November 20, 2006
Derek Swanson, Esq.
Securities and Exchange Commission
100 F Street, NE
Washington D.C. 20549
Re: BestNet Communications Corp.
Commission File No. 0-15482
Information Statement on Form 14C
Dear Mr. Swanson:
The purpose of this letter is to respond on behalf of BestNet
Communications Corp. (the "Company"), we respond to the questions that arose in
our telephone conversation on November 17, 2006. Our response follows the order
and form of the comments posed.
1. Information Provided to Participating Shareholders. You have asked
us to detail the information to which the seven other participating shareholders
who are not a part of management and not personally related to Mr. Silverman
("Other Shareholders") had access or were given that would support the Company's
position that there was in effect compliance with the provisions of Schedule
14A.
The Other Shareholders had access to the Company's 1934 Act Reports,
including the Current Report on Form 8-K, describing the Merger with JDA Medical
Technologies, Inc., the Quarterly Reports on Form 10-QSB for the quarters ended
November 30, 2005, February 28, 2006, and May 31, 2006 and Annual Report on Form
10-KSB for the year ended August 31, 2005. More importantly, perhaps, Mr.
Silverman discussed with each of the Other Shareholders the material information
presented in the Company's Preliminary Information Statement filed with the SEC
on or about October 17, 2006. It is noted that the earliest date an Other
Shareholder gave his or her consent to the Amendment was October 24, 2006. With
access to the Company's Preliminary Information Statement, available as a public
document, the Other Shareholders had access to the same type of information that
would have been provided to shareholders if the Company had solicited proxies
for an amendment to its Articles of Incorporation. In particular and to the
extent applicable, the Preliminary Information Statement included the
information similar to that required by Item 4 (Persons Making the
Solicitation), Item 5 (Interest of Persons in Matters to be Acted Upon), Item 6
(Voting Securities and Principal Holders Thereof), Item 10 (Compensation Plans),
Item 19 (Amendment of Charter, Bylaws or Other Documents), Item 20 (Other
Proposed Action) and Item 21 (Voting Procedures) of Schedule 14A.
As previously noted, the Company's management discussed with the Other
Shareholders the necessity of and reasons for the Company's Amendment to
increase the number of authorized shares as well as the effect of the Amendment.
Each of the Other Shareholders is a long term holder of the Company's common
stock who closely follow its affairs, is an accredited investor, and is
knowledgeable and experienced in investments in, and the financing of, small
public companies. As we have detailed, the Other Shareholders understood the
Company's need (both short and long term) to obtain financing for the Company's
operations, including the operations of Oncologix Corporation, and management's
belief that the number of authorized shares of common stock of the Company at
best severely limited and at worst absolutely prevented the Company's ability to
conduct equity financing, acquisitions and employee compensation.
The Company also discussed with Other Shareholders the Company's plans
for a private placement (to the extent determined at the time thereof) of
convertible promissory notes. Because the Other Shareholders were expected to be
among the persons the Company contacts when it finally commences such private
placement, they were provided access to the updated business plan of JDA
Acquisition, Inc.
Finally, the participating shareholders were informed as to the reasons
for the Company's Plan Resolution to increase the number of shares subject to
the Company's Incentive Stock Plan and the potential name change of the Company
to better reflect the Company's entry into the medical device industry and the
effect of the Plan Resolution and potential name change.
The Company believes that when taken as a whole, the participating
shareholders were provided with the required information through either oral or
written communications as well as through access to publicly available
information.
2. Discrepancies among Beneficial Ownership of Principal Shareholders.
You have asked us to explain and/or correct the differences between the Shares
Held by Principal Shareholders and Management table in the Preliminary
Information Statement and the proposed Participating Shareholders table to be
attached as an Exhibit to the definitive Information Statement, in particular
the holdings of Anthony Silverman.
The Participating Shareholders table to be attached to the Information
Statement lists Mr. Silverman's ownership of shares of common stock of the
Company to include 1,998,000 shares of common held by Katsinam Limited
Partnership, of which he is the General Partner with sole power to vote the
shares, or an aggregate of 4,916,400 shares of common stock. Previous 1934 Act
Reports filed with the SEC have noted the indirect ownership by Mr. Silverman of
the shares owned by Katsinam Limited Partnership, but have specifically
footnoted and included only Mr. Silverman's share of ownership in Katsinam
Limited Partnership (namely, 17.64%), for an aggregate of 4,171,653 shares of
common stock. Upon a review of Rule 13d-3 and noting that Mr. Silverman had
become the sole general partner of Katsinam Limited Partnership, a position
which he has only recently held, the Company believes that his ownership of the
Company's common stock should be more accurately identified in the Participating
Shareholders table (4,916,400 shares) and undertakes to revise accordingly, the
Shares Held by Principal Shareholders and Management table in the definitive
Information Statement and future SEC filings.
Please do not hesitate to contact Stephen T. Meadow or me if you have
any further questions.
Very truly yours,
FIRETAG, STOSS & DOWDELL, P.C.
/s/ JOHN L. STOSS
----------------------------------
JOHN L. STOSS