Message #5 From:
Stock News Bot Date: August 14, 2006 06:00:00 AM
OYSM News Oasys Mobile Announces Second Quarter 2006 Results; New Content and Carrier Partnerships Expected to Drive Revenue Growth in Second Half of 2006 and Beyond
RALEIGH, N.C.--(BUSINESS WIRE)--Aug. 14, 2006--Oasys Mobile, Inc. (OTCBB:OYSM), a leading provider of premium mobile media content, products and services, today announced financial results for the second quarter ended June 30, 2006. Results for the quarter include:
-- Total revenue for the second quarter of 2006 totaled approximately $1.81 million, as compared to total revenue of approximately $1.79 million for the second quarter of 2005. Second quarter 2005 results included approximately $438,000 of revenue from the company's contract with Sports Illustrated, which ended in March 2006. Total revenue for the six months ended June 30, 2006 totaled approximately $3.93 million compared to $3.78 million for the same period in 2005, The six months ended June 30, 2005 included approximately $982,000 of revenue from the company's contract with Sports Illustrated. Excluding the revenues from our Sports Illustrated contract in 2005, our revenues grew approximately 32% for the second quarter of 2006 and 30% for the first six months of 2006 over the same periods in the prior year.
-- Net loss from operations for the second quarter of 2006 was approximately $1.78 million compared to a net loss from operations of approximately $845,000 for the same period in 2005. For the six-month period ended June 30, 2006, net loss from operations was approximately $3.87 million compared to approximately $1.54 million for the same period in 2005. Operating loss for the second quarter of 2006 and the six months ended June 30, 2006 includes a charge of approximately $341,000 and $658,000, respectively, related to the expensing of employee stock options, as required by FAS 123R, which were not expensed in 2005. Operating loss for the 2006 period also reflects increased technology and product development costs related to developing OasysMobile.com and associated marketing expenses.
-- Net loss applicable to common stockholders for the second quarter of 2006 was approximately $3.12 million, or $0.23 per share, compared to approximately $895,000, or $0.07 per share, for the same period in 2005. For the six-month period ended June 30, 2006, net loss applicable to common stockholders was approximately $6.53 million, or $0.48 per share compared to $2.53 million, or $0.19 per share, for the same period in 2005. Net loss for the second quarter of 2006 included the effect of $341,000 for the expensing of stock options and approximately $1.24 million related to amortization of discount on debt and beneficial conversion feature.
-- As of June 30, 2006, Oasys Mobile's cash and accounts receivable totaled approximately $6.7 million.
Gary E. Ban, chief executive officer of Oasys Mobile, stated, "During the second quarter we saw good growth in games business, although total revenues increased only slightly due to the conclusion of our relationship with Sports Illustrated last quarter as well as our decision to minimize our investments in photo messaging and news based applications. Excluding the Sports Illustrated revenue generated in last year's second quarter, revenue rose more than 32% on a year-over-year basis, reflecting the strength of the many other products we sell through our core carrier business. Revenue from our games business increased approximately 44% for the quarter and 48% year-to-date over the same periods in 2005. We continued to expand our international carrier business and also took steps to significantly increase the scope of our content partnerships.
"In addition to the arrangement with Sprint we announced this morning, we just finalized our partnership with a major music label to enhance the content offering of our new mobile lifestyle portal, OasysMobile.com. We look forward to formally announcing this partnership very soon, and are also working on several other exciting initiatives that will greatly advance our direct-to-consumer strategy. I am happy to say that we are one of a select few to support all four major wireless carriers via our Oasysmobile.com portal for off deck interaction of mobile content. In addition, we filed a patent for our unique "locker" feature, which allows consumers to safely store their mobile content regardless of what happens to their handsets. This remains a key differentiator for our company.
"In June, we began to launch an aggressive marketing program to drive traffic to OasysMobile.com, focusing on grass-roots, event-based, and guerilla marketing opportunities that offer maximum impact while keeping expenses firmly in check. For example, we established a presence at nine premier music events over the summer, a very cost-effective method of reaching our target audience of teenagers and young adults. We have also created a 100-city Local Market Manager Network, to be launched on college campuses and cities across the U.S. in September, to provide us with face-to-face interaction with our target consumers.
"In addition, over the past several months, we have been working to enhance the look and functionality of our portal. The new portal, which will launch in the next few weeks, will target a broader demographic and provide our customers the power to create and express their mobile style as we build a true mobile community.
"With the many important agreements and initiatives we have been finalizing, we believe we have all the elements we need in place to generate strong momentum in both our carrier distribution as well as our direct to consumer portal business. We continue to expect these strategies to enhance Oasys Mobile's position as a leader in our space and to generate strong revenue growth in the second half of 2006 and beyond."
Second quarter operating highlights include:
Carrier distribution business:
-- Recognized for having two mobile games (Texas Hold'em by Phil Hellmuth and UNO(R) Challenge) in the top 10 best-sellers in the U.S. in the May rankings issued monthly by M:Metrics
-- Selected by Sprint as one of two partners to manage the content aggregation of Sprint's ringers and wallpapers
-- Announced partnership with AROD to develop the mobile game "AROD MVP Skills"
-- Launched Crazy 8's, our first original non-branded content game
-- Expanded our distribution of top-selling mobile games in Europe through a partnership with The Mobile Media Company
OasysMobile.com:
-- Filed patent on locker technology
-- Added support to Verizon customers; now supporting all major US carriers
-- Announced Site redesign to help our customers define, express, own and share their mobile style
-- Selected to be the exclusive provider of mobile services for the Bonnaroo Arts and Music Festival
-- Launched OnTour Bus marketing campaign, traveling to nine music events during Summer 2006
Conference Call
The Oasys Mobile second quarter conference call will be held at 11:00 am Eastern time on Monday, August 14, 2006. To participate in the call, please dial 706-634-2478. A live webcast of the call will also be available on the company's website, www.oasysmobileinc.com. To listen to the live call online, please visit the site at least 10 minutes early to register, download and install any necessary audio software. The webcast will be archived on Oasys Mobile's website, and a telephone replay of the call will be available for seven days beginning at 2:00 p.m. Eastern time, August 14, at 706-645-9291, using conference ID #3536373.
About Oasys Mobile, Inc.
Oasys Mobile, Inc. gives you the power to express Your Mobile Style! As a leading provider of premium mobile media content, products and services, Oasys Mobile delivers a breadth of offerings that are distributed through OasysMobile.com, 20 wireless carriers in the U.S. and another 55 carriers abroad. Oasys Mobile's leading-edge mobile lifestyle portal is changing the way people create, express and share their mobile style. At www.Oasysmobile.com, consumers can buy, own and keep their mobile content online and stay connected with friends with OMOBB, a mobile community, which allows users to share their camera phone photos directly from their mobile phone. Oasys Mobile, Inc. also develops, publishes and distributes more than 30 branded mobile applications in all major categories, from personalization and games to messaging and entertainment. The Oasys Mobile white-label services give carriers and content companies access to an exciting new venue which will extend their mobile offerings off-deck and reach new customers.
Whether it's OasysMobile.com, the branded mobile products or the white-label service offerings, Oasys Mobile provides consumers the perfect content to answer the question: What's your mobile style?(TM)
This press release contains forward-looking statements that involve risks and uncertainties concerning Oasys Mobile's business, products, and financial results. Actual results may differ materially from the results predicted. More information about potential risk factors that could affect our business, products, and financial results is included in Oasys Mobile's annual report on Form 10-K for the year ended December 31, 2005, and in reports subsequently filed by Oasys Mobile with the Securities and Exchange Commission ("SEC"). All documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov or from Oasys Mobile's web site at www.oasysmobileinc.com. Oasys Mobile hereby disclaims any obligation to publicly update the information provided above, including forward-looking statements, to reflect subsequent events or circumstances.
All trademarks and/or registered trademarks are the property of their respective owners.
OASYS MOBILE, INC.
BALANCE SHEETS (UNAUDITED)
June 30, December 31,
2006 2005
--------------------------
Assets
Current assets:
Cash $ 5,198,770 $ 8,985,158
Accounts receivable 1,482,674 1,072,615
Prepaids and other current assets 219,559 36,172
--------------------------
Total current assets 6,901,003 10,093,945
Equipment, software and furniture, net 164,200 125,839
--------------------------
Total assets $ 7,065,203 $ 10,219,784
==========================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,165,380 $ 2,319,754
Accrued salaries and related costs 223,039 205,076
Accrued interest 381,416 151,500
Current portion of notes payable 77,500 77,500
Current portion of capital lease
obligations 12,311 -
Convertible notes payable 8,000,000 -
Discount on convertible notes payable (4,957,556) -
--------------------------
Total current liabilities 5,902,090 2,753,830
Long-term liabilities:
Capital lease obligations 22,604 -
Convertible notes payable - 8,000,000
Discount on convertible notes payable - (7,415,960)
--------------------------
Total liabilities 5,924,694 3,337,870
Stockholders' equity:
Series A convertible preferred stock,
$0.001 par value; 10,000 shares
designated, 2,407 shares issued and
outstanding at June 30, 2006 and
December 31, 2005 (liquidation preference
of $2,760,027 as of June 30, 2006) 2,407,295 2,407,295
Common stock, $.001 par value,
185,000,000 shares authorized;
13,546,888 issued and 13,543,038
outstanding at June 30, 2006 and
13,523,554 issued and 13,519,704
outstanding at December 31, 2005 13,543 13,520
Additional paid-in capital 65,974,094 65,369,259
Deferred compensation - (85,578)
Accumulated deficit (67,026,804) (60,594,963)
Treasury stock, at cost (3,850 shares) (227,619) (227,619)
--------------------------
Total stockholders' equity 1,140,509 6,881,914
--------------------------
Total liabilities and stockholders'
equity $ 7,065,203 $ 10,219,784
==========================
OASYS MOBILE, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
Three-Month Period Ended
June 30, 2006 June 30, 2005
------------- -------------
Revenues:
Wireless applications and contracts $ 1,806,376 $ 1,792,686
Wireless license fees 2,100 1,500
------------- -------------
Total revenues 1,808,476 1,794,186
Cost of revenues:
Wireless applications and contracts 966,618 883,428
------------- -------------
Total cost of revenues 966,618 883,428
------------- -------------
Gross profit 841,858 910,758
Operating expenses:
General and administrative 613,235 708,156
Research and development 902,648 677,114
Sales and marketing 759,950 355,965
Non-cash compensation 341,353 9,666
Non-cash consulting expense - 5,199
------------- -------------
Total operating expenses 2,617,186 1,756,100
------------- -------------
Loss from operations (1,775,328) (845,342)
Interest expense (60,035) (1,492)
Amortization of discount on debt and
beneficial conversion feature (1,235,993) -
------------- -------------
Net loss $ (3,071,356) $ (846,834)
============= =============
Net loss applicable to common stockholders:
Net loss $ (3,071,356) $ (846,834)
------------- -------------
Preferred stock dividends (48,140) (48,140)
------------- -------------
Net loss applicable to common
stockholders $ (3,119,496) $ (894,974)
============= =============
Per share amounts (basic and diluted) $ (0.23) $ (0.07)
============= =============
Weighted average shares of common stock
outstanding 13,536,884 13,484,362
============= =============
OASYS MOBILE, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
Six-Month Period Ended
June 30, 2006 June 30, 2005
------------- -------------
Revenues:
Wireless applications and contracts $ 3,902,891 $ 3,779,033
Wireless license fees 22,750 5,200
------------- -------------
Total revenues 3,925,641 3,784,233
Cost of revenues:
Wireless applications and contracts 2,077,408 1,839,615
------------- -------------
Total cost of revenues 2,077,408 1,839,615
------------- -------------
Gross profit 1,848,233 1,944,618
Operating expenses:
General and administrative 1,430,507 1,435,259
Research and development 1,720,526 1,321,690
Sales and marketing 1,910,510 639,264
Non-cash compensation 657,769 20,734
Non-cash consulting expense - 10,401
Non-cash settlements - 58,750
------------- -------------
Total operating expenses 5,719,312 3,486,098
------------- -------------
Loss from operations (3,871,079) (1,541,480)
Interest expense (102,358) (44,829)
Amortization of discount on debt and
beneficial conversion feature (2,458,404) (851,332)
------------- -------------
Net loss $ (6,431,841) $ (2,437,641)
============= =============
Net loss applicable to common stockholders:
Net loss $ (6,431,841) $ (2,437,641)
------------- -------------
Preferred stock dividends (96,280) (96,280)
------------- -------------
Net loss applicable to common
stockholders $ (6,528,121) $ (2,533,921)
============= =============
Per share amounts (basic and diluted) $ (0.48) $ (0.19)
============= =============
Weighted average shares of common stock
outstanding 13,528,341 13,119,890
============= =============
OASYS MOBILE, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
Six-Month Period Ended
June 30, 2006 June 30, 2005
------------- -------------
Operating activities
Net loss $ (6,431,841) $ (2,437,641)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 30,561 22,703
Stock-based compensation 657,769 20,734
Common stock, options and warrants
issued for services -- 86,237
Amortization of discount on debt and
beneficial conversion feature 2,458,404 851,332
Non-cash settlements -- 58,750
Changes in operating assets and
liabilities:
Accounts receivable (410,059) (111,372)
Prepaid and other assets (183,387) 17,940
Accounts payable and other accrued
expenses (121,707) 424,867
Accrued interest 229,916 --
Accrued salaries and related costs 17,963 10,390
------------- -------------
Net cash used in operating activities (3,752,381) (1,056,060)
Investing activities
Purchases of equipment, software and
furniture (28,007) (31,717)
------------- -------------
Net cash used in investing activities (28,007) (31,717)
Financing activities
Proceeds from exercise of stock options
and warrants -- 4,332,878
Proceeds from issuance of convertible debt -- 215,000
Payments of convertible debt -- (1,640,000)
Principal payments on capital lease
obligations (6,000) --
Principal payments on notes payable and
short-term borrowings -- (59,084)
------------- -------------
Net cash (used in) provided by financing
activities (6,000) 2,848,794
------------- -------------
Net (decrease) increase in cash (3,786,388) 1,761,017
Cash at beginning of period 8,985,158 1,405,788
------------- -------------
Cash at end of period $ 5,198,770 $ 3,166,805
============= =============
Supplemental disclosures of cash flow
information
Cash paid for interest $ 17,064 $ 47,469
============= =============
