EX-99 3 ex-99.txt PRESS RELEASE DATED JULY 11, 2003 EX-99 Press Release dated July 11, 2003 BESTNET COMMUNICATIONS ANNOUNCES RECORD FISCAL 3RD QUARTER 2003 RESULTS. GRAND RAPIDS, Mich.--(PR Newswire)-- July 11, 2003--BestNet Communications Corporation (OTCBB: BESC - News), a provider of proprietary global communication solutions, today announces its results for the third quarter of fiscal 2003. As stated in a previous press release, revenues for the quarter totaled over $387,000 USD setting a new record and up 31% over the same period of fiscal 2002. Gross margins more than doubled based on the same period comparison and are continuing to improve. EBITDA, which represents virtually all of the cash used in current operations on a monthly basis is down over 62% based on fiscal 2003 and 2002 third quarter comparison. Robert A. Blanchard, President and CEO of BestNet Communications Corporation commented, "The third quarter of 2003 was one of continuous improvement and growth for us. I am particularly pleased with our continuing record setting revenue growth and strategic deployment of cash resources. The fact that revenue is up 31% while cash used is down over 60% in comparable periods indicates we are making good choices with our marketing and sales initiates. This is further reinforced by the increase we have seen in both corporate and active accounts this fiscal year to date. Thus far we have added over 350 new corporate accounts along with 4,000 new individual accounts. I encourage our investors to listen to our audio update which can be found at http://www.bestnetcom.com/investor.htm and review our 3rd quarter 10 Q which will be filed next week for more detailed information on the progress we are making." BestNet also announces today that it will hold a meeting of its shareholders on Wednesday September 17th, 2003 at a location and time to be announced to provide a comprehensive update and conduct business important to all shareholders. Details on the meeting will follow. About BestNet Communications Corp: BestNet Communications is a global communication solutions provider of international long distance, conference calling and ClicktoPhone communication services. BestNet's services are accessed via the internet and delivered using standard phone lines. This results in a cost effective, high quality service for both businesses and consumers. Under the brand name Bestnetcall(TM) (www.bestnetcall.com) patented services offer clients premium quality calls and conference calling worldwide, at significantly lower rates. Calls and conference calls can also be launched via a desktop application or handheld devices including Palm(TM), Pocket PC(R) and Blackberry(TM) and used with any standard or wireless phone. In addition the company's new ClicktoPhone(TM) service (www.ClicktoPhone.com) enables clients to add secure and anonymous voice communication connectivity anywhere in the world to web sites, web banners, pictures, electronic documents, and customized e-mail calling buttons. BestNet's communication solutions are now powered by our new GlobalPlex technology. BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MAY 31, 2003 AND 2002
2003 2002 ----------- ----------- (UNAUDITED) (UNAUDITED) Revenues: $ 387,769 $ 296,641 ----------- ----------- Expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 346,181 279,778 General and administrative expenses 371,855 546,660 Depreciation and amortization 556,562 572,278 ----------- ----------- Total expenses 1,274,598 1,398,716 ----------- ----------- Loss from operations (886,829) (1,102,075) ----------- ----------- Other income (expense): Interest income 1,876 890 Interest and finance charges (308,724) (205,296) Preferred stock conversion penalty -- (3,749) Foreign asset tax expense -- (50) Loss on sale of assets -- (257) Other (expense) income (2,073) 600 ------------ ----------- Total other expense (308,921) (207,862) ----------- ------------ Loss from continuing operations (1,195,750) (1,309,937) Discontinued Operations Operating income from discontinued operations -- 323 Loss on sale of discontinued operations -- (332) ----------- ------------ Loss from discontinued operations -- (9) ----------- ------------ Loss from operations (1,195,750) (1,309,946) ----------- ----------- Preferred stock dividends 265,006 1,540 ----------- ----------- Loss available to common shareholders $(1,460,756) $(1,311,486) =========== =========== Loss per common share, basic and diluted Continuing operations $ (.06) $ (.08) Discontinued operations -- (.00) ----------- ------------ $ (.06) $ (.08) =========== =========== Weighted average number of shares outstanding, basic and diluted 26,103,580 16,289,189 =========== ===========
See accompanying notes to condensed consolidated financial statements BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
MAY 31, AUGUST 31, ASSETS 2003 2002 ------------ ------------ (UNAUDITED) Current Assets: Cash and cash equivalents $ 607,424 $ 351,784 Certificate of deposit -- 22,773 Accounts receivable, less allowance of $387 and $7,826 63,875 72,844 Prepaid expenses and other current assets 53,213 71,801 ------------ ------------ Total current assets 724,512 519,202 Property and equipment, net of accumulated depreciation of $2,969,931 and $2,335,732 1,081,041 1,625,348 License fee, net of accumulated amortization of $4,966,841, and $3,930,258 4,707,927 5,744,510 Note receivable from Softalk 1,569,608 1,508,043 Deposits and other assets 100,237 103,297 ------------ ------------ Total assets $ 8,183,325 9,500,400 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Current Liabilities: Accounts payable and accrued expenses $ 821,152 $ 700,270 Notes payable, net of discount of $209,097 and $96,875 455,903 203,125 Deferred interest income 190,888 129,323 Deferred revenue 12,627 13,407 ------------ ------------ Total current liabilities 1,480,570 1,046,125 Long-Term Liabilities: Capital Lease 14,343 -- ------------ ------------ Total long-term liabilities 14,343 -- ------------ ------------ Total liabilities 1,494,913 1,046,125 Series A Preferred Stock and Warrants 420,216 -- STOCKHOLDERS EQUITY Common stock, par value $.001 per share; 50,000,000 shares authorized; 29,948,104 and 16,530,005 shares issued and outstanding 29,948 16,530 Additional paid-in capital 33,860,988 31,041,961 Accumulated deficit (27,622,740) (23,488,980) Common stock subscribed, underlying common shares of 0 and 1,866,842 -- 884,764 ------------ ------------ Total stockholders' equity 6,268,196 8,454,275 ------------ ------------ Total liabilities and stockholders' equity $ 8,183,325 $ 9,500,400 ============ ============
See accompanying notes to condensed consolidated financial statements. Contact BestNet at: investors@bestnetcom.com THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, WHICH ARE INTENDED TO BE COVERED BY THE "SAFE HARBOR" CREATED THEREBY. THESE STATEMENTS INCLUDE THE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS. THE FORWARD-LOOKING STATEMENTS HEREIN ARE BASED ON CURRENT EXPECTATIONS THAT INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS AND FUTURE BUSINESS DECISIONS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE BEYOND CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS ARE REASONABLE, ANY ONE OF THE ASSUMPTIONS COULD BE INACCURATE AND, THEREFORE, CAN BE NO ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS RELEASE WILL PROVE TO BE ACCURATE.