GRAND RAPIDS, Mich., Jan. 14 /PRNewswire-FirstCall/ --
BestNet Communications Corp. (OTC Bulletin Board: BESC), a provider of
patented Internet-based communications solutions, today announces the results
for the quarter ending November 30, 2002. In addition, the company is pleased
to announce the addition of three new independent board members.
Revenues for the three months ended November 30, 2002 increased 58% to
$300,208, as compared to $189,621 for the same period in fiscal 2002. Growth
was seen across the board in both existing and new accounts, along with
commercial and individual use.
Cost of Goods Sold decreased substantially to $287,764 for the three
months ended November 30, 2002 as compared to $406,437 for the same period in
fiscal 2002. In mid-September 2002, we took over monitoring and maintenance
of our entire network. The decrease in our cost of goods sold is a direct
result of our management and maintenance of the network we own. We expect to
see continued improvement and stability in these costs along with improved
performance and quicker response to existing and emerging customer needs. We
plan to continue development of applications that will meet customer needs and
grow our revenues.
BestNet is also pleased to announce that effective January 15, 2003, the
following individuals will join the Board of Directors: Mr. Chris J. Grant,
Principal of Wheaton Illinois based Grant Associates, LLC; Mr. Randy S. Moore,
Chief Investment Officer of Duluth, Georgia based Network Twenty-One
International; and Mr. James B. Woodcock, President of Executive Excellence, a
Grand Rapids based executive and strategic consulting firm. These gentlemen
will replace and augment the position previously held by Mr. Herman Haenert,
who resigned effective November 27, 2002. BestNet wishes to thank Mr. Haenert
for his service. The addition of our new board members completes a
restructuring of the BestNet board that now consists of two corporate
directors and three independent directors.
Robert A. Blanchard, President and CEO of the company said, "We continue
to see positive trends in our fiscal performance. We continue to execute our
business plan moving our company from a development focus to operational
focus. The individuals named to our board are well known within their
industry and will bring a level of wisdom, experience and leadership which
will help guide BestNet's growth for the foreseeable future. Each new member
has specific skill and experience pertinent to the our business that will help
us achieve our objectives."
About BestNet
BestNet Communications is an Internet-based provider of long distance,
conference calling and e-commerce communication services. BestNet's products
blend key attributes of the Internet with traditional telecom technologies,
offering a fresh approach to consumer and business markets.
Under the brand name Bestnetcall ( http://www.bestnetcall.com ), the patented
service offers subscribers premium quality calls, at significantly lower
rates. Calls can also be launched via the desktop application or handheld
devices including Palm(TM), Pocket PC(R) and Blackberry(TM) and used with any
standard or wireless phone.
For further information please contact: BestNet Communications Corp.,
+1-616-977-9933, 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.
FINANCIAL INFORMATION
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS NOVEMBER 30, AUGUST 31,
2002 2002
(UNAUDITED)
Current Assets:
Cash and cash equivalents $332,140 $351,784
Certificate of deposit -- 22,773
Accounts receivable, less allowance of
$10,136 and $7,826 62,195 72,844
Prepaid expenses and other current assets 101,635 71,801
Total current assets 495,970 519,202
Property and equipment, net of accumulated
depreciation of $2,546,660 and $2,335,732 1,437,948 1,625,348
License fee, net of accumulated amortization
of $4,275,786, and $3,930,258 5,398,982 5,744,510
Note receivable from Softalk 1,529,139 1,508,043
Deposits and other assets 125,097 103,297
Total assets $8,987,136 9,500,400
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $692,891 $700,270
Notes payable, net of discount of $531,602
and $96,875 175,848 203,125
Deferred interest income 150,419 129,323
Deferred revenue 12,396 13,407
Total current liabilities 1,031,554 1,046,125
Common stock, par value $.001 per share;
50,000,000 shares authorized; 19,199,625
and 16,530,005 shares issued and outstanding 19,200 16,530
Additional paid-in capital 32,883,847 31,041,961
Accumulated deficit (24,947,611) (23,488,980)
Common stock subscribed, underlying
common shares of 200 and 1,866,842 146 884,764
Total stockholders' equity 7,955,582 8,454,275
Total liabilities and stockholders'
equity $8,987,136 $9,500,400
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2002 AND 2001
2002 2001
(UNAUDITED) (UNAUDITED)
Revenues: $300,208 $189,621
Expenses:
Cost of revenues (exclusive of depreciation
and amortization shown separately below) 287,764 406,437
General and administrative expenses 707,365 464,280
Depreciation and amortization 556,455 575,163
Total expenses 1,551,584 1,445,880
Loss from operations (1,251,376) (1,256,259)
Other income (expense):
Interest income 910 896
Interest expense (188,188) --
Preferred stock conversion penalty (17,847) --
Gain on sale of assets -- 1,215
Other (expense) income (2,130) 4,746
Total other (expense) income (207,255) 6,857
Loss from continuing operations (1,458,631) (1,249,402)
Discontinued Operations
Operating loss from discontinued operations -- (4,614)
Loss on sale of discontinued operations -- --
Loss from discontinued operations -- (4,614)
Loss from operations (1,458,631) (1,254,016)
Preferred stock dividends -- 949,312
Loss available to common shareholders $(1,458,631) $(2,203,328)
Loss per common share, basic and diluted
Continuing operations $(.08) $(.16)
Discontinued operations -- (.00)
$(.08) $(.16)
Weighted average number of shares
outstanding, basic and diluted 18,399,469 13,832,696
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2002 AND 2001
2002 2001
(UNAUDITED) (UNAUDITED)
Operating activities:
Loss from operations $(1,458,631) $(1,254,016)
Less: loss from discontinued operations -- (4,614)
Loss from continuing operations (1,458,631) (1,249,402)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 556,455 575,163
Gain on sale of fixed assets -- (1,215)
Non-cash transactions 235,148 86,053
Changes in assets and liabilities:
Accounts receivable 10,649 (24,146)
Prepaid expenses and other current assets (68,022) (22,636)
Accounts payable and accrued expenses (7,379) 362,712
Deferred revenue (1,011) (573)
Deposits and other assets (17,518) (93,966)
Net cash used in operating activities
from continuing operations (754,591) (368,010)
Net cash used in operating activities
from discontinued operations -- (5,231)
Net cash used in operating activities (754,591) (373,241)
Investing activities:
Purchase of property and equipment (23,527) (182,871)
Cash received from sale of property and
equipment -- 12,499
Cash received for certificate of deposit 22,773 --
Repayment of notes receivable from related
parties -- --
Net cash used in investing activities
from continuing operations (754) (170,372)
Net cash used in investing activities
from discontinued operations -- --
Net cash used in investing activities (754) (170,372)
Financing activities:
Proceeds from issuance of notes payable 721,250 --
Repayment of notes payable (13,800) --
Proceeds from exercise of stock options 28,251 68,751
Proceeds from the issuance of Series C
Preferred Stock -- 409,250
Net cash provided by financing activities 735,701 478,001
Net decrease in cash (19,644) (65,612)
Cash and cash equivalents, beginning of period 351,784 285,518
Cash and cash equivalents, end of period $332,140 $219,906
SOURCE BestNet Communications Corp.
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Related links:
http://www.bestnetcall.com
CONTACT:
BestNet Communications Corp.,
+1-616-977-9933, investors@bestnetcom.com
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