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 Raleigh (rôl`ē, räl`ē), city (1990 pop. 207,951), state capital, and seat of Wake co., central N.C.; the site was selected for the capital in 1788, and the city was laid out and inc. 1792. , N.C. -- Oasys Mobile, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :OYSM), a leading provider of premium mobile media content, products and services, today announced financial results for the second quarter ended June June: see month. 30, 2006. Results for the quarter include: --Total revenue for the second quarter of 2006 totaled approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $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 Sports Illustrated is the largest weekly American sports magazine owned by media conglomerate Time Warner. It has over 3 million subscribers and is read by 23 million adults each week, including over 18 million men, 19% of the adult males in the country. , 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 operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. 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 accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying totaled approximately $6.7 million. Gary Gary, city (1990 pop. 116,646), Lake co., NW Ind., a port of entry on Lake Michigan; inc. 1909. Gary was founded by the U.S. Steel Corporation, which purchased the land in 1905 and landscaped it for a city. 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 In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. our investments in photo messaging Taking a picture with a cellphone and sending it to someone. A photo messaging phone enables the user to aim it, take a picture and transmit it. If recipients do not have photo-enabled cellphones, they are directed to a Web page where they can view the images. 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 Year-to-date (YTD) The period beginning at the start of the calendar year up to the current 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 See finalization. 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 (1) The part of a magnetic tape unit that holds and moves the tape reels. The term may refer to any equipment that serves as a physical framework for electronic or mechanical devices. See rack. See also DEC. interaction of mobile content. In addition, we filed a patent for our unique "locker Things commonly known as lockers include:
n. 1. One who, or that which, differentiates. Noun 1. differentiator - a person who (or that which) differentiates discriminator for our company. "In June, we began to launch an aggressive marketing program to drive traffic to OasysMobile.com, focusing on grass-roots grass roots pl.n. (used with a sing. or pl. verb) 1. People or society at a local level rather than at the center of major political activity. Often used with the. 2. The groundwork or source of something. , 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 cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. 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 September: see month. , to provide us with face-to-face (jargon, chat) face-to-face - (F2F, IRL) Used to describe personal interaction in real life as opposed to via some digital or electronic communications medium. 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 See demographics. 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 Phillip J. Hellmuth, Jr. (born July 16, 1964 in Madison, Wisconsin) is a professional poker player. He is a member of the Poker Hall of Fame[1] and holds the record for most bracelets won at the World Series of Poker (11). and UNO(R) Challenge) in the top 10 best-sellers in the U.S. in the May rankings issued monthly by M:Metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. --Selected by Sprint as one of two partners to manage the content aggregation of Sprint's ringers and wallpapers --Announced partnership with AROD Arod (ā`rŏd), in the Bible, son of Gad. Num. 26.17. He is the Arodi who appears in the Book of Genesis. to develop the mobile game "AROD MVP (Multimedia Video Processor) A high-speed DSP chip from Texas Instruments, introduced in 1994. Officially introduced as the TMS320C80, it combines RISC technology with the functionality of four DSPs on one chip. Skills" --Launched Crazy 8's Crazy 8's is a drinking game involving the use of playing cards. The predominant beverage of choice involves beer, but any type of liquor can be used. To begin, all of the 8's are taken out of the deck and laid in a vertical column on a flat surface. , our first original non-branded content game --Expanded our distribution of top-selling mobile games in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). through a partnership with The Mobile Media CompanyOasysMobile.com: --Filed patent on locker technology --Added support to Verizon customers; now supporting all major US carriers --Announced Site redesign re·de·sign tr.v. re·de·signed, re·de·sign·ing, re·de·signs To make a revision in the appearance or function of. re 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 OnTour is an Israeli company founded in 2005. OnTour's main business is "Music Tourism" - Organized travel abroad in order to attend a live musical show or music festival. 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 Monday: see week. , 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 To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. 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 Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is 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 Custom tailoring information to the individual. On the Web, personalization means returning a page that has been customized for the user, taking into consideration that person's habits and preferences. and games to messaging and entertainment. The Oasys Mobile white-label services give carriers and content companies access to an exciting new venue venue In law, the place or county in which the events giving rise to a legal action take place and from which a jury may be drawn to try the case. Venue statutes usually specify that a trial must take place in the district that has jurisdiction over the matter. which will extend their mobile offerings off-deck and reach new customers. Whether it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 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 retrieval /re·triev·al/ (-tre´v'l) in psychology, the process of obtaining memory information from wherever it has been stored. re·triev·al n. system (EDGAR Edgar or Eadgar (both: ĕd`gər), 943?–975, king of the English (959–75), son of Edmund, king of Wessex. In 957 the Mercians and Northumbrians rebelled against Edgar's brother Edwy and chose Edgar as their king. ) at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . All trademarks and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. 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
============= =============
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