Oasys Mobile cuts jobs, reports wider loss

Struggling Oasys Mobile, which provides ring tones and games for mobile phones, has cut its work force by more than one-fourth in order to trim expenses and reduce its losses.

The Raleigh-based company announced this morning that last week it eliminated 20 employees and contractors, leaving it with 50 workers and contractors.

The cutbacks were the result of an "extensive operational review," Bernard Stolar, the company's lead director, said during a conference call with Wall Street analysts and investors. Stolar previously had said a restructuring was in the works.

Moving forward, the company will outsource some of its product development efforts so that it can control costs while continuing to introduce new products, he said.

Stolar also said the company expects to announce "very, very shortly" that it has hired a new chief executive officer to replace Gary Ban, who resigned last month without saying why.

Ban transformed Oasys from a low-profile company that sold mobile content to cell phone providers to a youth-focused business that also sells directly to consumers through its Web site. Oasys was known as Summus until this year.

Stolar said the company is in the final stages of negotiating with a CEO candidate who has extensive experience in the wireless industry. He did not identify the candidate.

Oasys lost $5.28 million, or 39 cents per share, in the latest quarter. By contrast, a year ago the company lost $1.09 million, or 8 cents per share.

Included in latest quarter's numbers was a $259,000 charge for the expensing of stock options, which were not expensed a year ago; a one-time charge of $1.48 million related to the modification of stock purchase warrants; and more than $200,000 in severance costs for former CEO Ban.

Revenue in the third quarter totaled $2.12 million, just slightly ahead of the $2.06 million recorded a year ago. But the company pointed out that third-quarter revenue was 17 percent higher than the immediately preceding quarter.

Shares of Oasys, which are traded over the counter, were trading at 56 cents early this afternoon, up 8 cents. A year ago shares were trading above $2.50.