BESTNET COMMUNICATIONS (fka BESC)

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(BB:BESC) Bestnet Communications Corp (BB)

BESTNET COMMUNICATIONS CORP FILES FORM 8-K (BESC)
- Jul 14, 2003 03:53 PM (EDGAR Online)





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 11, 2003


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 [phone]

ITEM 5. OTHER EVENTS.

BestNet Communications Corp. announces record fiscal 3rd Quarter 2003
results.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

(c) Exhibits:

Exhibits Title
-------- -----
99 Press release, issued by BestNet Communications Corporation
Dated July 11, 2003

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/ Paul H. Jachim
------------------------------------
Paul H. Jachim
Chief Financial Officer

Date: July 14, 2003




TYPE: EX-99 OTHERDOC
SEQUENCE: 3
FILENAME: ex-99.txt
DESCRIPTION: PRESS RELEASE DATED JULY 11, 2003

OTHERDOC AVAILABLE Series=ex 99.txt Ver="": Document is copied.
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: [e-mail]

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.