Brinister had worked with large international consulting institutions such as Barents Group and East West Management Institute developing accounting and auditing pronouncements in Eastern European countries and providing training in financial and managerial accounting, auditing and financial management. He also possesses experience as an internal auditor and budget and fiscal analyst. Mr. Brinister graduated with honors from the University of Illinois with a Master's Degree in Accounting. He is a US Certified Public Accountant and a Certified Accountant (Auditor) of the Republic of Moldova.

Nicolae Sterbets has been our Director since June 2003 and the General Manager of S.A. Vitis Hincesti S.A. since 1988.

Mr. Sterbets oversees the operations at all six locations of the subsidiary. Prior to that Mr. Sterbets was Deputy Director of Moldvinprom Agroindustrial Association in Hincesti between 1981 and 1988.

From 1970 to 1981 he worked as wine technologist and later as deputy director of Sophiisky winery. Since 1998 Mr. Sterbets was a founder of the Association of Winemakers of Moldova and, has occupied its the President since 1998. Mr. Sterbets received his bachelor's degree in winemaking from the National College of Viticulture and Wine Making of Moldova and his Master's of Science in winemaking degree from the Moldova Agricultural University.

Frank Clear has served as an independent director since July 2003. He possesses over 20 years of experience in commercial banking, international banking and corporate finance, having progressed from junior to managerial levels with Barclary Bank Rhodesia and Barclays Bank South Africa. Mr. Clear was the co-founder and Marketing Director for one of the largest personal computer manufacturing plants in South Africa. Mr. Clear has also assisted several start-up companies with the raising of capital, development, marketing and business implementation. Mr. Clear has vast international experience and has contacts in the United Kingdom, Italy, Hong Kong, Singapore, Australia, China and throughout southern Africa. Mr. Clear graduated from the Barclays Management Training School, where his studies included accounting, management and international banking.

Radu Bujoreanu has served as another independent director since July 2003. Mr. Bujoreanu has been the President of Consular Assistance, Inc. of Washington, DC since December 2002. From August 1999 to September 2002 he had served as the Second Secretary and Consul of the Embassy of the Republic of Moldova to the US, also accredited to Canada. Prior to that, from February 1995 to August 1999, he had been in various positions of responsibility with the Ministry of Foreign Affairs of the Republic of Moldova ascending to the Attache and the First Secretary, Chief of Treaties section within the Department of International Law and Treaties. Mr. Bujoreanu earned a Law degree from the State University of Moldova.

Tatiana Radu has been the Marketing director of Asconi since January 2001. Her primary responsibilities are direct communication with distributors of Asconi wines worldwide, development and implementation of marketing and sales strategies.

From June 1999 to January 2001 Ms. Radu was the Director of Export-Import Department of Asconi From 1993 to 1999 Mrs. Radu was the Sales Manager of Perla. She earned a masters degree, with honors, from the International Institute of Management, majoring in Management Besides, she earned a masters degree, with honors, from the Teachers' University, majoring in Fine Arts and Drawing.

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Forward-Looking Statements
This news release may contain forward-looking statements, which involve risks and uncertainties. Accordingly, no assurance can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statement. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by the Company. These factors include the Company's success in its business and operations; the activities of new or existing competitors, the ability to attract and retain employees and strategic partners, the ability to leverage intangible assets, the ability to complete new projects at planned costs and on planned schedules and adoption of the Internet as a medium of commerce, communications and learning. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the company with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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