-----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, BwdQ8ZQm7TdkWpAJ6dz12yzzJAO51cm6PNpteodfIod+0F2MooiJuzPyShJBRktd Kwo7Dq1jYtRdJXqG2rub8w== 0001108890-04-000436.txt : 20040719 0001108890-04-000436.hdr.sgml : 20040719 20040719115110 ACCESSION NUMBER: 0001108890-04-000436 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040715 ITEM INFORMATION: ITEM INFORMATION: Other events FILED AS OF DATE: 20040719 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: 04919511 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 bestnet8k-071504a2.txt PERIOD ENDED 07-15-04 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) July 15, 2004 --------------- BestNet Communications Corporation ---------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Nevada 001-15482 86-1006416 --------------------------- ---------------------- ------------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) 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. announces record third quarter revenue for fiscal year 2004. BestNet Communications has seen continued revenue growth for the past six fiscal quarters. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION (a) BestNet Communications Corp. releases results of operations for the third quarter of fiscal 2004. Exhibits Title 99 Press release, issued by BestNet Communications Corporation Dated July 15, 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/ Richard Bourke -------------------------------- Richard Bourke Interim Chief Executive Officer By: /s/ Michael A. Kramarz -------------------------------- Michael A. Kramarz Principal Accounting Officer Date: July 19, 2004
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS May 31, August 31, ASSETS 2004 2003 ---- ---- (UNAUDITED) Current Assets: Cash and cash equivalents $ 66,527 $ 226,559 Accounts receivable, less allowance of $1,630 and $1,368 85,908 74,360 Prepaid expenses and other current assets 46,813 49,080 ------------ ------------ Total current assets 199,248 349,999 Property and equipment, net of accumulated depreciation of $3,622,578 and $3,142,251 484,945 909,713 License fee, net of accumulated amortization of $6,348,950, and $5,312,368 3,325,818 4,362,400 Deposits and other assets 53,709 97,038 ------------ ------------ Total assets $ 4,063,720 $ 5,719,150 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Current Liabilities: Capital lease obligations, current portion $ 4,550 $ 5,614 Convertible notes payable, net of discount of $117,407 and 158,814 589,752 $ 75,248 Note payable to related parties 160,000 -- Convertible note payable to related party, net of discount of 10,835 -- $15,164 and $0 Accounts payable and accrued expenses 264,897 290,535 Deferred revenue 11,013 15,734 ------------ ------------ Total current liabilities 610,109 901,635 Long-Term Liabilities: Capital lease obligations, long-term portion 4,343 7,331 ------------ ------------ Total long-term liabilities 4,343 7,331 ------------ ------------ Total liabilities 614,452 908,966 ------------ ------------ Commitments and contingencies -- -- STOCKHOLDERS' EQUITY Preferred stock, par value $.001 per share; 10,000,000 shares authorized; 3,763,593 and 3,563,593 shares issued and outstanding at May 31, 2004 and August 31, 2003, respectively 3,763 3,563 Common stock, par value $.001 per share; 100,000,000 shares authorized; 32,577,415 issued and 30,677,415 outstanding at May 31, 2004; and 29,948,104 shares issued and 28,048,104 shares outstanding at August 31, 2003 32,577 29,948 Additional paid-in capital 35,742,175 34,273,690 Accumulated deficit (31,627,434) (28,585,017) Common stock subscribed, underlying common shares of 2,101,865 210,187 -- and 0 ------------ ------------ 4,361,268 5,722,184 Less treasury stock, 1,900,000 common shares, at cost (912,000) (912,000) ------------ ------------ Total stockholders' equity 3,449,268 4,810,184 ------------ ------------ Total liabilities and stockholders' equity $ 4,063,720 $ 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 MAY 31, 2004 AND MAY 31, 2003 2004 2003 ---- ---- (UNAUDITED) (UNAUDITED) Revenues $ 557,322 $ 387,769 ------------ ------------ Expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 348,478 346,181 General and administrative expenses 259,703 371,855 Depreciation and amortization 506,058 556,562 ------------ ------------ Total expenses 1,114,239 1,274,598 ------------ ------------ Loss from operations (556,917) (886,829) ------------ ------------ Other income (expense): Interest income 2 1,876 Interest and finance charges (213,266) (308,724) Other income (expense) (3,292) (2,073) ------------ ------------ Total other expense (216,556) (308,921) ------------ ------------ Loss from operations $ (773,473) $ (1,195,750) ------------ ------------ Preferred stock dividends 15,245 265,006 ------------ ------------ Loss available to common stockholders' $ (788,718) $ (1,460,756) ------------ ============ Loss per common share, basic and diluted $ (.03) $ (.06) ------------ ------------ Weighted average number of shares outstanding, basic and diluted 30,937,984 26,103,580 ============ ============ See accompanying notes to condensed consolidated financial statements.
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MAY 31, 2004 AND MAY 31, 2003 2004 2003 ---- ---- (UNAUDITED) (UNAUDITED) Operating activities: Loss from operations $ (773,473) $(1,195,750) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 506,058 555,562 Non-cash transactions-interest expenses 189,254 298,002 Changes in assets and liabilities: Accounts receivable (3,678) (13,274) Prepaid expenses and other current assets 25,387 40,425 Deposits and other assets -- (18,733) Accounts payable and accrued expenses (4,861) 35,672 Deferred revenue (4,916) 1,468 ----------- ----------- Net cash used in operating activities (66,229) (296,628) ----------- ----------- Investing activities: Purchase of property and equipment (18,841) (42,008) ----------- ----------- Net cash used in investing activities (18,841) (42,008) ----------- ----------- Financing activities: Proceeds from issuance of notes payable 100,000 -- Repayment of notes payable (28,588) (21,425) Increase in capital lease payable -- 15,704 Principal payments on capital lease obligation (1,135) (1,361) Proceeds from sale of units 60,000 816,620 ----------- ----------- Net cash provided by financing activities 130,277 809,538 ----------- ----------- Net increase (decrease) in cash 45,207 470,902 Cash and cash equivalents, beginning of period 21,320 136,522 ----------- ----------- Cash and cash equivalents, end of period $ 66,527 $ 607,424 =========== =========== See accompanying notes to condensed consolidated financial statements.
EX-99 2 bestnetexhib99-071504a2.txt PRESS RELEASE EX-99 BestNet Communications Announces Record Third Quarter Fiscal 2004 GRAND RAPIDS, Mich.--(PR Newswire)--July 15, 2004--BestNet Communications Corporation (OTCBB: BESC - News), a provider of patented and proprietary global communication solutions, today announces results for the third quarter fiscal 2004. BestNet achieved record revenue for the third quarter fiscal 2004 totaling $557,000, an increase of 44% compared to the third quarter fiscal 2003. Gross margins improved substantially to 37% for the third quarter fiscal 2004 compared to 11% for the third quarter fiscal 2003 and 34% for the second quarter of fiscal 2004. BestNet believes it can maintain its current gross margins while concentrating on revenue growth. Richard Bourke, Chairman and interim-CEO of BestNet Communications commented, "This quarter's record revenue marks our sixth consecutive record revenue quarter. We have seen 86% revenue growth in these six quarters, as well as substantially increasing our gross margins. In addition, we have reduced our SG&A expenses by 30% during the third quarter fiscal 2004 when compared with the third quarter fiscal 2003. Our continued growth is a result of sustained focus on providing our customers with outstanding quality and service, along with new and innovative products." Mr. Bourke continued, "While we are pleased with our continued growth, we are committed to expanding our product offerings to emphasize seamless business-to-business solutions through our recently completed Application Program Interface (API). The next quarter will be marked by enhanced product capabilities, an expanded and improved global Internet identity, and a refocused marketing strategy. We appreciate the continue support of our shareholders in providing the capital necessary for these initiatives." 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-----