-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P5446v+oIW8Bcq7ZWZIuK0R0qInteEwcZ/m9lnZBGOzQNp8pbV7tzRMPNWjrbMAz PzcG+VhWTLpYQKYlnNFN5A== 0001108890-04-000025.txt : 20040115 0001108890-04-000025.hdr.sgml : 20040115 20040115100715 ACCESSION NUMBER: 0001108890-04-000025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040113 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BESTNET COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000799694 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 861006416 STATE OF INCORPORATION: NV FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15482 FILM NUMBER: 04526309 BUSINESS ADDRESS: STREET 1: 5075 CASCADE ROAD SE STREET 2: SUITE A CITY: GRAND RAPIDS STATE: MI ZIP: 49546 BUSINESS PHONE: 616-977-9933 MAIL ADDRESS: STREET 1: 5075 CASCADE ROAD SE STREET 2: SUITE A CITY: GRAND RAPIDS STATE: MI ZIP: 49546 FORMER COMPANY: FORMER CONFORMED NAME: WAVETECH INTERNATIONAL INC DATE OF NAME CHANGE: 19980225 FORMER COMPANY: FORMER CONFORMED NAME: WAVETECH INC DATE OF NAME CHANGE: 19920703 8-K 1 bestnet8k011304.txt DATED 01-13-04 SECURITIES AND EXHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OF 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) January 13, 2004 ---------------------- BestNet Communications Corporation ---------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) 001-15482 ---------------------- (Commission File Number) Nevada 86-1006416 ------------------------------ -------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 5075 Cascade Rd. SE, Suite A. Grand Rapids, MI 49546 -------------------------------------- -------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (616) 977-9933 -----------------
ITEM 5. OTHER EVENTS. BestNet Communications Corp. continues growth in fiscal 2004 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS November 30, August 31, ASSETS 2003 2003 ---- ---- (UNAUDITED) Current Assets: Cash and cash equivalents $ 124,419 $ 226,559 Accounts receivable, less allowance of $1,635 and $1,386 80,123 74,360 Prepaid expenses and other current assets 84,641 49,080 ------------ ------------ Total current assets 289,183 349,999 Property and equipment, net of accumulated depreciation of $3,301,103 and $3,142,251 768,862 909,713 License fee, net of accumulated amortization of $5,657,895, and $5,312,368 4,016,873 4,362,400 Deposits and other assets 53,782 97,038 ------------ ------------ Total assets $ 5,128,700 5,719,150 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Current Liabilities: Capital lease obligations, current portion $ 4,640 $ 5,614 Accounts payable and accrued expenses 334,765 290,535 Notes payable, net of discount of $383,904 and $75,248 112,400 589,752 Deferred revenue 15,969 15,734 ------------ ------------ Total current liabilities 467,774 901,635 Long-Term Liabilities: Capital lease obligations, long-term portion 6,866 7,331 ------------ ------------ Total long-term liabilities 6,866 7,331 ------------ ------------ Total liabilities 474,640 908,966 ------------ ------------ STOCKHOLDERS EQUITY Preferred stock, par value $.001 per share; 10,000,000 shares authorized; 3,563,593 and 3,563,593 shares issued and outstanding at November 30, 2003 and August 31, 2003 3,563 3,563 Common stock, par value $.001 per share; 100,000,000 shares authorized; 31,432,415 issued and 29,532,415 outstanding at November 30, 2003; and 29,948,104 shares issued and 28,048,104 shares outstanding at August 31, 2003 31,432 29,948 Additional paid-in capital 35,481,035 34,273,690 Accumulated deficit (29,949,970) (28,585,017) ------------ ------------ 5,566,060 5,722,184 Less treasury stock, 1,900,000 common shares, at cost (912,000) (912,000) ------------ ------------ Total stockholders' equity 4,654,060 4,810,184 ------------ ------------ Total liabilities and stockholders' equity $ 5,128,700 $ 5,719,150 ============ ============ See accompanying notes to condensed consolidated financial statements.
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2003 AND 2002 2003 2002 ---- ---- (UNAUDITED) (UNAUDITED) Revenues $ 545,027 $ 300,208 ------------ ------------ Expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 377,697 287,764 General and administrative expenses 341,494 707,365 Depreciation and amortization 504,379 556,455 ------------ ------------ Total expenses 1,223,570 1,551,584 ------------ ------------ Loss from operations (678,543) (1,251,376) ------------ ------------ Other income (expense): Interest income 330 910 Interest and finance charges (146,772) (188,188) Preferred stock conversion penalty -- (17,847) Conversion expense (See Note 5) (541,182) -- Other income (expense) 1,214 (2,130) ------------ ------------ Total other expense (686,410) (207,255) ------------ ------------ Loss available to common shareholders $ (1,364,953) (1,458,631) ============ ------------ Loss per common share, basic and diluted $ (.05) $ (.08) ------------ ------------ Weighted average number of shares outstanding, basic and diluted 28,408,756 18,399,469 ============ ============ See accompanying notes to condensed consolidated financial statements.
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2003 AND 2002 2003 2002 ---- ---- (UNAUDITED) (UNAUDITED) Operating activities: Loss from operations $(1,364,953) $(1,458,631) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 504,379 556,455 Non-cash transactions 677,526 235,148 Changes in assets and liabilities: Accounts receivable (5,763) 10,649 Prepaid expenses and other current assets 32,439 (68,022) Deposits and other assets 43,256 (21,800) Accounts payable and accrued expenses 46,877 (7,379) Deferred revenue 235 (1,011) ----------- ----------- Net cash used in operating activities (66,004) (754,591) ----------- ----------- Investing activities: Purchase of property and equipment (18,001) (23,527) Cash received for certificate of deposit -- 22,773 ----------- ----------- Net cash used in investing activities (18,001) (754) ----------- ----------- Financing activities: Proceeds from issuance of notes payable -- 721,250 Repayment of notes payable (16,696) (13,800) Principal payments on capital lease obligation (1,439) -- Proceeds from exercise of stock options -- 28,251 Proceeds from the sale of common stock -- -- ----------- ----------- Net cash provided by (used in) financing activities (18,135) 735,701 ----------- ----------- Net decrease in cash (102,140) (19,644) Cash and cash equivalents, beginning of period 226,559 351,784 ----------- ----------- Cash and cash equivalents, end of period $ 124,419 $ 332,140 =========== =========== See accompanying notes to condensed consolidated financial statements.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (CONTINUED) (c) Exhibits: Exhibits Title 99 Press release, issued by BestNet Communications Corporation Dated January 13, 2004 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BestNet Communications Corporation By: /s/ Robert A. Blanchard -------------------------------- Robert A. Blanchard Chief Executive Officer By: /s/ Michael A. Kramarz -------------------------------- Michael A. Kramarz Principal Accounting Officer Date: January 16, 2004 EX-99 3 bestnetexhib99-011304.txt PRESS RELEASE DATED 01-13-04 EX-99 Press Release dated January 13, 2004 BestNet Communications Continues Growth in Fiscal 2004 GRAND RAPIDS, Mich.--(PR Newswire)--January 13, 2004--BestNet Communications Corporation (OTCBB: BESC - News), a provider of patented and proprietary global communication solutions, today announces results for the first quarter of fiscal 2004. BestNet achieved record revenue for the first quarter totaling $545,000, an increase of 82% compared to the first quarter 2003. First quarter 2004 revenue also increased by 18% as compared to the fourth quarter of fiscal 2003. Gross margins improved substantially to 31% as compared to 4% for the first quarter of fiscal 2003 and 19% for the fourth quarter of fiscal 2003. BestNet believes it can maintain gross margins of 31% to 35% while concentrating on revenue growth. Enrollments for the first quarter also increased by 15% as compared to enrollments in the fourth quarter of 2003 as well as 51% growth over first quarter of fiscal year 2003. Robert A. Blanchard, President and CEO of BestNet Communications commented, "As we review the fiscal 2003 performance, overall revenue growth for fiscal 2003 was up 38% over fiscal 2002, while gross margin percent increased by approximately 44% during that same time. We have taken the momentum from last fiscal year and continued it in the first quarter of 2004. We are pleased with our revenue growth in the first quarter and very pleased with the improvement in our gross margins. We continue to take aggressive steps to surpass the break even mark. Continued growth of new customers is another strong indicator that the value brought by BestNet around the globe is being adopted at an ever increasing rate." Blanchard added, "We have also made significant progress towards our corporate goals and have worked together with our new board of directors to remove barriers to further growth and achievement of profitability. The settlement of the arbitration with Softalk, Inc., increased revenue, improved gross margins, growth in new accounts and a recent letter of intent for additional financing all point towards a formula for larger success for BestNet and its shareholders." About BestNet BestNet Communications is a global solutions provider of long distance; conference calling, ClicktoPhone and custom application-based communication services. BestNet's services are accessed worldwide via the Internet and wireless devices and are delivered using standard phone lines and equipment. This results in a cost effective high quality service for both businesses and consumers. Under the brand name Bestnetcall(TM) (WWW.BESTNETCALL.COM) the patented services offer subscribers premium quality calls and conference calling, 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. 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, including plans and objectives. 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. -----END PRIVACY-ENHANCED MESSAGE-----