10QSB 1 tenqsb_907.txt FORM 10-QSB FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended: September 30, 2007 ------------------- Commission File Number: 0-17264 ------- Omagine, Inc. ---------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 20-2876380 --------------------------------- --------------------- State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 350 Fifth Avenue, Suite 1103, New York, N.Y. 10118 --------------------------------------------------- (Address of principal executive offices) (212) 563-4141 -------------------------------------------------- (Registrant's telephone number, including area code) Alfa International Holdings Corp. --------------------------------- (Former name of registrant) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [x] Yes [ ] No As of October 30, 2007 the registrant had outstanding 45,022,405 shares of Common Stock, par value $.001 per share. (1) OMAGINE, INC. INDEX FORWARD-LOOKING STATEMENTS PART I - FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS: SEPTEMBER 30, 2007 AND DECEMBER 31, 2006 CONSOLIDATED STATEMENTS OF OPERATIONS: THREE MONTHS ENDED SEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006 NINE MONTHS ENDED SEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY: NINE MONTHS ENDED SEPTEMBER 30, 2007 CONSOLIDATED STATEMENTS OF CASH FLOWS: NINE MONTHS ENDED SEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006 NOTES TO FINANCIAL STATEMENTS ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 3: CONTROLS AND PROCEDURES PART II - OTHER INFORMATION ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K SIGNATURES (2) Forward-Looking Statements Some of the information contained in this Report may constitute forward-looking statements or statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and projections about future events. The words "estimate", "plan", "intend", "expect", "anticipate" and similar expressions are intended to identify forward-looking statements which involve, and are subject to, known and unknown risks, uncertainties and other factors which could cause the Company's actual results, financial or operating performance or achievements to differ from forecasted future results, financial or operating performance or achievements expressed or implied by such forward-looking statements. Projections and assumptions contained and expressed herein were reasonably based on information available to the Company at the time so furnished and as of the date of this filing. All such projections and assumptions are subject to significant uncertainties and contingencies, many of which are beyond the Company's control, and no assurance can be given that the projections will be realized. Potential investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. (3) OMAGINE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
September 30, December 31, 2007 2006 ASSETS ------------ ----------- - (Unaudited) Note 1 CURRENT ASSETS: Cash $ 581,641 $ 27,961 Accounts receivable 30,914 26,276 Inventories 13,063 13,063 Prepaid expenses and other current assets - 531 -------- -------- Total Current Assets 625,618 67,831 -------- -------- PROPERTY AND EQUIPMENT: Office & Computer Equipment 117,292 104,292 General Plant 17,800 17,799 Furniture & Fixtures 15,951 15,951 Leasehold Improvements 866 866 -------- -------- 151,909 138,908 Less: Accumulated depreciation and amortization (126,976) (123,273) -------- -------- 24,933 15,635 -------- -------- OTHER ASSETS: Other assets 13,749 13,749 -------- -------- Total Assets $ 664,300 $ 97,215 -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 345,471 $583,908 Customer Deposits - 12,140 Accrued officer payroll 202,121 320,553 Accrued expenses and other current liabilities 19,876 19,876 Dividends payable - - Due to Officers and Directors - 51,517 --------- -------- Total Current Liabilities 567,468 987,994 --------- -------- LONG-TERM LIABILITIES: Convertible Debentures, net of Discounts - 77,922 Accrued Interest payable on Convertible Debentures - 41,794 --------- -------- - 119,716 --------- -------- TOTAL LIABILITIES: 567,468 1,107,710 COMMITMENTS STOCKHOLDERS' EQUITY: Preferred stock: $0.001 par value Authorized - 1,000,000 shares Undesignated preferred stock: Authorized - 850,000 shares: Issued and outstanding - none Series B preferred stock: Authorized-150,000 shares: Issued and outstanding - none and 86,937 shares, respectively - 87 Common stock - $ .001 par value Authorized - 50,000,000 shares Issued and outstanding 45,022,405 and 32,112,964 shares, respectively 45,022 32,113 Capital in excess of par value 16,238,570 14,365,056 Retained earnings (Deficit) (16,186,760) (15,407,751) ---------- --------- - Total Stockholders' Equity/Deficit 96,832 (1,010,495) ---------- --------- Total Liabilities and Stockholders' Equity $ 664,300 $ 97,215 --------- --------- See accompanying notes to consolidated financial statements.
(4) OMAGINE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------------ (UNAUDITED) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED September 30, September 30, ---------------------- ------------------- --- 2007 2006 2007 2006 ---- ---- ---- ---- REVENUES: Net sales $ 29,838 $ 99,359 $ 30,155 $ 128,563 Settlement of Dispute - - - 1,000,000 --------- --------- --------- ------ --- Total revenues 29,838 99,359 30,155 128,563 --------- --------- --------- ---- --- COSTS AND EXPENSES: Cost of sales 28,177 79,975 28,242 91,979 Selling, general and administrative 299,202 269,380 636,316 1,242,033 ------- ------- --------- ---- --- Total costs and expenses 327,379 349,355 664,558 1,334,012 ------- ------- --------- ---- --- Operating loss (297,541) (249,996) (634,403) (205,449) Interest income - 459 33 492 Interest expense ( 8,161) (29,625) ( 21,198) (103,382) --------- --------- --------- ----- --- NET LOSS $ (305,702) $ (279,162) $ (655,568) $(308,339) --------- --------- --------- ------ --- PREFERRED STOCK DIVIDENDS $ 37,190 $ 7,057 $ 123,441 $ 36,498 --------- --------- --------- ------ --- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (342,892) $ (286,219) $ (779,009) $ (344,837) --------- ---------- ----------- ------- --- NET LOSS PER COMMON SHARE: BASIC $ (.01) $ (.01) $ (.02) $ (.01) --------- --------- ---------- ------- --- DILUTED $ (.01) $ (.01) $ (.02) $ (.01) --------- --------- ---------- ------- --- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC 42,373,025 29,806,552 39,321,996 29,334,026 ---------- ---------- ---------- -------- --- DILUTED 42,373,025 29,806,552 39,321,996 29,334,026 ---------- ---------- ---------- -------- --- See accompanying notes to consolidated financial statements.
(5) OMAGINE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY ---------------------------------------------------------- (UNAUDITED)
Common Stock Preferred Stock ---------------- --------------- Capital in Retained Par Par Excess of Earnings Shares Value Shares Value Par Value (Deficit) ------ -------- ------ ----- --------- -------- - Balances at December 31, 2006 32,112,964 $ 32,113 86,937 $ 87 $14,365,056 $(15,407,751) Issuance of Common stock for consulting services 6,250 6 744 Issuance of common stock for cash 2,350,000 2,350 252,650 Purchase of Common stock for cash (10) (3) Issuance of common stock upon conversion of debentures 2,737,629 2,738 124,206 Preferred Stock - and dividends converted to common stock 3,600,941 3,601 (86,937) (87) 119,927 Issuance of Common stock in payment of accounts payable 2,800,303 2,800 339,230 Cancellation of Common stock issued for consulting services (45,000) (45) (10,906) Issuance of Common stock upon exercise of Warrants 1,459,328 1,459 1,033,666 Stock option expense - - - - 14,000 Preferred stock dividends - - - - - (123,441) Net loss - - - - - (655,568) ---------- --------- ------- ------ ----------- --------- -- Balances at September 30, 2007 45,022,405 $ 45,022 - $ - $16,238,570 $(16,186,760) ---------- --------- ------- ------ ----------- --------- -- See accompanying notes to consolidated financial statements.
(6) OMAGINE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ---------------------------------------------------- (UNAUDITED)
Nine Months Ended September 30, ------------------ 2007 2006 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (655,568) $ (308,339) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation and amortization 10,074 81,842 Stock based compensation expense related to stock options 14,000 46,344 Issuance of Common Stock for consulting services 750 - Cancellation of common stock issued for consulting services (10,951) - Changes in operating assets and liabilities: Accounts receivable (4,638) (67,258) Inventories - (37,287) Prepaid expenses and other current assets 531 19,521 Other assets - (235) Customer deposits (12,140) (28,168) Accounts payable 103,593 (114,709) Accrued expenses and other current liabilities - (46,670) Accrued officer payroll (118,432) 20,709 Accrued interest payable 857 33,492 --------- --------- Net cash flows from operating activities (671,924) (400,758) CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of property and equipment (13,001) (3,894) --------- --------- Net cash flows from investing activities (13,001) (3,894) CASH FLOWS FROM FINANCING ACTIVITIES: Due to Officers and Directors (51,517) 119,898 Proceeds from sales of common stock 255,000 20,000 Proceeds from exercise of common stock warrants 1,035,125 - Proceeds from issuance of debenture 225,000 Purchase of common stock (3) - -------- -------- Net cash flows from financing activities 1,238,605 364,898 NET CHANGE IN CASH AND EQUIVALENTS 553,680 (39,754) -------- -------- CASH AND EQUIVALENTS, BEGINNING OF PERIOD 27,961 41,566 -------- -------- CASH AND EQUIVALENTS, END OF PERIOD $581,641 $ 1,812 --------- --------- SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid $ - $ - --------- --------- Interest paid $ 13,969 $ - --------- --------- NON-CASH FINANCING ACTIVITIES: Preferred stock dividends paid in common stock $123,441 $ 42,983 Issuance of common stock in payment of accounts payable $342,030 - Issuance of common stock upon conversion Of debentures and accrued interest $126,944 $ 62,067 See accompanying notes to consolidated financial statements.
(7) OMAGINE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED (UNAUDITED) INTERIM FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The consolidated balance sheet for Omagine, Inc. [formerly Alfa International Holdings Corp.]("Omagine" or the ?Company?) at the end of the preceding fiscal year has been derived from the audited balance sheet and notes thereto contained in the Company?s annual report on Form 10-KSB for its fiscal year ended December 31, 2006 and is presented herein for comparative purposes. All other financial statements are unaudited. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for all periods presented, have been made. The results of operations for the interim periods presented herein are not necessarily indicative of operating results for the respective full years. As of the date of this report the Company has three wholly-owned subsidiaries through which it conducts all operations. All inter-company transactions have been eliminated in the consolidated financial statements. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted in accordance with the published rules and regulations of the Securities and Exchange Commission. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-KSB for the fiscal year ended December 31, 2006. Net Profit (Loss) Per Share - Basic and diluted profit (loss) per share are based upon the weighted-average number of common shares outstanding during the period. The computation of diluted earnings per share does not assume the conversion, exercise or contingent issuance of securities that would have a dilutive effect on loss per share. (8) Principles of Consolidation ? The consolidated financial statements include the accounts of Omagine and its wholly- owned subsidiaries, Contact Sports, Inc. (?Contact?), Ty- Breakers Corp. (?Ty-Breakers?) and Journey of Light, Inc. (?JOL?). Omagine and its subsidiaries are collectively referred to as the ?Company?. All inter-company transactions have been eliminated in consolidation. NOTE 2 - GOING CONCERN AND LIQUIDITY The Company has incurred significant operating losses raising substantial doubt about its ability to continue as a going concern. The continued existence of the Company is dependent upon its ability to execute its business plan and attain profitable operations. NOTE 3 - CONVERTIBLE DEBENTURES: On December 8, 2005, Omagine sold a convertible debenture ("First Debenture") in the face amount of $250,000 to an investor in exchange for $215,000, net of placement costs and fees. On January 24, 2006, Omagine sold a second convertible debenture ("Second Debenture") in the face amount of $250,000 to the same investor in exchange for $225,000, net of placement costs and fees. The First Debenture was payable on or before December 7, 2008 and the Second Debenture was payable on or before January 23, 2009. Both the First Debenture and the Second Debenture (collectively "Debentures") accrued interest at 10% per annum. The holder had the option, at any time, to convert the then outstanding balance of the Debentures together with accrued and unpaid interest thereon into shares of Omagine's $0.001 par value common stock (?Common Stock?) at a price per share equal to 90% of the lowest volume weighted average price of a share of Common Stock during the fifteen trading days immediately preceding the conversion date, subject to certain adjustments. As of March 21, 2007, the Debentures together with all accrued and unpaid interest thereon were paid in full through such conversions into shares of Common Stock. The warrant that was sold with the First Debenture (the ?Debenture Warrant?) gave the holder the right to purchase 257,732 shares of Common Stock at a purchase price of (9) $0.97 per share and included an optional ?cashless exercise? provision. In July 2007, the holder of the Debentures exercised the Debenture Warrant pursuant to the ?cashless exercise? provision and was issued 79,161 shares of Common Stock pursuant thereto which represented the full exercise of the Debenture Warrant. The Company received no proceeds from the ?cashless exercise? and no portion of the Debenture Warrant remains outstanding or available for the purchase of any further shares of Common Stock. NOTE 4 - SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK: Omagine had designated 150,000 shares of its $0.001 par value preferred stock (?Preferred Stock?) as ?Series B Preferred Stock?. The face value of the Series B Preferred Stock was $40 per share and dividends accrued at 5.0% per annum. Each share of the Series B Preferred Stock (?Preferred Share(s)?) was convertible at the option of the holder, at any time, into 40 shares of Common Stock. Accrued dividends, at the Company?s option, could be paid in cash or in shares of Common Stock valued at $1.00 per share. Pursuant to the Certificate of Designation, Preferences and Rights for Series B Preferred Stock and a resolution of the Board of Directors, on September 28, 2007 (the ?Redemption Date?),the Company redeemed all Preferred Shares outstanding on the Redemption Date. The Company paid forty-one dollars and forty-eight cents ($41.48) per Preferred Share (the "Redemption Price") to the registered holders of the 76,437 Preferred Shares outstanding on the Redemption Date. The Redemption Price was calculated by adding the $40.00 face value of each Preferred Share to the $1.48 of dividends accrued thereon. The Redemption Price was paid in shares of the Company?s Common Stock valued at one dollar ($1.00) per share. From and after the Redemption Date, all rights of the holders of Preferred Shares (except the right to receive the Redemption (10) Price without interest upon surrender of their certificate or certificates) ceased with respect to such Preferred Shares. Such Preferred Shares shall not hereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever. As of the date hereof no Preferred Shares or any other shares of Preferred Stock are issued or outstanding. The Series B Preferred Stock has been excluded from the computation of diluted earnings per share for the three month period ended September 30, 2007 and the nine month periods ended September 30, 2007 and 2006 as the conversion would be anti- dilutive after adding back preferred stock dividends to the respective net loss for each such period. The 2,720,333 unexercised Common Stock purchase warrants held by the holders of Series B Preferred Stock (the ?$0.75 Warrants?) expired on July 31, 2007. During July 2007, 1,380,167 of such $0.75 Warrants were exercised by the holders thereof and the Company received proceeds therefrom of $1,035,125. NOTE 5 ? STOCKHOLDERS EQUITY In February and March 2007, the Company sold a total of 2,300,000 shares of its Common Stock to three individuals (including 50,000 shares to a Company director) at a price of $0.10 per share and the Company received the total net proceeds of $230,000. In May 2007, the Company sold 50,000 shares of its Common Stock to an individual at a price of $0.50 per share and the Company received the total net proceeds of $25,000. In February and March 2007, the Company issued a total of 2,737,629 shares of its Common Stock to the holder of the Convertible Debentures in satisfaction of $175,000 of principal amount of the Debentures and $42,651 of accrued interest. In March 2007, the Company issued a total of 2,600,303 shares of its Common Stock in satisfaction of $260,030 of accounts payable (including 145,813 shares to a Company Officer). In September 2007, the Company issued 200,000 shares of its Common Stock to an investor relations consultant in satisfaction of an $82,000 account payable due to the consultant. (11) In July and August 2007, the Company issued a total of 430,312 shares of its Common Stock (including 10,312 shares in payment of dividends payable), to holders of 10,500 Preferred Shares upon conversion of such Preferred Shares by the holders thereof. In September 2007, the Company issued a total of 3,170,629 shares of Common Stock (including 113,129 shares in payment of dividends payable) to holders of 76,437 Preferred Shares which the Company redeemed pursuant to the Redemption Notice (See Note 4). In July 2007 the Company issued 1,380,167 shares of its Common Stock to holders of $0.75 Warrants upon the exercise thereof by such holders. The Company received $1,035,125 from the exercise of such $0.75 Warrants. In July 2007, the Company issued 79,161 shares of its Common Stock to the holder of the Debenture Warrant upon the ?cashless exercise? thereof by such holder. (See Note 3). Stock Options and Warrants On September 20, 2007, the Company registered the 2.5 million shares of its Common Stock reserved for issuance under the Alfa International Corp 2003 Stock Option Plan (?Stock Option Plan?) for resale by filing a registration statement with the Securities and Exchange Commission on Form S-8. This registration statement did not increase either the total number of shares outstanding or the number of shares reserved for issuance under the Stock Option Plan. The adoption of the Stock Option Plan was approved by Board of Directors in March 2004 and ratified by the Company?s shareholders on September 1, 2004. The Stock Option Plan is designed to attract, retain and motivate employees, directors, consultants and other professional advisors of the Company and its subsidiaries (collectively, the ?Recipients?) by giving such Recipients the opportunity to acquire stock ownership in the Company through the issuance of stock options to purchase shares of the Company?s Common Stock. The following is a summary of stock option and warrant activity for the nine months ended September 30, 2007: (12)
------------------------ -- Stock Options Warrants ------------- ------ -- Outstanding at January 1, 2007 1,165,000 4,450,467 Granted and Issued 800,000 - Exercised - (1,637,899) Forfeited/expired/cancelled - (2,792,568) ---------- ------- -- Outstanding at Sept 30, 2007 1,965,000 20,000 ---------- ------- -- Exercisable at Sept 30, 2007 1,325,000 20,000 ---------- ------- --
(13) Stock options outstanding at September 30, 2007 (all non-qualified) consist of:
Year Number Number Exercise Expiration Granted Outstanding Exercisable Price Date ------- ----------- ----------- -------- ---------- 1997 125,000 125,000 $ .10 November 5, 2007 2001 750,000 750,000 $ .25 August 31, 2011 2004 60,000 60,000 $ .17 October 31, 2009 2005 30,000 30,000 $1.00 June 30, 2010 2005 200,000 200,000 $ .82 December 14, 2010 2007 800,000 160,000 $ .25 March 31, 2012 --------- ---------- Totals 1,965,000 1,325,000 ========= ==========
The 640,000 unvested options relating to the 2007 grant are scheduled to vest 160,000 on April 1, 2008 and 160,000 each April 1 thereafter for three succeeding years. As of September 30, 2007, there was $87,738 of total unrecognized compensation cost related to un-expensed stock options. That cost is expected to be recognized $5,920 in the three months ending December 31, 2007; $20,822 in 2008; $18,768 in 2009; $18,768 in 2010; $18,768 in 2011; and $4,692 in 2012. (14) Warrants outstanding at September 30, 2007 consist of:
Year Number Number Exercise Expiration Issued Outstanding Exercisable Price Date ------ ----------- ----------- -------- ---------- 2005 20,000 20,000 .20 December 19, 2007 ========= =========
(15) NOTE 6 ? COMMITMENTS Leases The Company leases its executive office in New York, N.Y. under a ten-year lease entered into in February 2003. The Company also rents warehouse space in Jersey City, New Jersey under a month to month lease. Rent expense for the nine months ended September 30, 2007 and 2006 was $58,027 and $54,602 respectively. At September 30, 2007, the minimum future lease payments are as follows: 2007 $ 12,950 2008 51,800 2009 51,800 2010 51,800 2011 51,800 Thereafter 60,433 ---------- Total $ 280,583 ========== Employment Agreements Omagine is obligated to pay its President and Chief Executive Officer an annual base salary of $125,000 through December 31, 2010 plus an additional amount based on a combination of net sales and earnings before taxes. Omagine had been obligated to employ its Vice-President and Secretary under an employment agreement which has been canceled. Effective August 1, 2007 the Company re-employed this individual at an annual salary of $85,000. Provided the Company is successful in signing the Development Agreement with the Government of Oman for the Omagine Project, the Company will enter into a new employment agreement with this individual. (16) The Company had been obligated to employ Contact?s President and Vice-President of Sales under separate employment agreements which have been canceled and the individuals? service with the Company terminated in 2006. Factoring Agreement In March 2004 Contact entered into a one-year agreement (the ?Factoring Agreement?) with a company (?Factor?) specializing in factoring accounts receivable. The Factoring Agreement was deemed renewed from year to year following the initial term unless terminated upon notice by either party. In March 2006 Contact gave such notice of termination to the Factor and subsequently the Factor and Contact agreed to continue the Factoring Agreement after March 2006 on a month-to-month basis. The Factoring Agreement continued in effect until March 15, 2007 when it was terminated in accordance with its terms by Contact. NOTE 7 - SEGMENT INFORMATION: Omagine is a holding company that operates through its wholly owned subsidiaries. The Company reports results in two business segments: real estate development and apparel. The real estate development business of the Company is conducted through its wholly owned subsidiary JOL which is in its initial stages of business development. JOL is presently conducting negotiations with the Government of Oman with respect to JOL?s proposed development of an approximately $1.6 billion tourism related project. The apparel business of the Company is conducted through its wholly owned subsidiaries - Contact and Ty-Breakers. Summarized financial information by business segment for the three and nine month periods ended September 30, 2007 and 2006 is as follows: (17) SEGMENT INFORMATION -------------------
THREE MONTHS ENDED NINE MONTHS ENDED September 30, September 30, ---------------------- -------------------- -- 2007 2006 2007 2006 ---- ---- ---- --- - Revenue: Real Estate Development $ - $ - $ - $1,000,000 Apparel 29,838 99,359 30,155 128,563 --------- ---------- ---------- ------ --- Total $ 29,838 $ 99,359 $ 30,155 $1,128,563 ====================================================================================== === Operating Expenses: Real Estate Development $ 65,274 $ 107,572 $ 204,459 $ 661,288 Apparel 32,703 122,884 73,405 158,273 Corporate 229,402 118,899 386,694 514,451 --------- --------- ---------- ----- --- Total $ 327,379 $ 349,355 $ 664,558 $1,334,012 ====================================================================================== === Operating Income (Loss): Real Estate Development $ ( 65,274) $ (107,572) $(204,459) $ 338,712 Apparel (2,865) (23,525) (43,250) (29,710) Corporate (229,402) (118,899) (386,694) (514,451) --------- --------- ---------- ------ --- Total $ (297,541) $(249,996) $ (634,403) $(205,449) ====================================================================================== === Identifiable Assets: Real Estate Development $ 1,141 $ 1,880 Apparel 58,758 80,239 Corporate 604,401 15,096 ---------- ------- Total $ 664,300 $ 97,215 ====================================================================================== === Capital Expenditures Real Estate Development $ - $ - $ - $ 3,894 Apparel - - - - Corporate - - 13,001 - --------- --------- ---------- ------- -- Total $ - $ - $ 13,001 $ 3,894 ====================================================================================== === Depreciation and Amortization: Real Estate Development $ 234 $ 234 $ 702 $ 702 Apparel - - - - Corporate 1,001 23,033 9,372 81,140 --------- --------- ---------- ------- -- Total $ 1,235 $ 23,267 $ 10,074 $ 81,842 ====================================================================================== === Operating loss is total revenue less operating expenses, which include cost of sales and selling, general and administrative expenses.
(18) ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations In June 2007 the Company changed its corporate name to Omagine, Inc. to align its corporate identity with its real estate development business. The Company?s website is www.omagine.com. All of the Company's operations are conducted through its wholly-owned subsidiaries, Journey of Light, Inc. (?JOL?), Contact Sports, Inc. ("Contact") and Ty-Breakers Corp.("Ty- Breakers"). JOL is proposing to develop a real estate project (the ?Omagine Project?) in the Sultanate of Oman (?Oman?).The Company presently concentrates the majority of its efforts on the development of JOL?s business. Contact and Ty-Breakers are in the apparel business. The Company plans to continue its focus on real-estate development, entertainment and hospitality ventures and on developing, building, owning and operating tourism and residential real-estate development projects ? primarily in the Middle East and North Africa. Critical Accounting Policies: ----------------------------- Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The policies discussed below are considered by management to be critical to an understanding of our financial statements because their application places the most significant demands on management's judgment, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain. Specific risks for these critical accounting policies are described in the following paragraphs. For all of these policies, management cautions that future events rarely develop exactly as forecast, and the best estimates routinely require adjustment. Revenue Recognition. The method of revenue recognition at JOL will be determined by management when and if it becomes likely that JOL will begin generating revenue. Revenue is recognized at (19) Contact and Ty-Breakers when goods are shipped to customers from the Company's warehouse. General Statement: Factors that may affect future results --------------------------------------------------------- With the exception of historical information, the matters discussed in Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements under the 1995 Private Securities Litigation Reform Act that involve various risks and uncertainties. Typically, these statements are indicated by words such as "anticipates", "expects", "believes", "plans", "could", and similar words and phrases. Factors that could cause the Company's actual results to differ materially from management's projections, forecasts, estimates and expectations include, but are not limited to, the following: * Failure of JOL or other proposed co-owners (collectively, the ?Founder Shareholders?) of the project company presently under formation in Oman (?Omagine SAOC?), to sign the Development Agreement with the Government of Oman. * Failure of Omagine SAOC to obtain the necessary financing required to design, build and operate the Omagine Project. * Inability of the Company or Omagine SAOC to secure additional financing as and if required; * Unexpected economic or political changes in the United States or abroad; * The imposition of new restrictions or regulations by government agencies in the U.S or abroad that affect the Company's business activities. JOURNEY OF LIGHT, INC. --------------------- The Omagine Project ------------------- JOL is engaged primarily in the business of real estate development in the country of Oman. (20) JOL prepared and presented to the Ministry of Tourism of Oman (?MOT?) and other Government officials a feasibility study for a proposed real-estate project (the "Omagine Project") to be developed in Oman by Omagine SAOC, an Omani company presently under formation by JOL and other Founder Shareholders. The Omagine Project is planned to be developed on one million square meters (equal to approximately 245 acres) of beachfront land facing the Gulf of Oman (the ?Omagine Site?) just west of the capital city of Muscat and nearby the Seeb International Airport. The Omagine Project is planned to be an integration of cultural, heritage, educational, entertainment and residential components, including: a "high culture" theme park containing seven pearl shaped buildings, each approximately 60 feet in diameter, associated exhibitions, two resort hotels, a boardwalk, an open air amphitheater and stage, a canal and enclosed harbor area, boat slips, commercial office buildings, shopping and retail establishments, open space green areas, restaurants and approximately 3,300 residences, 450 serviced apartments and 150 employee apartments. Through its ownership interest in Omagine SAOC, the Company plans over time to also be in the property management, hospitality and entertainment businesses. During the period from June through October 2007, JOL management had further meetings, discussions and negotiations with officials of the Government of Oman regarding the terms and conditions of a development agreement (?Development Agreement?) between the Government and Omagine SAOC and JOL has now delivered to the Government what it believes to be the final draft of the Development Agreement. Final discussions remain to be had with the MOT regarding only the identity and percentage ownership of the three required Founder Shareholders of Omagine SAOC. During October and continuing to date JOL has held discussions with Bank Muscat SAOG (the ?Bank?), the largest commercial bank in Oman, with a view toward signing an agreement (the ?Financial Advisory MOU?) with the Bank memorializing the agreement between JOL and the Bank regarding, among other things: (i) JOL appointing the Bank as its financial advisor immediately subsequent to signing the Development Agreement, (ii) the Bank (21) undertaking the task of structuring the optimal capital structure for Omagine SAOC, (iii) the Bank arranging for and placing equity, debt and mezzanine capital requirements for Omagine SAOC, and (iv) the Bank, or its nominee investing up to twenty-five percent (25%) of the capital of Omagine SAOC. As of the date hereof, JOL and the Bank have finalized their agreement and the Financial Advisory MOU is expected to be signed by JOL and the Bank within the next several days. During October and continuing to date JOL has held discussions with Consolidated Contractors International Company, S.A.L. and with its local Omani company Consolidated Contractors Company Oman, LLC (collectively, ?CCC?) (www.ccc.gr), with a view toward signing an agreement (the ?CCC Agreement?) with CCC memorializing the agreement between JOL and CCC regarding, among other things: (i) CCC being the General Contractor for the Omagine Project, (ii) CCC being a minority Founder Shareholder of Omagine SAOC, and (iii) CCC?s rapid mobilization and start of construction of the Omagine Project. CCC is one of the largest building contractors in Oman and the Middle East with worldwide operations, almost $5 billion in annual revenue and over 120,000 employees (6,000 presently in Oman). As of the date hereof, JOL and CCC have finalized their discussions and arrived at a verbal agreement with respect to the foregoing. This verbal agreement has now been reduced to a written document which JOL and CCC are reviewing. JOL and CCC expect to sign the CCC Agreement shortly. Joannou & Paraskevaides (Overseas) Ltd. (?J&P?) and JOL had an agreement with respect to J&P being a Founder Shareholder of Omagine SAOC and the General Contractor for the Omagine Project (the ?J&P Agreement?). J&P informed JOL in October 2007 that, ?in light of their current and future workload?, J&P wished to withdraw from the Omagine Project and the J&P Agreement was terminated. J&P has only a few clerical employees in Oman and would have had to mobilize and transport all employees and equipment into Oman subsequent the Financial Closing Date (which date itself will be at least 6 months after signing the Development Agreement). CCC, on the contrary, has its machinery, equipment and a workforce of 6,000 employees currently in Oman and thousands more employees in the nearby GCC countries. CCC moreover is approximately 5 times larger than J&P in terms of revenue and at 125,000 employees, employs approximately 8 times as many people and has significantly greater resources than J&P. (22) Significantly, the CCC Agreement as presently contemplated is also more advantageous financially to JOL than was the J&P Agreement and CCC, unlike J&P, is able to mobilize and begin construction of Omagine immediately after the signing of the Development Agreement and the CCC Agreement requires CCC to do so. Consequently, management believes that the termination of the J&P Agreement will not have any negative effect on the Company?s business and the CCC Agreement will have a materially positive effect on the Company?s business. Between June and October 2007 the Company has held, and continues to hold, numerous other discussions with financial investors interested in investing in Omagine SAOC (?Potential Investors?). Immediately after signing the Financial Advisory MOU with Bank Muscat, the Company will turn over all such existing and future Potential Investors to the Bank for its analysis and disposition. In order to move into the actual development stage of the Omagine Project, the Founder Shareholders and the Government must sign the Development Agreement ? an event which the Company previously expected to occur during the second or third quarter of 2007 but presently expects to occur during the fourth quarter of 2007. -------------------------------------------------------------- - Notwithstanding the foregoing positive developments no assurances can be given at this time that the Development Agreement, Financial Advisory MOU or the CCC Agreement will actually be signed. Although all three agreements are in the final draft forms and have been agreed and the outcome seems clear, until such agreements are actually signed, no assurance whatsoever can be given that they actually will be signed. Management therefore cautions that future events rarely develop exactly as forecast and the best estimates routinely require adjustment. -------------------------------------------------------------- -- Subsequent to the signing of the Development Agreement, the Omagine Site?s value will be definitively determined by a qualified independent real-estate appraiser and such appraisal will be used by Bank Muscat to optimize the Project Company?s capital structure and in its internal financing discussions and in its discussions with other financial institutions and investors. (23) The Company expects, based on present assumptions which are subject to modification, that the development costs for the entire Omagine Project will be approximately $1.6 billion dollars. The Founder Shareholders and Bank Muscat have agreed that, subject to the agreement of the lending institutions at the time, at the financial closing JOL will (i) be paid a success fee of approximately 0.5% of the total construction costs of the Omagine Project, and (ii) be reimbursed in full for all its development expenses incurred through the date of the financial closing. The present nature of JOL?s business is such that, other than the foregoing, it is not expected to generate revenue until after the occurrence of an event ? the development of the Omagine project - which, as of the date hereof, is not certain to occur. Contact Sports and Ty-Breakers ------------------------------ Contact and Ty-Breakers are in the apparel business which the Company no longer actively promotes and which is not expected to contribute significantly to the Company?s future results. The Company maintains its corporate offices at The Empire State Building, 350 Fifth Avenue, Suite 1103, New York, NY 10118 and its telephone number is 212-563-4141. Contact also maintains a warehouse in Jersey City, New Jersey. Both facilities are leased from unaffiliated third parties. Subsequent to the signing of the Development Agreement, the Company plans to open an office for Omagine SAOC in Muscat, Oman. RESULTS OF OPERATIONS: THREE MONTHS ENDED SEPTEMBER 30, 2007 vs. THREE MONTHS ENDED SEPTEMBER 30, 2006 Revenue in the third quarter of 2007 was $29,838 a decrease of $69,521 (233%) as compared to the same period in the previous year. This decrease was attributable to the reduced sales at Contact. (24) Selling, general and administrative expenses were $299,202 during the third quarter of 2007, compared to $269,380 in the third quarter of 2006. This increase of $29,822 (10%) in 2007 was primarily attributable to increased costs associated with the Debentures and costs incurred at JOL for travel, consulting fees and professional fees associated with the Omagine project in Oman. The Company experienced an operating loss of $297,541 during the third quarter of 2007 as compared to an operating loss of $249,996 during the same period in the previous fiscal year. This $47,545 increase in the Company's operating loss in 2007 is attributable to the above-mentioned increased selling, general & administrative expenses in 2007 offset by the approximately $51,000 decrease in cost of sales in 2007 and the approximately $70,000 reduction in net sales during the third quarter of 2007 compared to the same period in 2006. The Company expects to experience losses until revenue from the Omagine Project is realized. The nature of JOL's present business is such that, (other than the possible payment of a success fee and reimbursement of it development expenses), it is not expected to generate revenues until after the development of the Omagine project is significantly underway, an event which, as of the date hereof, is not certain to occur. Management is examining other possible sources of revenue which, subject to the Development Agreement being executed, may be added to the Company?s operations. The Company no longer actively promotes the apparel business of Contact and Ty-Breakers and the apparel business segment is not expected to contribute significantly to the Company?s future results. The Company may sell Contact or Ty-Breakers or may discontinue its apparel business in its entirety. The Company will need to raise significant capital and secure significant financing in order to execute the Omagine Project and its presently conceived business plan. Capital expenditures of $13,001 were incurred during the quarterly period ended September 30, 2007. Subject to the Development Agreement being executed and the availability of resources, the Company may incur significant expenses related to capital expenditures in the future. (25) NINE MONTHS ENDED SEPTEMBER 30,2007 vs. NINE MONTHS ENDED SEPTEMBER 30,2006 Revenue in the first nine months of 2007 was $30,155 a decrease of $1,098,408 as compared to the same period in the previous year. This decrease was attributable to the non-recurring $1 million settlement of a dispute in the second quarter of 2006, net of an approximately $98,000 decrease in apparel product sales during the period. Selling, general and administrative expenses were $636,316 during the first nine months of 2007, compared to $1,242,033 in the first nine months of 2006. This decrease of $605,717 (95%) was primarily attributable to decreased costs associated with Omagine's sale of the Debentures and to lower costs incurred at JOL for travel, consulting fees and professional fees associated with the Omagine project in Oman during the period, including salaries and consulting fees and costs related to JOL's March 2006 presentation in Oman. The Company's marketing and promotional expenditures were not significant during the period. Subject to the Development Agreement being signed, JOL may recover all or a portion of its expenses (the ?Development Expenses?) incurred to date in conceptualizing and promoting the Omagine Project and may be paid a ?success fee?. Subject to the Development Agreement being executed and the availability of resources, the Company may incur significant expenses related to marketing, and promotional expenditures in the future. The Company sustained a net loss from operations of $(634,403) during the first nine months of 2007 as compared to a net loss from operations of $(205,449) during the first nine months of 2006. This $428,954 increase in the Company's net loss from operations was primarily attributable to the absence in 2007 of the $1 million non-recurring 2006 revenue item associated with a settlement with the Government of Qatar combined with reduced sales revenue from the apparel segment during the first nine months of 2007; both of which were partially offset by the decrease of $605,717 in selling, general & administrative expenses in the first nine months of 2007 compared to the previous period in 2006. After provision for the payment of $123,441 in preferred stock dividends and the amortization of (26) $21,198 of costs associated with the Debenture financing, the Company sustained a net loss applicable to common stockholders of $779,009 for the nine month period ended September 30, 2007 compared to a net loss applicable to common stockholders of $344,837 for the comparable nine month period in 2006. The Company expects to experience losses until revenue from the Omagine Project is realized. Subject to the Development Agreement being signed, JOL may recover all or a portion of its expenses (the ?Development Expenses?) incurred to date in conceptualizing and promoting the Omagine Project and may be paid a ?success fee?. Otherwise, the nature of JOL?s present business is such that it is not expected to generate revenues until after the development of the Omagine project is significantly underway, an event which, as of the date hereof, is not certain to occur. Management is examining other possible sources of revenue which, subject to the Development Agreement being executed, may be added to the Company?s operations. The Company no longer actively promotes the apparel business of Contact or Ty-Breakers and the apparel business segment is not expected to contribute significantly to the Company?s future results. The Company may sell Contact and Ty-Breakers or may discontinue its apparel business in its entirety. The Company will need to raise significant capital and secure significant financing in order to execute the Omagine Project and its presently conceived business plan. LIQUIDITY AND CAPITAL RESOURCES: With the exception the second quarter of 2006, the Company has experienced negative cash flows during the past four fiscal years. The Company incurred net losses of $767,951, $5,900,662, $1,020,624 and $706,801 in its fiscal years 2006, 2005, 2004 and 2003, respectively. The Company's net loss for the nine months ended September 30, 2007 was $655,568. During the nine months ended September 30, 2007, the Company experienced an increase in cash and equivalents of $553,680. At September 30, 2007, the Company had a working capital surplus of $58,151, compared to a working capital deficit of $920,163 at December 31, 2006. (27) The $978,314 decreased deficit in working capital was primarily attributable to: increase in proceeds from sale of common stock $ 255,000 increase in proceeds from exercising warrants 1,035,125 decrease in accounts payable 103,593 Of the $567,468 of current liabilities at September 30, 2007, $202,121 (35.6%) represents amounts which are due to officers. The $671,924 of funds used by operating activities during the nine months ended September 30, 2007 resulted primarily from the net loss of $655,568. Funds totaling $13,001 were invested in computer equipment during the first nine months of fiscal 2007. Funds totaling $1,238,605 were provided by financing activities during the first nine months of fiscal 2007; $255,000 from the sale of 2,350,000 shares of unregistered and restricted Common Stock that were sold without registration under the Securities Act of 1933, as amended (the ?Act?), in reliance upon exemptions from such registration requirements contained in Section 4(2) under the Act to three ?accredited investors? as that term is defined in Rule 501 under Regulation D under the Act, one of whom is a director of the Company, $1,035,125 in proceeds from the exercising of Common Stock warrants from the holders of the Series B Preferred Stock, net of (i) a reduction of $51,517 in loans to the Company by its officers and directors and (ii) the purchase for $3.00 and retirement by the Company of 10 shares of Common Stock from a stockholder. On May 1, 2006, JOL received $1,000,000 pursuant to a friendly settlement of a dispute with the State of Qatar. During the first nine months of 2007 the holder of the Debentures converted the remaining $175,000 principal amount of the Debentures plus the accumulated interest thereon into 2,699,138 shares of the Company?s Common Stock. During the third quarter of 2007, the holder of the Debentures exercised the warrant that was sold with the First Debenture (the ?Debenture Warrant?). The Debenture Warrant gave the holder (28) the right to purchase 257,732 shares of Common Stock at a purchase price of $0.97 per share and included an optional ?cashless exercise? provision. In July the holder of the Debentures exercised the Debenture Warrant pursuant to the ?cashless exercise? provision and was issued 79,161 shares of Common Stock pursuant thereto which represented the full exercise of the Debenture Warrant. The Company received no proceeds from the ?cashless exercise? and no portion of the Debenture Warrant remains outstanding or available for the purchase of any further shares of Common Stock. Between July 1, 2007 and July 31, 2007, holders of the Company?s Series B Preferred Stock exercised 1,380,167 common stock purchase warrants ($0.75 Warrants) at an exercise price of $0.75 per share and the Company issued 1,380,167 shares of restricted Common Stock to such holders. The Company received proceeds of $1,035,125 from such exercise of the $0.75 Warrants. The remaining 2,720,333 unexercised $0.75 Warrants expired unexercised on July 31, 2007. On December 16, 2005, in accordance with a contract (?Contract?) Omagine granted Agora Public Relations an option to purchase up to 200,000 shares of Common Stock at a purchase price of $0.82 per share (the ?Agora Options?). Pursuant to an agreement dated August 27, 2007 covering the period beginning December 16, 2005 and ending December 31, 2007, Omagine (i) issued Agora 200,000 shares of Common Stock (the ?Agora Shares?) as compensation for services rendered through December 31, 2006, (ii) continued the Agora Options in effect and (iii) Agora acknowledged and agreed that (a) the Agora Shares are, and (b) the Common Stock issuable upon exercise of the Agora Options will be, ?restricted securities? within the meaning of the Securities Act of 1933, as amended. The Agora Options are fully vested as of the date hereof and may be exercised in whole or in part at any time before December 31, 2011 (the ?Expiry Date?). Any unexercised Agora Options will terminate on the Expiry Date. The Company redeemed all 76,437 of its outstanding Preferred Shares on September 28, 2007 (the ?Redemption Date?). The Company paid forty-one dollars and forty-eight cents ($41.48) per Preferred Share (the ?Redemption Price?) on the Redemption Date. The Redemption Price was paid in shares of the Company?s (29) Common Stock valued at one dollar ($1.00) per share. No Preferred Shares shall hereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever. As of the date hereof no Preferred Shares or any other shares of Preferred Stock are issued or outstanding. The Company?s inability to secure or arrange additional funding to implement JOL?s business plan, or Omagine SAOC?s failure to sign the Development Agreement with the Government of Oman regarding the Omagine Project will significantly affect the Company?s ability to continue operations. ITEM 3: DISCLOSURE CONTROLS AND PROCEDURES Within the 90 days prior to the date of the filing of this Form 10-QSB, the Company carried out an evaluation under the supervision and with the participation of management, including the Company's chief executive and financial officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Securities Exchange Act of 1934 Rule 13a-14(c) and 15d-14(c). Based upon that evaluation, our chief executive and financial officer concluded that the Company's disclosure controls and procedures are effective in timely alerting him to material information relating to the Company required to be included in the Company's periodic SEC filings. There have been no significant changes in the Company's internal Controls or other factors which could significantly affect internal controls subsequent to the date of the evaluation. (30) PART II - OTHER INFORMATION ITEM 5. (a) Company?s Code of Ethics and Business Conduct. During the third quarter of 2007 the Company completed a draft of a code of ethics that applies to all employees, officers and members of the Board of Directors, including its principal executive officers, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Company?s Board of Directors is reviewing the draft and once approved, this code of ethics will be adopted. The Company intends to post a copy of its code of ethics on the Company?s website, www.omagine.com in 2007. ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits numbered in accordance with Item 601(a) of Regulation SB Exhibit Page Numbers Description Number ------- ----------- ------ 99.1 Sarbannes-Oxley certification E-1 99.2 Sarbannes-Oxley certification E-3 (b) Reports on Form 8-K On July 25, 2007, the Company made a press release updating shareholders with regard to recent developments about its Omagine Project being proposed to be developed by the Company's wholly owned subsidiary Journey of Light, Inc. The press release was filed on form 8-K with the SEC on July 26, 2007. (31) CERTIFICATION PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002 I, Frank J. Drohan, certify that: 1. I have reviewed this quarterly report for the period ended September 30, 2007 on Form 10-QSB of Omagine, Inc. ("the Registrant"); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 14 and 15d-14) for the Registrant and I have: a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared; and b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date. 5. I have disclosed, based on my most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors: (32) a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls. 6. I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the Evaluation Date, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 19, 2007 /s/ Frank J. Drohan ------------------- Frank J. Drohan Chief Executive Officer and Chief Financial Officer The originally executed copy of this Certification will be maintained at the Registrant's offices and will be made available for inspection upon request. (33) CERTIFICATION PURSUANT TO: 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Omagine, Inc. on Form 10-QSB for the period ended September 30, 2007 (the "Report"), as filed with the Securities and Exchange Commission on the date hereof, the undersigned certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Omagine, Inc. /s/Frank J. Drohan ------------------ Frank J. Drohan Chief Executive & Financial Officer November 19, 2007 The originally executed copy of this Certification will be maintained at the Registrant's offices and will be made available for inspection upon request. (34) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATED: November 19, 2007 Omagine, Inc. (Registrant) By: /s/ Frank J. Drohan ------------------------- Frank J. Drohan Chief Executive Officer and Chief Financial Officer (35)