April 5th, 2007 by Arjan Olsder Posted in Companies & M&A | No Comments »
Games developer Oasys Mobile has announced their 2006 financial results to the
public which shows some bad weather coming their way in June 2007, even though they
had a great 4th quarter in 2006 compared to the 4th quarter of 2005.
The revenues generated in the 4th quarter of 2006 increased by 35.4% to $ 2.64 million. In 2005 the 4th quarter was worth only $ 1.95 million. For the total year, the revenue was up 11.5% to $ 8.69 million compared to $ 7.79 million they earned in 2005.
The 4th quarter of 2006, the net loss was set at $ 1.55 million which was $ 0.27 million less than the 4th quarter of 2005. This was achieved mainly due to the restructuring of the company and resulted in expenses going down while revenues went up. The total 2006 net loss was $9.33 million which is more then double that of 2005; $ 4.41 million. $ 960,000 of this loss was caused by employee stock options as required by FAS 123(r), which where not expensed in 2005. Also there was a bill of about $ 1.48 million for expense related to the modification of stock purchase warrants in conjunction with the securities purchase agreement entered into in November 2005, in connection with the Company’s 6% Senior Secured Convertible Debentures. Operating loss for 2006 also reflects increased costs for the development and marketing of oasysmobile.com, the company’s off-deck consumer-focused portal and mobile content store, and severance costs for the former chief executive officer of the Company.
Net loss applicable to common shareholders for the fourth quarter of 2006 was approximately $2.95 million, or $0.22 per share, compared to approximately $2.49 million, or $0.18 per share, for the same period in 2005. Net loss applicable to common shareholders for the year ended December 31, 2006 was $14.76 million, or $1.09 per share, compared to $6.11 million, or $0.46 per share, for the same period in 2005. Net loss applicable to common shareholders for 2006 includes a non-cash charge of approximately $4.96 million related to amortization of the debt discount and beneficial conversion feature related to the Company’s 6% Senior Secured Convertible Debentures.
As of December 31, 2006, Oasys Mobile’s cash and accounts receivable totaled approximately $3.81 million.
Oasys Mobile also announced that it has engaged RBC Daniels & Associates as its investment banker to assist in obtaining an equity investment or debt issuance to allow it to pay or refinance its senior secured debt due in June 2007 and have additional working capital for growth and expansion. Alternatively, RBC Daniels is assisting Oasys Mobile in evaluating certain strategic alternatives, including investments from strategic partners or business combinations, including the sale of the business.
Doug Dyer, CEO of Oasys Mobile, stated, "Our fourth quarter was our strongest yet and marked a turning point in the Company’s operations. We are now focused on three distinct lines of business that we believe have long-term sustainable growth. Our games and mobile publishing business is one of the strongest in the industry. While we have successfully streamlined our operations and reduced our headcount by approximately 33%, we grew fourth quarter 2006 revenues by 35 percent over fourth quarter 2005 revenues. Additionally, our aggregation business, which we launched in the third quarter of 2006, grew 49% over the previous quarter. In 2006, Oasys Mobile increased headcount and expended resources pursuing an off-deck direct-to-consumer portal strategy. We have now refocused our portal operations and have positioned the portal technology as a white-label business. It is important to note that our fourth quarter 2006 revenues grew approximately 25% percent over the third quarter of 2006. We will continue to introduce new titles in 2007 and focus on global expansion, and we anticipate reaching profitability in 2007."
