10-Q/A 1 form10qa.htm OMAGINE, INC. FORM 10-Q/A form10qa.htm
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q /A

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)

For the Quarterly Period Ended: September 30, 2012

Commission File Number: 0-17264

Omagine, Inc.
(Exact name of registrant as specified in its charter)

Delaware
 
20-2876380
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)

350 Fifth Avenue, 48th Floor, New York, N.Y. 10118
(Address of principal executive offices)

(212) 563-4141
(Registrant’s telephone number, including area code)


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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
Large accelerated filer
[ ]
Accelerated filer
[ ]
 
Non accelerated filer
[ ]
Smaller reporting company
[X]
 

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes[X] No

As of November 20, 2012, the registrant had outstanding 14,369,041 shares of common stock, par value $.001 per share.


OMAGINE, INC.
 
Forward-Looking Statements
 
PART I - FINANCIAL INFORMATION
   
     
  Explanatory Note 3  
  Forward Looking Statements 3  
       
4
 
  4  
 
 
 
  5  
 
 
 
 
 
 
  CUMULATIVE PERIOD FROM OCTOBER 11, 2005  (INCEPTION) TO SEPTEMBER 30, 2012
 
 
  6  
 
 
 
  10  
 
 
 
  CUMULATIVE PERIOD FROM OCTOBER 11, 2005 (INCEPTION) TO SEPTEMBER 30, 2012    
 
11
 
22  
 
 
 
35
 
       
PART II - OTHER INFORMATION
   
       
35
 
36
 
 
37
 
 
 
 
 
 

 
 
Omagine, Inc. (the “Company”) is filing this amendment No. 1 on Form 10-Q/A (the “Amended Filing”) to amend its report on Form 10-Q for the three and nine month periods ended September 30, 2012 filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 26, 2012 (the “Original Filing”). The Company is a development stage entity (“DSE”) as that term is defined in the guidance contained in ASC 915 issued by the Financial Accounting Standards Board. This Amended Filing includes the Company’s consolidated financial statements formatted as a DSE pursuant to the guidance contained in ASC 915 (the “DSE Financial Statements”).
 
This Amended Filing speaks as of the date hereof and it updates information contained in the Original Filing to reflect the inclusion of information required for DSE Financial Statements. Other than the foregoing, this Amended Filing does not update information contained in the Original Filing to reflect information or events that may have occurred subsequent to the date of the Original Filing or subsequent to any periods for which disclosure was otherwise provided in the Original Filing.
 
The DSE Financial Statements do not change any numbers previously reported in our financial statements contained in the Original Filing but the DSE Financial Statements do change the presentation format of our financial statements to reflect the Company’s present status as a development stage entity (“DSE”) and the DSE Financial Statements include the additional information required pursuant to ASC 915 to be presented in DSE Financial Statements.
 
This Amended Filing should be read in conjunction with the Original Filing, the Company’s Second Amended Filing on Form 10K/A for the fiscal year ended December 31, 2011 filed with the SEC on January 22, 2013 and the filings made with the Securities and Exchange Commission subsequent to the Original Filing, including any amendments to such filings.
 
 
Some of the statements contained in this report that are not statements of historical facts constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such. Examples of forward-looking statements include but are not limited to: (i) projections of revenues, expenses, income or loss, cash flow, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of Omagine, Inc. or its management or Board of Directors, including those relating to business plans, products, services or to Omagine LLC and the probability of Omagine LLC signing the DA with the Government; (iii) statements of future economic or financial performance; and (iv) statements of assumptions underlying such statements. Words such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may” and other similar expressions, or the negative or other variations thereof, as well as discussions of strategy that involve risks and uncertainties, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. We urge you to be cautious of the forward-looking statements and other similar forecasts and statements of expectations since such statements reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations and growth strategy. No assurances can be given regarding the achievement of future results, as our actual results may differ materially from our projected future results as a result of the risks we face, and actual future events may differ from anticipated future events because of the assumptions underlying the forward-looking statements that have been made regarding such anticipated future events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:
 
the uncertainty associated with whether or not the Government of the Sultanate of Oman will honor its commitment with respect to its intention to sign the agreed Final Development Agreement (“DA”) with Omagine LLC;
the uncertainty associated with military and political events in the Middle East and North Africa (the “MENA Region”) in general;
the success or failure of the Company’s efforts to secure additional financing, including project financing for the Omagine Project;
oversupply of residential and commercial property inventory or other adverse conditions in the Oman real estate market;
the impact of local, national, and international economies and future events (including natural disasters) on the Oman economy, on the Company’s business and operations in Oman, on tourism within and into Oman, on the oil and natural gas businesses and on other major industries operating within the Omani market;
deterioration or malaise in economic conditions, including the continuing destabilizing factors in, and continuing slow recovery of, the local Omani, regional MENA Region, and international real estate markets, as well as the impact of continuing depressed levels of consumer and business confidence in the state of the Omani and international economies;
inflation, interest rates and movements in interest rates and securities market and monetary fluctuations;
acts of war, civil or political unrest, terrorism or political instability; or
the ability to attract and retain skilled employees.
 
Forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such a statement is made, or to reflect the occurrence of unanticipated events.

PART 1 - FINANCIAL INFORMATION

ITEM 1 : FINANCIAL STATEMENTS

 
OMAGINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY - As Restated - Note 10)
CONSOLIDATED BALANCE SHEETS
 
   
September 30,
   
December 31,
 
   
2012
   
2011
 
ASSETS
 
(Unaudited)
       
             
CURRENT ASSETS:
           
     Cash
  $ 207,159     $ 235,381  
     Prepaid expenses and other current assets
    12,794       19,826  
Total Current Assets
    219,953       255,207  
                 
PROPERTY AND EQUIPMENT:
               
     Office and computer equipment
    138,745       132,570  
     General plant
    -       17,800  
     Furniture and fixtures
    -       15,951  
     Leasehold improvements
    -       866  
      138,745       167,187  
     Less accumulated depreciation and amortization
    (132,687 )     (164,730 )
      6,058       2,457  
                 
Other assets
    12,161       12,161  
                 
TOTAL ASSETS
  $ 238,172     $ 269,825  
                 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
CURRENT LIABILITIES:
               
     Convertible notes payable and accrued interest
  $ 366,612     $ 647,949  
     Accounts payable
    137,096       386,294  
     Accrued officers' payroll
    421,116       529,300  
     Due officers and directors
    -       16,864  
     Accrued expenses and other current liabilities
    92,808       87,111  
  Total  Current Liabilities
    1,017,632       1,667,518  
                                         Long Term Liabilities
    -       -  
TOTAL LIABILITIES
    1,017,632       1,667,518  
                 
STOCKHOLDERS' DEFICIT: ( - As Restated - Note 10)
         
                 
     Preferred stock:
               
     $0.001 par value,
               
     Authorized:  850,000 shares,
               
     Issued and outstanding: - none
    -       -  
                 
     Common Stock:
               
     $0.001 par value,
               
     Authorized: 50,000,000 shares,
               
     Issued and outstanding:
               
       14,369,041 shares in 2012 and 12,853,701 shares in 2011
    14,369       12,854  
     Committed to be issued:
               
        Zero shares in 2012 and 365,000 shares in 2011
    -       365  
     Capital in excess of par value
    23,393,242       20,621,545  
Deficit accumulated prior to development stage
         
        commencing on October 11, 2005 ( As Restated - Note 10)
    (9,201,144 )     (9,201,144 )
Deficit accumulated during the development stage
         
        commencing October 11, 2005 ( As Restated - Note 10)
    (15,007,081 )     (12,876,729 )
     Total Omagine, Inc. stockholders' deficit
    (800,614 )     (1,443,109 )
     Noncontrolling interests in Omagine LLC
    21,154       45,416  
                 
Total Stockholders' Deficit
    (779,460 )     (1,397,693 )
                 
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ 238,172     $ 269,825  
 
See accompanying notes to consolidated financial statements.
 
 
OMAGINE, INC. AND  SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY - As Restated  - Note 10)
 
   
Three Months Ended September 30,
   
Nine Months Ended September 30,
   
From the Period October 11, 2005 (Inception of Development Stage) to September 30, 2012
 
   
2012
   
2011
   
2012
   
2011
   
( As Restated -
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
Note 10)
 
                               
REVENUE:
                             
Total revenue
  $ -     $ -     $ -     $ -     $ -  
                                         
OPERATING EXPENSES:
                                       
                                         
                                         
     Officers and directors compensation (including stock-based
                                       
           compensation of $266,302, $18,433, $875,156, $148,049
                                       
           and $1,810,057 respectively)
    342,552       97,683       1,105,406       365,549       3,393,474  
     Professional fees
    8,615       34,425       22,977       89,580       1,320,631  
     Consulting fees (including stock-based compensation
                                       
           of $173,967, $4,692,  $525,151, $20,826 and
                                       
           $ 570,188 respectively)
    192,509       90,409       553,413       139,809       1,777,063  
     Commitment fees
    -       -       -       300,000       300,000  
     Travel
    46,938       23,119       118,413       77,109       976,551  
     Occupancy
    30,058       27,412       88,733       110,620       829,195  
Other selling general and administrative (including sponsorship fee of
                                 
          $30,220 in 2012 periods)
    81,578       52,027       234,994       167,871       1,682,070  
     Total Costs and Expenses
    702,250       325,075       2,123,936       1,250,538       10,278,984  
                                         
OPERATING LOSS
    (702,250 )     (325,075 )     (2,123,936 )     (1,250,538 )     (10,278,984 )
                                         
  OTHER (EXPENSE) INCOME ( As Restated - Note 10)
                                       
     Settlement of Qatar Real Estate development dispute
    -       -       -       -       1,004,666  
     Impairment of goodwill
    -       -       -       -       (5,079,919 )
     Interest expense
    (7,867 )     (14,032 )     (30,678 )     (41,419 )     (238,389 )
     Amortization of Debt discount
    -       -       -       -       (93,910 )
     Interest income
    -       -       -       -       8,805  
     Other (Expense) - Net
    (7,867 )     (14,032 )     (30,678 )     (41,419 )     (4,398,747 )
                                         
                                         
NET LOSS FROM DEVELOPMENT STAGE ENTITY - CONTINUING
                                 
     OPERATIONS DEVELOPMENT ( As Restated - Note 10)
    (710,117 )     (339,107 )     (2,154,614 )     (1,291,957 )     (14,677,731 )
                                         
Add net loss attributable to noncontrolling interests in Omagine LLC
    3,623       1,644       24,262       1,644       44,418  
                                         
NET LOSS ATTRIBUTABLE TO OMAGINE, INC. (As Restated - Note 10)
    (706,494 )     (337,463 )     (2,130,352 )     (1,290,313 )     (14,633,313 )
                                         
LOSS FROM DISCONTINUED OPERATIONS - SPORTS
                                       
      APPAREL
    -       -       -       -       (345,990 )
                                         
NET LOSS ACCUMULATED DURING DEVELOPMENT STAGE
    (706,494 )     (337,463 )     (2,130,352 )     (1,290,313 )     (14,979,303 )
                                         
Net preferred stock dividends
    -       -       -       -       (27,778 )
                                         
LOSS APPLICABLE TO COMMON SHAREHOLDERS
  $ (706,494 )   $ (337,463 )   $ (2,130,352 )   $ (1,290,313 )   $ (15,007,081 )
                                         
                                         
LOSS PER SHARE - BASIC AND DILUTED
  $ (0.05 )   $ (0.03 )   $ (0.15 )   $ (0.10 )   $ (1.61 )
LOSS PER SHARE - CONTINUING OPERATIONS - REAL ESTATE
                                 
     DEVELOPMENT
                                  $ (1.57 )
LOSS PER SHARE DISCONTINUED OPERATIONS - SPORTS APPAREL
                            $ (0.04 )
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
                                       
     - BASIC AND DILUTED
    14,369,041       12,808,779       14,094,677       12,608,235       9,298,870  
 
See accompanying notes to consolidated financial statements.
 
 
OMAGINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY -  As Restated - Note 10)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT    (Unaudited)
 
                                             
Deficit
   
Deficit
             
                                              Accumulated     Accumulated              
                                             
Prior to
   
During the
             
                                              Development Stage     Development Stage              
          Common Stock          
Commencing
   
Commencing
   
Noncontrolling
 
     
Preferred Stock
   
Issued and Outstanding
 
Committed to be issued
     
Capital in
   
October 11, 2005
   
October 11, 2005
   
Interests in
       
         
$0.001 Par
          $0.001 Par        
$0.001 Par
   
Excess of
   
(As Restated
   
(As Restated
    Omagine        
   
Shares
   
Value
   
Shares
   
Value
   
Shares
   
Value
   
Par Value
   
- Note 10)
   
- Note 10)
   
LLC
   
Total
 
                                                                   
Balances at October 11, 2005
                                                                 
(inception of development stage)
    108,350     $ 108       5,667,569     $ 5,668       -     $ -     $ 13,797,424     $ (9,201,144 )   $ -     $ -     $ 4,602,056  
                                                                                         
Conversion of preferred stock for common stock
    (1,250 )     (1 )     10,000       10       -       -       (9 )     -       -       -       -  
                                                                                         
Issuance of preferred stock dividends in common stock
    -       -       348       -       -       -       1,457       -       -       -       1,457  
                                                                                         
Beneficial conversion feature of Convertible Debenture
    -       -       -       -       -       -       132,208       -       -       -       132,208  
                                                                                         
Value of warrant attached to Convertible Debenture
    -       -       -       -       -       -       69,421       -       -       -       69,421  
                                                                                         
Reduction of preferred stock dividends accrual
    -       -       -       -       -       -       -       -       116,705.00       -       116,705  
                                                                                         
Net loss
    -       -       -       -       -       -       -       -       (5,534,319 )     -       (5,534,319 )
                                                                                         
Balances at December 31, 2005
    107,100       107       5,677,917       5,678       -       -       14,000,501       (9,201,144 )     (5,417,614 )     -       (612,472 )
                                                                                         
Issuance of common stock for cash
    -       -       10,000       10.00       -       -       19,990       -       -       -       20,000  
                                                                                         
Issuance of common stock upon conversion of debentures
    -       -       495,032       495       -       -       196,882       -       -       -       197,377  
                                                                                         
Conversion of preferred stock for common stock
    (20,163 )     (20 )     161,300       161       -       -       (141 )     -       -       -       -  
                                                                                         
Issuance of preferred stock dividends in common stock
    -       -       78,343       78       -       -       63,946       -       -       -       64,024  
                                                                                         
Stock option expense
    -       -       -       -       -       -       56,791       -       -       -       56,791  
                                                                                         
Beneficial conversion feature of Convertible Debenture
    -       -       -       -       -       -       52,778       -       -       -       52,778  
                                                                                         
Preferred stock dividends
    -       -       -       -       -       -       -       -       (21,042 )     -       (21,042 )
                                                                                         
Net loss
    -       -       -       -       -       -       -       -       (767,951 )     -       (767,951 )
 
 
Balances at December 31, 2006
    86,937       87       6,422,592       6,422       -       -       14,390,747       (9,201,144 )     (6,206,607 )     -       (1,010,495 )
                                                                                         
Issuance of common stock for consulting services
    -       -       1,250       1       -       -       749       -       -       -       750  
                                                                                         
Issuance of common stock for cash
    -       -       570,000       570       -       -       754,430       -       -       -       755,000  
                                                                                         
Purchase of common stock for cash
    -       -       (2 )     -       -       -       (3 )     -       -       -       (3 )
                                                                                         
Issuance of common stock upon conversion of debentures
    -       -       547,526       548       -       -       126,396       -       -       -       126,944  
                                                                                         
Issuance of common stock in payment of accounts payable
    -       -       560,067       560       -       -       341,470       -       -       -       342,030  
                                                                                         
Issuance of common stock upon exercise of warrants
    -       -       295,866       296       -       -       1,038,829       -       -       -       1,039,125  
                                                                                         
Preferred stock and dividends converted to common stock
    (86,937 )     (87 )     720,188       720       -       -       122,808       -       -       -       123,441  
                                                                                         
Cancellation of common stock issued for consulting services
    -       -       (9,000 )     (9 )     -       -       (10,942 )     -       -       -       (10,951 )
                                                                                         
Stock option expense
    -       -       -       -       -       -       20,187       -       -       -       20,187  
                                                                                         
Preferred stock dividends
    -       -       -       -       -       -       -       -       (123,441 )     -       (123,441 )
                                                                                         
Net loss
    -       -       -       -       -       -       -       -       (1,043,190 )     -       (1,043,190 )
                                                                                         
Balances at December 31, 2007
    -       -       9,108,487       9,108       -       -       16,784,671       (9,201,144 )     (7,373,238 )     -       219,397  
                                                                                         
Issuance of common stock for consulting services
    -       -       2,230       3       -       -       7,498       -       -       -       7,501  
                                                                                         
Issuance of common stock for cash
    -       -       109,500       110       -       -       235,090       -       -       -       235,200  
                                                                                         
Contribution of common stock to 401(k) Plan
    -       -       20,192       20       -       -       52,480       -       -       -       52,500  
                                                                                         
Issuance of common stock for SEDA commitment fees
    -       -       45,830       46       -       -       149,954       -       -       -       150,000  
                                                                                         
Cancellation of common stock
    -       -       (8,712 )     (9 )     -       -       9       -       -       -       -  
                                                                                         
Stock option expense
    -       -       -       -       -       -       60,629       -       -       -       60,629  
                                                                                         
Net loss
    -       -       -       -       -       -       -       -       (1,307,630 )     -       (1,307,630 )
 
 
Balances at December 31, 2008
    -       -       9,277,527       9,278       -       -       17,290,331       (9,201,144 )     (8,680,868 )     -       (582,403 )
                                                                                         
Issuance of common stock for cash
    -       -       2,000       2       -       -       1,398       -       -       -       1,400  
                                                                                         
Contribution of common stock to 401(k) Plan
    -       -       72,500       72       -       -       72,428       -       -       -       72,500  
                                                                                         
Stock option expense
    -       -       -       -       -       -       112,328       -       -       -       112,328  
                                                                                         
Sale of stock under Stock Equity Distribution Agreement
    -       -       1,308,877       1,309       -       -       553,691       -       -       -       555,000  
                                                                                         
Net loss
    -       -       -       -       -       -       -       -       (1,114,409 )     -       (1,114,409 )
                                                                                         
Balances at December 31, 2009
    -       -       10,660,904       10,661       -       -       18,030,176       (9,201,144 )     (9,795,277 )     -       (955,584 )
                                                                                         
Adjustment for stock splits
    -       -       22       -       -       -       -       -       -       -       -  
                                                                                         
Issuance of common stock for cash
    -       -       336,972       337       -       -       304,163       -       -       -       304,500  
                                                                                         
Contribution of common stock to 401(k) Plan
    -       -       289,996       290       -       -       72,210       -       -       -       72,500  
                                                                                         
Issuance of common stock in payment of salaries payable
    -       -       82,305       82       -       -       99,918       -       -       -       100,000  
                                                                                         
Issuance of common stock for stockholder investor relations
    -       -       118,750       119       -       -       47,381       -       -       -       47,500  
                                                                                         
Stock option expense
    -       -