GRAND RAPIDS, Mich., April 14-/PRNewswire-FirstCall/ -- BestNet
Communications Corporation (OTC Bulletin Board: BESC), a provider of patented
and proprietary global communication solutions, today announces results for
the second quarter of fiscal 2004.
BestNet achieved record revenue for the second quarter 2004 totaling
$552,000, an increase of 74% compared to the second quarter 2003. Gross
margins improved substantially to 34% as compared to 12% for the second
quarter of fiscal 2003 and 3% for the first quarter of fiscal 2004. BestNet
believes it can maintain its current gross margins while concentrating on
revenue growth.
Robert A. Blanchard, President and CEO of BestNet Communications
commented, "This quarter's record revenue marks our fifth consecutive record
revenue quarter, providing strong momentum for the balance of fiscal 2004. We
have seen 84% revenue growth in these five quarters, in addition to
substantially increasing our gross margins. Our continued effort toward
surpassing the break even mark, along with growth in new customers sustains
the value proposition that BestNet offers. Our continued growth is a result
of continued focus on providing our customers with outstanding quality and
service, along with new and innovative products."
Mr. Blanchard continued, "The next two quarters will be marked with many
significant events including: international growth in targeted geographies
beginning with a current beta test in China, additional language translations
for the new website, enhanced conference calling with North American dial-in
capabilities, and a VoIP offering. Our global VoIP offering will be
application based without the need for routers, adaptors or a broadband
Internet connection -- vastly different from the offerings of current VoIP
providers. These new product offerings continue to showcase the flexibility
of our GlobalPlex technology."
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) (http://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 (http://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.
For further information, please 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.
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
February 29, August 31
2004 2003
(UNAUDITED)
Current Assets:
Cash and cash equivalents $21,320 $226,559
Accounts receivable, less allowance of
$3,300 and $1,386 82,230 74,360
Prepaid expenses and other current assets 72,200 49,080
Total current assets 175,750 349,999
Property and equipment, net of accumulated
depreciation of $3,462,048 and $3,142,251 626,635 909,713
License fee, net of accumulated
amortization of $6,003,423,
and $5,312,368 3,671,345 4,362,400
Deposits and other assets 53,709 97,038
Total assets $4,527,439 $5,719,150
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Current Liabilities:
Capital lease obligations, current portion $4,416 $5,614
Notes payable, net of discount of
$301,554 and $75,248 204,469 589,752
Note payable to related party 60,000 --
Convertible note payable to related party,
net of discount of $21,448 and $0 3,908 --
Accounts payable and accrued expenses 270,946 290,535
Accounts payable to related parties 9,000 --
Deferred revenue 15,929 15,734
Total current liabilities 568,668 901,635
Long-Term Liabilities:
Capital lease obligations, long-term portion 5,612 7,331
Total long-term liabilities 5,612 7,331
Total liabilities 574,280 908,966
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
February 29, 2004 and August 31, 2003 3,563 3,563
Common stock, par value $.001 per share;
100,000,000 shares authorized;
31,952,415 issued and 30,052,415
outstanding at February 29, 2004; and
29,948,104 shares issued and 28,048,104
shares outstanding at August 31, 2003 31,952 29,948
Additional paid-in capital 35,668,360 34,273,690
Accumulated deficit (30,838,716) (28,585,017)
4,865,159 5,722,184
Less treasury stock, 1,900,000 common
shares, at cost (912,000) (912,000)
Total stockholders' equity 3,953,159 4,810,184
Total liabilities and stockholders'
equity $4,527,439 $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 FEBRUARY 29, 2004 AND FEBRUARY 28, 2003
2004 2003
(UNAUDITED) (UNAUDITED)
Revenues $552,477 $316,628
Expenses:
Cost of revenues (exclusive of depreciation
and amortization shown separately below) 363,394 280,031
General and administrative expenses 410,931 484,763
Depreciation and amortization 506,473 557,763
Total expenses 1,280,798 1,322,557
Loss from operations (728,321) (1,005,929)
Other income (expense):
Interest income 55 700
Interest and finance charges (159,016) (211,737)
Other income (expense) (1,465) 2,593
Total other expense (160,426) (208,444)
Loss available to common shareholders $(888,747) $(1,214,373)
Loss per common share, basic and diluted $(.03) $(.06)
Weighted average number of shares
outstanding, basic and diluted 29,622,415 19,200,663
See accompanying notes to condensed consolidated financial statements.
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003
2004 2003
(UNAUDITED) (UNAUDITED)
Operating activities:
Loss from operations $(888,747) $(1,214,373)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 506,473 557,763
Non-cash transactions 227,818 239,024
Changes in assets and liabilities:
Accounts receivable (2,107) 11,594
Prepaid expenses and other current assets 20,633 (30,191)
Deposits and other assets 73 43,593
Accounts payable and accrued expenses (54,819) 92,589
Deferred revenue (40) (1,237)
Net cash used in operating activities (190,716) (301,238)
Investing activities:
Purchase of property and equipment (18,718) (23,355)
Cash received for certificate of deposit -- --
Net cash used in investing activities (18,718) (23,355)
Financing activities:
Proceeds from issuance of notes payable 135,000 150,000
Repayment of notes payable (27,186) (21,025)
Principal payments on capital lease
obligation (1,479) --
Proceeds from the sale of common stock -- --
Net cash provided by (used in) financing
activities 106,335 128,975
Net decrease in cash (103,099) (195,618)
Cash and cash equivalents, beginning of
period 124,419 332,140
Cash and cash equivalents, end of period $21,320 $136,522
See accompanying notes to condensed consolidated financial statements.
SOURCE BestNet Communications
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Related links:
http://www.bestnetcall.com
CONTACT:
BestNet, +1-616-977-9933,
investors@bestnetcom.com
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