POS AM

As filed with the Securities and Exchange Commission on February 6, 2017

Registration No. 333-199383

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

Post-Effective Amendment No. 4 To

FORM S-1/A

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

OMAGINE, INC.

(Exact name of Registrant as specified in its charter)

Delaware	9995	20-2876380
(State or other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

136 Madison Avenue, 5th Floor

New York, New York 10016

(212) 563-4141

(Address, including zip code, and telephone number including area code, of Registrant’s principal executive offices)

Frank J. Drohan, Chief Executive Officer and Chief Financial Officer

Omagine, Inc.

136 Madison Avenue, 5th Floor

New York, New York 10016

(212) 563-4141

(Name, address, including zip code, and telephone number, including area code, of agent for service)

with copies to:

Michael Ference, Esq.

David Manno, Esq.

Sichenzia Ross Ference Kesner LLP

61 Broadway, 32nd Floor

New York, New York 10006

(212) 930-9700

(212) 930-9725 (fax)

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

From time to time after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”) check the following box: ☒ 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐ 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐ 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
(Do not check if a smaller reporting company)

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the United States Securities & Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus (“Prospectus”) is not complete and may be changed. The Selling Stockholder may not sell these securities until the Registration Statement filed with the United States Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, DATED February 6, 2017

OMAGINE, INC.

3,085,822 Shares of Common Stock 

This Prospectus relates to the public offering of up to 3,085,822 shares of Omagine, Inc.’s $0.001 par value per share common stock (the ”Common Stock” or “Common Shares”) by YA II PN, Ltd. (p/k/a YA Global Master SPV Ltd.) (“YA”) or any of YA’s pledgees, assignees or successors-in-interest (each a “Selling Stockholder”). The United States Securities and Exchange Commission (“SEC”) may take the view that, under certain circumstances, any broker-dealers or agents that participate with the Selling Stockholder in the distribution of the Common Shares may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). Commissions, discounts or concessions received by any such broker-dealer or agent may be deemed to be underwriting commissions under the Securities Act. YA has informed us that it is an “underwriter” within the meaning of the Securities Act. The Selling Stockholder may sell Common Shares from time to time in the principal market on which the Registrant’s Common Stock is quoted and traded at the prevailing market price or in negotiated transactions. We will not receive any of the proceeds from the sale of those Common Shares being sold by the Selling Stockholder. We will pay the expenses of registering these Common Shares. 

The Common Stock is quoted on the over-the-counter market on the OTCQB and trades under the symbol “OMAG”. The last reported sale price of the Common Stock on the OTCQB on February 3, 2017 was $0.55 per Common Share.

The Selling Stockholder is offering these Common Shares. The Selling Stockholder may sell all or a portion of these Common Shares from time to time in market transactions through any market on which the Common Stock is then traded, in negotiated transactions or otherwise, and at prices and on terms that will be determined by the then prevailing market price or at negotiated prices directly or through a broker or brokers, who may act as agent or as principal or by a combination of such methods of sale. The Selling Stockholder will receive all proceeds from such sales of the Common Shares. For additional information on the methods of sale, you should refer to the section entitled "Plan of Distribution."

Ignoring any caps on the number of Common Shares that the Selling Stockholder may own at any time and based on the $0.55 closing market price for a Common Share on February 3, 2017, the Selling Stockholder may sell 3,085,822 Common Shares offered under this Prospectus. We will file a new registration statement to cover the resale of any additional shares in the event that the number of shares actually sold to YA under the 2014 SEDA exceeds 3,085,822 shares. 

Investing in these securities involves significant risks. See "Risk Factors" beginning on page 7.

The opinion of our independent auditors in our fiscal year 2015 audited financial statements included in this Prospectus does not contain any expression of concern about our ability to continue as a going concern. In their opinion on our fiscal year 2014 audited financial statements included in this Prospectus, our auditors expressed substantial doubt about our ability to continue as a going concern but beginning in our September 30, 2015 unaudited quarterly financial statements and continuing through all reporting periods up to and including our September 2016 unaudited quarterly financial statements included in this Prospectus, that expression of concern has been removed. 

We may amend or supplement this Prospectus from time to time by filing amendments or supplements as required. You should read the entire Prospectus and any amendments or supplements carefully before you make your investment decision.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this Prospectus is February __, 2017.

TABLE OF CONTENTS

	Page
About This Prospectus	i
Prospectus Summary	1
Risk Factors	7
Special Note Regarding Forward-Looking Statements	15
Use Of Proceeds	16
Selling Stockholder	16
Plan of Distribution	17
Description Of Securities To Be Registered	19
Description Of Preferred Stock And Warrants	19
Legal Matters	23
Experts	23
Description of Business	23
Description of Property	46
Legal Proceedings	46
Market for Common Shares and Related Stockholder Matters	46
Selected Financial Data and Supplementary Financial Information	47
Financial Statements	48
Management's Discussion and Analysis of Financial Condition and Results of Operations	48
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	67
Quantitative and Qualitative Disclosures about Market Risk	67
Directors and Executive Officers	68
Executive Compensation	70
Security Ownership of Certain Beneficial Owners and Management	83
Certain Relationships and Related Transactions and Director Independence	85
Disclosure of Commission Position on Indemnification for Securities Act Liabilities	87
Where You Can Find More Information	87

ABOUT THIS PROSPECTUS

You should rely only on the information contained in this Prospectus or that we have referred you to via this Prospectus. We have not authorized any dealer, salesperson or other person to provide you with information concerning us except for the information contained in this Prospectus. The information contained in this Prospectus is complete and accurate only as of the date on the front cover page of this Prospectus regardless of when the time of delivery of this Prospectus or the sale of any Common Stock occurs. Neither the delivery of this Prospectus nor any sale made in connection with this Prospectus shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this Prospectus or that the information contained herein this Prospectus by reference thereto is correct as of any time after its date.

The Selling Stockholders may not sell the securities until the registration statement filed with the Securities and Exchange Commission (“Registration Statement”) is effective. This Prospectus is not an offer to sell nor is it a solicitation of an offer to buy Common Shares in any jurisdiction in which such offer or sale is not permitted.

 i

PROSPECTUS SUMMARY

The following summary highlights selected information contained in this Prospectus and in the documents incorporated by reference into this Prospectus. This summary does not contain all the information you should consider before investing in the Common Stock. Before making an investment decision, you should carefully read the entire Prospectus and the documents incorporated by reference into this Prospectus, including the "RISK FACTORS" section, the financial statements and the notes to the financial statements. As used throughout this Registration Statement and Prospectus, the term "Registrant" refers to Omagine, Inc. and the terms "Company", "we," "us," or "our" refer to Omagine, Inc. and its consolidated subsidiaries unless the context otherwise requires.

General

Omagine, Inc. (“Omagine” or the ”Registrant”) was incorporated in Delaware in October 2004 and is a holding company which conducts substantially all its operations through its 60% owned subsidiary Omagine LLC, an Omani limited liability corporation (“LLC”) and its wholly-owned subsidiary Journey of Light, Inc., a New York corporation (“JOL”). Omagine and JOL are collectively referred to herein as “OMAG” and Omagine, JOL and LLC and are collectively referred to herein as the ”Company”.

In November 2009, Omagine organized LLC as a wholly owned subsidiary under the laws of the Sultanate of Oman (”Oman”) to design, develop, own and operate our initial project – a mixed-use tourism and real estate project named the “Omagine Project” (See “The Omagine Project” below). In October 2014, LLC and the Government of Oman (the “Government”) signed an agreement (the “Development Agreement” or “DA”) for the development in Oman by LLC of the Omagine Project (See: Exhibits 10.7 and 99.1 and “The Development Agreement and the Usufruct Agreement”, below). On July 2, 2015, after the Usufruct Agreement (“UA”) was registered by the Government legally perfecting LLC’s ownership of the Land Rights, the Government and LLC entered into an agreement (the “Operative Agreement”) making July 1, 2015 the “Operative Date” from which all time periods for the execution by LLC of various tasks enumerated in the DA are to be measured.

Omagine initially capitalized LLC at Omani Rials (“OMR”) 20,000 [$52,000] and in 2011 Omagine’s 100% ownership of LLC was reduced to 60% pursuant to a shareholders’ agreement (the “Shareholder Agreement”) signed in May 2011 by Omagine, JOL and three new LLC minority investors (See: Exhibit 10.5 and “The Shareholder Agreement” below).

As of the date hereof, the shareholders of Omagine LLC (the “LLC Shareholders”) are:

i.	Omagine, Inc. and
ii.	The Office of Royal Court Affairs (“RCA”), an organization representing the personal interests of His Majesty Sultan Qaboos bin Said, the ruler of Oman, and
iii.	Two subsidiaries of Consolidated Contractors International Company, SAL (“CCIC”). CCIC is a 65 year old Lebanese multi-national company headquartered in Athens, Greece having worldwide and operating subsidiaries in among other places, every country in the MENA Region. In its fiscal years immediately prior to 2016, CCIC had approximately five (5) billion U.S. dollars in annual revenue and one hundred thirty thousand (130,000) employees but this may be reduced during its 2016 fiscal year as a result of adverse economic conditions in the MENA Region (See: “Market Conditions” below).  The two CCIC subsidiaries which are LLC shareholders are:

a.	Consolidated Contracting Company S.A. (“CCC-Panama”), a wholly owned subsidiary of CCIC and its investment arm, and
b.	Consolidated Contractors Oman Company LLC (“CCC-Oman”), CCIC’s operating subsidiary in Oman which is a construction company with approximately 13,000 employees.

CCC-Panama and CCC-Oman are sometimes referred to collectively in this report as “CCC”.

1

As previously reported several obstacles were encountered with regard to concluding the construction contract for the Omagine Project with CCC (the “CCC-Contract”). It recently appeared that these obstacles would be overcome via an agreement with CCC and an Omani bank with whom CCC has a business relationship. CCC’s introduction and long-standing relationship with the Omani bank was the impetus behind the proposed debt financing and advisory services to LLC by the Omani bank. All efforts to date to conclude the CCC-Contract with CCC, and recently to conclude an agreement with the Omani bank referred to us by CCC, have resulted in no forward progress.

Management was originally pleased in August 2016 by the prospect of concluding the drawn out negotiations with CCC to finalize the CCC-Contract and the Amended and Restated Shareholder Agreement with CCC and RCA before concluding a term sheet with the Omani Bank, but all such CCC negotiations once again foundered and management no longer sees that path as a viable way forward.

Also as previously reported, management has been holding discussions in parallel with several potential LLC investors and as of the date hereof, we are in final discussions with several such investors and have a signed agreement with one such investor.

We presently expect to amend the Shareholder Agreement as necessary to memorialize the new arrangements and revisions to which the LLC Shareholders may agree (the “Amended and Restated Shareholder Agreement”). We presently expect that the Amended and Restated Shareholder Agreement will be signed by the parties sometime during February 2017 and that serious design, development and construction activities on the Omagine Project will begin during the first quarter of 2017.

Management has also been conducting parallel project finance discussions with a bank other than the Omani Bank with whom CCC has a business relationship, and, based on our prior discussions with that bank, we presently expect a successful conclusion to that project finance discussion to occur only after the Amended and Restated Shareholder Agreement is executed by the parties – i.e. sometime during the first quarter of 2017.

Notwithstanding the foregoing however, no assurance can be given that the Amended and Restated Shareholder Agreement will be signed until it is actually signed by the parties; nor can any assurance be given that the necessary project finance for the Omagine Project can be arranged with the bank with which we are presently discussing it until it actually is arranged. As these matters unfold, management will report all material developments and agreements to its shareholders in a timely manner.

Management’s primary goal continues to be the launch in the first quarter of 2017 of serious design and construction activities for the Omagine Project. Management cautions that future events rarely develop exactly as forecast and the best estimates routinely require adjustment. Investors and shareholders are cautioned not to place undue reliance on any such forward-looking statement or forecast, which speaks only as of the date hereof.

The Shareholder Agreement

Upon organizing Omagine LLC in 2009, Omagine made an initial cash investment into LLC of OR 20,000 [$52,000] in consideration for the issuance to Omagine of 200,000 LLC Shares.

Pursuant to the Shareholder Agreement:

i. Before the DA was signed and after the execution of the Shareholder Agreement, the LLC Shareholders purchased an aggregate of 1,300,000 LLC Shares for an aggregate cash investment of OR 130,000 [$338,000], as follows:

a)	Omagine purchased an additional 700,000 LLC Shares for OR 70,000 [$182,000] in cash, and
b)	RCA purchased 375,000 LLC Shares for OR 37,500 [$97,500] in cash, and
c)	CCC-Panama purchased 150,000 LLC Shares for OR 15,000 [$39,000] in cash, and CCC-Oman purchased 75,000 LLC Shares for OR 7,500 [$19,500] in cash (collectively, the “225,000 Initial CCC Shares”).

ii.  After the DA was signed on October 2, 2014, Omagine purchased an additional 2,100,000 LLC Shares for an additional investment by Omagine of OR 210,000 [$546,000] in cash, and

iii.  On July 2, 2015, RCA purchased an additional 663,750 LLC Shares in consideration for the non-cash investment by RCA of the Land Rights valued at OR 276,666,667 [$718,614,000].

2

The CCC Contract was not signed on or before July 1, 2016 and the Shareholder Agreement is expected to be amended shortly by the Amended and Restated Shareholder Agreement. Pursuant to the terms and conditions of the Shareholder Agreement, Omagine, Inc. has the option (the “OMAG Option”) to purchase the 225,000 Initial CCC Shares from CCC for 22,500 Omani Rials ($58,500). The OMAG Options are exercisable at any time up to and including July 1, 2017 and Omagine, Inc. in its sole discretion, may assign the OMAG Option to any Person. (See: “the CCC-Contract” below and the CCC-Panama Subscription Agreement and the CCC-Oman Subscription Agreement which are integral parts of and fully incorporated into the Shareholder Agreement attached hereto as Exhibit 10.6).

As of September 30, 2016 and the date hereof the LLC shareholders have made cash investments into LLC as indicated in the following Table A:

Table A  -  LLC Shareholders’ Cash Equity Investments into Omagine LLC

	Omagine, Inc.				Royal Court Affairs				Consolidated Contractors
	OR		USD		OR		USD		OR		USD
Initial cash equity investment at inception		OR 20,000	$	52,000		0		0		0		0
Additional cash equity investment at signing of Shareholder Agreement (the “SHA”)		OR 70,000	$	182,000	OR	37,500	$	97,500	OR	22,500	$	58,500
Additional OMAG Deferred Cash Equity Investment due under the SHA before the first Financing Agreement Date **		OR 210,000	$	546,000		0		0		0		0
Total Cash Equity Investments made by each of the LLC Shareholders into LLC as of September 30, 2016 and the date hereof.		OR 300,000	$	780,000	OR	37,500	$	97,500		OR 22,500	$	58,500

As of September 30, 2016 and the date hereof RCA has made a non-cash payment-in-kind investment into LLC as indicated in the following Table B:

Table B  -  RCA’s Non-Cash Equity Investment into Omagine LLC

Omagine, Inc.

Royal Court Affairs

Consolidated Contractors

OR

USD

OR

USD

OR

USD

Additional non-cash equity investment of Land Rights on registration of the Usufruct Agreement*

0

0

OR 276,666,667

$

718,614,000

0

0

3

As of July 1, 2016 and the date hereof RCA is obligated to make an additional Deferred Cash Investment into LLC as indicated in the following Table C:

Table C  -  RCA Deferred Cash Equity Investment into Omagine LLC

Omagine, Inc.

Royal Court Affairs

Consolidated Contractors

OR

USD

OR

USD

OR

USD

Additional RCA Deferred Cash Investment which is now due under the SHA

0

0

OR 7,640,625

$

19,865,625

0

0

As of September 30, 2016 CCC, in management’s opinion, was obligated to make additional Deferred Cash Investments into LLC as indicated in the following Table D, however it is management’s present opinion that this is now unlikely to occur.

Table D  -  CCC Deferred Cash Equity Investments into Omagine LLC

Omagine, Inc.

Royal Court Affairs

Consolidated Contractors

OR

USD

OR

USD

OR

USD

Additional Deferred Cash Investments which may be due under the SHA

0

0

0

0

OR 18,987,500

$

49,367,500

* All conversions of Omani Rials to U.S. Dollars in this Report are calculated at an exchange rate of one (1) Omani Rial being equivalent to $2.60 except for the land valuation which is calculated at an exchange rate of one (1) Omani Rial being equivalent to $2.5974. See: “The Land Rights” and “Critical Accounting Policies”, below.

In order to bring the Omagine Project to its present state, Omagine, Inc. (as of September 30, 2016), has:

(i) invested 300,000 Omani Rials ($780,000) in cash into Omagine LLC, and

(ii) expended $17.9 million of Pre-Development Expenses on behalf of the Omagine Project through the October 2, 2014 DA signing date consisting of both cash and non-cash expense items as Omagine, Inc. had promised to do pursuant to the SHA, and

(iii) single-handedly kept the Omagine Project and Omagine LLC financially afloat after the October 2, 2014 DA signing date by expending an additional $10.8 million on behalf of the Omagine Project via cash loans from Omagine, Inc. to Omagine LLC (“Loans”) and the direct payment by Omagine, Inc. of Omagine LLC liabilities and accounts payable consisting of both cash and non-cash items (“Advances”), neither of which Loans nor Advances Omagine, Inc. had any obligation whatsoever to do pursuant to the SHA.

4

All such Pre-Development Expenses, Loans and Advances are or will be liabilities of LLC, reimbursable to Omagine, Inc. in accordance with the terms of the Shareholder Agreement (as may likely be amended; See: the following Table E, and “Pre-Development Expenses and Loans and Advances to LLC”, below).

Table E - Pre-Development Expenses, Loans and Advances

Pre-Development Expenses, Loans and Advances	Cash Items		Non-Cash Items (Depreciation; Amortization; Stock Option Expense)		Total
Pre-Development Expense Amount (incurred prior to the October 2, 2014 DA signing date)	$	13,611,951	$	4,308,163	$	17,920,114
Loans & Advances (incurred on or after the October 2, 2014 DA signing date)	$	3,876,589	$	6,961,789	$	10,838,378
Total - (Due to Omagine, Inc. from Omagine LLC)	$	17,488,540	$	11,269,952	$	28,758,492

The foregoing summary of some of the terms of the Shareholder Agreement and does not purport to be complete and it is qualified in its entirety by reference to the full text of the SHA. The full text of the SHA is attached hereto as Exhibit 10.6. RCA and Omagine, Inc. are presently in negotiations with investors which may lead to an Amended and Restated Shareholder Agreement.

The Standby Equity Distribution Agreement

The 2014 SEDA

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement which was amended on October 10, 2014 and again amended on September 20, 2016 (the “2014 SEDA”). The 2014 SEDA is generally on the same terms as the 2011 SEDA. Unless earlier terminated in accordance with its terms, the 2014 SEDA shall automatically expire on the earlier of (i) February 1, 2019, or (ii) the date on which YA shall have made payment of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000. In satisfaction of a $150,000 commitment fee due pursuant to the 2014 SEDA, Omagine issued 85,822 restricted Common Shares (the “Commitment Fee Shares”) in 2014 to YA Global II SPV, LLC which is an affiliate of YA (the “Affiliate”). In satisfaction of an additional $150,000 commitment fee due pursuant to the September 2016 extension of the 2014 SEDA, Omagine issued an additional 161,290 restricted Common Shares (the “Extension Shares”) to YA’s Affiliate. (See: Exhibit 10.41, SEDA 2^nd Amendment Agreement).

Pursuant to the terms of the 2014 SEDA, Omagine may in its sole discretion, and upon giving written notice to YA (an “Advance Notice”), periodically sell Common Shares to YA (“Shares”) at a per Share price (“Purchase Price”) equal to 95% of the lowest daily volume weighted average price (the “VWAP”) for a Common Share as quoted by Bloomberg, L.P. during the five (5) consecutive Trading Days (as such term is defined in the 2014 SEDA) immediately subsequent to the date of the relevant Advance Notice (the “Pricing Period”).

Omagine is not obligated to sell any Shares to YA but may, over the term of the 2014 SEDA and in its sole discretion, sell to YA that number of Shares valued at the Purchase Price from time to time in effect that equals up to five million dollars ($5,000,000) in the aggregate. YA is obligated under the 2014 SEDA to purchase such Shares from Omagine subject to certain conditions including (i) Omagine filing a registration statement with the SEC to register the resale by YA of the Shares sold to YA under the 2014 SEDA (“Registration Statement”), (ii) the SEC declaring such Registration Statement effective, (iii) Omagine certifying to YA at the time of each Advance Notice that Omagine has performed all covenants and agreements to be performed and has complied with all obligations and conditions contained in the 2014 SEDA, (iv) periodic sales of Shares to YA must be separated by a time period of at least five Trading Days, and (v) the dollar value of any individual periodic sale of Shares designated by Omagine in any Advance Notice may not exceed the greater of (a) two hundred thousand dollars ($200,000), or (b) the average of the "Daily Value Traded" for each of the five (5) Trading Days immediately preceding the date of the relevant Advance Notice where Daily Value Traded is the product obtained by multiplying the number representing the daily trading volume of Common Shares for such Trading Day by the VWAP for Common Share on such Trading Day.

5

Pursuant to the 2014 SEDA in no event shall the number of Common Shares issuable to YA pursuant to an Advance cause the aggregate number of Common Shares beneficially owned (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended), by YA and its affiliates to exceed 9.99% of the then outstanding common stock of the Company. In addition this 9.99% ownership cap may not be waived by YA or Omagine and since such ownership cap includes all Common Shares owned by any YA affiliate, such cap cannot be avoided by transferring Common Shares to an affiliate of YA.

On October 15, 2014 Omagine filed the Registration Statement on Form S-1 to register the 3,085,822 Common Shares covered by the 2014 SEDA and on January 8, 2015, Omagine filed an amendment to the Registration Statement and the Registration Statement was declared effective by the SEC on January 22, 2015. Post-Effective Amendment No. 1 was filed with the SEC on December 21, 2015 and subsequently declared effective by the SEC. Post-Effective Amendment No. 2 to the Registration Statement was filed with the SEC on January 6, 2016 and was declared effective on January 13, 2016. This Post-Effective Amendment No. 3 to the Registration Statement is being filed to update the Registration Statement including the updating of the 2014 SEDA as amended on September 20, 2016. As of the date hereof, Omagine has issued and sold a total of 134,807 of the Resale Shares to YA, of which 85,822 Shares were the Commitment Fee Shares. 

The foregoing summary of the terms of the 2014 SEDA does not purport to be complete and is qualified in its entirety by reference to the full texts of the 2014 SEDA and the amendments thereto, copies of which are attached hereto as Exhibits 10.18, 10.20 and 10.41.

Omagine intends to utilize the 2014 SEDA to fund its ongoing operations as and if necessary and as of the date of this Report, the Company has sold 48,985 shares of its Common Shares pursuant to the 2014 SEDA for proceeds of $50,000.

About This Offering

This Prospectus relates to a total of up to 3,085,822 Common Shares (the “Resale Shares”) which may be offered by the Selling Stockholder none of which Resale Shares are owned by the Selling Stockholder or its Affiliate as of the date hereof. As of the date hereof, 2,951,015 Resale Shares may be purchased by and issued to the Selling Stockholder under the terms of the 2014 SEDA. 

Number of Shares Outstanding After This Offering

As of February 6, 2017, we had 21,293,178 Common Shares issued and outstanding. Assuming Omagine is able to sell all 2,951,015 Common Shares to YA under the 2014 SEDA, then the number of Common Shares outstanding after this offering is expected to be 24,244,193. 

Summary of Offering

Common Shares outstanding prior to the offering	21,293,178 (as of February 6, 2017)
Resale Shares offered by the Selling Stockholder	Up to 2,951,015
Common Shares expected to be outstanding after the offering	24,244,193 *
Use of proceeds	We will not receive any proceeds from the resale by the Selling Stockholder of the Resale Shares hereunder. See “Use of Proceeds” for a complete description.

* Assumes Omagine is able to sell all 2,951,015 Common Shares to YA under the 2014 SEDA.

6

RISK FACTORS

You should carefully consider the following risk factors and the other information included in this Prospectus as well as the information included in other reports and filings made with the SEC before investing in our common stock.   The following factors, as well as other factors affecting our operating results and financial condition, could cause our actual future results and financial condition to differ materially from those projected. The trading price of our common stock could decline due to any of these risks, should they materialize, and you may lose part or all of your investment.

Risk Factors Related to Our Company and Our Business

To fully develop our business plan we will need additional financing.

Omagine LLC will have to secure substantial further equity financing in order to carry out its plans for the phased development and construction of the Omagine Project and thereafter will have to secure approximately $350 million of Project Finance over time to finance the construction of the Omagine Project. As of the date hereof, neither of these two issues has been resolved. Management is presently holding discussions with a potential investor with whom LLC has a signed preliminary agreement. Bank liquidity and the availability of Project Finance in the GCC have been negatively affected by the dramatic drop in the price of crude oil during 2014 and 2015 which resulted in a dramatic drop in government deposits with local banks. This liquidity squeeze at the MENA Region Banks has been further exacerbated by greatly increased government borrowings from such banks in order to finance large and often unexpected government budget deficits. These increased government borrowing levels absorb large portions of the banks’ lending capacity; tending to crowd out lending for private companies that the banks might otherwise undertake. As governments and banks adjust to the new realities of lower priced oil, management expects to see an improvement in the liquidity levels of some banks. No assurance can be given at this time that LLC’s financing requirements can or will be arranged.

Although some of our Tempest Warrants (as hereinafter defined) have been exercised, it is impossible to predict if any of our remaining outstanding Common Stock purchase warrants (“Warrants”) will ever be exercised. In the near term, we expect to continue to rely principally upon financing received from proceeds of sales of Common Shares made pursuant to private placements, the 2014 SEDA and the possible exercise of Warrants. For the past several years we have relied on the proceeds from the YA Loans and from sales of Common Shares made pursuant to the “Prior SEDAs” (as those terms are hereinafter defined) as well as from sales of restricted Common Shares made pursuant to private placements and to the exercise of Tempest Warrants. We cannot guarantee the success of this plan. (See: “Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”).

We will have to obtain additional financing in order to conduct our business in a manner consistent with our proposed operations. There is no guaranty that additional funds will be available when, and if, needed. If we are unable to obtain financing, or if its terms are too costly, we may be forced to curtail expansion of operations until such time as alternative financing may be arranged, which could have a materially adverse impact on our operations and our shareholders' investment. It is impossible to predict if any more of our Warrants will ever be exercised. Omagine believes that there is virtually no probability that any “Strategic Warrants” (as hereinafter defined) will be exercised unless our Common Shares trade at a market price materially above the relevant exercise prices of the Strategic Warrants. (See: “Description of Preferred Stock”, “Warrants” and “Management's Discussion and Analysis of Financial Condition and Results of Operations”).

7

We have no history of profitability from the development of real estate and we have incurred significant losses and cannot assure you that we will be profitable in the near term or at all.

We have dedicated the vast majority of our financial resources over the past many years toward the effort to conclude the DA with the Government of Oman. The DA is now signed but we encountered numerous delays prior to its signing and as a result we have incurred significant losses over the past few years, including net losses of $1,509,171 for the six month period ended June 30, 2016; $5,673,293 for the fiscal year ended December 31, 2015, $5,160,960 for the fiscal year ended December 31, 2014 and $2,640,590 for the fiscal year ended December 31, 2013, primarily due to an absence of revenue due to delays during those periods in the start of development of the Omagine Project and to incurring other expenses associated with the design, development and promotion of the Omagine Project as well as significant non-cash expenses related to stock options. (See: “Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations - Nine Months Ended September 30, 2016 vs. Nine Months Ended September 30, 2015 – Liquidity and Capital Resources”). We expect to continue to incur such losses and expenses over the near term as a result of financing LLC’s operations and until LLC closes a transaction with one or more investors or banks. This will adversely impact our overall financial performance and results of operations. The Omagine Project may never result in a profit to Omagine. Sales of our proposed real estate development properties, and income, if any, from the Omagine Project may never generate sufficient revenues to fund our continuing operations. We cannot assure you that we will be profitable in the near term or at all. 

Because of our limited history and the potential for competition, an investment in our Company is inherently risky.

Because we are a company with a limited history, our operations are subject to numerous risks similar to those of a start-up company. We expect the real estate development business to be highly competitive because many developers have access to the same market. Substantially all of them have greater financial resources and longer operating histories than we have and can be expected to compete within the business in which we engage and intend to engage. We cannot assure you that we will have the necessary resources to be competitive.

We may not be able to conduct successful operations in the future.

The results of our operations will depend, among other things, upon our ability to develop and market the Omagine Project. Furthermore, our proposed operations may not generate income sufficient to meet operating expenses or may generate income and capital appreciation, if any, at rates lower than those anticipated or necessary to sustain ourselves. Our operations may be affected by many factors, some known by us, some unknown, and some which are beyond our control. Any of these problems, or a combination thereof, could have a materially adverse effect on our viability as an ongoing enterprise and might cause the investment of our shareholders to be impaired or lost.

While our 2015 audited financial statements assume we will continue our operations on a going concern basis, the opinion of our independent auditors in our 2014 financial statements contained an explanatory paragraph stating that there was substantial doubt about our ability to continue as a going concern.

The opinion of our independent auditors contained in our 2015 audited financial statements included in this Prospectus does not contain any expression of concern about our ability to continue as a going concern. The opinion of our independent auditors contained in our 2014 audited financial statements did contain a paragraph stating that as of the date of such opinion there was substantial doubt about our ability to continue as a going concern. As discussed in Note 2 to such 2014 audited financial statements, Omagine's then present financial situation raised substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter were also described in Note 2 and such 2014 audited financial statements were prepared under the assumption that we would continue our operations on a going concern basis, which contemplated the realization of assets and the discharge of liabilities in the normal course of business. Our 2014 audited financial statements did not include any adjustments that might have been necessary if we were unable to continue as a going concern. (See: “Management's Discussion and Analysis of Financial Condition and Results of Operations – Overview”). Beginning in our September 30, 2015 unaudited quarterly financial statements and continuing through all reporting periods up to and including our September 2016 unaudited quarterly financial statements included in this Prospectus that expression of concern has been removed. Notwithstanding the foregoing, if we sustain unanticipated losses and we cannot continue as a going concern, our shareholders may lose all of their investment in Omagine. 

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Even after entering into the 2014 SEDA, we lack capital.

Even with the 2014 SEDA, we will require additional funds to sustain our operations as presently contemplated. There can be no guaranty that such additional funds will be available in the future. If we or LLC are unable to obtain additional financing as required, or if its terms are too costly, we may be forced to curtail the expansion of our operations until such time as alternative financing may be arranged which could have a materially adverse impact on our operations and our shareholders' investments. (See: “Financial Adviser”, below). 

We may not have full access to or be able to fully utilize the 2014 SEDA.

Because the market for our Common Stock has historically exhibited low liquidity levels and has been limited, sporadic and often volatile, we may not be able to take full advantage of the 2014 SEDA. If the market for our Common Shares is exhibiting low liquidity levels at the time we give YA an Advance Notice (a “Put”) and if YA sells Common Shares into the public market during the five Trading Day Pricing Period subsequent to our Put (as is YA’s customary practice), it is likely that the price of our Common Shares will decline. Any such price decline will immediately increase the number of Common Shares we would otherwise be required absent such price decline to deliver to YA subsequent to the Pricing Period in satisfaction of such Put. If this pattern continued to happen with subsequent Puts by us, it is likely that we would issue and sell to YA the maximum 2,951,015 shares presently available to be sold to YA under the 2014 SEDA well before reaching the aggregate sales price of $5 million available under the 2014 SEDA.

Our ultimate success will be dependent upon management.

Our success is dependent upon the skill and decision making ability of our directors and executive officers, who are Frank J. Drohan, Charles P. Kuczynski, Louis J. Lombardo, Jack A. Smith, Alan M. Matus, William Hanley and Sam Hamdan. The loss of any or all of these individuals could have a material adverse impact on our operations. We do not presently have a written employment agreement with any of our officers or directors (See: “Executive Compensation – Employment Agreements”). We have not obtained key man life insurance on the lives of any of these individuals. Our success depends in large part on our ability to attract and retain key people and consultants. If we are not able to retain and recruit qualified personnel, which we require now and will require in the future to conduct our and LLC’s ongoing operations, our business and our ability to successfully implement our business plan could be adversely affected.

We will rely on dividends from LLC for most of our revenue.

Because we are a holding company with no significant operations other than the operations of our 60% owned subsidiary, LLC, we will depend upon dividends from LLC for a substantial portion of our future revenues. LLC has generated no revenue to date and we do not anticipate that LLC will be in a position to pay dividends until after the development of the Omagine Project is well underway.

We are subject to risks associated with investments in real estate.

The value of our proposed properties and our projected income therefrom may decline due to developments that adversely affect real estate generally and those that are specific to our proposed properties. General factors that may adversely affect our potential real estate holdings include:

● increases in interest rates;

● adverse changes in foreign exchange rates;

● a decline in prevailing rental rates for the properties we intend to own and lease;

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● a general tightening of the availability of credit and project financing facilities;

● a decline in economic conditions in Oman;

● an increase in competition for customers or a decrease in demand by customers for the residential and commercial properties we plan to develop and offer for sale;

● a decline in prevailing sales prices for the properties we intend to develop and offer for sale;

● an increase in supply in Oman of property types similar to those proposed to be developed by us;

● declines in consumer spending during an economic recession or recovery from an economic recession that adversely affect our revenue; and

● the adoption by the relevant government authorities in Oman of more restrictive laws and governmental regulations, including more restrictive zoning, labor, visa, licensing, land use, building or environmental regulations or increased real estate taxes.

Additional factors may adversely affect the value of our proposed properties and our projected income therefrom, including:

● adverse changes in the perceptions of prospective purchasers or users of the attractiveness of the properties proposed to be developed by us;

● opposition from local community or political groups with respect to development or construction at a particular site;

● a change in existing comprehensive zoning plans or zoning or environmental or business licensing regulations that impose additional restrictions on use or requirements with respect to the properties proposed to be developed by us;

● our inability to provide adequate management and maintenance or to obtain adequate insurance for the properties proposed to be developed by us;

● an increase in operating costs;

● new development of a competitor's property in close proximity to the Omagine Project;

● earthquakes, floods or underinsured or uninsured natural disasters; and

● terrorism, political instability or civil unrest in Oman or the MENA Region.

The occurrence or existence of one or more of the events or circumstances described above could result in significant delays or unexpected expenses. If any of these events occur or circumstances come into existence, we may not achieve our projected returns on the Omagine Project and we could lose some or all of our investment in LLC and in the Omagine Project.

We are subject to risks associated with real estate development.

The Omagine Project is subject to significant risks relating to LLC’s ability to complete it on time and within budget. Factors that may result in the Omagine Project or any other development project we may undertake in Oman or elsewhere exceeding budget or being prevented from completion include:

● an inability to obtain or delays in obtaining zoning, environmental, occupancy or other required governmental permits, approvals and authorizations;

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● an inability to secure sufficient financing on favorable terms, including an inability to obtain or refinance construction loans;

● a general tightening of the availability of credit and project financing facilities;

● the prices of housing and commercial properties in Oman and consumer and/or business confidence; any of which could affect LLC’s ability to construct and/or sell homes and to construct, sell and/or lease commercial properties and/or to secure financing;

● construction delays or cost overruns, either of which may increase project development costs; and

● an increase in commodity costs.

If any of the forgoing occurs or exists, we may not achieve our projected returns on the Omagine Project and we could lose some or all of our investment in LLC and in the Omagine Project or in other properties we may then have under development.

We are vulnerable to concentration risks because our operations are presently exclusively in Oman and our future operations are planned to be exclusively in Oman and the MENA Region market. Our real estate activities are presently concentrated exclusively on the Omagine Project to be located in Oman. Because of such geographic and project specific concentration, our operations are more vulnerable to Oman and MENA Region economic downturns and adverse project-specific events than those of larger, more diversified companies.

The performance of Oman’s economy will greatly affect the values of the properties proposed to be developed by us and consequently our prospects for sales and revenue growth. The Oman economy is heavily influenced by the prices of crude oil and natural gas which are Oman’s main export products and sources of revenue. Fluctuations in the international price of crude oil directly affect Oman’s revenue and budget considerations. The price of crude oil has fallen substantially since the last quarter of 2014 and through the date hereof (from over $100 per barrel to around $40 per barrel) and this has put significant pressure on Oman’s (and MENA Region countries’) budgetary and fiscal policies. A decrease in government supported projects and employment because of budget cuts or otherwise could adversely affect the economy in Oman.

Our results of operations and financial condition will be greatly affected by the performance of the real estate industry.

Our real estate activities are, and will continue to be, subject to numerous factors beyond our control, including local real estate market conditions in Oman and in areas where our potential customers reside, substantial existing and potential competition, general economic conditions in Oman, the MENA Region and internationally, decreases in the price of crude oil exports by Oman, fluctuations in interest rates and mortgage availability and changes in demographic conditions. Real estate markets have historically been subject to strong periodic cycles driven by numerous factors beyond the control of market participants.

Real estate investments often cannot easily be converted into cash and market values may be adversely affected by economic or political circumstances, market fundamentals, competition or demographic conditions. Because of the effect these factors may have on real estate values and because of the long length of the project development cycle, the future sales prices for our individual proposed properties or the future level of our sales revenue from the operation, sales and/or leasing of our various proposed properties, is impossible to predict with certainty and difficult to predict with accuracy.

Our real estate operations will also be dependent upon the availability and cost of mortgage financing for our potential customers to the extent they finance the purchase of the residences or commercial properties we intend to develop and offer for sale.

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The real estate business is very competitive and many of our competitors are larger and financially stronger than we are.

The real estate business is highly competitive. We compete with a large number of companies and individuals, and most of them have significantly greater financial, managerial and other resources than we have. Our competitors include local developers who are committed primarily to the Oman market and also international developers who acquire properties throughout the MENA Region. Because we are a company with a limited history, our operations are subject to numerous risks similar to those of a start-up company. We cannot assure that we will have the necessary resources to be competitive.

Our operations are subject to political risks.

The ongoing civil and political unrest in parts of the MENA Region, the military unrest and interventions in Iraq, Afghanistan, Libya, Syria and Yemen and the terrorist attacks in the U.S., Europe and the MENA Region, and the potential for additional future terrorist acts and civil and/or political or military unrest have created economic, political and social uncertainties that could materially and adversely affect our business. Further acts of civil and/or political unrest or terrorism could be directed against the U.S. or Oman either domestically or abroad. These acts could be directed against properties and personnel of American companies that work abroad, particularly companies such as ours that operate in the MENA Region. Civil and/or political unrest, terrorism, war, political considerations, and/or military developments may materially and adversely affect our business and profitability and the prices of our Common Stock in ways that we cannot predict at this time.

Our operations are subject to natural risks.

Our performance may be adversely affected by weather conditions that delay development or damage property.

We may have violated Section 5 of the Securities Act.

A sale under this registration statement occurred during a period when, based on interpretations of applicable Securities Act provisions by the staff of the SEC, the registration statement was not effective. Accordingly, we may have violated Section 5 of the Securities Act, and as a result, we may be subject to an enforcement action by the SEC. If the SEC were to bring such an enforcement action against the Company, it may have a material adverse effect on our financial position.

Risk Factors Related to Our Common Stock

Our stock price may be volatile and you may not be able to resell your Common Shares at or above your purchase price.

There has been and continues to be a limited public market for our Common Stock. Although our Common Stock trades on the OTCQB, an active trading market for our Common Shares has not developed and may never develop or be sustained. If you purchase Common Shares you may not be able to resell them at or above the price you paid. The market price of our Common Shares may fluctuate significantly in response to numerous factors, some of which are beyond our control, including the following:

● the exercise of Warrants;

● actual or anticipated fluctuations in our operating results;

● changes in financial estimates by securities analysts or our failure to perform in line with such estimates;

● changes in market valuations of other real estate companies, particularly those that sell products similar to ours;

● announcements by us or our competitors of significant innovations, acquisitions, strategic investors or partnerships, joint ventures or capital commitments;

● delays to LLC’s ongoing operations by Government authorities; or

● departure of key personnel.

Much of our issued and outstanding Common Stock is currently restricted. As restrictions on resale end, the market price of our Common Shares could drop significantly if the holders of restricted Common Shares sell them or are perceived by the market as intending to sell them. This could cause the market price of our Common Shares to drop significantly, even if our business is doing well.

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Our Common Shares have a limited public trading market.

While our Common Stock currently trades on the OTCQB, the market for our Common Shares is limited and sporadic. We cannot assure that such market will improve in the future, even if our Common Stock is ever listed on a national stock exchange. We cannot assure that an investor will be able to liquidate his investment without considerable delay, if at all. If a more active market for our Common Stock does develop, the price may be highly volatile. The factors discussed herein, including the history of project delays, the sudden and sharp drop in crude oil prices and the unknown impact of MENA Region civil, political or military unrest may have a significant impact on the market price of our Common Shares. The relatively low price of our Common Shares may keep many brokerage firms from engaging in transactions in our Common Stock.

The over-the-counter market for stock such as ours has had extreme price and volume fluctuations.

The securities of companies such as ours have historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as new product developments and trends in our industry and in the investment markets generally, as well as economic conditions and annual variations in our operational results may have a negative effect on the market price of our Common Shares.

Additional stock offerings may dilute current stockholders.

Given our plans and our expectation that we will need additional capital and personnel, we may need to issue additional shares of capital stock or securities convertible into or exercisable for shares of capital stock, including preferred stock, options, warrants or convertible notes. The issuance of additional shares of capital stock for any of these reasons or pursuant to the exercise of Warrants may dilute the ownership of our current shareholders.

Our management collectively beneficially owns approximately 31.7% of our Common Stock and this concentration of ownership may have the effect of preventing a change in control.

Assuming their ownership of the Common Shares underlying unexercised Stock Options and Strategic Warrants, our officers and directors collectively beneficially own approximately thirty one and seven-tenths percent (31.7%) of our Common Shares, and if Common Shares underlying 1,440,000 Stock Appreciation Rights held by officers and directors were presently “in the money” and calculable, the officer and director collective beneficial ownership of our Common Shares would be greater than 31.7% (See: “Security Ownership of Certain Beneficial Owners and Management”). As a result, if our officers and directors act in concert, they will have the ability by virtue of their voting power to exercise substantial influence over our business with respect to the election of directors and all other matters requiring action by stockholders. Such concentration of Common Share ownership may have the effect of discouraging, delaying or preventing a change in control of Omagine.

Our ability to issue preferred stock may adversely affect the rights of holders of our Common Stock and may make takeovers more difficult, possibly preventing you from obtaining the optimal Common Share price.

Our Certificate of Incorporation authorizes the issuance of shares of "blank check" preferred stock, which would have the designations, rights and preferences as may be determined from time to time by the Board of Directors. Accordingly, the Board of Directors is empowered, without shareholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of the Common Shares. The issuance of preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of Omagine.

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Our Common Stock is subject to the “penny stock” rules of the SEC, which may make it more difficult for you to sell our Common Shares.

The SEC has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that:

● the broker or dealer approve a person's account for transactions in penny stocks; and

● the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

● obtain the financial information and investment experience and objectives of the person; and

● make a reasonable determination that (a) transactions in penny stocks are suitable for that person, and (b) the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

● sets forth the basis on which the broker or dealer made the suitability determination; and

● states that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The regulations applicable to penny stocks may severely affect the market liquidity for the Common Shares owned by you and could limit your ability to sell such Common Shares in the secondary market.

As an issuer of “penny stock”, the protection provided by the federal securities laws relating to forward looking statements does not apply to us.

Although federal securities laws provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any legal action based upon a claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading. Such an action could hurt our financial condition.

Other than the distribution of the rights and warrants in our 2012 rights offering and warrant distribution, we have not paid dividends in the past and do not expect to pay dividends in the future unless and until dividends are paid to Omagine by LLC. Any return on your investment may therefore be limited to the value of our Common Shares.

We have never paid cash dividends on our Common Stock and do not anticipate paying cash dividends in the foreseeable future. Up until this time Omagine has utilized all cash reserves for the operation of its business and Omagine plans to continue this policy for the foreseeable future. Any future payment of dividends on our Common Stock will depend on the payment of dividends to Omagine by LLC and, as the Board of Directors may consider relevant, our earnings, financial condition and other business and economic factors at such time. If we do not pay cash dividends, our Common Stock may be less valuable because a return on your investment will only occur if the price of our Common Shares appreciates above the price you paid for it.

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There are substantial risks associated with the 2014 SEDA with YA which could contribute to the decline of the price of our Common Shares and have a dilutive impact on our existing stockholders.

In order to obtain needed capital, we entered into the 2014 SEDA with YA. The sale of our Common Shares pursuant to the 2014 SEDA will have a dilutive impact on our stockholders. We believe YA intends to promptly re-sell the Common Shares that we sell to it under the 2014 SEDA. Such re-sales could cause the market price of our Common Shares to decline significantly. Any subsequent sales by us to YA under the 2014 SEDA may, to the extent of any such decline, require us to issue a greater number of Common Shares to YA in exchange for each dollar of such subsequent sale.  Under these circumstances our existing stockholders would experience greater dilution (See: “Management's Discussion and Analysis of Financial Condition and Results of Operations”). The sale of Common Shares under the 2014 SEDA could encourage short sales by third parties which could contribute to the further decline of the price of our Common Stock.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Prospectus that are not statements of historical facts constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified as such. These forward-looking statements are based on current expectations and projections about future events. The words "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 (such as the potential new investor or investors in LLC or the potential financing with MENA Region banks), are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Examples of forward-looking statements include but are not limited to statements about or relating to: (i) future 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) plans, objectives and expectations of Omagine, Inc. or its management or Board of Directors, (iii) the Company’s business plans, products or services, (iv) future economic or financial performance, and (v) assumptions underlying such statements. We urge you to be cautious of the forward-looking statements and other similar forecasts and statements of expectations since such statements (i) reflect our current beliefs with respect to future events, (ii) involve, and are subject to, known and unknown risks, uncertainties and other factors affecting our operations and growth strategy, and (iii) could cause the Company's actual results, financial or operating performance or achievements to differ from future results, financial or operating performance, or achievements expressed or implied by such forward-looking statements. Forecasts, 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 Prospectus. All such forecasts, 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 such forecasts, projections or assumptions will be realized. 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 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 political events in the MENA Region in general, including the ongoing civil disorder and military activities in the MENA Region;

● the success or failure of Omagine’s efforts to secure additional financing, including project financing for the Omagine Project;

● oversupply of residential and/or commercial property inventory in the Oman real estate market or other adverse conditions in such market;

● the impact of MENA Region or international economies and/or future events (including natural disasters) on the Oman economy, on Omagine’s business or operations, on tourism within or into Oman, on the oil and natural gas businesses in Oman and on other major industries operating within the Omani market;

● deterioration or malaise in economic conditions, including the continuing destabilizing factors associated with recent rapid decline in the price of crude oil on international markets;

● inflation, interest rates, movements in interest rates, securities market and monetary fluctuations;

● threatened and ongoing acts of war, civil or political unrest, terrorism or political instability in the MENA Region; or

● the ability to attract and retain skilled employees.

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Potential investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof. Omagine 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.

USE OF PROCEEDS

We will not receive any of the proceeds resulting from the sale of the Resale Shares by the Selling Stockholder.

SELLING STOCKHOLDER

The following table sets forth the name of each person who is offering the sale of Resale Shares by this Prospectus, the number of Common Shares beneficially owned by each such person as of the date of this Prospectus, the number of Resale Shares that may be sold in this offering and the number of Common Shares each such person is expected to beneficially own after this offering, assuming they sell all of the Resale Shares offered. Neither the Selling Stockholder nor any of its affiliates have held any position or office with Omagine nor, other than the Prior SEDAs, the YA Loans and the 2014 SEDA, have any of them ever had any other material relationship with us or any of our predecessors or affiliates.

Name	Common Shares Owned Prior to the Offering (1)		Percentage of Ownership Before the Offering (1)			Number of Common Shares being Offered (4)		Common Shares Owned After the Offering (2)	Percentage of Ownership After the Offering (2)
YA II PN, Ltd. (p/k/a YA GLOBAL MASTER SPV LTD.) (3)		16,094		0.08	%		2,951,015	0	0
YA Global II SPV, LLC (5)		161,290		0.76	%			0	0
Total		177,384		0.83	%		2,951,015	0	0

(1)	Applicable percentage ownership is based on 21,293,178 Common Shares issued and outstanding as of February 6, 2017 and on:
	a.	161,290 Shares owned of record by YA Global II SPV, LLC, an affiliate of YA, as of February 6, 2017, which are the Extension Shares and are “restricted securities” not included in this Prospectus or Registration Statement, plus
	b.	16,094 Common Shares with respect to which YA has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended (the “Act”) and are unissued Common Shares underlying (i) 8,047 Strategic Warrants exercisable at $5.00 per Common Share and (ii) 8,047 Strategic Warrants exercisable at $10.00 per Common Share that are owned by YA as of February 6, 2017 and are currently exercisable.
	YA acquired the Strategic Warrants in March 2012 pursuant to a “Rights Offering and Warrant Distribution” conducted by Omagine in February and March of 2012 (the “Warrant Distribution”). Pursuant to the Warrant Distribution Omagine distributed one-fourth (1/4) of a $5 Warrant and one-fourth (1/4) of a $10 Warrant to the Record Shareholders for each share of Common Stock held by them at the Record Time. Each Record Shareholder received, automatically and at no charge, one $5 Warrant and one $10 Warrant for each four Common Shares held by such Record Shareholder at the Record Time. If the foregoing calculation resulted in a fractional Strategic Warrant, the result was rounded up to the nearest whole Strategic Warrant. YA was a Record Shareholder of 64,376 Common Shares at the Record Time and as a result the aforementioned 16,094 Strategic Warrants were distributed to YA at such time. (See: “Results of Operations – Fiscal Year ended December 31, 2015 vs. Fiscal Year ended December 31, 2014 - Liquidity and Capital Resources – Rights Offering and Warrant Distribution” below).

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	Beneficial ownership and Common Shares outstanding are determined in accordance with Rule 13d-3(d)(1) under the Act and generally includes voting or investment power with respect to the relevant securities. For the purpose of computing YA’s percentage of ownership therefore: (a) the 161,290 Common Shares owned by YA’s Affiliate as of February 6, 2017 are deemed to be owned by YA as of such date, and (b) the 16,094 Common Shares underlying the 16,094 Strategic Warrants owned by YA are deemed to be outstanding and beneficially owned by YA.
(2)	Assumes (i) all Common Shares offered hereby are sold, (ii) the 161,290 Extension Shares are sold pursuant to Rule 144, and (iii) the 16,094 Strategic Warrants either (a) expire unexercised, or (b) are exercised and the underlying Common Shares are sold.
(3)	YA is the investor under the 2014 SEDA. Yorkville Advisors Global, LP (“Yorkville LP”) is YA’s investment manager and Yorkville Advisors Global, LLC (“Yorkville LLC”) is the General Partner of Yorkville LP. All investment decisions for YA are made by Yorkville LLC’s President and Managing Member, Mr. Mark Angelo. The address of YA is 1012 Springfield Avenue, Mountainside, NJ 07092, Attention: Mark Angelo, Portfolio Manager. YA has informed us that it is an “underwriter” within the meaning of the Securities Act, and to the best of our knowledge no other underwriter or person has been engaged to facilitate the sale of Resale Shares in this offering.
(4)	The 2,951,015 Resale Shares included in this Prospectus represent the Common Shares remaining issuable as of the date hereof under the 2014 SEDA (See: “The Standby Equity Distribution Agreement”).
(5)	YA Global II SPV, LLC is an affiliate of YA. All investment decisions and control of for YA Global II SPV, LLC are made and held by its investment manager, Yorkville LP. Mr. Mark Angelo, the portfolio manager of Yorkville LP, makes the investment decisions on behalf of and controls Yorkville LP. The address of YA Global II SPV, LLC is 1012 Springfield Avenue, Mountainside, NJ 07092, Attention: Mark Angelo, Portfolio Manager.

PLAN OF DISTRIBUTION

A Selling Stockholder may, from time to time, sell any or all of their Resale Shares on the OTCQB or any other stock exchange, market or trading facility on which the Common Shares are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling Resale Shares:

● ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers;

● block trades in which a broker-dealer will attempt to sell Resale Shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

● purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

● privately negotiated transactions;

● broker-dealers may agree with the Selling Stockholder to sell a specified number of such Resale Shares at a stipulated price per share;

● a combination of any such methods of sale; or

● any other method permitted pursuant to applicable law.

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Broker-dealers engaged by a Selling Stockholder may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from a Selling Stockholder (or, if any broker-dealer acts as agent for the purchaser of Resale Shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction, not in excess of a customary brokerage commission in compliance with NASDR Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with NASDR IM-2440.

In connection with the sale of the Resale Shares or interests therein, a Selling Stockholder may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of Common Shares in the course of hedging the positions they assume. A Selling Stockholder may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealers or other financial institutions of Resale Shares offered by this Prospectus, which Resale Shares such broker-dealer or other financial institution may resell pursuant to this Prospectus (as supplemented or amended to reflect such transaction).

YA is, and any other Selling Stockholder, broker-dealer or agent that is involved in selling the Resale Shares may be deemed to be, an “underwriter” within the meaning of the Securities Act in connection with such sales. Any commissions received by YA or such other Selling Stockholder, broker-dealer or agent, and any profit on the sale of the Resale Shares purchased by them, may be deemed to be underwriting commissions or discounts under the Securities Act. YA has informed Omagine that it does not have any written or oral agreement or understanding, directly or indirectly, with any other Selling Stockholder or person to distribute Resale Shares. YA has informed Omagine that in no event shall any broker-dealer receive fees, commissions or markups which, in the aggregate, would exceed eight percent (8%) of the amount of the relevant sale.

Omagine is required to pay certain fees and expenses incurred by Omagine incident to the registration of the Resale Shares. Omagine has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

Because YA is and any other Selling Stockholder may be deemed to be an “underwriter” within the meaning of the Securities Act, they will be subject to the Prospectus delivery requirements of the Securities Act including Rule 172 thereunder. YA has informed Omagine that there is no underwriter or coordinating broker acting in connection with the proposed sale of the Resale Shares by the Selling Stockholders.

We agreed to keep this Prospectus effective until the earlier of (i) the date on which the Resale Shares may be resold by the Selling Stockholders without registration and without regard to any volume limitations by reason of Rule 144 under the Securities Act or any other rule of similar effect, or (ii) all of the Resale Shares have been resold pursuant to this Prospectus or Rule 144 under the Securities Act or any other rule of similar effect. YA has informed Omagine that the Resale Shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In certain states, the Resale Shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the Resale Shares may not simultaneously engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of Common Shares by the Selling Stockholders or any other person. We will make copies of this Prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this Prospectus to each purchaser of Resale Shares at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

The obligations of the parties under the 2014 SEDA are not transferrable.

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DESCRIPTION OF SECURITIES TO BE REGISTERED

Common Stock

The following is a summary of the material provisions of our $0.001 par value Common Stock, restated Certificate of Incorporation and our By-Laws, all as in effect as of the date of this Prospectus. You should also refer to the full text of our restated Certificate of Incorporation and By-Laws which have been filed with the SEC as Exhibits 3(i) and 3(ii) to the Registration Statement of which this Prospectus forms a part. Our total authorized capital stock is 50,850,000 shares of which 50,000,000 shares are Common Shares.

The holders of our Common Shares are entitled to one vote per Common Share on all matters to be voted on by our stockholders including the election of directors. Our stockholders are not entitled to cumulative voting rights and, accordingly the holders of a majority of the Common Shares voting for the election of directors can elect the entire Board of Directors if they choose to do so and, in that event, the holders of the remaining Common Shares will not be able to elect any person to our Board of Directors.

The holders of Common Shares are entitled to receive ratably such dividends or distributions, if any, as may be declared from time to time by the Board of Directors in its discretion from funds or securities legally available therefor and subject to prior dividend rights of holders of any shares of our $.001 par value per share preferred stock (the “Preferred Stock” or “Preferred Shares”) which may be outstanding. Upon Omagine’s liquidation, dissolution or winding up, subject to prior liquidation rights of the holders of Preferred Shares if any, the holders of our Common Shares are entitled to receive on a pro rata basis our remaining assets available for distribution (See: “Description of Preferred Stock and Warrants” below). Holders of Common Shares have no preemptive or other subscription rights and there are no conversion rights or redemption or sinking fund provisions with respect to such Common Shares. All outstanding Common Shares are, and all Common Shares being offered by this Prospectus will be, fully paid and not liable to further calls or assessment by Omagine.

Dividends and Dividend Policy

The holders of our Common Stock share proportionately, on a per Common Share basis, in all dividends and other distributions declared by our Board of Directors. Other than a 2012 non-cash dividend distribution of rights and warrants to our shareholders, we have not declared any dividends on our Common Stock since inception and do not anticipate paying cash dividends in the foreseeable future. We plan to retain any future earnings for use in our business operations. Any future decisions as to payment of cash or non-cash dividends or distributions on our Common Stock will be at the discretion of the Board of Directors and will depend upon our earnings and financial position at such time and on such other factors as the Board of Directors may then deem relevant.

Transfer Agent

The transfer agent for our Common Shares is Continental Stock Transfer and Trust Company, 17 Battery Place, New York, New York 10004.

Outstanding Common Shares and Holders

At February 6, 2017 there were 21,293,178 Common Shares issued and outstanding and, based upon the number of record holders plus the number of individual participants in security position listings at such date, there were approximately 1,074 holders of Common Shares.

DESCRIPTION OF PREFERRED STOCK AND WARRANTS

The following is a summary of the material provisions of our Preferred Stock, our Warrants, restated Certificate of Incorporation and our By-Laws, all as in effect as of the date of this Prospectus. You should also refer to the full text of our restated Certificate of Incorporation and By-Laws which have been filed with the SEC as Exhibits 3(i) and 3(ii) to the Registration Statement of which this Prospectus forms a part. Our total authorized capital stock is 50,850,000 shares of which 850,000 are Preferred Shares.

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Preferred Stock

As of February 6, 2017 there were no Preferred Shares issued or outstanding. Our Certificate of Incorporation authorizes the issuance of Preferred Shares in one or more series. Our Board of Directors has the authority, without any vote or action by the shareholders, to create one or more series of Preferred Shares up to the limit of our number of authorized but unissued Preferred Shares and to fix the number of Preferred Shares constituting such series and the designation of such series, the voting powers (if any) of the Preferred Shares of such series and the relative participating, option or other special rights (if any), and any qualifications, preferences, limitations or restrictions pertaining to such series which may be fixed by the Board of Directors pursuant to a resolution or resolutions adopted by the Board of Directors and providing for the issuance of such series of Preferred Shares. The transfer agent for our Preferred Shares is Omagine. 

Warrants

As of February 6, 2017, Omagine has 6,572,124 Warrants issued and outstanding, (a) 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $5.00 [the “$5 Warrants”]; (b) 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $10.00 [the “$10 Warrants”] (collectively (a) and (b) being, the “Strategic Warrants”) and (c) 150,000 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price equal to the greater of: (i) $0.50, or (ii) eighty percent (80%) of the Market Price on the Trading Day immediately preceding the relevant Exercise Date [(c) being, the “Rural Concepts Warrants”]. 

As promptly as reasonably possible after each exercise of the purchase rights represented by a Warrant, Omagine shall deliver to the relevant holder thereof (each, a “Warrant Holder”) a certificate representing the Common Shares so purchased (or such will be electronically delivered to the Warrant Holder if such Warrant is held in electronic form) and, unless such Warrant has been fully exercised, expired or redeemed, a new Warrant Certificate (or such will be electronically delivered to the Warrant Holder if such Warrant is held in electronic form) representing the balance of the Common Shares subject to such Warrant. Warrant Holders do not have any voting or other rights as a stockholder of our Company by virtue of being a Warrant Holder. The person entitled to receive the Common Shares issuable upon any exercise of the purchase rights represented by the Warrants, shall be treated for all purposes as the holder of such Common Shares of record as of the close of business on the date of exercise. The Warrants may be exercised only for whole Common Shares.

The Warrants are transferrable and a Warrant Holder may transfer all or part of the Warrants (but no fractional Warrants) at any time on the books of Omagine upon surrender of the Warrant Certificate(s), properly endorsed. Upon such surrender, Omagine shall issue and deliver to the transferee a new Warrant Certificate representing the Warrants so transferred (or such will be electronically delivered to the Warrant Holder if such Warrant is held in electronic form). Upon any partial transfer, Omagine shall issue and deliver to the Warrant Holder a new Warrant Certificate representing the Warrants not so transferred.

During the period within which the Warrants may be exercised, Omagine shall at all times have authorized and reserved for issuance enough Common Shares for the full exercise of the purchase rights represented by the then unexercised Warrants. If Omagine dissolves, liquidates or winds up its business before the exercise, expiration or redemption of the Warrants, any Warrant Holder shall be entitled, upon exercising its Warrants, to receive in lieu of the Common Shares receivable upon such exercise, the same kind and amount of assets as would have been issued, distributed or paid to such Warrant Holder upon any such dissolution, liquidation or winding up with respect to such Common Shares, had such Warrant Holder been the holder of record on the record date for the determination of those entitled to receive any such liquidating distribution or, if no record is taken, upon the date of such liquidating distribution. Omagine shall pay all issue and other taxes that may be payable in respect of any issue or delivery of Common Shares upon the exercise of Warrants. The Warrants are governed by and shall be construed and enforced in accordance with the laws of the State of New York in the United States of America.

Strategic Warrants

Omagine filed Post-Effective Amendment No. 1 to its registration statement on Form S-1 (Commission File No. 333-183852) whereby the Strategic Warrants and the 6,422,124 Common Shares underlying the Strategic Warrants were registered by Omagine (the “Warrant Registration”). Post-Effective Amendment No. 1 to the Warrant Registration was declared effective by the SEC and its effective status expired. Omagine filed Post-Effective Amendments No. 2 and No. 3 to the Warrant Registration with the SEC on January 28, 2015 and February 11, 2015, respectively, in order to further update the Warrant Registration and to re-instate its effective status. The SEC declared the Warrant Registration effective February 13, 2015 and its effective status expired. On January 14, 2016, Omagine filed a Post-Effective Amendment on Form S-1 to update the previous registration and to reinstate its effective status. The SEC declared the Warrant Registration effective January 25, 2016. The effective status of the Warrant Registration expired on October 21, 2016 and Omagine presently plans to file a further Post-Effective Amendment to the Warrant Registration to reinstate its effectiveness.  

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When originally issued in March 2012, the expiration date for all Strategic Warrants was December 31, 2012. Because of the extended delays encountered in signing the DA with the Government, the Board of Directors subsequently resolved on multiple occasions to extend the expiration date of the Strategic Warrants while keeping all other terms and conditions of the Strategic Warrants the same. The last such extension was made pursuant to a Board of Directors resolution dated December 9, 2016. All Strategic Warrants now expire on December 31, 2017 unless redeemed earlier by Omagine upon 30 days prior written notice to the Strategic Warrant holders. 

The Strategic Warrants are redeemable at any time and at Omagine’s sole discretion at a price of $0.001 per Strategic Warrant (the “Redemption Price”). Upon thirty days prior written notice to the holders of such Strategic Warrants (the “Strategic Warrant Holders”) specifying the Strategic Warrants to be redeemed and the date at 5 p.m. Eastern Time in the United States for such redemption by Omagine (the “Redemption Time”), Omagine may redeem all or a portion of such Strategic Warrants remaining unexercised at the Redemption Time at a Strategic Warrant Redemption Price of $0.001 per Strategic Warrant. The Redemption Price shall be paid in cash by Omagine to the relevant Strategic Warrant Holders and such Strategic Warrants shall not be deemed to be outstanding for any purpose whatsoever after the Redemption Time. The Redemption Time shall be on a day at least thirty (30) days subsequent to the aforesaid written notice to Strategic Warrant Holders and it shall also be the time at which a Strategic Warrant Holder's right to exercise such Strategic Warrants being redeemed shall terminate. The Strategic Warrants to be redeemed may be exercised by Strategic Warrant Holders at any time prior to the Redemption Time.

All Strategic Warrants expire at 5 p.m. Eastern Time in the United States on December 31, 2017 (the “Expiration Time”). The Strategic Warrants are exercisable at the option of the Strategic Warrant Holder at any time up to the earlier of the (a) Expiration Time, or (b) Redemption Time, provided that no person who owned (a) less than 4.99% or (b) between 4.99% and 9.99% of the Common Shares outstanding on February 24, 2012 (the “Issuance Date”), may exercise a number of Strategic Warrants which would thereby cause such person to acquire, together with its affiliates, beneficial ownership of, as the case may be, (a) 4.99% or more, or (b) 9.99% or more of the Common Shares outstanding immediately prior to the time of such exercise. A Strategic Warrant Holder may exercise the purchase rights represented by Strategic Warrants, in whole or in part, by surrendering the properly executed Strategic Warrant Certificate(s) at the transfer agent’s office in New York City, New York or at the principal office of Omagine in New York City, New York, and by paying Omagine, by certified or cashier’s check, an amount equal to the aggregate exercise price for the Common Shares proposed to be purchased (the “Warrant Payment”).

Notwithstanding the foregoing, no Strategic Warrants will be exercisable and we will not be obligated to issue any Common Shares issuable upon the exercise of such Strategic Warrants unless (i) at the time the Strategic Warrant Holder thereof seeks to exercise such Strategic Warrant, we have a registration statement under the Securities Act in effect covering the Common Shares issuable upon the exercise of such Strategic Warrant and a current prospectus relating to our Common Stock, and (ii) the Common Shares issuable upon such exercise have been registered or qualified or deemed to be exempt from registration under the securities laws of the state of residence of such Strategic Warrant Holder. Furthermore, if a Strategic Warrant Holder, who on the Issuance Date owned (a) less than 4.99% or (b) between 4.99% and 9.99% of the Common Shares outstanding on the Issuance Date, seeks to exercise Strategic Warrants, and such proposed exercise would cause such Strategic Warrant Holder to acquire, together with its affiliates, beneficial ownership of, as the case may be, (a) 4.99% or more, or (b) 9.99% or more of the Common Shares outstanding immediately prior to the time of such exercise, then in such an event, such proposed exercise will be effected by Omagine for the maximum number of Strategic Warrants resulting in the beneficial ownership by such Strategic Warrant Holder of the maximum number of whole Common Shares which number fails to meet the above stated applicable limitation for such Strategic Warrant Holder and its affiliates, and any excess Warrant Payment will be returned to such Strategic Warrant Holder.

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The Strategic Warrants do not contain any anti-dilution provisions and the exercise price and the number of Common Shares that Omagine must issue upon exercise of Strategic Warrants shall not be subject to adjustment for any reason, including but not limited to a stock split, combination or subdivision of the Common Stock or a dividend, reclassification, reorganization, or spinoff.

As of the date hereof there is no active trading market for the Strategic Warrants and Omagine does not presently expect an active trading market for the Strategic Warrants to develop in the near term. Our attempts to date to have the Strategic Warrants listed for quotation and trading on the OTCQB have not been successful. We hope to have the Strategic Warrants trade on the OTCQB under symbols to be assigned by FINRA and after the required application for such listing for quotation on the OTCQB is made by a market-maker on our behalf. We cannot, however, give any assurance that the Strategic Warrants will be quoted or traded on the OTCQB or on any securities exchange until such application is made on our behalf by a market-maker, such listing is approved and such symbols are assigned by FINRA. Furthermore, if such application is made on our behalf by a market-maker and the Strategic Warrants are approved by FINRA for listing and quotation on the OTCQB, we cannot give any assurance that a market for the Strategic Warrants will develop or, if such a market does develop, whether it will be sustainable throughout the period within which the Strategic Warrants are valid and transferable or at what prices such Strategic Warrants will trade. Strategic Warrant Holders may resell all or a portion of such Strategic Warrants from time to time in market transactions through any market on which the Strategic Warrants are then traded, in negotiated transactions or otherwise, and at prices and on terms determined by the then prevailing market price or at negotiated prices directly or through a broker or brokers, who may act as agent or as principal or by a combination of such methods of sale.

Transfer Agent for Strategic Warrants

The transfer agent for our Strategic Warrants is Continental Stock Transfer and Trust Company, 17 Battery Place, New York, New York 10004.

Outstanding Strategic Warrants and Holders

As of February 6, 2017 there were 6,422,124 Strategic Warrants issued and outstanding, 3,211,062 of which are $5 Warrants and 3,211,062 of which are $10 Warrants and, based upon the number of Record Shareholders on January 17, 2012, there are approximately 1,122 holders of our Strategic Warrants.

Tempest Warrants 

On June 24, 2014, Omagine issued the 1,000,000 Tempest Warrants to an investor each of which were exercisable for the purchase of one restricted Common Share at a per Common Share exercise price equal to the greater of: (a) $1.00 per Common Share, or (b) 80% of the closing sale price for a Common Share on the Trading Day immediately preceding the relevant exercise date (See: Exhibit 4.4). Prior to their expiration date, a total of 650,603 Tempest Warrants were exercised for aggregate proceeds to Omagine of $916,540. The remaining 349,397 Tempest Warrants expired unexercised on June 23, 2016. As of February 6, 2017 there were no Tempest Warrants issued or outstanding. 

Rural Concepts Warrants

On October 14, 2016, in connection with a non-interest bearing $75,000 convertible promissory note in favor of Rural Concepts LLC, a British corporation (“Rural Concepts”), Omagine issued 150,000 Warrants to Rural Concepts, each of which was exercisable for the purchase of one restricted Common Share at a per Common Share exercise price equal to the greater of (a) $0.50 per Common Share, or (b) 80% of the Market Price on the Trading Day immediately preceding the relevant Exercise Date [the “Rural Concepts Warrants”].

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Transfer Agent for the Rural Concepts Warrants

The transfer agent for the Rural Concepts Warrants is Omagine.

Outstanding Rural Concepts Warrants

As of February 6, 2017 there were 150,000 Rural Concepts Warrants issued and outstanding.

LEGAL MATTERS

The validity of our Common Shares offered hereby will be passed upon by Sichenzia Ross Friedman Ference LLP, New York, New York.

EXPERTS

Our consolidated financial statements at December 31, 2015 and for the two years then ended appearing in this Prospectus have been audited by Michael T. Studer, CPA P.C., independent registered public accounting firm, as set forth in their report thereon appearing elsewhere in this Prospectus and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.

DESCRIPTION OF BUSINESS

Omagine, Inc. (“Omagine” or the “Registrant”) was incorporated in Delaware in October 2004 and is a holding company which conducts substantially all its operations through its 60% owned subsidiary Omagine LLC, an Omani limited liability corporation (“LLC”) and its wholly-owned subsidiary Journey of Light, Inc., a New York corporation (“JOL”). Omagine and JOL are collectively referred to herein as “OMAG” and Omagine, JOL and LLC are collectively referred to herein as the “Company”.

The Company is focused on entertainment, hospitality and real estate development opportunities in the Middle East and North Africa (the “MENA Region”) and on the design and development of distinctive tourism destinations. The Company presently concentrates the majority of its efforts on the business of LLC and specifically on the Omagine Project. Omagine, Inc. has 21,293,178 shares of its Common Stock issued and outstanding as of February 6, 2017.

In November 2009, Omagine organized LLC as a wholly owned subsidiary under the laws of the Sultanate of Oman (“Oman”) to design, develop, own and operate our initial project – a mixed-use tourism and real estate project named the “Omagine Project” (See “The Omagine Project” below). In October 2014, LLC and the Government of Oman (the “Government”) signed an agreement (the “Development Agreement” or “DA”) for the development in Oman by LLC of the Omagine Project (See: Exhibits 10.7 and 99.1 and “The Development Agreement and the Usufruct Agreement”, below). On July 2, 2015, after the Usufruct Agreement (“UA”) was registered by the Government legally perfecting LLC’s ownership of the Land Rights, the Government and LLC entered into an agreement (the “Operative Agreement”) making July 1, 2015 the “Operative Date” from which all time periods for the execution by LLC of various tasks enumerated in the DA are to be measured.

Omagine initially capitalized LLC at Omani Rials (“OR”) 20,000 [$52,000] and in 2011 Omagine’s 100% ownership of LLC was reduced to 60% pursuant to a shareholders’ agreement (the “Shareholder Agreement”) signed in May 2011 by Omagine, JOL and three new LLC minority investors (See: Exhibit 10.6 and “The Shareholder Agreement” below).

As of the date hereof, the shareholders of Omagine LLC (the “LLC Shareholders”) are:

i.	Omagine, Inc. and
ii.	Royal Court Affairs (“RCA”), an organization representing the personal interests of His Majesty Sultan Qaboos bin Said, the ruler of Oman, and
iii.	Two subsidiaries of Consolidated Contractors International Company, SAL (“CCIC”). CCIC is a 65 year old Lebanese multi-national company headquartered in Athens, Greece having worldwide and operating subsidiaries in among other places, every country in the MENA Region. In its fiscal years immediately prior to 2016, CCIC had approximately five (5) billion U.S. dollars in annual revenue and one hundred thirty thousand (130,000) employees but this may be reduced during its 2016 fiscal year as a result of adverse economic conditions in the MENA Region (See: “Market Conditions” below).  The two CCIC subsidiaries which are LLC shareholders are:

a.	Consolidated Contracting Company S.A. (“CCC-Panama”), a wholly owned subsidiary of CCIC, and
b.	Consolidated Contractors Oman Company LLC (“CCC-Oman”), CCIC’s operating subsidiary in Oman.

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CCC-Panama and CCC-Oman are sometimes referred to collectively in this report as “CCC”.

As previously reported several obstacles were encountered with regard to concluding the construction contract for the Omagine Project with CCC (the “CCC-Contract”). It recently appeared that these obstacles would be overcome via an agreement with CCC and an Omani bank with whom CCC has a business relationship. CCC’s introduction and long-standing relationship with the Omani bank was the impetus behind the proposed debt financing and advisory services to LLC by the Omani bank. All efforts to date to conclude the CCC-Contract with CCC, and recently to conclude an agreement with the Omani bank referred to us by CCC, have resulted in no forward progress.

Management was originally pleased in August 2016 by the prospect of concluding the drawn out negotiations with CCC to finalize the CCC-Contract and the Amended and Restated Shareholder Agreement with CCC and RCA before concluding a term sheet with the Omani Bank, but all such CCC negotiations once again foundered and management no longer sees that path as a viable way forward.

Also as previously reported, management has been holding discussions in parallel with several potential LLC investors and as of the date hereof, we are in final discussions with several such investors and have a signed agreement with one such investor.

We presently expect to amend the Shareholder Agreement as necessary to memorialize the new arrangements and revisions to which the LLC Shareholders may agree (the “Amended and Restated Shareholder Agreement”). We presently expect that the Amended and Restated Shareholder Agreement will be signed by the parties within the next month and that serious design, development and construction activities on the Omagine Project will begin during the first quarter of 2017.

Management has also been conducting parallel project finance discussions with a bank other than the Omani Bank with whom CCC has a business relationship, and we expect a successful conclusion to that discussion to occur soon after the Amended and Restated Shareholder Agreement is executed by the parties.

As these matters unfold, management will report all material developments and agreements to its shareholders in a timely manner.

Management’s primary goal continues to be the launch in the first quarter of 2017 of serious design and construction activities for the Omagine Project. Management cautions that future events rarely develop exactly as forecast and the best estimates routinely require adjustment. Investors and shareholders are cautioned not to place undue reliance on any such forward-looking statement or forecast, which speaks only as of the date hereof.

The Shareholder Agreement

Upon organizing Omagine LLC in 2009, Omagine made an initial cash investment into LLC of OR 20,000 [$52,000] in consideration for the issuance to Omagine of 200,000 LLC Shares.

Pursuant to the Shareholder Agreement:

i. Before the DA was signed and after the execution of the Shareholder Agreement, the LLC Shareholders purchased an aggregate of 1,300,000 LLC Shares for an aggregate cash investment of OR 130,000 [$338,000], as follows:

a)	Omagine purchased an additional 700,000 LLC Shares for OR 70,000 [$182,000] in cash, and
b)	RCA purchased 375,000 LLC Shares for OR 37,500 [$97,500] in cash, and
c)	CCC-Panama purchased 150,000 LLC Shares for OR 15,000 [$39,000] in cash, and CCC-Oman purchased 75,000 LLC Shares for OR 7,500 [$19,500] in cash (collectively, the “225,000 Initial CCC Shares”).

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ii.  After the DA was signed on October 2, 2014, Omagine purchased an additional 2,100,000 LLC Shares for an additional investment by Omagine of OR 210,000 [$546,000] in cash, and

iii.  On July 2, 2015, RCA purchased an additional 663,750 LLC Shares in consideration for the non-cash investment by RCA of the Land Rights valued at OR 276,666,667 [$718,614,000].

The CCC Contract was not signed on or before July 1, 2016 and the Shareholder Agreement is expected to be amended shortly by the Amended and Restated Shareholder Agreement. Pursuant to the terms and conditions of the Shareholder Agreement, Omagine, Inc. has the option (the “OMAG Option”) to purchase the 225,000 Initial CCC Shares from CCC for 22,500 Omani Rials ($58,500). The OMAG Options are exercisable at any time up to and including July 1, 2017 and Omagine, Inc. in its sole discretion, may assign the OMAG Option to any Person. (See: “the CCC-Contract” below and the CCC-Panama Subscription Agreement and the CCC-Oman Subscription Agreement which are integral parts of and fully incorporated into the Shareholder Agreement attached hereto as Exhibit 10.6).

As of September 30, 2016 and the date hereof the LLC shareholders have made cash investments into LLC as indicated in the following Table A:

Table A  -  LLC Shareholders’ Cash Equity Investments into Omagine LLC

	Omagine, Inc.				Royal Court Affairs				Consolidated Contractors
	OR		USD		OR		USD		OR		USD
Initial cash equity investment at inception		OR 20,000	$	52,000		0		0		0		0
Additional cash equity investment at signing of Shareholder Agreement (the “SHA”)		OR 70,000	$	182,000		OR 37,500	$	97,500		OR 22,500	$	58,500
Additional OMAG Deferred Cash Equity Investment due under the SHA before the first Financing Agreement Date **		OR 210,000	$	546,000		0		0		0		0
Total Cash Equity Investments made by each of the LLC Shareholders into LLC as of September 30, 2016 and the date hereof.		OR 300,000	$	780,000		OR 37,500	$	97,500		OR 22,500	$	58,500

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As of September 30, 2016 and the date hereof RCA has made a non-cash payment-in-kind investment into LLC as indicated in the following Table B:

Table B  -  RCA’s Non-Cash Equity Investment into Omagine LLC

Omagine, Inc.

Royal Court Affairs

Consolidated Contractors

OR

USD

OR

USD

OR

USD

Additional non-cash equity investment of Land Rights on registration of the Usufruct Agreement*

0

0

OR 276,666,667

$

718,614,000

0

0

As of July 1, 2016 and the date hereof RCA is obligated to make an additional Deferred Cash Investment into LLC as indicated in the following Table C:

Table C  -  RCA Deferred Cash Equity Investment into Omagine LLC

Omagine, Inc.

Royal Court Affairs

Consolidated Contractors

OR

USD

OR

USD

OR

USD

Additional RCA Deferred Cash Investment which is now due under the SHA **

0

0

OR 7,640,625

$

19,865,625

0

0

As of September 30, 2016 and the date hereof CCC, in management’s opinion, was obligated to make additional Deferred Cash Investments into LLC as indicated in the following Table D, however it is management’s present opinion that this is now unlikely to occur:

Table D  -  CCC Deferred Cash Equity Investments into Omagine LLC

Omagine, Inc.

Royal Court Affairs

Consolidated Contractors

OR

USD

OR

USD

OR

USD

Additional Deferred Cash Investments which may be due under the SHA

0

0

0

0

OR 18,987,500

$

49,367,500

* All conversions of Omani Rials to U.S. Dollars in this Report are calculated at an exchange rate of one (1) Omani Rial being equivalent to $2.60 except for the land valuation which is calculated at an exchange rate of one (1) Omani Rial being equivalent to $2.5974. See: “The Land Rights” and “Critical Accounting Policies”, below.

In order to bring the Omagine Project to its present state, Omagine, Inc. (as of September 30, 2016), has:

(i) invested 300,000 Omani Rials ($780,000) in cash into Omagine LLC, and

(ii) expended $17.9 million of Pre-Development Expenses on behalf of the Omagine Project through the October 2, 2014 DA signing date consisting of both cash and non-cash expense items as Omagine, Inc. had promised to do pursuant to the SHA, and

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(iii) single-handedly kept the Omagine Project and Omagine LLC financially afloat after the October 2, 2014 DA signing date by expending an additional $10.3 million on behalf of the Omagine Project via cash loans from Omagine, Inc. to Omagine LLC (“Loans”) and the direct payment by Omagine, Inc. of Omagine LLC liabilities and accounts payable consisting of both cash and non-cash items (“Advances”), neither of which Loans nor Advances Omagine, Inc. had any obligation whatsoever to do pursuant to the SHA.

All such Pre-Development Expenses, Loans and Advances are or will be liabilities of LLC; reimbursable to Omagine, Inc. in accordance with the terms of the Shareholder Agreement (as may likely be amended; See: the following Table E, and “Pre-Development Expenses and Loans and Advances to LLC” as of September 30, 2016, below).

Table E - Pre-Development Expenses, Loans and Advances

Pre-Development Expenses, Loans and Advances	Cash Items		Non-Cash Items (Depreciation; Amortization; Stock Option Expense)		Total
Pre-Development Expense Amount (incurred prior to the October 2, 2014 DA signing date)	$	13,611,951	$	4,308,163	$	17,920,114
Loans & Advances (incurred on or after the October 2, 2014 DA signing date)	$	3,876,589	$	6,961,789	$	10,838,378
Total  -  (Due to Omagine, Inc. from Omagine LLC)	$	17,488,540	$	11,269,952	$	28,758,492

The foregoing summary of some of the terms of the Shareholder Agreement and does not purport to be complete and it is qualified in its entirety by reference to the full text of the SHA. The full text of the SHA is attached hereto as Exhibit 10.6. RCA and Omagine are presently in negotiations with investors which may lead to an Amended and Restated Shareholder Agreement.

The Omagine Project

The Omagine Project is a mixed-use tourism and residential real estate project. Subject to normal and customary scheduling changes during its development and construction and to the current delays encountered in getting the CCC-Contract signed, the Omagine Project is now planned to be completed in late 2021. It is being developed on one million square meters (equal to 100 hectares or approximately 245 acres) of beachfront land (the “Existing Land”) facing the Gulf of Oman just west of Oman’s capital city of Muscat and approximately six miles from Muscat International Airport. Present development plans envision the creation of approximately a net additional 106,000 square meters of “Reclaimed Land” which together with the Existing Land will comprise approximately 1,106,000 square meters of land (the “Project Land”). The Omagine Project will require substantial Project Finance to complete (See: “The Shareholder Agreement”, above and “Financial Advisor”, below).

The Omagine Project is planned to be an elegant integration of cultural, scientific, heritage, entertainment and residential components, including seven pearl shaped (20 meter diameter) buildings (the “Pearls”) located along an open boardwalk with associated entertainment exhibitions; an amphitheater and stage; green landscaped spaces; a canal; an enclosed harbor and marina; boat slips and docking facilities; retail shops; a variety of restaurants, cafes and entertainment venues; a five-star resort hotel; a four-star hotel; and possibly an additional three or four-star hotel; shopping and retail establishments integrated with the hotels; commercial office buildings; and more than two thousand elegant residences to be developed for sale by LLC. The ethos of the project is elegant but relaxed entertainment and the Company expects that the Pearls will become “the Landmark” for the Sultanate of Oman.

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Pursuant to Omani Law, non-Omani persons are not permitted to purchase land in Oman unless such land is located within an Integrated Tourism Project (“ITC”) such as the Omagine Project. The Government has designated the Omagine Project as an ITC and has issued a license to LLC (an “ITC License”) thereby permitting the sale by LLC of the freehold title to the Project Land and to properties developed on the Project Land to any person, including any non-Omani person. Since the Omagine Project will contain significant hospitality (hotels), retail, commercial, and entertainment elements, LLC’s business operations are expected over time to encompass real estate development, hospitality, entertainment and property management.

The Development Agreement and the Usufruct Agreement

Omagine’s 60% owned subsidiary, LLC, signed a Development Agreement (“DA”) with the Government of Oman in October 2014 for the development in Oman by LLC of the Omagine Project. The legal effectiveness of the DA was conditional upon its ratification by Oman’s Ministry of Finance which Ratification occurred in March 2015. On July 1, 2015 (the “Operative Date”), the Government and LLC entered into a Usufruct Agreement (“UA”) with respect to the Land Rights over the Existing Land and the DA and UA extend such Land Rights to all of the Project Land.

On July 2, 2015, after the UA was registered by the Government legally perfecting LLC’s ownership of the Land Rights, the Ministry of Tourism (“MOT”) of the Government and LLC entered into an agreement (the “Operative Agreement”) making July 1, 2015 the “Operative Date” from which all time periods for the execution by LLC of various tasks enumerated in the DA are to be measured. In the Operative Agreement MOT states in relevant part: “We ask you to receive the land and begin procedures for executing the project as per the development agreement entered into with you, keeping in mind that the effective commencement date of the development agreement is 1 July 2015”. The Operative Date is the date from which all time periods for the execution by LLC of various tasks enumerated in the DA are to be measured (See Exhibits 10.8 and 99.2).

The DA and UA are the contracts that govern the design, development, construction, management and ownership of the Omagine Project, the use and sale by LLC of the Project Land, and the Government’s and LLC’s rights and obligations with respect to the Omagine Project. In the event of any conflict between the terms and conditions of the DA and the terms and conditions of the UA, the terms and conditions of the DA control (See Exhibits 10.7, 99.1, 10.8 and 99.2). The term of the DA is 20 years and the term of the UA is 50 years (renewable) commencing from the Operative Date. The UA and those DA provisions relevant to the UA survive the expiration of the term of the DA.

The Land Rights owned by LLC give it extensive rights over the Project Land including the right to sell such Project Land on a freehold basis. LLC may use, control, develop, retain, operate and/or sell the approximately 1.1 million square meters of Project Land to itself or to third parties. The DA obligates LLC to pay the Government twenty-five (25) Omani Rials ($65) for each square meter of Project Land purchased directly by LLC or sold by LLC to any third party (the “Land Price”). The average valuation for the Land Rights (net of such Land Price is OR 276,666,667 ($718,614,000) (See: “The Land Rights”, below).

The five year period commencing on the Operative Date is a rent free period (the “Rent Free Period”) and thereafter LLC will pay annual rent to the Government (the “Land Rent”) based on only the built but unsold commercial area (excluding the residential area) of the Omagine Project (approximately 150,000 sq. meters) or approximately OR 45,000 ($117,000) per year based on the current annual per square meter fee of OR 0.300 ($0.78). No Land Rent is due or owing during the Rent Free Period and no Land Rent is ever due or owing with respect to plots of Project Land (i) on which there is a residential building, or (ii) on which there is not a substantially completed non-residential building (i.e. Project Land that is open space, roads, non-residential building work-in-progress, etc. are rent-free).

The continued legal effectiveness of the DA subsequent to the Operative Date is dependent upon certain milestone dates being achieved (any or all of which may be extended or waived by the Government), including: (1) LLC’s delivery to the Government by June 30, 2016 of a term sheet with lenders for the financing of the first or any other phase of the Project, [this milestone date was achieved by the term sheet and financing agreement which LLC received from the Qatari Bank in November 2015], (2) LLC’s submission to the Ministry of Tourism of a social impact assessment by March 31, 2016 and the Government’s approval thereof by June 30, 2016, (3) the Government’s approval by June 30, 2016 of the development control plan for the Omagine Project, and (4) the transformation of LLC into a joint stock company by June 30, 2016 (these milestone dates 2, 3 and 4 are not yet achieved and are expected to be extended as mentioned above if and when the Operative Date is extended).

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LLC management and RCA have met with and spoken to the staff at the Ministry of Tourism and with the Minister several times during December 2016 and January and February 2017 in regard to our efforts to finalize the Amended and Restated Shareholder Agreement with our proposed new investor as well as in regard to the delays encountered to date by LLC in meeting certain DA milestone dates as measured from the Operative Date. The MOT (and all Government Ministries) are acutely aware of the unusual fiscal strains imposed on the present banking and economic environments in the region. In this regard on September 26, 2016 management met with the Minister of Tourism and his senior staff to update MOT on recent events and to discuss the matter of extending the Operative Date. While no conclusive extension of the Operative Date was made in the meeting, as noted above we have continued to keep both the Minister and the staff updated and LLC management and RCA have scheduled another February 2017 follow up meeting (depending upon the Minister’s schedule) and management is hopeful and presently expects that the Operative Date will be extended once we finalize our ongoing negotiations and agreements with respect to the Amended and Restated Shareholder Agreement – which negotiations and agreements are presently expected to be finalized during February 2017. No assurance can be given however to what extent, if any, that the Operative Date will in fact be extended by MOT. 

Pursuant to the DA, LLC must substantially complete the construction of the seven Pearl buildings and one hotel (the “Minimum Build Obligation” or “MBO”) by June 30, 2020 (the “MBO Completion Date”), as such date may be amended or extended per the DA as indicated above. The DA imposes no performance timelines on LLC with respect to completing the development or construction of elements of the Omagine Project other than the MBO but the completion of the MBO will require LLC to obtain the necessary Project Finance to do so. Any material breach by LLC of its obligation to perform the MBO would constitute an event of default under the DA. The DA specifies that the principal construction contract (i.e. the CCC Contract) should be executed by June 30, 2016. This did not happen as indicated above. LLC is required to provide written notice to the Government in certain circumstances, such as LLC’s change in an anticipated milestone date that would result in a substantial achievement of work to occur later than 60 days after such milestone date. Such notice has been communicated both verbally and in writing to the appropriate government officials in recent communications with them and was discussed further at the September 26, 2016 meeting with the Minister of Tourism. 

The Company undertook and financed many development activities on behalf of LLC subsequent to the DA signing (the “Initial Activities”) in an effort to fast-track the Omagine Project’s development. The fast-track advantages sought to be gained thereby however have not materialized due to LLC’s failure to utilize the $25 million Al-Rayan Loan to finance the Initial Activities, LLC’s ongoing operations in Oman, and LLC’s previously disclosed Phase One design and construction activities (See: our previous disclosures in prior reports filed with the SEC). The cause of such failure was the extended and drawn out negotiations with CCC relevant to the CCC-Contract and CCC’s Deferred Cash Investment after the November 2015 Financing Agreement Date.

Because of these delays therefore, the more serious and substantial design, masterplanning and construction activities for the Omagine Project did not begin in December 2015 as required for the fast-track development strategy and as management had planned. (See: “Initial Activities” and “Pre-Development Expenses and Loans and Advances to LLC”, below). The design, development and construction of the Omagine Project will still benefit from these Initial Activities having been undertaken but not to the extent envisioned by our planned fast-track development approach.

Non-Omani persons (such as expatriates living and working in Oman) are not permitted by Omani law to purchase land or residences in Oman outside of an ITC. The Government’s designation and licensing of the Omagine Project as an ITC therefore permits LLC to sell the freehold title to Project Land and properties which are developed on Project Land to any Omani or non-Omani individual or juristic person worldwide. Properties within an ITC enjoy a premium price relative to properties not in an ITC. Any Project Land or buildings remaining unsold at the expiration of the 50 year Usufruct Term will revert to the Government. LLC does not anticipate that there will be any such unsold properties at the expiration of the 50 year Usufruct Term.

The foregoing summary of some of the terms of the DA and of the UA does not purport to be complete and it is qualified in its entirety by reference to the full texts of such agreements. The full text of the Development Agreement is attached hereto as Exhibits 10.7 and 99.1. The full text of the Usufruct Agreement is attached hereto as Exhibits 10.8 and 99.2 and also contained in Schedule 2A of the Development Agreement.

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The Land Rights

The value of the Project Land has been determined by three highly experienced professional valuation firms in accordance with the requirements and procedures specified for such a valuation by (i) the Royal Institution of Chartered Surveyors (“RICS”) of London, England, and (ii) International Financial Reporting Standards (“IFRS”). Each of the three firms has a worldwide brand in the real estate valuation business.

● In November 2014, LLC engaged the Oman office of Savills (http://www.savills.com/ (“Savills”) operating as Arabian Real Estate LLC (http://www.savills.om). Savills provides real estate services from over 600 offices worldwide, is listed on the London Stock Exchange, and is a FTSE 250 Index company.

● In December 2014, LLC engaged DTZ International Ltd., a Dubai, UAE firm with extensive experience in Oman (http://www.dtzglobal.com) (“DTZ”). DTZ is one of the top three global commercial real estate service companies, with more than 28,000 employees operating across more than 260 offices in 50 countries and $63 billion in transaction volume.

● In January 2015, LLC engaged Jones Lang LaSalle, UAE Limited, Dubai Branch (http://www.jll-mena.com/mena/en-gb/locations/Our-locations-in-MENA/dubai) (“JLL”). JLL has 53,000 employees operating across more than 230 offices in 80 countries.

The Savills and DTZ final valuation reports were received by LLC in January 2015. The JLL final valuation report was received by LLC in July 2015. The Company is of the opinion that JLL’s valuation is flawed and most probably represents a statistical outlier. In an abundance of caution however, management has nevertheless determined to include the JLL valuation in its calculation of the average value of LLC’s Land Rights. The Land Rights valuations by the three aforementioned firms are summarized in the table below:

Land Rights Valuation
Valuation Firm	Omani Rials
Savills	OR 295,000,000
DTZ	OR 385,000,000
JLL	OR 150,000,000
Average	OR 276,666,667

In view of the changing economic conditions in the MENA Region due to the fall in oil prices, LLC may commission an updated land valuation in the coming months.

The Accounting Treatment for the Land Rights

Omagine and JOL prepare their financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”) and the Company prepares its consolidated financial statements in accordance with US GAAP. LLC’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).

LLC has land under development valued at 276,666,667 Omani Rials. Based on a $2.5974 per 1 Omani Rial exchange rate, the Company recorded this land under development in its financial statements at $718,614,000 and the Company has allocated this amount as follows: 188,963,334 Omani Rials ($490,813,363 based on a $2.5974 per 1 Omani Rial exchange rate) to inventory; and 87,703,333 Omani Rials ($227,800,637 based on a $2.5974 per 1 Omani Rial exchange rate) to property. This land under development was purchased by LLC on July 2, 2015 pursuant to the terms of the Shareholder Agreement whereby an LLC shareholder subscribed for 663,750 LLC Shares at a purchase price equal to the value of the Land Rights. Since the Land Rights represented a non-cash payment-in-kind for the LLC Shares, it was necessary to value the Land Rights.

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Three expert real estate valuation companies were engaged by LLC to independently value the Land Rights in accordance with the professional standards specified by RICS and IFRS. The average of the three Land Rights valuations was OR 276,666,667. (See: “The Land Rights”, above and Exhibits 99.4, 99.5 and 99.6).

Since the 276,666,667 Omani Rial value of the Land Rights is substantial, LLC retained the services of PricewaterhouseCoopers LLP (“PwC”) to provide its written analysis and report to LLC with respect to the correct IFRS accounting method LLC should use to record the 276,666,667 Omani Rial Land Rights value in its IFRS compliant financial statements. PwC did not advise on the valuation of the Land Rights (as determined by Savills, DTZ and JLL), but only on the correct accounting LLC should use to record such Land Rights valuation in LLC’s financial statements in accordance with IFRS. PwC’s written report was received by LLC in August 2015. Promptly thereafter, LLC consulted with its independent auditor, Deloitte & Touche (M.E.) & Co. LLC (“Deloitte”) with respect to the matter, and Deloitte’s written technical analysis report (which agreed with PwC’s analysis) was received by LLC in November 2015.

The Land Rights over the Project Land are extensive, are closely akin to ownership rights and include the right to sell such land on a freehold basis. The Land Rights are virtually equivalent to ownership rights and like any asset, if its value were to become impaired for any reason (including any contractual reason pursuant to the DA requirements), a reserve for such impairment would need to be established at such time. Although it is not required to do so, in view of the unsettled economic environment in Oman and the greater MENA Region, the Company is considering updating its land valuation to verify if any material changes in the value of the Project Land may have occurred since the above three valuation reports were completed thereby possibly requiring the establishment of such a reserve for impairment. Management’s decision as to whether or not to undertake such updated reports will depend to a large extent upon management’s assessment of economic conditions in Oman in December 2016. Both PwC and Deloitte independently concluded that the Land Rights should be recorded as capital and as tangible assets (work-in-process inventory and land) on LLC’s financial statements. With respect to the Company’s consolidated financial statements, the Company’s independent auditor in the U.S. has likewise concurred that pursuant to US GAAP, the Land Rights should be recorded as capital, inventory and land. 

In determining the proper amounts to be allocated to inventory and to land, LLC calculated the percentage (x) by dividing (y) the area of the land LLC presently plans definitively to sell, by (z) the total area of the Project Land, and then multiplying that percentage (x) by 276,666,667 Omani Rials to get the number (N) for inventory. The amount to be allocated to property was then calculated by subtracting N from 276,666,667 Omani Rials. Using its detailed internal financial model, management calculated (x) to be equal to 68.3%, thereby making the inventory number (N) equal to 188,963,334 Omani Rials ($490,813,363 based on a $2.5974 per 1 Omani Rial exchange rate) and the property number equal to 87,703,333 Omani Rials ($227,800,637 based on a $2.5974 per 1 Omani Rial exchange rate). In its consolidated financial statements therefore, the Company has allocated the value of the Land Rights between (i) land under development which is held for sale (inventory), and (ii) land under development which is held for investment (PP&E). As more precise land use percentages emerge during and after the masterplanning and construction of the Omagine Project, the percentage allocations for the value of the Land Rights may be reclassified to distinguish between the land underlying properties that we will own and operate and those which we will own and lease.

Pre-Development Expenses and Loans and Advances to LLC

Prior to the DA being signed, Omagine incurred significant costs related to marketing, planning, concept design, re-design, feasibility studies, engineering, financing, promotions, capital raising, travel, legal fees, consulting and professional fees, other general and administrative activities and similar such activities including preparing and making presentations to the Government and to potential investors and all other activities and matters associated with the negotiation and conclusion of the DA with the Government (collectively, the ”Pre-Development Expenses”). The Shareholder Agreement defines the “Pre-Development Expense Amount” as the total amount of such Pre-Development Expenses incurred before the DA was signed by the Government and LLC on October 2, 2014.

Omagine, Inc. expended $17,920,114 to pay for 100% of the Pre-Development Expense Amount.

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Subsequent to the October 2, 2014 DA signing date and as of September 30, 2016, Omagine, Inc. has voluntarily - and without any obligation to do so - single-handedly kept the Omagine Project and Omagine LLC financially afloat by expending an additional $10.8 million on behalf of the Omagine Project via Loans and Advances to LLC.

A summary of the Pre-Development Expense Amount and of the Loans and Advances is detailed in the following table:

Pre-Development Expenses, Loans and Advances

	Cash Items		Non-Cash Items		Total
Pre-Development Expense Amount (incurred prior to the October 2, 2014 DA signing date)	$	13,611,951	$	4,308,163	$	17,920,114
Loans & Advances (incurred on or after the October 2, 2014 DA signing date)	$	3,876,589	$	6,961,789	$	10,838,378
Total Due to Omagine, Inc. from Omagine LLC	$	17,488,540	$	11,269,952	$	28,758,492

The Pre-Development Expense Amount and the Loans and Advances are, or will be, liabilities of LLC; reimbursable to Omagine, Inc. in accordance with the terms of the Shareholder Agreement. The terms and conditions of the Amended and Restated Shareholder Agreement now being negotiated may change the presently existing terms and conditions of the existing Shareholder Agreement with respect to the payment of the Pre-Development Expense Amount and the Loans and Advances. 

The Pre-Development Expense Amount

Pursuant to the Shareholder Agreement as presently in effect, the date subsequent to the first Financing Agreement Date when LLC draws down the first amount of debt financing is defined as the “Draw Date”.

The first Financing Agreement Date occurred on November 29, 2015 when LLC and Masraf Al Rayan signed a Financing Agreement. A Draw Date pursuant to that Financing Agreement never occurred however because CCC (represented by CCIC executive management), after first agreeing in December 2015 to promptly (i) finalize the negotiation of the CCC-Contract (which in December 2015 was in an advanced stage of completion), (ii) sign the CCC-Contract, and (iii) invest their Deferred Cash Investments immediately after the CCC-Contract was signed – subsequently – and on several different occasions - changed its mind. Consequently, these matters have been the subject matter of numerous and virtually continuous discussions and negotiations since December 2015 with many and varied interim “agreed agreements”, all of which to date were “agreed” and then later forsaken by CCC. The CCC-Contract negotiations were ultimately abandoned by management (See: “The CCC-Contract”, below).

Further pursuant to the Shareholder Agreement as presently in effect:

1) the liability for the Pre-Development Expense Amount shall be recorded on LLC’s financial records on the Draw Date and in accordance with the International Financial Reporting Standards (“IFRS”), and

2) fifty percent (50%) of the Pre-Development Expense Amount will be paid to Omagine, Inc. on or within ten (10) days after the Draw Date, and

3) the remaining fifty percent (50%) of the Pre-Development Expense Amount will be paid to Omagine, Inc. in five equal annual installments beginning on the first anniversary of the Draw Date.

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The Loans and Advances to LLC

The $10,838,378 of Loans and Advances (as of September 30, 2016) are payable to Omagine, Inc. by LLC on demand (but as a practical matter, not until LLC has the financial capacity to do so and Omagine has no present intention of demanding immediate payment of the Loans and Advances). 

The Success Fee

The Shareholder Agreement defines the Success Fee as being equal to ten (10) million dollars. Pursuant to the terms of the Shareholder Agreement as presently in effect:

1) the liability for the Success Fee shall be recorded on LLC’s financial records on the Draw Date and in accordance with the IFRS, and

2) the Success Fee will be paid to Omagine, Inc. in five annual two (2) million dollar installments beginning on or within ten (10) days after the Draw Date.

Omagine, may at its option, not enforce the aforementioned payment schedules for the Pre-Development Expense Amount and/or the Success Fee as agreed in the Shareholder Agreement and may agree to a different schedule for such payments and Omagine may likewise, at its option, refrain from demanding payment of the Loans and Advances until LLC is in a financial position to make such payment.

As of the date hereof, Omagine continues to make Loans and Advances to and on behalf of LLC for the activities being undertaken by or on behalf of LLC for the Omagine Project and expects to do so until the Amended and Restated Shareholder Agreement is agreed and signed. 

The Amended and Restated Shareholder Agreement (assuming it is agreed and executed) is expected to, among other things, address, restate and formalize the terms of repayment by LLC to Omagine, Inc. of the Pre-Development Expense Amount, the Loans and Advances and the Success Fee but the manner, terms and conditions to be agreed relative thereto is uncertain at this time. Management’s primary goal continues to be the launch of serious design and construction activities for the Omagine Project and management does not object to any reasonable resolution of these and other matters preventing that goal from being accomplished.

LLC Capital Structure

As of the date hereof the LLC Shareholders have made:

(i)	cash investments totaling OR 360,000 [$936,000] (of which OR 300,000 [$780,000] was invested by Omagine), and
(ii)	a non-cash investment of the Land Rights valued at OR 276,666,667 ($718,614,000), for a total investment to date of OR 277,026,667 ($720,269,334).

LLC is presently capitalized as follows:

Shareholder	Omani Rials		US Dollars
Omagine		OR 300,000	$	780,000
RCA		OR 276,704,167	$	718,711,500
CCC-Panama		OR 15,000	$	39,000
CCC-Oman		OR 7,500	$	19,500
Total		OR  77,026,667	$	719,550,000

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As of the date hereof, as a result of (i) Omagine having made its OR 210,000 ($560,000) Deferred Cash Investment into LLC, and (ii) RCA having made its OR 276,666,667 ($718,614,000) non-cash PIK Investment of the Land Rights into LLC, LLC is presently obligated to issue a further 2,100,000 LLC Shares to Omagine and a further 663,750 LLC Shares to RCA. As of the date hereof, neither CCC nor RCA have made their respective Deferred Cash Investments into LLC.

As of the date hereof, the ownership percentages of LLC as registered at Oman Ministry of Commerce & Industry are as follows:

LLC Shareholder	% Ownership
Omagine	60%
RCA	25%
CCC-Panama	10%
CCC-Oman	5%
Total:	100%

RCA continues to be obligated to make further cash investments into LLC in the aggregate amount of OR 7,640,625 [$19,865,625] but the timing and payment of such RCA Deferred Cash Investment may change from that memorialized in the Shareholder Agreement presently in effect to what may be agreed in the Amended and Restated Shareholder Agreement.

The Transformation

At some time subsequent to the execution of the Amended and Restated Shareholder Agreement, LLC intends to transform its corporate structure from a limited liability company into a joint-stock company (the “Transformation”).

The Shareholder Agreement also specifies, among other things, the corporate governance and management policies of LLC and it provides for the LLC shares presently owned by JOL to be transferred to Omagine subsequent to the signing of the DA. We presently expect this share transfer to occur at the time of the Transformation of LLC into a joint stock company or at the time of the execution of the Amended and Restated Shareholder Agreement.

The foregoing summary of the terms of the Shareholder Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Shareholder Agreement attached hereto as Exhibit 10.6.

Banks, Investors and Contractors

The Al Rayan Bank

As previously reported, in November 2015, LLC signed an agreement (the “Al Rayan Loan Agreement”) and arranged a $25 million loan (the “Al Rayan Bank Loan”) with Masraf Al Rayan, a substantial Qatari bank. Management has continued to have discussions with Masraf Al Rayan since November 2015 but it is management’s present opinion that the Al Rayan Loan Agreement and the Al Rayan Bank Loan will not be utilized by LLC. 

The Omani Bank with whom CCC has a business relationship

Extended meetings and discussions with CCC and with the Omani Bank with whom CCC has a business relationship resulted in changing, confusing and often contradictory paths being followed before ending unsuccessfully. It was planned by all the LLC Shareholders that CCC and RCA would inject into LLC a portion (an aggregate of approximately $26 million USD) of their “Deferred Equity Investments” (as such term is defined in the Shareholder Agreement); that LLC would hire the Omani Bank as its financial adviser and lender; that LLC would execute a Phase One valued at approximately $220 million and consisting of one hotel, 250 residences and one Pearl; that LLC and CCC-Oman would enter into the CCC-Contract; and that an Amended and Restated Shareholder Agreement would be executed, however all such plans were apparently based on CCC providing the adequate corporate guarantee to the Omani bank – which to the best of management’s knowledge – did not happen. Discussions with the Omani bank and with CCC on this matter are now ended. 

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Management however remains cautiously optimistic that ongoing discussions with an alternative investor may be concluded during February 2017 and that our ongoing discussions with an alternative bank may be concluded after that and by March 31, 2017.

Other Investors and Contractors

During 2015 and 2016 management has conducted a multitude of investor presentations across the MENA Region with potential LLC equity investors including sovereign funds, investment funds and high net-worth individuals. Several of these investors expressed interest in becoming shareholders of LLC but in all such cases to date except one, management concluded that the percentage of LLC equity required by such investors was excessive and much too dilutive to the LLC Shareholders (and indirectly dilutive to our Omagine shareholders via their 60% ownership of LLC). LLC management is presently focused on one investor (with whom it has a preliminary written investment agreement) and on a second possible back-up investor in the event such is needed.

Given the present liquidity issues at local banks, the matter of construction debt financing (“Project Finance”) is an issue at the top of all developer’s and contractor’s agendas. The required Project Finance for the Omagine Project – or any project – is not really needed until after the masterplanning and design phase is complete or near complete. Our present plans with CCC however combines the financing of the design, masterplanning and construction for Phase One into a single effort.

Design, Development & Construction:

The design, development and construction of the Omagine Project will be divided into various phases (each, a “Phase”). Since the CCC Contract has not and will not be signed, neither CCC nor any other contractor is presently expected to be the General Contractor for the entire Omagine Project. The various construction Phases are now expected to be put out to bid to various contractors and this competitive bidding process (especially given the present economic environment for contractors in the MENA Region) is expected to garner substantial cost savings for LLC.

Initial Activities

The Immediate Post-DA Period is the time period between the DA signing and the first Financing Agreement Date. The execution of many initial activities during this period by LLC required the parallel launching by LLC management of many diverse efforts and processes on multiple fronts immediately after the DA Execution Date of October 2, 2014 and continuing through the date hereof. This early initiative fast track strategy (financed entirely by Omagine) greatly benefited LLC to date in many ways, among which are:

1.	the DA was Ratified by the Government;
2.	the UA was signed and registered with the Government;
3.	the Operative Date of July 1, 2015 replaced both the Execution Date of October 2, 2014 and the Effective Date of March 11, 2015 referenced in the DA;

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4.	three separate valuation studies and reports were commissioned and the valuation of the Land Rights was completed;
5.	expert accounting analyses and reports were received from PwC, Deloitte and the Company’s independent auditor regarding LLC’s purchase of the Land Rights and the recording thereof in LLC’s and the Company’s financial statements;
6.	LLC booked 276,666,667 Omani Rials of new equity which is also reflected in the Company’s consolidated financial statements;
7.	a cost accounting budgetary framework to be used during the development, construction and marketing of the Omagine Project was created by an independent accounting and finance consultant;
8.	an expert IT consultant was selected to architect and install the IT framework and solutions we intend to implement across LLC and the Company and across the Omagine Project’s “smart city” environment;
9.	an independent third party update to our feasibility study was commissioned and completed;
10.	an update of LLC’s internal financial model by specialist real estate investment bankers and advisers was commissioned and completed;
11.	confirmation from banks in Oman (but not from banks outside of Oman) that the value of the Land Rights can be used as collateral to support the Syndicated Bank Financing was received;
12.	the “Brand Identity” and associated brand pillar components and uniform brand messaging platform we intend to implement for Omagine, LLC and the Omagine Project were created;
13.	LLC’s strategic plan was completed;
14.	multiple meetings with, and multiple iterations of proposals and presentations from major mission-critical project consultants (architects, designers, master planners, engineers, program managers, quantity surveyors, real estate advisers, hospitality advisers, hotel management companies, financial advisers and others) have been received, reviewed and analyzed by management and selections of many consultants have been made by management;
15.	candidates for senior LLC executive positions have been recruited, interviewed and selected;
16.	extensive and multiple presentations and meetings with potential LLC equity investors in six MENA Region countries, Europe, Asia and the U.S. were conducted and while most offers were declined by LLC, negotiations with several selected strategic investors are still ongoing with a present focus on one such investor;
17.	extensive and multiple presentations and meetings with local, regional and international banks in Oman, the MENA Region and Europe with respect to the provision of Syndicated Bank Financing have occurred with a present focus on one such bank;
18.	Multiple drafts of the CCC Contract were created (most recently in May 2016) but the final attempt to close this transaction ended unsuccessfully after many delays, and
19.	several other contracts for mission-critical consultants are presently being prepared,

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The CCC Contract / The CCC Phases

In August 2016, management was optimistic and positively inclined to believe that a beneficial conclusion for all parties concerned would be forthcoming in a matter of several weeks but no conclusion occurred and management presently believes that no amount of further negotiations will result in a definitive conclusion of these matters with CCC.

All prior disclosures and discussion of the CCC-Contract and to prior descriptions of Phase One or other phases contemplated under the CCC-Contract are now inoperative, void and of no consequence since the CCC-Contract was not and will not be signed with CCC-Oman. The Omagine Project will however still be developed in Phases but the previously described and disclosed description of phases will be altered as we go forward. Discussions with CCC have ceased and the CCC Contract is not expected to be signed at all.

Management’s primary present goal is the launch of serious design and construction activities for the Omagine Project during the first quarter of 2017.

It is presently expected that several building contractors will be involved in the project as the various Phases of the work is designed and specified and then put out to bid by local contractors after the design is substantially completed. As part of the masterplanning, we will develop a phasing program for the entire project and as the design and/or specifications of any Phase is sufficiently completed such that LLC can tender it for competitive bidding it will do so. CCC-Oman will be welcome to bid on any such Phase if it so desires.

Any new construction contracts with potential contractors will be modeled after the early draft CCC-Contract as envisioned by Omagine and will be based on internationally accepted contracting standards promulgated by the International Federation of Consulting Engineers (“FIDIC”) and will contain a set of industry standard performance parameters, incentives and penalties to ensure Omagine LLC’s interests are protected and that value is delivered.

LLC will manage the bidding and competitive process by which the various contractors will be chosen. There is an ample supply of qualified contractors in Oman.

The contractor will only commence construction activities on a Phase or section of a Phase after the competitive bids therefore are examined and a contract award is made by LLC.

It is anticipated that several Phases will be under construction simultaneously in an overlapping manner as the various designs and specifications for the various Phases are sequentially completed. Construction on Phases will continue until the conclusion of all Permanent Works constituting the Omagine Project are completed.

LLC plans to maintain a robust control of the design of the entire project and of each Phase through to completion.

Development Phases / Construction Phases / Project Financing / Masterplanning 

It is anticipated that the Omagine Project will be developed in several phases and each such phase will likely include one or more Sections of construction. It is expected therefore that several tranches of project financing from banks or other financial institutions will occur and several Financing Agreements will likely be executed during the course of the project’s phased development and construction. The first Financing Agreement Date occurred on November 29, 2015 with the signing of the Al Rayan Loan agreement but as stated above that is now unlikely to be utilized. Until other Financing Agreements are actually executed by the relevant parties however, no assurance can be given that they actually will be so executed or that Project Financing will be available to LLC. Each such further Financing Agreement, if any, is expected to coincide approximately with the beginning of a new development and construction phase, all of which phases will include design, marketing and one or more new Sections of construction activities. The closing of a tranche of Project Finance whether from banks, investors, financial institutions or from Syndicated Bank Financing will each be memorialized by a separate Financing Agreement. 

The November 29, 2015 execution date of the first such Financing Agreement with Masraf Al Rayan is defined in the Shareholder Agreement as the “Financing Agreement Date”. The earlier that the Financing Agreement Date occurred, the better it was expected to be for LLC, the Omagine Project, and all concerned for a variety of reasons but this was ultimately complicated by the CCC-Contract delays described herein. The present liquidity squeeze in GCC banks may continue to have a negative impact on our Project Finance efforts. Notwithstanding the foregoing sentence, the bank with which we are presently negotiating a project finance package does not have such liquidity issues. 

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No assurance however can be given at this time as to whether the Company will be successful in arranging either Equity Sales or Debt Facilities or in closing the financing facility for the Omagine Project until such events actually happen.

Any reference in this report to a term or condition of the Development Agreement, the Usufruct Agreement and/or the Shareholders Agreement does not purport to be complete and is qualified in its entirety by reference to the full texts of such agreements. The full text of the Development Agreement is attached hereto as Exhibits 10.7 and 99.1. The full text of the Usufruct Agreement is attached hereto as Exhibits 10.8 and 99.2. The full text of the Shareholder Agreement is attached hereto as Exhibit 10.6.

Subject to the Amended and Restated Shareholder Agreement being signed in January or February of 2017, the masterplanning of the Omagine Project is planned to occur in the first quarter of 2017. It is presently planned that in parallel with the masterplanning effort we will engage the hospitality, real estate, insurance and marketing consultants to execute various professional studies which will inform the masterplanning process and our business plan. These consultants and advisers all contribute to and inform the masterplanning and final design process for the Omagine Project.

The preliminary master plan along with the various studies and our fleshed-out business plan (which in turn is informed by our now completed Strategic Plan) is expected to be utilized by the financial adviser to drive the Syndicated Bank Financing effort.

During the masterplanning process, exact sizes, shapes and placement of the various project elements (residential, hotels, entertainment, landscape, etc.) are determined and as the master plan evolves and takes shape, the various follow-on Phases of development and construction will also naturally evolve. Simultaneously with these processes, the Financial Adviser will be updating the Omagine Project’s financial model to reflect the precise and final constituent project elements along with their projected costs and associated projected revenue streams. Finally, all of the foregoing data and other marketing, sales and strategic planning studies created by or on behalf of LLC are assembled into an “LLC Business Plan”. With the LLC Business Plan in hand and with the LLC Financial Adviser in the lead, LLC and the Financial Adviser and other select consultants set about the business of making final presentations to the various banks, with which we are now and will continue to be in touch, with the objective of arranging the Syndicated Bank Financing.

Notwithstanding anything contained in this report regarding possible, proposed or planned (i) sales of equity by Omagine and/or LLC (“Equity Sales”), or (ii) debt facilities with banks, financial institutions or other persons (including the Al Rayan Bank Loan) or sale of debt securities by LLC (collectively, “Debt Facilities”), or (iii) Syndicated Bank Financing or Project Finance, no assurance can be given at this time as to whether the Company or LLC will be able to obtain the significant amount of financing and Project Finance necessary over time to execute the development of the Omagine Project.

Over the past many months, we have conducted, and continue to conduct, numerous meetings:

i.	with respect to LLC Equity Sales, with several potential equity investors interested in becoming shareholders of LLC, including sovereign funds, investment funds and high net-worth individuals from Europe, China, and several MENA Region countries, and
ii.	with respect to Omagine Equity Sales, with investment funds and high net-worth investors in the U.S., Europe and the MENA Region interested in becoming shareholders of Omagine, and
iii.	with respect to Debt Facilities for LLC other than Syndicated Bank Financing, with several banks and other potential investors in the U.S., Europe, the GCC countries and Oman, and
iv.	with respect to major local, regional and international banks in Oman and the GCC there appeared to be a significant amount of banking liquidity in 2015, but presently the banking liquidity levels are under severe pressure primarily as a result of the worldwide drop in the price of crude oil and resulting decrease in deposits into these banks by governments. Similarly the large appetite we witnessed in 2015 at such banks for providing Syndicated Bank Financing and Debt Facilities to LLC appeared to have cooled in 2016. Notwithstanding the foregoing sentence, the bank with which we are presently negotiating a project finance package does not have such liquidity issues.

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LLC management and financial executives have held numerous meetings and discussions over the past several months with many major local and international banks, the purpose of which, among other things, was to discuss the prospects for such banks providing the Syndicated Bank Financing which is expected to be composed primarily of debt financing from banks. This is a crucial matter to address and accomplish in order to make the Omagine Project a reality. Based on present assumptions, we estimate that LLC’s peak Syndicated Bank Financing requirements will be approximately $350 to $400 million during the multi-year development cycle of the Omagine Project.

The process of obtaining project financing is not a trivial exercise. It is a time-consuming and complicated process which, when successful, culminates in an event known as a “Financial Close” – usually several Financial Close events - as projects of the size and scope of the Omagine Project are almost always developed in phases. With respect to any proposed Syndicated Bank Financing requirements, the question of whether or not LLC’s Land Rights can or will be used by the various banks as collateral to support such Syndicated Bank Financing is therefore of considerable importance. At present LLC management is confident that banks within Oman will use LLC’s Land Rights as collateral for bank debt facilities for LLC but we are unclear as to the position of many of the regional and international banks outside of Oman in this regard.

The DA addresses this matter in considerable length and clearly contemplates that LLC - as the registered owner of the Land Rights will be granting a security interest in its Land Rights to banks and lenders to the project. The DA further obliges the Government - as the registered owner of the land - to consent to any such grant of a security interest by LLC. (See: Exhibits 10.7 and 99.1, and Clause 22 of the DA - Lenders Security Interests). The DA states in relevant part:

“… the Government shall enter into Direct Agreements with Lenders acknowledging their rights by way of Security Interests over certain assets of the Project Company including an assignment to the Lenders of the Development Agreement, the Usufruct Agreement, other related agreements, and the Project Assets …” (See: Exhibits 10.7 and 99.1, Schedule 20 to the DA - Principles of Direct Agreement).

The major Omani banks with which LLC management has met - and with whom we continue to meet and update - have indicated that LLC’s Land Rights will be considered by such Omani banks as collateral to support bank financing debt facilities for the Project Finance for the Omagine Project but other non-Omani regional and international banks (including their branches in Oman) have been less forthcoming with definitive answers until they see more details about the nature and extent of LLC’s Land Rights. 

LLC management is presently confident that the OR 276,666,667 ($718,614,000) value of its Land Rights will be considered by the Omani banks as collateral for the Syndicated Bank Financing for the Omagine Project but it remains unclear at this stage whether or not banks other than Omani banks will do likewise. Notwithstanding the foregoing statement however, it is not possible at this time to predict with certainty what future events may alter LLC’s present assessment of its ability to use its Land Rights to collateralize any bank debt financing including any Syndicated Bank Financing.

Updated Studies

In addition to the valuation studies and reports with respect to the Land Rights (See: “The Land Rights”, above), management also commissioned:

(i)	an updated feasibility study of the Omagine Project by an independent third party which is a professional real estate, tourism and marketing consultant, and
(ii)	an updated LLC internal financial model for the Omagine Project by unaffiliated third parties who are expert financial, investment banking and real estate consultants.

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Both the updated feasibility study and the financial model have been completed (and given the delays incurred to date, they may need to be further updated) and they will be utilized by LLC to fine tune its development plans, and ultimately by LLC’s designated Financial Adviser for the balance of the project in arranging the Syndicated Bank Financing and other financing for LLC as may be required.

Omagine LLC’s internal financial model is updated, modified and adjusted from time to time in order to capture what management believes are the then present market realities and projected trends. The financial model is organized to show best case, worst case and probable case scenarios. The most recently updated probable case scenario forecasts substantial net positive cash flows for Omagine LLC over the seven year period subsequent to the signing of the DA and a net present value (“NPV”) of the Omagine Project of approximately $1.4 billion dollars. Management believes its financial model assumptions are reasonable but cautions that they may change as new facts and information become available, as the development program and design process unfolds and as market conditions require. It is virtually certain that the various components of the financial model - and therefore the estimates of total cash flow and NPV - will change from time to time in line with market fluctuations and as the project unfolds.

The sale of residential and commercial properties is a large revenue driver supporting Omagine LLC's internal financial projections. The OR 276,666,667 average valuation of the Land Rights has had a positive effect on projected revenue at LLC.

Management cautions that investors should not place undue reliance on the aforementioned financial model projections or on estimates by market participants mentioned herein as all such projections, estimates and forecasts 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 or that the estimates or forecasts will prove to be accurate. Potential investors are cautioned not to place undue reliance on any such forward-looking statement or forecast, which, unless otherwise noted to the contrary, speaks only as of the date hereof.

Off Plan Sales and Land Price Payments

As is present practice in Oman, LLC anticipates that sales contracts with third party purchasers of residential or commercial properties that are purchased “off plan” (i.e. purchased before the construction thereof), will stipulate the payment to LLC by such purchasers of (i) a deposit on signing of such sales contract, and (ii) progress payments during the construction period of the relevant property covered by such sales contract. Since the aggregate of such deposit and progress payments before and during the construction of the relevant property is expected to be approximately 85% of the sales price of the relevant property stipulated in such sales contract, LLC anticipates that (i) the construction costs for properties that are sold “off plan” will be substantially “owner-financed” by the relevant purchaser, and (ii) it will likely be unnecessary therefore for LLC to utilize any or very much Syndicated Bank Financing in order to pay for the construction costs of properties which are sold pursuant to “off plan” sales contracts. Management expects that this commonly accepted sales contract and payment process will significantly benefit LLC by reducing its aggregate requirements for Syndicated Bank Financing from its banks. The consumer appetite for such “off plan” sales is less today than it was in recent years. (See “Market Conditions” below).

Furthermore, Land Price Payments to the Government are not due or owing from LLC until such time as LLC legally transfers the freehold title to land to a purchaser at the time of the closing of the sale of such land. Such closings will only occur after LLC has received final payment of the relevant sales contract amount from the purchaser. LLC’s financing profile is therefore further enhanced since it is not obligated to make any Land Price Payments to the Government until after it has already received 100% of the contracted sales price amount from the relevant purchaser at the closing when the freehold title to such land and property is transferred to the purchaser.

Consolidated Results

The financial results of LLC are included in the consolidated financial results of the Company in accordance with accounting principles generally accepted in the United States. The Company experienced a substantial increase in capital on July 2, 2015 when the Land Rights were registered in LLC’s name and recorded in LLC’s and the Company’s financial statements. The Company will experience another substantial increase in capital, if and when further capital increases occur at LLC and the then appropriate percentage representing Omagine’s ownership interest in LLC is recorded in the Company’s consolidated financial statements. LLC's ongoing financial results will be included in the consolidated financial statements of the Company as appropriate for as long as Omagine remains a shareholder of LLC.

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In addition to the activities mentioned above, the Company’s preparations for its future business activities also include, but are not limited to: (i) negotiating various agreements with other major vendors, contractors, consultants and employees proposed to be involved in the Omagine Project, (ii) arranging the appropriate and required legal, accounting, tax and other professional services both in Oman and the U.S., (iii) reviewing and complying (to the extent we are presently able) with the listing requirements of various stock exchanges so we may be prepared to apply for such listing(s) as soon as we are eligible, (iv) examining various other matters we believe will enhance shareholder value, and (v) examining other potential Company revenue streams which are ancillary to, and derivative of, the Omagine Project.

The Company plans to enter businesses other than real estate development - and ancillary to, and derivative of, the Omagine Project - and the Company presently expects to generate ongoing revenue streams from such businesses, but no projections of the amount of such revenue, if any, can be made at this time.

Although the Company had expected to generate revenue in the medium term as LLC (i) began reimbursing Omagine for its Pre-Development Expenses, and (ii) begins paying the Success Fee installments to Omagine, such reimbursements are now likely to be delayed and/or possibly altered by the terms of the Amended and Restated Shareholder Agreement (See: “Pre-Development Expenses and Loans and Advances to LLC” and “Success Fee” above). The Company is not expected to generate revenue from sales or operations of properties within the Omagine Project until the development and construction of the Omagine Project is substantially underway. Subject to the execution of the Amended and Restated Shareholder Agreement, the masterplanning, development and construction of the Omagine Project is presently expected to begin in the first quarter of 2017.

Financial Adviser

LLC’s financial adviser (“Financial Adviser”) for the Omagine Project is expected to be a bank or other professional financial consulting company. As such the Financial Adviser will arrange the syndication among several banks of the debt financing (“Syndicated Bank Financing”) for the Omagine Project.

It is presently expected that a definitive agreement between LLC and its Financial Advisor will be executed within the second quarter of 2017. No assurance however can be given that any such agreement will be signed until it is actually signed by the parties.

Importantly, given the present liquidity issues at local and MENA Region banks, the matter of Project Finance is an issue that has now moved to the forefront of LLC’s agenda. While the required Project Finance for the Omagine Project (estimated at approximately $400 million) – or any project – is not usually needed until after the masterplanning and design phase is complete or near complete, given present economic strains both developers and contractors are well advised to seek to lock up a Project Finance commitment early on rather than waiting to start a syndication at a later date.

LLC’s Financial Adviser will advise on capital structure and lead the arrangement and placement of the Syndicated Bank Financing. LLC will then work together with its Financial Advisor to appoint lead arrangers for such Syndicated Bank Financing which may include the Financial Advisor itself.

The amount of Syndicated Bank Financing owed at any one time by LLC to its Lenders is expected to fluctuate over the development and construction cycle of the Omagine Project and will be greatly influenced by (i) any additional Equity Sales, and (ii) the pace and tempo of LLC’s receipt of proceeds from its planned sales of real estate to third parties. The capital of LLC, proceeds from Equity Sales if any, Syndicated Bank Financing and the proceeds from sales of its residential and commercial properties, are expected to be utilized by LLC to develop the Omagine Project.

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The maximum amount of such Syndicated Bank Financing presently expected to be outstanding at any one time during the development and construction cycle of the Omagine Project is presently estimated by management to be between $350 million and $400 million.

We have had extensive discussions with a number of MENA Region financial institutions with respect to such Syndicated Bank Financing and while they remain interested in discussing the Project Finance for the Omagine Project, almost all such banks confirmed the tightening of bank liquidity due to the current economic climate resulting from the sharply reduced price for crude oil. We are presently in discussions with a bank which is not experiencing such liquidity issues and which has already given LLC a “soft commitment” with respect to the provision by it of the debt financing required for the Omagine Project. With LLC’s Financial Adviser leading this effort, management remains hopeful with respect to LLC’s prospects for arranging the Syndicated Bank Financing for the Omagine Project but recognizes that given present economic and market conditions, it is not a trivial task and will be challenging. These discussions are ongoing and no assurances can be given at this time regarding the outcome, if any, from such discussions. The DA recognizes and addresses this issue when it states, in relevant part:

“The Government recognizes that the Project Company intends to raise limited recourse financing in relation to the Project and that Lenders may expect to be afforded certain rights in relation to it. Accordingly, the Project Company will by or before the completion of twelve (12) months from the Execution Date [now the Operative Date of July 1, 2015; see Exhibits 10.7, 99.1, 10.8 and 99.2] enter into a written term sheet with the Lenders for the financing of the First Phase, any other phase or all of the Project (a “Term Sheet”). If the Project Company has not delivered a copy of such Term Sheet to the Government by or before the expiry of the twelve (12) month period referred to above, this Development Agreement then shall have no further effect.” (See Exhibits 10.7 and 99.1).

The condition referred to above was fulfilled on November 9, 2015 when LLC entered into a written term sheet with Masraf Al Rayan with respect to the financing of the First Phase of the Omagine Project.

MENA Region banks and financial institutions continue to maintain adequate levels of liquidity but the rapid fall in world oil prices is a challenge to those banks whose liquidity relies to a great deal on government deposits resulting from the sale of crude oil. Such new and large government borrowings from commercial banking institutions tend to crowd out commercial borrowing capacity for private companies. The largest banks of course are weathering this storm more handily then the mid-size or smaller banks.

The project financing environment in Oman and the MENA Region continues to remain cautious after the rapid decline of worldwide oil prices which led to the rapid decline of bank deposits being received from governments. LLC management regularly meets with several internationally recognized Financial Advisers, all of whom have deep and wide-ranging expertise in the MENA Region project financing markets and as part of their normal business activities are in regular contact with MENA Region banks and international financial institutions regarding the status of and conditions prevailing in the project finance marketplace. The Company is now cautiously optimistic (and less confident then it had been before the 2015 sudden drop in oil prices) that LLC and its yet to be designated Financial Adviser will be able to arrange the necessary project financing for the Omagine Project. Management believes that all the Financial Advisers and banks with whom it has recently met concur that there is currently still a reasonable degree of liquidity and appetite among MENA Region banks and financial institutions for lending to, and investing in, sound development projects in the MENA Region. Most such persons and institutions however are more cautious than they were a year ago because of the recent rapid fall in oil prices and the continuation of the unsettled military activities ongoing in Syria, Iraq, Yemen and Libya.

No assurance can be given at this time that LLC will be able to obtain any, or a sufficient amount of, the project financing required to develop, build and complete the Omagine Project. If such a circumstance were to occur, it would have a material adverse effect on our business and operations.

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Market Conditions

As previously disclosed and as has been and continues to be widely reported by local and international media and press, the worldwide price of crude oil fell very suddenly and dramatically in 2014 and 2015 (from over $100 per barrel to about $25/$30 per barrel) as robust production in the U.S. and elsewhere created a global glut of crude oil. Presently the price of crude oil is about $45/bbl. Almost all countries in the MENA Region are dependent on the sale of crude oil to support their economies and their government spending programs.  

Although MENA Region governments had 100s of billions of dollars of savings in sovereign reserve funds, this oil price shock ushered in an extremely challenging environment for the MENA Region governments and for the companies of all types – including developers and contractors – operating in the MENA region. In reaction to the large, rapid and unexpected drop in crude oil prices, government budgets were slashed across the region; contractors’ payments were delayed; and many government sponsored projects were postponed, delayed or cancelled. Payment delays and stalled government projects off the back of the decline in oil prices have severely impacted the entire construction industry in the MENA Region – including in Oman. The Omagine Project however is not a government sponsored project and Omagine LLC is a private company.

Crude oil prices “seem” to have recently stabilized around the mid-$40s per barrel price and a rebalancing of the market “seems to be” is in progress but the knock-on effects of the lower government spending and the delayed payments by MENA Region governments to contractors has had a severe economic impact on local economies and contractors.

Almost all local banking institutions in the MENA Region are dependent on large deposits from oil and gas sales by governments in order to provide the normally excess liquidity apparent in the local banking system prior to this recent dramatic worldwide drop in oil prices. With the sudden fall in deposits from oil sales, bank liquidity at local banking institutions in the GCC and wider MENA Region are under immense pressure as deposits have fallen dramatically while simultaneously governments became large borrowers where they were not before. Now however even some of the largest contractors are experiencing difficulties.

We expect that this sudden business cycle change will eventually right itself as all market participants adapt to the new realities but we are of the present opinion that the Company has succeeded in creatively making a path where none had apparently previously existed. These current economic conditions however, should they continue unabated, could cause a knock-on effect in the real estate markets resulting in slower or fewer sales and lower selling prices.

The market intelligence garnered by management indicates that local bankers and market participants believe that both transaction volume and pricing in the Omani real estate market are stable and are expected to improve in 2017 relative to expected performance in 2015 and 2016. We are presently unsure what the impact on transaction volume and pricing will be from the fall in crude oil prices but we expect some softness in the market as all participants adjust to the “new normal” of $40 to $50 crude oil prices. From a timing perspective, LLC plans to now launch residential and commercial sales at the Omagine Project in the first quarter of 2018.

Trends in the Omani market during the past few years have indicated a reduced presence of speculative buyers and a reduced consumer appetite for pre-sales of residence units (“off-plan” sales) as buyers now frequently demand a finished product before entering into sales contracts with developers. Although, many societal disorders, military activities and terrorism continue in other parts of the MENA Region, as long as the politically stable and quite safe conditions existing at present in Oman persist then, market conditions should favorably impact LLC’s future operations.

Nearby Dubai is experiencing softness in its residential sales and leasing market but in general Dubai’s economy (a regional barometer) remains relatively strong and, in certain areas, quite robust. Raw material and labor prices remain somewhat volatile in Oman having recently experienced both downward and upward swings over the past year – but overall construction costs are sharply down due to the severe competition presently in the market among building contractors.

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In Iraq, Syria, Yemen and Libya, among other countries, daily violent military clashes and terrorism are now commonplace. Other Arab countries in the MENA Region have experienced and are experiencing demonstrations of discontent with the rule of their heads of state and in some cases these demonstrations are being met with violent pushback by some MENA Region governments but this was not and is not the case in politically and economically stable Oman. Anxiety over the health of His Majesty, the much beloved Sultan Qaboos, and what effect, if any, that will have on Oman’s political stability and leadership succession seems to have abated and His Majesty seen to be actively managing state affairs.

Construction material costs and property selling prices in Oman and the surrounding region remain somewhat volatile and undue reliance on present forecasts should be avoided. Management cautions that future events rarely develop exactly as forecast and the best estimates routinely require adjustment. Management fully expects that its cost estimates for the Omagine Project (and therefore, its financial model) will require adjustment – possibly significant adjustment – as future events unfold. Investors and shareholders are cautioned not to place undue reliance on any such forward-looking statement or forecast, which speaks only as of the date hereof.

Nearby Dubai leads the way for the Gulf tourism market and this is likely to be the case for the foreseeable future, given its existing visitor market, attractions, its impressive future capital development and marketing investment programs, and especially given its recent selection as the host for EXPO 2020 which is expected to attract over 25 million visitors.

Sales and Marketing

LLC plans to undertake several wide ranging and continuous marketing, advertising, branding and public relations campaigns to establish its brand identity in anticipation of its early 2018 launch of residential and commercial properties for sale and to advertise and promote its forthcoming entertainment, hospitality and retail offerings.

As we move forward we plan to construct and operate a sales showroom at the Omagine Site. The sales office/showroom will be staffed with experienced real estate sales personnel and will contain large scale models of the Omagine Project and its various components as well as associated collateral sales and marketing materials.

The anticipated launch date for residential and commercial sales is presently planned to be in the first quarter of 2018. Management expects that the continuing stability of local real estate markets as well as the Government’s continuing improvements to Oman’s infrastructure (Muscat International Airport, roads, regional airports, etc.) will contribute positively to LLC’s future sales prospects. The impact of the recent fall in crude oil prices and the knock-on economic effects on consumers and government projects is unknown and difficult to predict at this time.

Management expects the Omagine Project to benefit from Dubai’s hosting of EXPO 2020, and similarly from nearby Qatar’s hosting of the World Cup Games in 2022. Both of these events are expected to attract a huge amount of visitors and tourists. The Omagine Project will be conveniently located one hour from Dubai and Qatar by air and is easily accessible by a fine roadway system in both Oman and the U.A.E. A visit to the Omagine Project will be a natural and logical addition to a Dubai or Qatar visit.

Sale prices and rental rates for housing in other integrated tourism projects in the Muscat area of Oman have remained stable during 2016 and as of the date of this report. The inventory of unsold housing in the secondary (re-sale) market (both outside of and within ITCs) has diminished due to recent, albeit quite price-sensitive, sales activity. New housing inventory, especially smaller apartments designed to hit perceived market price-points, has continued to come onto the local Muscat area market and the market absorption rates (number of market transactions) for such new residential housing is strong. The DA allows for sales and pre-sales of any of the residential or commercial buildings that will be developed and built on the Omagine Site.

The DA stipulates the obligation of the Government to issue such Licenses and Permits as may be required for the development of the Omagine Project, including but not limited to issuing an Integrated Tourism Complex License (“ITC License”) designating the Omagine Project as an ITC. On June 26, 2014, the Government issued an ITC License to LLC designating the Omagine Project as an ITC.

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Non-Omani persons (including expatriates living and working in Oman) are forbidden by Omani law to purchase land, residences or commercial properties in Oman unless such land, residences or commercial properties are located within an ITC. Because it is now licensed as an ITC, the land, residences and commercial properties within the Omagine Project may be sold to any buyer worldwide - including any non-Omani buyer - and the freehold title to such land, residences and commercial properties may be transferred to such buyers. Residences in ITCs are viewed to be highly desirable by purchasers (by both investors and owner-occupiers) and ITC residences therefore enjoy a premium selling price relative to non-ITC residences. Purchasers of residences within Omagine (or any ITC) are entitled by Omani Law to be issued a resident visa (for themselves and their immediate family).

The excellent location of the Omagine Site is recognized by local market participants and the significance of the provision of the Omagine Site to LLC is substantial. The increase in the value over the last several years of the land constituting the Omagine Site has had a positive effect on the valuation of the Land Rights and is expected to have a positive effect on LLC’s revenue from the sale of residential and commercial properties. The value of the land constituting the Omagine Site is expected to be a primary driver of future LLC and Company revenue and the benefits accruing to LLC and the Company pursuant to LLC’s Land Rights over the Project Land is expected to be material and significant.

Pursuant to the DA and UA, LLC will pay the Government OR 25 ($65) per square meter for the Project Land it sells to third party purchasers. The average valuation for the Land Rights (net of such Land Price) is OR 276,666,667 ($718,614,000) (See: “The Land Rights”, above).

Design, Engineering, Construction, Program Management, Content Development

The Company does not presently own or directly operate any design, engineering, content development or construction companies or facilities. With assistance from Omagine via the Loans and Advances, LLC has undertaken many critical tasks as indicated above, but for LLC to fully accomplish its objectives and undertake and finance the Omagine Project, it will have to close an Equity Sale or Debt Facility transaction (or a combination thereof) and the Amended and Restated Shareholder Agreement. The failure to date to accomplish these matters with CCC has delayed the Omagine Project and the masterplanning process.

Subject to the approval of its shareholders and to negotiating and agreeing to a contract, LLC intends to hire a design firm, an engineering firm, a program management firm (such as Michael Baker International (“Baker”) or a similar internationally prominent firm), a construction management firm and a quantity surveying/cost consultant firm. Omagine has employed Baker through the feasibility and engineering study phases of the Omagine Project.

The interpretive design, entertainment content, and visitor experience design candidates to be hired by LLC have been narrowed to a short list of professional companies. One or more of such companies (”Content Developers”) will be engaged by LLC to design the transformation of Omagine’s high level strategic vision for the content of the Pearl structures and surrounding areas into physical places offering emotional, intellectual and physical experiences and interactions. Each of the prospective Content Developers has serviced a diverse client base, including theme parks, museums, zoos, aquariums and other such complex entertainment centers around the world, including in the MENA Region, and each continues to regularly produce world class attractions globally of the size and scope of the Omagine Project.

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LLC presently intends to hire various local Omani contractors for the construction of the Omagine Project.  

To date, Omagine has generally conceived the development concepts and defined the ”scope of work” and then, as required, contracted with various designers, architects, contractors and consultants in the United States, Europe and the Middle East to perform those tasks. LLC will engage various firms as its consultants (master planner, engineers, real estate and hospitality consultants, etc.) who will together with management finalize the design for the entire Omagine Project. There are many such consultants available with competitive pricing and the Company does not believe that the loss or inability to perform of any such consultant which it has selected would have a material, adverse impact on its business or operations. The Company believes it maintains a good working business relationship with its consultants. As presently planned, all copyrights to all material documents, designs and drawings executed by such independent designers, architects, contractors and consultants are, or will be, the property of either LLC or Omagine.

DESCRIPTION OF PROPERTY

Omagine maintains its corporate offices at 136 Madison Avenue, 5th Floor, New York, NY 10016. The premises are leased by Omagine under a month to month lease. LLC leases premises in Muscat, Oman from an unaffiliated third party under a one year lease which commenced in January 2017 which provides for an annual rental of $35,880.

LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings which would have a material adverse effect on it or its operations.

MARKET FOR COMMON SHARES AND RELATED STOCKHOLDER MATTERS

Common Stock

Although our Common Stock is quoted and traded on the OTCQB under the symbol "OMAG", there is presently a limited amount of trading in our Common Stock and it is uncertain if such limited trading constitutes an “established public trading market”. The following table sets forth the high and low sales price quotations for our Common Shares as reported by the OTCQB on the quarterly ending dates indicated and as of the most recent practicable date. The table reflects inter-dealer prices without retail mark-up, markdown or commission and may not represent actual transactions. The last reported sale price of our Common Stock on the OTCQB on January 4, 2017 was $0.616 per Common Share.

Quarter Ended	High		Low
3/31/2014	$	1.80	$	1.75
6/30/2014	$	1.95	$	1.77
9/30/2014	$	1.64	$	1.34
12/31/2014	$	2.55	$	2.52
3/31/2015	$	2.99	$	1.65
6/30/2015	$	2.50	$	1.20
9/30/2015	$	3.09	$	1.45
12/31/2015	$	1.40	$	1.30
3/31/2016	$	1.40	$	0.90
6/30/2016	$	1.28	$	0.61
9/30/2016	$	1.12	$	0.85
12/30/2016	$	0.95	$	0.62
2/3/2017	$	0.73	$	0.55

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As of the date hereof Omagine has issued and outstanding:

i	3,269,000 Stock Options exercisable at various per Common Share exercise prices for the purchase of an aggregate of 3,269,000 Common Shares (See: “Executive Compensation - Equity Compensation Plan Information”), and
ii	1,455,000 Stock Appreciation Rights (“SARs”) with a grant price of $2.00, all vested on the grant date of August 31, 2015 and expiring on December 31, 2017, payable only in Common Shares (See: “Executive Compensation - Equity Compensation Plan Information”), and
iii	6,422,124 Strategic Warrants exercisable for the purchase of an aggregate of 6,422,124 Common Shares, 3,211,062 of which are $5 Warrants and the remaining 3,211,062 of which are $10 Warrants (See: “Description of Preferred Stock and Warrants – Strategic Warrants”), and
iv	150,000 Rural Concepts Warrants exercisable for the purchase of an aggregate of 150,000 Common Shares at an exercise price equal to the greater of (a) $0.50, or (b) 80% of the Market Price on the Trading Day immediately preceding the relevant Exercise Date (See: “Description of Preferred Stock and Warrants –Rural Concepts Warrants”), and
v	a convertible promissory note in the aggregate principal amount of $100,000 issued to a company controlled by two Independent Directors, which note and accrued interest in the aggregate amount of $100,521 (at September 30, 2016) is convertible at $0.75 per Common Share into approximately 134,028 Common Shares (See: “Certain Relationships and Related Transactions and Director Independence - Related Party Payables”), and
vi	two convertible promissory notes issued to an Independent Director in the aggregate principal amount of $150,000, with accrued interest thereon at September 30, 2016 of $89,987, which two notes and accrued interest in the aggregate amount of $239,987 (at September 30, 2016) are convertible at $2.50 per Common Share into approximately 95,995 Common Shares (See: “Certain Relationships and Related Transactions and Director Independence - Related Party Payables”), and
vii	a promissory note in the amount of $185,000 to an unaffiliated third party which, under certain circumstances may be convertible into Common Shares pursuant to a formula contained in the Note Purchase Agreement associated with such promissory note (See: “The St. George Investments LLC Loan Agreement”),

In addition, the Registration Statement of which this Prospectus forms a part, covers the registration by Omagine of up to 3,085,822 Common Shares of which up to 2,951,015 may be sold by the Selling Stockholder or its affiliate (See: “Selling Stockholder”).

At February 6, 2017, Omagine had 21,293,178 Common Shares issued and outstanding and based upon the number of record holders plus the number of individual participants in security position listings at such date, there were approximately 1,074 holders of such Common Shares.

Dividends and Dividend Policy

The holders of Common Stock share proportionately, on a per Common Share basis, in all dividends and other distributions declared by our Board of Directors. Other than a 2012 non-cash dividend distribution of rights and warrants to our shareholders, we have not declared any dividends on our Common Stock since inception and do not anticipate paying cash dividends in the foreseeable future. We plan to retain any future earnings for use in our business operations. Any future decisions as to payment of cash or non-cash dividends or distributions on our Common Stock will be at the discretion of the Board of Directors and will depend upon our earnings and financial position at such time and on such other factors as the Board of Directors may then deem relevant.

Performance graph

A performance graph is not required for Omagine since it is a smaller reporting company.

Selected Financial Data and Supplementary Financial Information

Selected financial data and supplementary financial information are not required for Omagine since it is a smaller reporting company.

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FINANCIAL STATEMENTS

The response to this Item, commencing on Page F-1, is submitted as a separate section to this Prospectus.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion highlights Omagine's business activities during the nine month period ended September 30, 2016 and during its 2015 and 2014 fiscal years.

Overview 

The Company is expected to generate revenue as LLC begins reimbursing Omagine for its Pre-Development Expenses and Loans and Advances and begins paying the Success Fee installments (See: “Pre-Development Expenses and Loans and Advances to LLC” and “The Success Fee”, above) but is not expected to generate revenue from operations in the near term until the development of the Omagine Project is substantially underway. The Company will need to generate sustainable operating revenue in order to attain its objectives and sustain its operations going forward. 

As the development program for the Omagine Project becomes more detailed and as the planning and design processes progress, the estimates of construction and development costs have and will become proportionately more accurate. LLC presently expects, based on the current assumptions underlying its updated development program, that the development costs (including the costs for design, construction, program management and construction management) for the Omagine Project will be between $2.1 and $2.5 billion dollars.

The costs of labor and materials as well as the selling prices and market absorption rates of new residential and commercial properties remain somewhat volatile in Oman and accurate forecasts for such future costs, selling prices or market absorption rates cannot be made at this time. (See “Market Conditions” and “Sales and Marketing”, above).

LLC nevertheless presently expects, based on current assumptions and market activity that such residential selling prices during its planned multiple sales releases beginning in 2017 will be at least equal to the prices that are presently budgeted by LLC.

Beginning in the Company’s September 30, 2015 consolidated financial statements and continuing to date, the Company’s consolidated financial statements reflect a substantial increase in capital resulting from the inclusion therein as of July 2, 2015 of the value of the Land Rights purchased by LLC. The opinion of our independent auditors in our fiscal year 2015 audited financial statements included in this Prospectus does not contain any expression of concern about our ability to continue as a going concern. In their opinion on our fiscal year 2014 audited financial statements, our auditors expressed substantial doubt about our ability to continue as a going concern but beginning in our September 30, 2015 unaudited quarterly financial statements and continuing through to our fiscal year 2015 audited financial statements, our March 31, 2016 and June 30, 2016 unaudited quarterly financial statements and our September 30, 2016 unaudited financial statements included in this Prospectus, that expression of concern has been removed.

In April 2016, Omagine sold (a) 700,000 restricted Common Shares to an investor for proceeds to Omagine of $504,000 and (b) an aggregate of 139,334 restricted Common Shares to the Company’s president and three independent directors for aggregate proceeds to Omagine of $125,400. During July and August 2016, Omagine sold an aggregate of 35,241 restricted Common Shares to investors for aggregate proceeds to Omagine of $30,000. In November and December 2016, Omagine sold an aggregate of 370,000 restricted Common Shares to investors for aggregate proceeds to Omagine of $185,000.

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The Development Agreement was signed by Omagine LLC and the Government of Oman on October 2, 2014. Thereafter the DA was ratified by the Government, the UA was signed by and registered with the Government and LLC’s Land Rights were valued by three outside independent experts at an average valuation of seven hundred eighteen million six hundred fourteen thousand dollars ($718,614,000).

LLC was organized in late 2009 for the sole purpose of developing the Omagine Project. By definition therefore, it was designed to be relatively inactive until the Development Agreement was signed and to become fully operational only after the DA was signed. At the time the Shareholder Agreement was signed in late 2011, the LLC Shareholders were expecting the imminent signing of the DA but as previously reported the DA signing was continually delayed (the Arab Spring; four different Ministers of Tourism; the worldwide financial crisis; etc.) for a variety of reasons. (See our previous SEC reports for a detailed narrative on these delays). The DA was ultimately signed on October 2, 2014.

LLC was initially capitalized by Omagine in 2009 at $52,000. Two years later pursuant to the Shareholder Agreement the LLC Shareholders made modest initial cash investments into LLC totaling $338,000 (of which Omagine invested 60% or $182,000) and simultaneously the LLC Shareholders obligated themselves to make further more substantial investments into LLC ($70 million plus Land Rights) after the DA was signed and the Financing Agreement Date was achieved. This structure of initial and deferred investment stages memorialized in the Shareholder Agreement was a cumbersome but eminently sensible arrangement given the numerous delays the project had experienced (and continued to experience through October 2014). This investment structure had the added advantage of facilitating the low risk entry into LLC of our strategic partners RCA and CCC.

As previously reported it was also foreseeable, and foreseen by management, that this multi-stage investment structure had a built in disadvantage. It left a future financing gap to be addressed after the DA was signed, namely -- the time period between the DA signing and the first Financing Agreement Date (the “Immediate Post-DA Period”) would be a challenging period to finance.

A fast track development schedule during the Immediate Post-DA Period - followed by the First Phase was always planned and desirable. Since it was clear that such a fast track schedule would need significant financing, management planned accordingly and sought to address this predictable coming financing gap in a variety of ways, including the following: (i) we structured the Shareholder Agreement investments such that although the initial investments into LLC by RCA, CCC and Omagine were minimized, LLC would receive a $546,000 additional cash investment from Omagine promptly after the DA was signed; (ii) anticipating that the value of the Land Rights would be substantial (whether on balance sheet or off ), beginning in 2011 we expanded our investor outreach with respect to post-DA LLC equity sales; (iii) in our 2012 rights offering, we included 6,773,896 Strategic Warrants (3,211,062 of which are exercisable at $5.00 and 3,211,062 exercisable at $10) which we distributed to our shareholders as a dividend (See: “Strategic Warrants”, below); (iv) we registered both the Strategic Warrants and the Common Stock underlying the Strategic Warrants with the SEC in order to make them “freely trading”.

Management realized that financing for the Immediate Post-DA Period would be scarce because of the way the Shareholder Agreement was structured but we were hopeful that the aforesaid plans would yield the desired results. They didn’t. In order to sustain LLC during the pre-DA delays, Omagine had trickled out its additional $546,000 investment into LLC over time and mostly before the DA was signed. No post-DA “immediate $546,000 cash infusion into LLC” was therefore forthcoming; it was already mostly used up pre-DA.

Shortly after the DA was signed management undertook a series of MENA Region trips (many of which were arranged for us by CCC senior management) to make many investor presentations to wealthy investors and investment funds in the MENA Region – all were interested – some offered to invest – but none of the proposed investment offers were acceptable to LLC management.

As previously disclosed, we had planned to finance the activities required to be executed during the Immediate Post-DA Period via equity sales at LLC or debt financing (including possibly a loan from Omagine to LLC if the financial resources were available to Omagine at such time); which debt financing would also (assuming the CCC Contract was signed) be the first Financing Agreement Date; which in turn would satisfy the Conditions Precedent to RCA’s and CCC’s obligations pursuant to the Shareholder Agreement to make their Deferred Cash Investments into LLC in the aggregate amount of approximately $69 million; which in turn we planned to follow (at a later time) with additional sales of LLC equity at a stepped-up LLC valuation, followed next by the syndicated bank financing. The Immediate Post-DA Period activities, the First Phase, and all follow-on phases (and construction Sections) were planned therefore to be tracked in parallel with the appropriate and necessary financing phases. It was a reasonable plan but events didn’t evolve as expected and the plan didn’t work as intended.

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It was fortunate that we (i) had developed a good working relationship with YA over the years and we had renewed the SEDA and also arranged several working capital loans from them over time (See: “Results of Operations - Standby Equity Distribution Agreements” and “The YA Loan Agreements”, below); (ii) had accelerated our outreach and relationship management with banks and financial institutions in Oman, the UAE and Qatar, and (iii) had made some significant private placement sales of our Common Stock. While judicious in our use of the foregoing financing mechanisms, in order to finance the pre-DA delays (and the Immediate Post-DA Period tasks and activities), the sale and issuance by the Company over the years of many additional shares of Common Stock was required. It is a mark of the Company’s judiciousness and frugality however that as of the date hereof we still have only approximately 20.86 million Common Shares outstanding. Absent the Pre-DA delays, much of even this dilution could have been avoided; but the alternative was not attractive.

The Immediate Post-DA Period consisted essentially of activities required prior to engaging the masterplanner, engineering and other consultants and in preparation for the start of construction and serious syndicated debt discussions with banks. These initial activities included: land valuation reports, updating of feasibility studies & financial models; strategic planning, marketing plans; construction planning; vendor identification and selection (master-planner, specialty architects [residential, landscape, hotels, lighting, IT]; engineers, and several specialty consultants, etc.), and initial financial, banking and investor activities. As we continued executing various tasks during the Immediate Post-DA Period, we also held discussions with senior CCC management regarding a short term loan to LLC from CCC to help finance the ongoing Immediate Post-DA Period activities required for our fast track development model, but these discussions became extended and were ultimately inconclusive. The Immediate Post-DA Period is now about to conclude and it was financed in its entirety on behalf of LLC by Omagine.

The first Phase of the development and construction of the Omagine Project was budgeted at approximately $24 million and such first Phase as contemplated consisted mainly of the execution over the next 10 to 12 months of the masterplanning, design, engineering and construction work necessary for vertical construction to begin and the administrative, financial and marketing activities necessary for the implementation of our business plan.

Assuming the availability of the necessary financing and the execution of an Amended and Restated Shareholder Agreement, the masterplanning and design can begin in the first quarter of 2017. LLC is attempting to arrange an equity investment into LLC followed by bank debt financing to finance masterplanning, design and engineering and development activities. Architectural, design and engineering activities are planned to continue over the next several years spanning many follow-on phases (the second, third, fourth, etc. phases) as the development and construction of the Omagine Project unfolds.

Before 2009 when LLC was organized, 100% of the Pre-Development Expenses associated with the Omagine Project were paid by Omagine. From its inception in 2009 through the date hereof approximately 3% of all expenses associated with the Omagine Project were paid by LLC and 97% of all such expenses continued to be paid by Omagine. LLC was capitalized at $390,000 pre-DA; 60% of which ($234,000) was invested by Omagine. Instead of making one lump sum investment of $546,000 after the DA was signed as the Shareholder Agreement had contemplated, Omagine made a series of earlier advance investments into LLC over the years totaling $546,000 both before and after the DA was signed.

As the DA negotiations and signing dragged on, LLC bled cash which Omagine financed. The ambitious vision and scope for the Omagine Project required substantial cash to sustain it and this very quickly exhausted LLC’s already meager initial capital from the LLC Shareholders’ $390,000 minimal initial investments. Omagine continued to solely finance and pay LLC’s ongoing expenses while simultaneously advancing cash directly into LLC to keep it viable and functioning. As of September 30, 2016 Omagine has incurred expenses totaling approximately $28.8 million to bring the Omagine Project and LLC to their present state (See: “Pre-Development Expenses and Loans and Advances to LLC). No one expected at the time that it would take an additional four years after the Shareholder Agreement was signed to get the DA signed. But it did. Ninety-seven percent (97%) of the financing for that four year effort and 99.2% of all financing of pre-development expenses for the Omagine Project to date on behalf of LLC, was financed by Omagine.

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LLC has booked the 276,666,667 Omani Rials value of the Land Rights as capital and as hard assets (inventory & land) on its financial statements and the Company has likewise booked the appropriate consolidating entries (based on a $2.5974 per 1 Omani Rial exchange rate) for the Land Rights on its consolidated balance sheet included in its audited financial statements for the year ended December 31, 2015.

The Company is continuing to hold discussions with several potential investors with respect to equity sales at LLC and Omagine at equity valuations which management considers to be reasonable.

Investors and shareholders should be aware that the execution of the Omagine Project over the multi-year schedule contemplated by the Company will require significant amounts of project financing which is planned to be arranged in several tranches in parallel with the development cycle of the project and no assurance can be given that any or all of such required project financing, including the proposed debt financing with a regional bank, will be able to be obtained by LLC.

Forecasts, 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 hereof. All such forecasts, 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 such forecasts, projections or assumptions will be realized. 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 statements that have been made regarding such anticipated events.

Warrant Distribution

In 2012 Omagine distributed 6,422,124 Strategic Warrants at no charge to its shareholders. All such Strategic Warrants presently expire on December 31, 2017.

Critical Accounting Policies

Our financial statements attached hereto have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Actual results as determined at a later date could differ from those estimates. In recording 276,666,667 Omani Rials ($718,614,000 based on a $2.5974 per 1 Omani Rial exchange rate) in the Company’s consolidated financial statements as the non-cash value of Land Rights (as defined below) purchased by LLC from an LLC Shareholder in consideration for the issuance to such shareholder of 663,750 Omagine LLC shares (“LLC Shares”), management has relied to a great extent upon the written valuation reports of three expert land valuation firms engaged by LLC to value such Land Rights. Furthermore, in allocating such non-cash value to inventory and land under development, management has relied to a great extent upon the written report of an expert independent accounting firm engaged by LLC to advise it on the proper accounting to be used to record such non-cash value in LLC’s financial statements. 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.

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Land Rights - The Company’s consolidated audited financial statements for the period ended December 31, 2015 reflects 276,666,667 Omani Rials ($718,614,000 based on a $2.5974 per 1 Omani Rial exchange rate) of land under development which the Company has allocated as follows: 188,963,334 Omani Rials ($490,813,363 based on a $2.5974 per 1 Omani Rial exchange rate) to inventory; and 87,703,333 Omani Rials ($227,800,637 based on a $2.5974 per 1 Omani Rial exchange rate) to property. This land under development was purchased by LLC on July 2, 2015 pursuant to the terms of the Shareholder Agreement whereby an LLC shareholder subscribed for 663,750 LLC Shares at a purchase price equal to that amount of Omani Rials determined to be the value of the usufruct rights over one million square meters of beachfront land (the “Land Rights”). The Land Rights are extensive and they include the right to sell such land on a freehold basis (See: Exhibits 10.7 and 99.1). Since the Land Rights represented a non-cash payment-in-kind for the LLC Shares, it was necessary to value the Land Rights.

Three expert real estate valuation companies were engaged by LLC to independently value the Land Rights in accordance with the professional standards specified by the Royal Institution of Chartered Surveyors (“RICS”) and International Financial Reporting Standards (“IFRS”). The average of the three Land Rights valuations was OMR 276,666,667. See: Exhibits 99.4, 99.5 and 99.6.

LLC engaged the services of an expert IFRS accounting consultant, PricewaterhouseCoopers LLP (“PwC”), to definitively determine the correct method of recording the OMR 276,666,667 average value of its Land Rights in its IFRS compliant financial statements. After receiving PwC’s written report, LLC then consulted with its independent auditor, Deloitte & Touche (M.E.) & Co. LLC (“Deloitte”) and received Deloitte’s written report agreeing with the PwC analysis. Both PwC and Deloitte have concluded that the Land Rights are to be recorded as capital, work-in-process (inventory) and land on LLC’s financial statements. The Company’s independent auditor in the U.S. has likewise concurred that with respect to the Company’s consolidated financial statements prepared pursuant to US GAAP, that the Land Rights should be recorded as capital, inventory and land.

In determining the proper amounts to be allocated to inventory and to land, LLC calculated the percentage (x) by dividing (y) the area of the land LLC presently plans definitively to sell, by (z) the total area of the Project Land, and then multiplying that percentage (x) by 276,666,667 Omani Rials to get the number (N) for inventory. The amount to be allocated to property was then calculated by subtracting N from 276,666,667 Omani Rials. Using its detailed internal financial model, management calculated (x) to be equal to 68.3%, thereby making the inventory number (N) equal to 188,963,334 Omani Rials ($490,813,363 based on based on a $2.5974 per 1 Omani Rial exchange rate) and the property number equal to 87,703,333 Omani Rials ($227,800,637 based on a $2.5974 per 1 Omani Rial exchange rate). In its consolidated financial statements therefore, the Company has allocated the value of the Land Rights between (i) land under development which is held for sale (inventory), and (ii) land under development which is held for investment (PP&E). As more precise land use percentages emerge during and after the masterplanning and construction of the Omagine Project, the percentage allocations for the value of the Land Rights may be reclassified to distinguish between the land underlying properties that we will own and operate and those which we will own and lease.

Inventory – Inventory is stated at cost. At June 30, 2016 and December 31, 2015, inventory consists of the land under development acquired on July 2, 2015 (valued using the fair value of the Land Rights at the date of acquisition). The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $490,813,363 in inventory resulting from LLC’s July 2, 2015 acquisition of the Land Rights.

Property, Plant and Equipment – Property, plant and equipment (“PP&E”) are stated at cost. PP&E consists of land under development which is held for investment; furniture and fixtures; and office machinery and equipment. PP&E (including buildings and structures after they are completed and put into service) are depreciated on a straight-line basis over their respective useful service life. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $227,800,637 in PP&E resulting from LLC’s July 2, 2015 acquisition of the Land Rights.

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Revenue Recognition - The Company follows the guidelines of SEC Staff Accounting Bulletin No. 101,”Revenue Recognition in Financial Statements”. LLC will recognize revenue ratably over the development period of the Omagine Project measured by methods appropriate to the services or products provided.

Valuation Allowance for Deferred U.S. Tax Assets - The carrying value of deferred U.S. tax assets assumed that Omagine would not be able to generate sufficient future taxable income to realize the deferred tax assets, based on management's prior estimates and assumptions. Now that LLC has signed the Development Agreement for the Omagine Project and has purchased the Land Rights, management expects to re-evaluate such estimates and assumptions within the Company’s next fiscal year.

Foreign Exchange Rates – The Omani Rial is pegged to the U.S. Dollar and as such its value relative to the U.S. Dollar normally exhibits very minimal fluctuation between approximately $2.597 and $2.60 U.S. Dollars to 1 Omani Rial. In its initial recording of the Land Rights in its September 30, 2015 consolidated financial statement, the Company utilized the exchange rate of $2.5974 U.S. Dollars to 1 Omani Rial which was based on the July 7, 2015 XE Currency Converter. For presentation purposes subsequent to September 30, 2015, the Company utilizes an exchange rate of $2.60 to 1 Omani Rial. Adjustments required, if any, will be reflected in the Company’s fiscal year-end audited financial statements.

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 MENA Region. The Company presently concentrates the majority of its efforts on the tourism and real estate development business of LLC in Oman and in particular on the Omagine Project.

Results of Operations:

THREE MONTHS ENDED SEPTEMBER 30, 2016 vs.

THREE MONTHS ENDED SEPTEMBER 30, 2015

The Company did not generate any revenue or incur any cost of sales during the three month periods ended September 30, 2016 and 2015. The Company is relying on Omagine LLC’s operations for the Company’s future revenue generation. Management is presently examining other possible sources of revenue for the Company which may be added to the Company’s operations.

Total selling, marketing, general and administrative operating expenses (“SG&A Expenses”) were $738,590 during the three months ended September 30, 2016 compared to $3,689,287 during the three months ended September 30, 2015. This $2,950,697 (80%) decrease in SG&A Expenses was attributable to the following expense categories: officers and directors compensation including stock based compensation ($1,862,630), consulting fees including stock-based compensation ($1,386,390), Travel ($2,677), Occupancy ($30,993) and other selling, general and administrative costs ($74,908) offset by increases in professional fees ($256,901) and commitment fees ($150,000).

The Company sustained a net loss of $677,045 for the three months ended September 30, 2016 compared to a net loss of $3,695,678 for the three months ended September 30, 2015. This $3,018,633 (82%) decrease in the Company's net loss for the three months ended June 30, 2016 compared to the prior period was principally attributable to the $2,950,697 decrease in SG&A Expenses mentioned above and an increase in amortization of debt discounts ($12,500), increase in interest expense ($8,035) and an increase in net loss attributable to non-controlling interests in LLC ($88,471).

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NINE MONTHS ENDED SEPTEMBER 30, 2016 vs.

NINE MONTHS ENDED SEPTEMBER 30, 2015

The Company did not generate any revenue or incur any cost of sales for the nine month periods ended September 30, 2016 and 2015.

Total SG&A Expenses were $2,176,004 during the nine month period ended September 30, 2016 compared to $4,963,778 for the nine months ended September 30, 2015. This $2,787,774 (56%) decrease was attributable to the following expense categories: officers and directors compensation including stock based compensation ($1,662,297), consulting fees including stock based compensation ($1.279,653), Travel ($34,672), Occupancy ($78,762) and other selling general and administrative costs ($82,753) offset by increases in professional fees ($200,363) and commitment fees ($150,000).

The Company sustained a net loss of $2,159,877 for the nine months ended September 30, 2016 compared to a net loss of $4,935,261 for the nine months ended September 30, 2015. This $2,775,384 (56%) decrease in the Company's net loss for the nine months ended September 30, 2016 compared to the prior period was principally attributable to the $2,787,774 decrease in SG&A Expenses mentioned above and an increases in amortization of debt discounts ($34,533), increase in interest expense ($15,205) and an increase in net loss attributable to non-controlling interests in LLC ($37,348).

Liquidity and Capital Resources

The Company incurred net losses of $2,159,877 and $4,935,261 during the nine months ended September 30, 2016 and 2015, respectively. During the nine months ended September 30, 2016, the Company had a decrease in cash of $312,280 resulting from the positive cash flow of $930,700 from financing activities offset by a negative cash flow of $1,242,980 from operating activities. Financing activities for the nine months ended September 30, 2016 consisted of proceeds from the sale of Common Stock of $584,000, proceeds of $540,000 from a note payable to YA II PN, Ltd. (p/k/a YA Global Master SPV, Ltd.) (“YA”) (the March 2016 YA Loan), proceeds of $360,000 from a note payable to YA (the June 2016 YA Loan), proceeds of $1,700 from the exercise of stock options and proceeds of $100,000 from the issuance of a convertible note payable to an entity owned by two Independent Directors of Omagine, Inc., offset by payment of five monthly installments totaling $225,000 for the 2015 YA Loan, payment of six monthly installments totaling $315,000 for the March 2016 YA Loan, and payment of three monthly installments totaling $115,000 for the June 2016 YA Loan.

The Company had $0 in capital expenditures for the nine months ended September 30, 2016.

At September 30, 2016, the Company had $490,836,876 in current assets, consisting of $490,813,363 of land under development held for sale (See Note 2 to the Company’s consolidated financial statements), $12,423 of cash and $11,090 in prepaid expenses and other current assets. The Company's current liabilities at September 30, 2016 totaled $2,306,901 consisting of $482,110 of convertible notes payable and accrued interest, $514,842 of notes payable and accrued interest, $942,072 of accounts payable and accrued expenses and $367,877 of accrued officers’ payroll. At September 30, 2016, the Company had working capital of $488,529,975 compared to working capital of $489,652,283 at December 31, 2015. Thirty-three percent (33%) of the $2,306,901 of current liabilities at September 30, 2016 ($768,915) is due and owing to officers and/or directors of Omagine.

The $1,122,308 decrease in the Company's working capital at September 30, 2016 compared to December 31, 2015 is attributable to the increase in current liabilities ($819,351) and a decrease in cash ($312,280) offset by an increase in prepaid expenses and other current assets ($9,323). The Company’s liabilities at September 30, 2016 increased compared to December 31, 2015 due to increases in notes payable and accrued interest ($310,675), accounts payable, accrued expenses and other current liabilities ($446,452) and convertible notes payable and accrued interest ($84,181) offset by decreases in accrued officers’ payroll ($21,957).

Warrants

As of September 30, 2016, Omagine has 6,422,124 Common Stock purchase warrants (“Warrants”) issued and outstanding, 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $5.00 and 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $10.00 (collectively, the “Strategic Warrants”).

Management is hopeful that the 6,422,124 outstanding Strategic Warrants will eventually become “in the money” and will be exercised which will provide a future source of additional financing for Omagine. 

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Strategic Warrants

Of the 6,422,124 Strategic Warrants distributed, 3,211,062 are exercisable at $5 per Common Share and 3,211,062 are exercisable at $10 per Common Share. On January 14, 2016, Omagine filed a Post-Effective Amendment on Form S-1 (Commission File No. 333-183852) to update the previous registration of all 6,422,124 then issued and outstanding Strategic Warrants and the 6,422,124 Common Shares underlying such Strategic Warrants (the “Updated Warrant Registration”). The SEC declared the Updated Warrant Registration effective January 25, 2016. The effective status of the Updated Warrant Registration expired on October 21, 2016 and the Company intends to file an updated post-effective amendment to maintain the warrants effective status of such registration statement. Pursuant to a Board of Directors resolution dated August 12, 2015, the expiration date of all Strategic Warrants was extended from December 31, 2015 to December 31, 2016 and pursuant to a Board of Directors resolution dated December 9, 2016, the Strategic Warrants were again extended from December 31, 2016 to December 31, 2017. All other terms and conditions of the Strategic Warrants remained unchanged.

Tempest Warrants

On June 24, 2014, Omagine issued the 1,000,000 Tempest Warrants to an investor each of which are exercisable for the purchase of one restricted Common Share at a per Common Share exercise price equal to the greater of: (a) $1.00 per Common Share, or (b) 80% of the closing sale price for a Common Share on the Trading Day immediately preceding the relevant exercise date (See: Exhibit 4.4). On August 15, 2014, such investor transferred 240,000 Tempest Warrants to an affiliate and such affiliate exercised 240,000 Tempest Warrants on August 15, 2014 at $1.40 per share for the purchase of 240,000 restricted Common Shares. On October 2, 2014, such investor transferred an additional 250,000 Tempest Warrants to such affiliate and such affiliate exercised 250,000 Tempest Warrants on October 2, 2014 at $1.31 per share for the purchase of 250,000 restricted Common Shares. On June 29, 2015, the investor exercised 158,228 of the Tempest Warrants at an exercise price of $1.58 per Common Share for proceeds of $250,000. Subsequently on October 8, 2015, such investor transferred an additional 2,375 Tempest Warrants to an affiliate and such affiliate exercised 2,375 Tempest Warrants on October 8, 2015 at $1.28 per share for the purchase of 2,375 restricted Common Shares. All 349,397 remaining Tempest Warrants expired on June 23, 2016 and are no longer exercisable.

Standby Equity Distribution Agreements

Between 2009 and 2011, Omagine had a Stand-By Equity Distribution Agreement with an affiliate of YA (the “2009 SEDA”). Omagine and YA were parties to a second Stand-By Equity Distribution Agreement (the “2011 SEDA”) which was terminated on July 21, 2014. The 2009 SEDA and the 2011 SEDA are collectively referred to herein as the “Prior SEDAs”. 

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement which was amended on October 10, 2014 (the “2014 SEDA”). The 2014 SEDA is generally on the same terms as the 2011 SEDA.

Any use by Omagine of the 2014 SEDA will be guided by several factors, including but not limited to: (i) the availability and cost of alternative financing, (ii) our ability to rapidly access required financing, (iii) the liquidity and market price of our Common Stock, (iv) the exercise, if any, of Warrants, (v) the likelihood (or actuality) of the success of our present efforts to arrange (a) new equity investments into Omagine and (b) new debt and/or equity investments into LLC, (vi) the likelihood (or actuality) of LLC having the financial capacity to pay Omagine the $10 million Success Fee and the Pre-Development Expense Amount and Post-DA Pre-Development Expenses in excess of $28.2 million. (See: “Financial Advisor”, and “The Shareholder Agreement”, “LLC Capital Structure”, “Pre-Development Expenses / Post-DA Pre-Development Expenses”, above), and (vii) our then current cash requirements.

Because the market for our Common Stock has historically exhibited low liquidity levels, we may not be able to take full advantage of the 2014 SEDA if such liquidity levels do not improve. If the market for our Common Shares is exhibiting low liquidity levels at the time we give YA an Advance Notice (a “Put”) and if YA sells Common Shares into the public market during the five Trading Day Pricing Period subsequent to our Put (as is YA’s customary practice), it is likely that the price of our Common Shares will decline. Any such price decline will immediately increase the number of Common Shares we would otherwise be required absent such price decline to deliver to YA subsequent to the Pricing Period in satisfaction of such Put. If this pattern continued to happen with subsequent Puts by us, it is likely that we would issue and sell to YA the maximum 3,000,000 shares available under the 2014 SEDA before reaching the aggregate sales price of $5 million available under the 2014 SEDA.

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LLC is now obligated to design, develop and construct the $2.5 billion Omagine Project. Given the size and scope of the Omagine Project, it is expected that LLC will require a minimum of $300 million (possibly up to $500 million) of debt financing / project financing (including the Construction Financing) over various times during the next 4 to 5 years. This Construction Financing requirement will not be addressed by utilizing the 2014 SEDA. Notwithstanding that fact, the Company expects to have substantial and rapidly forthcoming working capital requirements other than the Construction Financing for a portion of which it plans to utilize the 2014 SEDA but no assurance can be given that the Company will be able to obtain the necessary working capital.

Given the considerable resources we will be required to bring to bear to execute the Omagine Project, we presently expect that we will fully utilize the entire $5 million amount available to us under the 2014 SEDA. Such use of the 2014 SEDA will of course be guided by the price, liquidity and volatility of our Common Stock as we move forward. We cannot presently predict what other future sources of financing might become available to us to cause us to utilize less than the full $5 million available under the 2014 SEDA and our present assessment is that, we will surely need the full $5 million available under the 2014 SEDA. The Prior SEDAs indisputably provided the Company the lifeline needed to achieve the DA signing and the 2014 SEDA will likely provide some of the supplementary working capital the Company will need going forward.

Prior SEDAs

The 2009 SEDA expired in 2011. The 2011 SEDA was due to expire on September 1, 2014 but was terminated on July 21, 2014 by the mutual consent of the parties (See: Exhibit 10.19).

In connection with the 2011 SEDA, Omagine filed with the SEC a registration statement (the “2011 SEDA Registration Statement”) on Form S-1 (Commission File No. 333-175168) pursuant to which 3,244,216 Common Shares were registered (including 244,216 Common Shares issued to YA in May and June 2011 in satisfaction of the $300,000 commitment fees due under the 2011 SEDA). Between August 24, 2011 and May 6, 2014, YA purchased 561,690 Common Shares from Omagine under the 2011 SEDA for an aggregate Purchase Price of $835,000 and YA did not thereafter purchase any Common Shares from Omagine under the 2011 SEDA. On July 21, 2014 Omagine filed a post-effective amendment to the 2011 SEDA Registration Statement de-registering the previously registered 2,438,310 Common Shares which were not issued or sold to YA pursuant to the 2011 SEDA. Such post-effective amendment to the 2011 SEDA Registration Statement was declared effective by the SEC on July 25, 2014.

The 2014 SEDA

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement which was amended on October 10, 2014 and thereafter amended again on September 20, 2016 to extend the term of the SEDA (the “2014 SEDA”). The 2014 SEDA is generally on the same terms as the 2011 SEDA. Unless earlier terminated in accordance with its terms, the 2014 SEDA shall automatically expire on the earlier of (i) February 1, 2019, or (ii) the date on which YA shall have made payment of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000. In satisfaction of a $150,000 commitment fee due pursuant to the 2014 SEDA, Omagine issued 85,822 restricted Common Shares (the “Commitment Fee Shares”) to YA Global II SPV, LLC which is an affiliate of YA (the “Affiliate”). In satisfaction of a $150,000 commitment fee pursuant to the “Second SEDA Amendment” in September 2016, the Company issued 161,290 restricted shares to the Affiliate.

Pursuant to the terms of the 2014 SEDA, Omagine may in its sole discretion, and upon giving written notice to YA (an “Advance Notice”), periodically sell Common Shares to YA (“Shares”) at a per Share price (“Purchase Price”) equal to 95% of the lowest daily volume weighted average price (the “VWAP”) for a Common Share as quoted by Bloomberg, L.P. during the five (5) consecutive Trading Days (as such term is defined in the 2014 SEDA) immediately subsequent to the date of the relevant Advance Notice (the “Pricing Period”).

Omagine is not obligated to sell any Shares to YA but may, over the term of the 2014 SEDA and in its sole discretion, sell to YA that number of Shares valued at the Purchase Price from time to time in effect that equals up to five million dollars ($5,000,000) in the aggregate. YA is obligated under the 2014 SEDA to purchase such Shares from Omagine subject to certain conditions including (i) Omagine filing a registration statement with the SEC to register the resale by YA of the Shares sold to YA under the 2014 SEDA (“Registration Statement”), (ii) the SEC declaring such Registration Statement effective (the date of such declaration by the SEC being the “Registration Effective Date”), (iii) Omagine certifying to YA at the time of each Advance Notice that Omagine has performed all covenants and agreements to be performed and has complied with all obligations and conditions contained in the 2014 SEDA, (iv) periodic sales of Shares to YA must be separated by a time period of at least five Trading Days, and (v) the dollar value of any individual periodic sale of Shares designated by Omagine in any Advance Notice may not exceed the greater of (a) two hundred thousand dollars ($200,000), or (b) the average of the "Daily Value Traded" for each of the five (5) Trading Days immediately preceding the date of the relevant Advance Notice where Daily Value Traded is the product obtained by multiplying the number representing the daily trading volume of Common Shares for such Trading Day by the VWAP for Common Share on such Trading Day.

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Pursuant to the 2014 SEDA in no event shall the number of Common Shares issuable to YA pursuant to an Advance cause the aggregate number of Common Shares beneficially owned (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended), by YA and its affiliates to exceed 9.99% of the then outstanding common stock of the Company. In addition this 9.99% ownership cap may not be waived by YA or Omagine and since such ownership cap includes all Common Shares owned by any YA affiliate, such cap cannot be avoided by transferring Common Shares to an affiliate of YA.

In connection with the 2014 SEDA, on October 15, 2014 Omagine filed the Registration Statement on Form S-1 to register the 3,085,822 Common Shares covered by the 2014 SEDA. On January 8, 2015, Omagine filed an amendment to that Registration Statement and such amendment to the 2014 SEDA Registration Statement was declared effective by the SEC on January 22, 2015. Post-Effective Amendments No. 1 and No. 2 to the SEDA Registration Statement were filed with the SEC on December 21, 2015 and January 6, 2016, respectively, to maintain the effectiveness of the SEDA Registration. On January 13, 2016, the SEC declared the SEDA Registration effective. The Company plans to file a post-effective amendment with the SEC to reinstate the effectiveness of the SEDA Registration which expired on October 9, 2016.

The foregoing summaries of the terms of the Prior SEDAs and of the 2014 SEDA do not purport to be complete and are qualified in their entirety by reference to the full texts of the Prior SEDAs and the 2014 SEDA, copies of which are attached hereto as Exhibits 10.14, 10.15 and 10.18.

Sales of Common Shares to YA pursuant to the Prior SEDAs totaled 561,690 Common Shares for an aggregate Purchase Price of $835,000. Management believes that it has been judicious and conservative in its use to date of the Prior SEDAs, but nonetheless our periodic sales of Common Shares to YA or its affiliate pursuant to the Prior SEDAs have been dilutive to all shareholders and the subsequent resales by YA of such Common Shares into the public market have from time to time inflicted downward pressure on our stock price. Omagine intends to utilize the 2014 SEDA to fund its ongoing operations as and if necessary and as of the date of this Report, the Company has sold 48,985 shares of its Common Shares pursuant to the 2014 SEDA for proceeds of $50,000.

The YA Loan Agreements

Omagine and YA, the investment fund which is a party with Omagine to the 2014 SEDA, entered into an unsecured loan agreement dated July 26, 2013 (the “2013 YA Loan Agreement”). Pursuant to the 2013 YA Loan Agreement, Omagine borrowed two hundred thousand dollars ($200,000) from YA (the “2013 YA Loan”) for a term of one year at an annual interest rate of 10%. The 2013 YA Loan Agreement called for a 10% monitoring and management fee equal to $20,000 to be escrowed and paid to Yorkville Advisors thereby making the net proceeds from the 2013 YA Loan to Omagine equal to $180,000. Such $180,000 of proceeds was received by Omagine on September 3, 2013. The 2013 YA Loan Agreement also extended the expiration date of the 2011 SEDA. The foregoing summary of the terms of the 2013 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the 2013 YA Loan Agreement attached hereto as Exhibit 10.21.

On April 22, 2014, Omagine and YA entered into another unsecured loan agreement (the “2014 YA Loan Agreement”) whereby Omagine borrowed five hundred thousand dollars ($500,000) from YA (the “2014 YA Loan”) for a term of one year at an annual interest rate of 10%. Pursuant to the 2014 YA Loan Agreement, on April 22, 2014, through deduction from the $500,000 principal balance of the 2014 YA Loan, Omagine (i) paid the $110,680 balance then due under the 2013 YA Loan Agreement, (ii) paid a $39,000 commitment fee with respect to the 2014 YA Loan, and (iii) prepaid the $1,096 of interest due on the 2014 YA Loan for the period April 23, 2014 through April 30, 2014. The $349,224 net proceeds of the 2014 YA Loan was received by Omagine on April 23, 2014. The foregoing summary of the terms of the 2014 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the YA Note Purchase Agreement, the YA Note and the YA Closing Statement attached hereto as Exhibits 10.22; 10.23; and 10.24 respectively. Omagine repaid the 2014 YA Loan pursuant to its terms.

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On May 20, 2015, the Company and YA entered into a third loan agreement (the “2015 YA Loan Agreement”). Pursuant to the 2015 YA Loan Agreement, the Company borrowed five hundred thousand dollars ($500,000) from YA (the “2015 YA Loan”) for a term of one year at an annual interest rate of 10%. Pursuant to the 2015 YA Loan Agreement the Company agreed to pay a $50,000 commitment fee with respect to the 2015 YA Loan to YA Global II SPV LLC, an affiliate of YA (the “Affiliate”). The $500,000 proceeds of the 2015 YA Loan was received by the Company on May 21, 2015 and the $50,000 commitment fee was paid to the Affiliate. The foregoing summary of the terms of the 2015 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the YA Note Purchase Agreement, the YA Note and the YA Closing Statement attached hereto as Exhibits 10.25; 10.26; and 10.27 respectively.

In 2016, the Company and YA entered into two additional loans. On March 15, 2016, the Company and YA entered into a loan agreement (the “March 2016 YA Loan Agreement”). Pursuant to the March 2016 YA Loan Agreement, the Company borrowed six hundred thousand dollars ($600,000) from YA (now named YA II PN, Ltd.) (the “March 2016 YA Loan”) for a term of one year at an annual interest rate of 10%. Pursuant to the March 2016 YA Loan Agreement the Company agreed to pay off the $150,575 balance due as of March 15, 2016 under the 2015 YA Loan Agreement and to pay a $60,000 commitment fee with respect to the March 2016 YA Loan to YA Global II SPV LLC, the Affiliate. At the closing on March 15, 2016 of the March 2016 YA Loan, the appropriate amounts representing the balance due under the 2015 YA Loan Agreement and the commitment fee for the March 2016 YA Loan were deducted from the $600,000 principal balance of the March 2016 YA Loan and paid to YA and the Affiliate. The $349,425 proceeds of the March 2016 YA Loan were received by the Company on March 15, 2016. The foregoing summary of the terms of the March 2016 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the YA Note Purchase Agreement, the YA Note and the YA Closing Statement attached hereto as Exhibits 10.28; 10.29; and 10.30 respectively.

On June 22, 2016, the Company and YA entered into another loan agreement (the “June 2016 YA Loan Agreement”). Pursuant to the June 2016 YA Loan Agreement, the Company borrowed four hundred thousand dollars ($400,000) from YA (the “June 2016 YA Loan”) for a term of one year at an annual interest rate of 10%. Pursuant to the June 2016 YA Loan Agreement the Company agreed to pay a $40,000 commitment fee with respect to the June 2016 YA Loan to the Affiliate. At the closing on June 22, 2016 of the June 2016 YA Loan, the commitment fee for the June 2016 YA Loan was deducted from the $400,000 principal balance of the June 2016 YA Loan and paid to the Affiliate. The $360,000 proceeds of the June 2016 YA Loan was received by the Company on June 22, 2016. The foregoing summary of the terms of the June 2016 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the YA Note Purchase Agreement, the YA Note and the YA Closing Statement attached hereto as Exhibits 10.38; 10.39; and 10.40 respectively. Omagine presently anticipates that the March 2016 YA Loan and the June 2016 YA Loan will be repaid from proceeds of sales of Common Shares made pursuant to (a) private placement transactions, (b) the exercise of Warrants, or (c) the 2014 SEDA, or a combination thereof.

On December 7, 2016, the Company and YA entered into another loan agreement (the “December 2016 YA Loan Agreement”). Pursuant to the December 2016 YA Loan Agreement, the Company borrowed seven hundred fifty thousand dollars ($750,000) from YA (the “December 2016 YA Loan”) for a term of one year at an annual interest rate of 10%. Pursuant to the December 2016 YA Loan Agreement the Company agreed to pay off the aggregate of the $432,710 balance due as of December 7, 2016 under the March 2016 Loan Agreement and the June 2016 Loan Agreement and to pay a $75,000 commitment fee with respect to the December 2016 YA Loan to YA Global II SPV LLC, an affiliate of YA (the “Affiliate”). At the closing on December 7, 2016 of the December 2016 YA Loan, the appropriate amounts representing the balances due under the March 2016 YA Loan and the June 2016 YA Loan and the commitment fee for the December 2016 YA Loan were deducted from the $750,000 principal balance of the December 2016 YA Loan and paid to YA and the Affiliate. The $242,290 proceeds of the December 2016 YA Loan were received by the Company on December 7, 2016.

The foregoing summary of the terms of the December 2016 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the YA Note Purchase Agreement, the YA Note and the YA Closing Statement attached hereto as Exhibits 10.45; 10.46; and 10.47 respectively.

There can be no assurance given that Omagine will be able to successfully utilize the Warrants or the 2014 SEDA to secure the interim financing necessary for it to execute its business plan as presently conceived or that we will be able to repay the December 2016 YA Loan.

The St. George Investments LLC Loan Agreement

On November 14, 2016, the Company entered into an interest free Convertible Promissory Note with St. George Investments LLC for the principal amount of $185,000 due on May 15, 2017, six months from the funding date of November 16, 2016, convertible into the Company’s Common Stock only in the case of non-payment or in the Event of Default at a Conversion Price equal to 60% of the three lowest daily Volume Weighted Average Prices for the Company’s Common Stock during the twenty trading days immediately preceding the Conversion. The Company may prepay the Note in whole or in part at any time without penalty. After deduction of a $30,000 original issue discount (OID) and legal fees of $5,000, the Company received net proceeds of $150,000 on November 16, 2016. (See: Exhibits 10.42 and 10.43, the Note Purchase Agreement and the Securities Purchase Agreement).

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Omagine LLC

LLC presently has limited and strained resources.

Omagine invested the OMR 20,000 cash [$52,000] OMAG Initial Equity Investment into LLC upon its organization and pursuant to the Shareholder Agreement the following additional investments have been made to date into LLC:

i. a further OMR 130,000 [$338,000] cash investment was made by the LLC Shareholders, and

ii. a further OMR 210,000 [$546,000] cash investment was made by Omagine, and

iii. a further OMR 276,666,667 [$718,614,000] non-cash investment was made by RCA.

LLC is presently capitalized at OMR 277,026,667 [$719,550,000]. Notwithstanding the foregoing, LLC presently has limited cash resources because expenses incurred to date have depleted LLC’s limited cash capital.

As of the date hereof Omagine has invested OMR 210,000 [$546,000] in advance of when Omagine was obligated to do so in order to maintain LLC’s liquidity and has satisfied in full its obligation pursuant to the Shareholder Agreement to make the OMAG Deferred Investment into LLC.

RCA is presently obligated to make its Deferred Cash Investment into LLC in the aggregate amount of OR 7,640,625 [$19,865,625]. However it is possible that the Amended and Restated Shareholder Agreement will modify when such Deferred Cash Investment will be made by RCA.

The OMR 276,666,667 [$718,614,000] investment of the Land Rights into LLC by RCA was perfected on July 2, 2015 concurrent with the registration of the Usufruct Agreement with the Oman Ministry of Housing (See: “The Land Rights”, above).

The continuation of LLC’s business to date has been financed by Omagine.

LLC will have to arrange a significant amount of project financing, including most probably Syndicated Bank Financing, in order to execute its plan to develop the Omagine Project. Until Financing Agreements with respect to such additional financing are actually executed by the parties, no assurance can be given that they actually will be so executed or that such project financing will be available to LLC. (See “Financial Advisor”, above). The Company is relying for revenue growth upon the future business of LLC.

Omagine Inc.

In order to generate the cash needed to sustain the Company’s ongoing operations, Omagine has over the past many years relied on the proceeds from the YA Loans and from sales of Common Shares made pursuant to the Prior SEDAs and the 2012 rights offering as well as from sales of restricted Common Shares and notes made pursuant to private placements. Management is hopeful that the Warrants will provide a future source of additional financing but it is not possible to predict if any of our Warrants will ever be exercised.

Subject to the necessary financial resources being available to it, Omagine may make a secured loan to LLC in order to finance its operations. Such a loan from Omagine, if it were to be made, would be memorialized by a Financing Agreement like any other Debt Facility.

Investors and shareholders should be aware that we have had no revenue for the past several years and we do not expect to generate any revenue until after the development of the Omagine Project is well underway.

The failure to ultimately secure project financing via the closing of a Financing Agreement would have a materially significant adverse effect on the Company’s ability to continue operations.

Capital Expenditures and Construction Financing

The Company did not incur any capital expenditures in the first nine months of 2016. We expect, assuming we are able to close one or more of the debt or equity facilities we are presently working on, that in the near term (i) the Company will incur significant expenses related to capital expenditures, and (ii) LLC will incur substantial debt associated with project financing for the Omagine Project.

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We presently expect that such capital expenditures will be largely concentrated at LLC and will largely comprise the purchase by LLC and Omagine of the quantities of office equipment, furniture, vehicles, computer hardware and software and telecommunications equipment which will be necessary to service the expanded staff and offices required at both LLC and Omagine to manage the ramping up of our business operations in Oman and the U.S.

We presently expect that such capital expenditures will be financed:

i.	at Omagine via the proceeds from sales of Common Shares via the 2014 SEDA, the exercise of Warrants, private placement sales of restricted Common Shares, and the payments received from LLC with respect to the Success Fee, the Pre-Development Expense Amount and the Advances and Loans, and
ii.	at LLC through a combination of invested capital, Equity Sales, bank loans and project finance Debt Facilities (See: “Business - The Shareholder Agreement / LLC Capital Structure,” and “Master planning/Equity Sales/Debt Facilities/Project Financing”).

No assurance can be given that such financing will be available to the Company at either Omagine or LLC.

We presently expect that any future project financing requirements (including any Syndicated Bank Financing) for LLC will be placed with regional and international banks as arranged by LLC with the assistance of its Financial Adviser. LLC’s requirement for project financing is expected to be reduced by its ability to pre-sell residence and commercial units by entering into sales contracts with third party purchasers and receiving deposits and progress payments during the construction of such units. Recent trends in the Omani market however have indicated a reduced consumer appetite for pre-sales of residence units as many more buyers are now demanding a finished product before entering into sales contracts with developers. (See: “Financial Advisor” and “Market Conditions” and “Sales & Marketing”). 

Off-Balance Sheet Arrangements

We have not entered into and have no present intention of entering into any off-balance sheet financing arrangements. We have not formed and have no present intention of forming any special purpose entities.

FISCAL YEAR ENDED DECEMBER 31, 2015 vs.

FISCAL YEAR ENDED DECEMBER 31, 2014

The Company did not generate any revenue or incur any cost of sales during the years ended December 31, 2015 and 2014. The Company is relying on Omagine LLC’s operations for the Company’s future revenue generation. Management is presently examining other possible sources of revenue for the Company which may be added to the Company’s operations.

Total selling, marketing, general and administrative operating expenses (“SG&A Expenses”) were $5,768,201 during the year ended December 31, 2015 compared to $5,113,241 during the year ended December 31, 2014. This $654,960 (13%) increase in SG&A Expenses was attributable to the following expense categories: consulting fees including stock based compensation ($467,450), travel ($286,946), professional fees including stock based compensation ($178,820), other selling general and administrative costs ($86,923) and occupancy costs ($7,731) offset by decreases in officers and directors compensation including stock based compensation ($222,910) and a decrease in commitment fees paid for with Common Shares ($150,000).

The Company sustained a net loss of $5,673,293 for the year ended December 31, 2015 compared to a net loss of $5,160,960 for the year ended December 31, 2014. This $512,333 (10%) increase in the Company's net loss for the year ended December 31, 2015 compared to the prior period was principally attributable to the $654,960 increase in SG&A Expenses mentioned above and an increase in amortization of debt discounts ($1,101), offset by a decrease in interest expense ($1,518) and an increase in net loss attributable to non-controlling interests in LLC ($142,210).

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Liquidity and Capital Resources

The Company incurred net losses of $5,673,293 and $5,160,960 during the years ended December 31, 2015 and 2014, respectively. During the year ended December 31, 2015, the Company had a decrease in cash of $788,976 resulting from the negative cash flow of $2,471,338 from operating activities and $6,398 from purchase of equipment offset by a positive cash flow of $1,688,760 from financing activities. Financing activities for the year ended December 31, 2015 consisted of proceeds of $450,000 from a note payable to YA II PN, Ltd. (p/k/a YA Global Master SPV, Ltd.) (the 2015 YA Loan), sales of its Common Stock for proceeds of $1,484,700, proceeds from the exercise of Common Stock Warrants of $253,040 and exercise of stock options for proceeds of $1,020, offset by payment of five monthly installments totaling $225,000 for the 2014 YA Loan and seven monthly installments totaling $275,000 for the 2015 YA Loan.

The Company had $6,398 in capital expenditures for the year ended December 31, 2015.

At December 31, 2015, the Company had $491,139,833 in current assets, consisting of $490,813,363 of land under development held for sale (See Note 2 to the Company’s consolidated financial statements), $324,703 of cash and $1,767 of prepaid expenses and other current assets. The Company's current liabilities at December 31, 2015 totaled $1,487,550 consisting of $397,929 of convertible notes payable and accrued interest, $204,167 of notes payable and accrued interest, $495,620 of accounts payable and accrued expenses and $389,834 of accrued officers’ payroll. At December 31, 2015, the Company had working capital of $489,652,283 compared to a working capital deficit of $520,738 at December 31, 2014. Forty-three percent (43%) of the $1,487,550 of current liabilities at December 31, 2015 ($640,693) is due and owing to officers and/or directors of Omagine.

The $490,173,021 increase in the Company's working capital at December 31, 2015 compared to December 31, 2014 is attributable to the increase in land under development held for sale ($490,813,363) and the decrease in current liabilities ($152,647) offset by a decrease in cash ($788,976) and a decrease in prepaid expenses and other current assets ($4,013). The Company’s liabilities at December 31, 2015 decreased compared to December 31, 2014 due to decreases in accrued officers’ payroll ($248,088) and note payable and accrued interest ($10,611) offset by increases in convertible notes payable and accrued interest ($27,500) and accounts payable and accrued expenses and other current liabilities ($78,552).

Omagine LLC

LLC presently has limited and strained resources.

Omagine invested the OMR 20,000 cash [$52,000] OMAG Initial Equity Investment into LLC upon its organization and pursuant to the Shareholder Agreement the following additional investments have been made to date into LLC:

i. a further OMR 130,000 [$338,000] cash investment was made by the LLC Shareholders, and

ii. a further OMR 210,000 [$546,000] cash investment was made by Omagine, and

iii. a further OMR 276,666,667 [$718,614,000] non-cash investment was made by RCA.

LLC is presently capitalized at OMR 277,026,667 [$719,550,000]. Notwithstanding the foregoing, LLC presently has limited cash resources because expenses incurred to date have depleted LLC’s limited cash capital.

As of the date hereof Omagine has invested OMR 210,000 [$546,000] in advance of when Omagine was obligated to do so in order to maintain LLC’s liquidity and has satisfied in full its obligation pursuant to the Shareholder Agreement as presently in effect to make the OMAG Deferred Investment into LLC.

CCC and RCA are obligated to make their Deferred Cash Investments into LLC in the aggregate amount of OMR 26,628,125 [$69,233,125] promptly on or after the Conditions Precedent are satisfied which is now upon the occurrence of the Contract Date since the Financing Agreement Date has occurred. However it is possible, even likely, that the Shareholder Agreement will be amended to accommodate the present economic conditions such that the Deferred Cash Investments will be made over a period more in line with LLC’s actual cash requirements. (See: “The Present State of Affairs – an Overview”, “The Shareholder Agreement” and the “The CCC Contract”).

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LLC is hoping to sign a Financing Agreement (the Al Rayan Loan Agreement) with the Qatari Bank in the near future. Until such Al Rayan Loan Agreement is executed by the parties no assurance can be given that the Al Rayan Bank Loan will actually be made. (See “The Al Rayan Bank Loan” above).

The OMR 276,666,667 investment of the Land Rights into LLC by RCA was perfected on July 2, 2015 concurrent with the registration of the Usufruct Agreement with the Oman Ministry of Housing (See: “The Land Rights”, above).

The continuation of LLC’s business to date has to a large extent been financed by Omagine.

Even if the Al Rayan Bank Loan closes, LLC will have to arrange a significant amount of additional project financing, including most probably Syndicated Bank Financing, in order to execute its plan to develop the Omagine Project. Until Financing Agreements with respect to such additional financing are actually executed by the parties however, no assurance can be given that they actually will be so executed or that such project financing will be available to LLC. (See “Financial Advisor”, above). The Company is relying for revenue growth upon the future business of LLC.

Omagine Inc.

In order to generate the cash needed to sustain the Company’s ongoing operations, Omagine has over the past many years relied on the proceeds from the YA Loans and from sales of Common Shares made pursuant to the Prior SEDAs and the 2012 rights offering as well as from sales of restricted Common Shares made pursuant to private placements. Management is hopeful that the Warrants will provide a future source of additional financing but it is not possible to predict if any of our Warrants will ever be exercised.

In the absence of the closing of an Equity Sale, Debt Facility or the Al Rayan Bank Loan, and subject to the necessary financial resources being available to it, Omagine may make a secured loan to LLC in order to finance the First Phase. Such a loan from Omagine, if it were to be made, would be memorialized by a Financing Agreement like any other Debt Facility.

Investors and shareholders should be aware that we have had no revenue for the past several years and we do not expect to generate any revenue until after the development of the Omagine Project is well underway.

The failure to ultimately secure project financing via the closing of a Syndicated Financing Agreement will have a materially significant negative effect on the Company’s ability to continue operations.

Rights Offering and Warrant Distribution

Omagine conducted a “Rights Offering and Warrant Distribution” in 2012 for the sole benefit of its shareholders at the time (the “Record Shareholders”) pursuant to which Omagine distributed “Rights” and Strategic Warrants to the Record Shareholders. The Rights, the Strategic Warrants and the Common Shares underlying the Rights and Strategic Warrants were registered in a registration statement filed by Omagine on Form S-1 (Commission File No. 333-179040), which was declared effective by the SEC on February 13, 2012 and in a separate registration statement filed by Omagine on Form S-1 (Commission File No. 333-183852), which was declared effective by the SEC on April 25, 2013 (the “Warrant Registration”).

A total of 1,014,032 Common Shares were subscribed for in the Rights Offering at a subscription price of $1.25 per Common Share. Total proceeds to Omagine from the Rights Offering was $1,267,540 of which $731,639 was paid in cash and $535,901 was paid via the satisfaction of debt owed by Omagine to Record Shareholders exercising such Rights. Of the 1,014,032 Common Shares issued pursuant to the Rights Offering, 585,311 were issued in exchange for $731,639 in cash and 428,721 were issued in satisfaction of $535,901 of debt constituting promissory notes for loans to Omagine and accrued but unpaid salaries and expenses. Of the $535,901 of debt which was satisfied in the Rights Offering, $506,750 represented unpaid salaries, expenses and loans which were due and owing by Omagine to Omagine officers and directors.

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Of the 6,422,124 Strategic Warrants distributed, 3,211,062 are exercisable at $5 per Common Share and 3,211,062 are exercisable at $10 per Common Share. On August 13, 2013, Omagine filed a Post-Effective Amendment on Form S-1 to the Warrant Registration (Commission File No. 333-183852) to update the Warrant Registration to include all 6,422,124 then issued and outstanding Strategic Warrants and the 6,422,124 Common Shares underlying such Strategic Warrants (the “Updated Warrant Registration”). The SEC declared the Updated Warrant Registration to be effective as of August 26, 2013 which effective status had expired. Post-Effective Amendments No. 2 and No. 3 to the Warrant Registration were filed with the SEC on January 28, 2015 and February 11, 2015, respectively, in order to further update the Warrant Registration and to re-instate its effective status. The SEC declared the Warrant Registration effective February 13, 2015 which effective status had expired. Post-Effective Amendment No. 4 to the Warrant Registration was filed on January 14, 2016 in order to further update the Warrant Registration and to re-instate its effective status. The SEC declared the Warrant Registration effective January 25, 2016. All Strategic Warrants expire on December 31, 2017 unless redeemed earlier by Omagine pursuant to their terms.

Tempest Warrants

As of the date hereof there are 349,397 Tempest Warrants issued and outstanding.

On June 24, 2014, Omagine issued the 1,000,000 Tempest Warrants to an investor, each of which are exercisable for the purchase of one restricted Common Share at a per Common Share exercise price equal to the greater of: (a) $1.00 per Common Share, or (b) 80% of the closing sale price for a Common Share on the Trading Day immediately preceding the relevant exercise date. (See: Exhibit 4.4). On August 15, 2014, such investor transferred 240,000 Tempest Warrants to an affiliate and such affiliate exercised 240,000 Tempest Warrants on August 15, 2014 at $1.40 per share for the purchase of 240,000 restricted Common Shares. On October 2, 2014, such investor transferred an additional 250,000 Tempest Warrants to such affiliate and such affiliate exercised 250,000 Tempest Warrants on October 2, 2014 at $1.31 per share for the purchase of 250,000 restricted Common Shares. On June 29, 2015, the investor exercised 158,228 of the Tempest Warrants at an exercise price of $1.58 per Common Share for proceeds of $250,000. In conjunction with this June 29, 2015 exercise, Omagine agreed with the investor to file a registration statement with the SEC to register all the aforementioned Common Shares presently owned by the investor and his affiliate as well as the remaining Common Shares underlying the remaining Tempest Warrants outstanding. Subsequently on September 30, 2015, such investor transferred an additional 2,375 Tempest Warrants to an affiliate and such affiliate exercised 2,375 Tempest Warrants on October 8, 2015 at $1.28 per share for the purchase of 2,375 restricted Common Shares.

Both the Tempest Warrants and the Common Shares issuable upon exercise of the Tempest Warrants are “restricted securities” as that term is defined in the Securities Law. Omagine presently intends to register with the SEC the 349,397 remaining Tempest Warrants and the Common Shares underlying the Tempest Warrants and the aforementioned Common Shares presently owned by the investor and his affiliates.

The Tempest Warrants are subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock or a dividend, reclassification, reorganization, or spin off. The Tempest Warrants may be exercised in whole or in part but only for whole shares of restricted Common Stock and the Tempest Warrants are not redeemable by Omagine. The Tempest Warrants are exercisable at the option of the Tempest Warrant Holder at any time up until their expiration at 5 p.m. Eastern Time in the United States on June 23, 2016.

Standby Equity Distribution Agreements

Between 2009 and 2011, Omagine had a Stand-By Equity Distribution Agreement with an affiliate of YA (the “2009 SEDA”). Omagine and YA were parties to a second Stand-By Equity Distribution Agreement (the “2011 SEDA”) which was terminated on July 21, 2014. The 2009 SEDA and the 2011 SEDA are collectively referred to herein as the “Prior SEDAs”.

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement which was amended on October 10, 2014 (the “2014 SEDA”). The 2014 SEDA is generally on the same terms as the 2011 SEDA.

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Any use by Omagine of the 2014 SEDA will be guided by several factors, including but not limited to: (i) the availability and cost of alternative financing, (ii) our ability to rapidly access required financing, (iii) the liquidity and market price of our Common Stock, (iv) the exercise, if any, of Warrants, (v) the likelihood (or actuality) of the success of our present efforts to arrange (a) new equity investments into Omagine and (b) new debt and/or equity investments into LLC, (vi) the likelihood (or actuality) of LLC having the financial capacity to pay Omagine the $10 million Success Fee and the Pre-Development Expense Amount in excess of $27.1 million. (See: “Rights Offering and Warrant Distribution, and Financial Advisor, and Business - The Shareholder Agreement / LLC Capital Structure - Pre-Development Expenses / Success Fee”, above), and (vii) our then current cash requirements.

Because the market for our Common Stock has historically exhibited low liquidity levels, we may not be able to take full advantage of the 2014 SEDA if such liquidity levels do not improve. If the market for our Common Shares is exhibiting low liquidity levels at the time we give YA an Advance Notice (a “Put”) and if YA sells Common Shares into the public market during the five Trading Day Pricing Period subsequent to our Put (as is YA’s customary practice), it is likely that the price of our Common Shares will decline. Any such price decline will immediately increase the number of Common Shares we would otherwise be required absent such price decline to deliver to YA subsequent to the Pricing Period in satisfaction of such Put. If this pattern continued to happen with subsequent Puts by us, it is likely that we would issue and sell to YA the maximum 3,000,000 shares available under the 2014 SEDA before reaching the aggregate sales price of $5 million available under the 2014 SEDA.

LLC is now obligated to design, develop and construct the $2.5 billion Omagine Project. Given the size and scope of the Omagine Project, it is expected that LLC will require a minimum of $300 million (possibly up to $500 million) of debt financing / project financing (including the Construction Financing) over various times during the next 4 to 5 years. This Construction Financing requirement will not be addressed by utilizing the 2014 SEDA (See: “Financial Advisor”, above). Notwithstanding that fact, the Company expects to have substantial and rapidly forthcoming working capital requirements other than the Construction Financing for a portion of which it plans to utilize the 2014 SEDA but no assurance can be given that the Company will be able to obtain the necessary working capital.

Given the considerable resources we will be required to bring to bear to execute the Omagine Project, we presently expect that we will fully utilize the entire $5 million amount available to us under the 2014 SEDA. Such use of the 2014 SEDA will of course be guided by the price, liquidity and volatility of our Common Stock as we move forward. We cannot presently predict what other future sources of financing might become available to us to cause us to utilize less than the full $5 million available under the 2014 SEDA and our present assessment is that, we will surely need the full $5 million available under the 2014 SEDA. The Prior SEDAs indisputably provided the Company the lifeline needed to achieve the DA signing and the 2014 SEDA will likely provide some of the supplementary working capital the Company will need going forward.

Prior SEDAs

The 2009 SEDA expired in 2011. The 2011 SEDA was due to expire on September 1, 2014 but was terminated on July 21, 2014 by the mutual consent of the parties (See: Exhibit 10.19).

In connection with the 2011 SEDA, Omagine filed with the SEC a registration statement (the “2011 SEDA Registration Statement”) on Form S-1 (Commission File No. 333-175168) pursuant to which 3,244,216 Common Shares were registered (including 244,216 Common Shares issued to YA in May and June 2011 in satisfaction of the $300,000 commitment fees due under the 2011 SEDA). Between August 24, 2011 and May 6, 2014, YA purchased 561,690 Common Shares from Omagine under the 2011 SEDA for an aggregate Purchase Price of $835,000 and YA did not thereafter purchase any Common Shares from Omagine under the 2011 SEDA. On July 21, 2014 Omagine filed a post-effective amendment to the 2011 SEDA Registration Statement de-registering the previously registered 2,438,310 Common Shares which were not issued or sold to YA pursuant to the 2011 SEDA. Such post-effective amendment to the 2011 SEDA Registration Statement was declared effective by the SEC on July 25, 2014.

The 2014 SEDA

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement which was amended on October 10, 2014 (the “2014 SEDA”). The 2014 SEDA is generally on the same terms as the 2011 SEDA. Unless earlier terminated in accordance with its terms, the 2014 SEDA shall automatically expire on the earlier of (i) the first day of the month next following the 24-month anniversary of the “Registration Effective Date” (as hereinafter defined), or (ii) the date on which YA shall have made payment of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000. In satisfaction of a $150,000 commitment fee due pursuant to the 2014 SEDA, Omagine issued 85,822 restricted Common Shares (the “Commitment Fee Shares”) to YA Global II SPV, LLC which is an affiliate of YA.

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Pursuant to the terms of the 2014 SEDA, Omagine may in its sole discretion, and upon giving written notice to YA (an “Advance Notice”), periodically sell Common Shares to YA (“Shares”) at a per Share price (“Purchase Price”) equal to 95% of the lowest daily volume weighted average price (the “VWAP”) for a Common Share as quoted by Bloomberg, L.P. during the five (5) consecutive Trading Days (as such term is defined in the 2014 SEDA) immediately subsequent to the date of the relevant Advance Notice (the “Pricing Period”).

Omagine is not obligated to sell any Shares to YA but may, over the term of the 2014 SEDA and in its sole discretion, sell to YA that number of Shares valued at the Purchase Price from time to time in effect that equals up to five million dollars ($5,000,000) in the aggregate. YA is obligated under the 2014 SEDA to purchase such Shares from Omagine subject to certain conditions including (i) Omagine filing a registration statement with the SEC to register the resale by YA of the Shares sold to YA under the 2014 SEDA (“Registration Statement”), (ii) the SEC declaring such Registration Statement effective (the date of such declaration by the SEC being the “Registration Effective Date”), (iii) Omagine certifying to YA at the time of each Advance Notice that Omagine has performed all covenants and agreements to be performed and has complied with all obligations and conditions contained in the 2014 SEDA, (iv) periodic sales of Shares to YA must be separated by a time period of at least five Trading Days, and (v) the dollar value of any individual periodic sale of Shares designated by Omagine in any Advance Notice may not exceed the greater of (a) two hundred thousand dollars ($200,000), or (b) the average of the "Daily Value Traded" for each of the five (5) Trading Days immediately preceding the date of the relevant Advance Notice where Daily Value Traded is the product obtained by multiplying the number representing the daily trading volume of Common Shares for such Trading Day by the VWAP for Common Share on such Trading Day.

Pursuant to the 2014 SEDA in no event shall the number of Common Shares issuable to YA pursuant to an Advance cause the aggregate number of Common Shares beneficially owned (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended), by YA and its affiliates to exceed 9.99% of the then outstanding common stock of the Company. In addition this 9.99% ownership cap may not be waived by YA or Omagine and since such ownership cap includes all Common Shares owned by any YA affiliate, such cap cannot be avoided by transferring Common Shares to an affiliate of YA.

In connection with the 2014 SEDA, on October 15, 2014 Omagine filed the Registration Statement on Form S-1 to register the 3,085,822 Common Shares covered by the 2014 SEDA. On January 8, 2015, Omagine filed an amendment to that Registration Statement and such amendment to the 2014 SEDA Registration Statement was declared effective by the SEC on January 22, 2015. Post-Effective Amendments No. 1 and No. 2 to the SEDA Registration Statement were filed with the SEC on December 21, 2015 and January 6, 2016, respectively, to maintain the effectiveness of the SEDA Registration. On January 13, 2016, the SEC declared the SEDA Registration effective.

The foregoing summaries of the terms of the Prior SEDAs and of the 2014 SEDA do not purport to be complete and are qualified in their entirety by reference to the full texts of the Prior SEDAs and the 2014 SEDA, copies of which are attached hereto as Exhibits 10.14, 10.15, and 10.18.

Sales of Common Shares to YA pursuant to the Prior SEDAs totaled 561,690 Common Shares for an aggregate Purchase Price of $835,000. Management believes that it has been judicious and conservative in its use to date of the Prior SEDAs, but nonetheless our periodic sales of Common Shares to YA or its affiliate pursuant to the Prior SEDAs have been dilutive to all shareholders and the subsequent resales by YA of such Common Shares into the public market have from time to time inflicted downward pressure on our stock price. Omagine intends to utilize the 2014 SEDA to fund its ongoing operations as and if necessary and as of the date hereof, the Company has sold 17,696 of its Common Shares pursuant to the 2014 SEDA for proceeds of $25,000. The 2014 SEDA expires February 1, 2017.

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The YA Loan Agreements

Omagine and YA, the investment fund which is a party with Omagine to the 2014 SEDA, entered into an unsecured loan agreement dated July 26, 2013 (the “2013 YA Loan Agreement”). Pursuant to the 2013 YA Loan Agreement, Omagine borrowed two hundred thousand dollars ($200,000) from YA (the “2013 YA Loan”) for a term of one year at an annual interest rate of 10%. The 2013 YA Loan Agreement called for a 10% monitoring and management fee equal to $20,000 to be escrowed and paid to Yorkville Advisors thereby making the net proceeds from the 2013 YA Loan to Omagine equal to $180,000. Such $180,000 of proceeds was received by Omagine on September 3, 2013. The 2013 YA Loan Agreement also extended the expiration date of the 2011 SEDA. The foregoing summary of the terms of the 2013 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the 2013 YA Loan Agreement attached hereto as Exhibit 10.21.

On April 22, 2014, Omagine and YA entered into another unsecured loan agreement (the “2014 YA Loan Agreement”) whereby Omagine borrowed five hundred thousand dollars ($500,000) from YA (the “2014 YA Loan”) for a term of one year at an annual interest rate of 10%. Pursuant to the 2014 YA Loan Agreement, on April 22, 2014, through deduction from the $500,000 principal balance of the 2014 YA Loan, Omagine (i) paid the $110,680 balance then due under the 2013 YA Loan Agreement, (ii) paid a $39,000 commitment fee with respect to the 2014 YA Loan, and (iii) prepaid the $1,096 of interest due on the 2014 YA Loan for the period April 23, 2014 through April 30, 2014. The $349,224 net proceeds of the 2014 YA Loan were received by Omagine on April 23, 2014. The foregoing summary of the terms of the 2014 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the YA Note Purchase Agreement, the YA Note and the YA Closing Statement attached hereto as Exhibits 10.22; 10.23; and 10.24 respectively.

On May 20, 2015, the Company and YA entered into a third loan agreement (the “2015 YA Loan Agreement”). Pursuant to the 2015 YA Loan Agreement, the Company borrowed five hundred thousand dollars ($500,000) from YA (the “2015 YA Loan”) for a term of one year at an annual interest rate of 10%. Pursuant to the 2015 YA Loan Agreement the Company agreed to pay a $50,000 commitment fee with respect to the 2015 YA Loan to YA Global II SPV LLC, an affiliate of YA (the “Affiliate”). The $500,000 proceeds of the 2015 YA Loan were received by the Company on May 21, 2015 and the $50,000 commitment fee was paid to the Affiliate. The foregoing summary of the terms of the 2015 YA Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the YA Note Purchase Agreement, the YA Note and the YA Closing Statement attached hereto as Exhibits 10.31; 10.32; and 10.33 respectively.

On March 15, 2016, the Company and YA entered into another loan agreement (the “2016 YA Loan Agreement”). Pursuant to the 2016 YA Loan Agreement, the Company borrowed six hundred thousand dollars ($600,000) from YA (now named YA II PN, Ltd.) (the “2016 YA Loan”) for a term of one year at an annual interest rate of 10%. Pursuant to the 2016 YA Loan Agreement the Company agreed to pay off the $150,575 balance due as of March 15, 2016 under the 2015 YA Loan Agreement and to pay a $60,000 commitment fee with respect to the 2016 YA Loan to YA Global II SPV LLC, the Affiliate. At the closing on march 15, 2016 of the 2016 YA Loan, the appropriate amounts representing the balance due under the 2015 YA Loan Agreement and the commitment fee for the 2016 YA Loan were deducted from the $600,000 principal balance of the 2016 YA Loan and paid to YA and the Affiliate. The $349,425 proceeds of the 2016 YA Loan were received by the Company on March 15, 2016.

Omagine presently anticipates that the 2016 YA Loan will be repaid from proceeds of sales of Common Shares made pursuant to (a) private placement transactions, (b) the exercise of Warrants, or (c) the 2014 SEDA, or a combination thereof.

There can be no assurance given that Omagine will be able to successfully utilize the Warrants or the 2014 SEDA to secure the significant amount of financing necessary for it to execute its business plan as presently conceived or that it will be able to repay the 2016 YA Loan.

Capital Expenditures and Construction Financing

The Company incurred $6,398 for capital expenditures in fiscal year 2015. We expect, assuming we are able to close one or more of the debt facilities we are presently working on, that in the near term (i) the Company will incur significant expenses related to capital expenditures, and (ii) LLC will incur substantial debt associated with the Al Rayan Bank Loan, Debt Facilities and other project financing and Syndicated Bank Financing for the Omagine Project.

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We presently expect that such capital expenditures will be largely concentrated at LLC and will largely comprise the purchase by LLC and Omagine of the quantities of office equipment, furniture, vehicles, computer hardware and software and telecommunications equipment which will be necessary to service the expanded staff and offices required at both LLC and Omagine to manage the ramping up of our business operations in Oman and the U.S.

We presently expect that such capital expenditures will be financed:

i. at Omagine via the proceeds from sales of Common Shares via the 2014 SEDA, the exercise of Warrants, private placement sales of restricted Common Shares, and the payments received from LLC with respect to the Success Fee, the Pre-Development Expense Amount, and the Post-DA Pre-Development Expenses, and

ii. at LLC through a combination of invested capital, Equity Sales, bank loans and project finance Debt Facilities (including possibly, the Al Rayan Bank Loan) (See: “Business - The Shareholder Agreement / LLC Capital Structure,” “The First Phase” and “Masterplanning/Equity Sales/Debt Facilities/Project Financing”).

No assurance can be given that such financing will be available to the Company at either Omagine or LLC.

We presently expect that any future project financing requirements (including any Syndicated Bank Financing) for LLC will be placed with regional and international banks as arranged by LLC with the assistance of its Financial Adviser. LLC’s requirement for project financing is expected to be reduced by its ability to pre-sell residence and commercial units by entering into sales contracts with third party purchasers and receiving deposits and progress payments during the construction of such units. Recent trends in the Omani market subsequent to the recent worldwide financial crisis however have indicated a reduced consumer appetite for pre-sales of residence units as many more buyers are now demanding a finished product before entering into sales contracts with developers. . (See: “Financial Advisor” and “Market Conditions” and “Sales & Marketing”).

Off-Balance Sheet Arrangements

We have not entered into and have no present intention of entering into any off-balance sheet financing arrangements. We have not formed and have no present intention of forming any special purpose entities.

Impact of Inflation

The level of inflation in the U.S. has been relatively low during the last several fiscal years and has not had a significant impact on Omagine. Although inflation in Oman has also been relatively low during the last several fiscal years, the Oman economy has recently been experiencing volatility in its inflation rate (including in the prices of construction materials and labor) which volatility may have an impact on LLC's proposed future operations in Oman.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required under this caption is not required for Omagine since it is a smaller reporting company.

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our directors are elected at the annual meeting of shareholders to hold office until the annual meeting of shareholders for the ensuing year or until their successors have been duly elected and qualified. Officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors. The directors and executive officers of the Registrant as of the date hereof are as follows:

Name	Age	Current Position
Frank J. Drohan	71	Chairman of the Board, President, Chief Executive and Financial Officer and Director
Charles P. Kuczynski	63	Vice President, Secretary and Director
Louis J. Lombardo (1) (2)	73	Director
Jack A. Smith (1) (2)	81	Director
Alan M. Matus (1) (2)	72	Director

(1)	Member of the Audit Committee
(2)	Member of the Compensation Committee

Directors

Frank J. Drohan has served as a director, Chairman of the Board of Directors, President and CEO of the Registrant since 1991. Mr. Drohan is also the Managing Director and Chief Executive Officer of LLC and he serves as a director and the chairman of JOL. He was chairman of the board of directors, president and sole shareholder of Rif International Corp., a privately held company active in the construction and real estate development business and which had extensive overseas activities in the MENA Region between 1977 and 1986 and which was acquired by Omagine in 1997. Mr. Drohan holds a Bachelor of Science degree in Economics and Political Science from Manhattan College in New York City. He has over 35 years of experience doing business across most of the MENA Region, has many long-standing business and personal relationships in the region and is familiar with the region’s cultural and business environment.

Charles P. Kuczynski has served as a director, Secretary and a Vice-President of the Registrant since 1996 and previously served as a director and Secretary of the Registrant from 1988 to 1993. Mr. Kuczynski is a director and the secretary of JOL. Prior to joining Omagine, Mr. Kuczynski was a sales executive with Hillenbrand Industries. Mr. Kuczynski holds a Bachelor of Arts degree from Merrimack College in Massachusetts. Mr. Kuczynski has over 30 years of diverse business experience in marketing, sales, public relations and administration.

Louis J. Lombardo has served as a non-employee independent director (“Independent Director”) of the Registrant since 2005. Mr. Lombardo retired after 35 years at American Express Company where he was Executive Vice President - Travel Related Services. In this capacity he led an organization of worldwide operating centers employing over 14,000 people and managed a $1.3 billion operating budget and a $600 million capital budget. Mr. Lombardo holds an MBA degree from New York University. Mr. Lombardo’s years of experience as a senior executive of American Express Company brings a unique perspective and added value to his role as an Independent Director on our Board of Directors. He lives in New York City where he owns and operates two privately held businesses and a consulting company.

Jack A. Smith has served as a non-employee Independent Director of Omagine since September 1, 2015. Mr. Smith founded and was the chief executive officer of a NYSE company - The Sports Authority, Inc. ("TSA") - a national sporting goods chain. He was the Chairman of TSA until it was sold in 1999. Previously Mr. Smith served in executive management positions at W.R. Grace & Co. and with other major companies including Herman's Sporting Goods, Sears & Roebuck and Montgomery Ward. In 2006 Mr. Smith joined the board of I-Trax, an AMEX listed health care provider and Carrols, Inc., a NASDAQ listed firm in the restaurant industry, whose public company spinoff, Fiesta, Inc., appointed him in 2012 as Non-Executive Chairman of the Board. Mr. Smith recently rotated off the Board of NYSE-listed Darden Restaurants after 15 years of service, last serving as chairman of the audit committee. Mr. Smith is a globally recognized and respected corporate and community leader. His lifetime experience in both financial and management roles for publicly traded companies and his experience in financing early stage companies (TSA was financed by Bain & Co., among others) will provide a wealth of knowledge, business acumen and public company experience to the Board's deliberations.

Alan M. Matus has served as a non-employee Independent Director of Omagine since September 1, 2015. Mr. Matus has five decades of residential, hospitality and commercial real estate development experience. He is a seasoned real estate industry executive and owner who has personally directed the development, planning, architectural design, financing, construction and marketing of many public and private developments both internationally and in the U.S. Mr. Matus graduated as a Chartered Accountant (a CPA equivalency) from the University of Witwatersrand, Johannesburg, South Africa. Mr. Matus is an owner and operator of Acqualina Residences and Resort, a beachfront luxury resort near Miami, Florida which he developed and opened in 2006. Mr. Matus joined Williams Island as its President and CEO in the 1980’s to conceive, develop, build and manage this two billion dollar landmark residential and resort community in Aventura, Florida. This renowned 80-acre community has been heralded worldwide. Mr. Matus brings a highly diverse skill set to the Board and to our business with his development, ownership and operational expertise, finance experience and other relevant real estate development skills.

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Directors are elected to serve for one-year terms or until their successors are duly elected and qualified. The Board of Directors is authorized to fill Board vacancies by appointment for a term lasting until Omagine’s next annual meeting of shareholders or until such appointed person’s successor has been duly elected and qualified. Directors who are Company employees receive no fees for acting as such. Independent Directors receive stock options, an annual cash stipend and are entitled to reimbursement of reasonable out-of-pocket expenses incurred by them in attending such meetings.

The Board of Directors filled the prior two board vacancies effective September 1, 2015 with the appointments of Jack A. Smith and Alan M. Matus as Independent Directors bringing the number of independent directors to a majority on the Board of Directors. As of the date hereof, Omagine has an Audit Committee and a Compensation Committee (which also recommends grants of stock options to officers, directors and consultants) each designated by the Board of Directors. There is no nominating committee but future nominations and related nomination activities will be made by a majority vote of the Independent Directors of the Board. The committees of the Board may, in their sole discretion, retain professional outside independent search and/or advisory firms if deemed advisable.

The Audit Committee has 3 members who are independent directors and is chaired by Mr. Matus who is the audit committee financial expert. The Compensation Committee which also has 3 members who are independent directors is chaired by Mr. Smith.

Officers

Officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors. Mr. Drohan and Mr. Kuczynski are both officers of Omagine as described above. William Hanley has served as the Controller and Principal Accounting Officer of the Registrant since January 2008. Mr. Hanley served as the controller of Mittal Steel from 1986 to 2007 and as the Controller and Chief Financial Officer of Rif International Corp. from 1980 to 1986. From 1973 to 1980 he served as the controller at two Wall Street brokerage firms and from 1968 to 1972 as a senior accountant at the public accounting firm Main LaFrentz & Company. Mr. Hanley holds a Bachelor of Business Administration degree in Accounting from St. Francis College in New York.

Code of Ethics

Omagine has adopted and its Board of Directors has approved a Code of Ethics and Business Conduct ("Code"). The Code applies to all directors, officers and employees of Omagine. Omagine believes that the policies and procedures contained in the Code are consistent with the requirements for a Code of Ethics as required by the SEC. A copy of the Code is attached hereto as Exhibit 14 and is available on Omagine's website, www.omagine.com.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who own more than 10% of the Company’s stock (collectively, “Reporting Persons”) to file with the SEC initial reports of ownership and changes in ownership of the Company’s Common Stock. Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports they file. Other than as disclosed below, and based solely on a review of the reports furnished to us or written representations from reporting persons that all reportable transaction were reported, we believe that our officers, directors and greater than ten percent stockholders timely filed all reports they were required to file under Section 16(a), other than as disclosed below.

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William Hanley, our Controller, filed three late Form 4s: one reporting one transaction in 2013, another reporting one transaction in 2013 and one transaction in 2014, and another reporting one other 2014 transaction.

Louis J. Lombardo, an independent director, filed three late Form 4s: one reporting one transaction in 2013, another reporting two transactions in 2014, and another reporting one other 2014 transaction.

Charles P. Kuczynski, our Vice President and Secretary, filed three late Form 4s: one reporting one transaction in 2013, another reporting two transactions in 2014, and another reporting one other 2014 transaction.

Frank J. Drohan, our President and CEO, filed two late Form 4s: one reporting two transactions in 2014, and another reporting one other 2014 transaction.

EXECUTIVE COMPENSATION

Officer Compensation

The following table sets forth information relating to the aggregate compensation received by the then current executive officers of the Company for services in all capacities during the Company’s four fiscal years indicated for (i) Omagine’s Chief Executive and Financial Officer, and (ii) each then current executive officer of Omagine and/or LLC whose total compensation exceeded $100,000 (the foregoing (i) and (ii) being collectively, the “Named Executive Officers”).

Summary Compensation Table

(a)	(b)		(c)		(d)		(e)		(f)		(g)		(h)
Name and Principal Position	Year		Salary (1)		Bonus		Stock Awards (1)		Option Awards (2)		All Other Comp.		Total
			($)		($)		($)		($)		($)		($)
Frank J. Drohan,		2016	$	125,000	$	0	$	31,193	$	120,050	$	0	$	276,243
Chief Executive and		2015	$	125,000	$	0	$	31,976	$	1,401,817	$	0	$	1,558,793
Financial Officer		2014	$	125,000	$	0	$	33,443	$	1,495,595	$	0	$	1,654,038
		2013	$	125,000	$	0	$	33,889	$	566,727	$	0	$	725,616
Charles P. Kuczynski,		2016	$	100,000	$	0	$	32,348	$	34,260	$	0	$	166,608
Vice-President and Secretary		2015	$	100,000	$	0	$	33,205	$	227,428	$	0	$	360,633
		2014	$	100,000	$	0	$	34,781	$	375,277	$	0	$	510,058
		2013	$	100,000	$	0	$	35,301	$	194,805	$	0	$	330,106
William Hanley,		2016	$	80,000	$	0	$	9,242	$	10,232	$	0	$	99,474
Controller and		2015	$	80,000	$	0	$	8,609	$	73,496	$	0	$	162,105
Principal Accounting Officer		2014	$	80,000	$	0	$	8,026	$	146,937	$	0	$	234,963
		2013	$	80,000	$	0	$	7,060	$	42,508	$	0	$	129,568
Sam Hamdan,		2016	$	0	$	0	$	3,466	$	104,350	$	0	$	107,816
Deputy Managing Director,		2015	$	0	$	0	$	2,460	$	1,259,392	$	0	$	1,261,852
Omagine LLC (3)		2014	$	0	$	0	$	0	$	1,159,445	$	0	$	1,159,445
		2013	$	0	$	0	$	0	$	644,479	$	0	$	644,479

1. Amounts included under Column (e) represent contributions of the Registrant’s Common Stock made in the year indicated to the 401(k) Plan account of the Named Executive Officer, valued at the closing market price of the Common Stock on the dates of such contributions.

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2.

Amounts included under Column (f) represent the dollar amount recognized as compensation expense for financial statement reporting purposes for the year indicated under ASC 718 and not an amount paid to or realized by the Named Executive Officers. There can be no assurance that the amounts determined by ASC 718 will ever be realized. In December 2012, the Company extended the expiration date of all Strategic Options from December 31, 2012 to December 31, 2013 and the Company again extended the expiration date of such Strategic Options four more times, to December 31, 2014, to December 31, 2015, to December 31, 2016, and in December 2016 the Company last extended the expiration date of all such Strategic Options to December 31, 2017. Assumptions used in the calculation of the amounts specified in Column (f) for 2014 and 2015 are included in Note 1- STOCK-BASED COMPENSATION and Note 7 – STOCK OPTIONS to the Company's audited financial statements for the fiscal year ended December 31, 2015. (Also see: “Equity Compensation Plan Information” below).

3.

In addition to the 750,000  Strategic Options exercisable at $1.70 per share awarded to Mr. Hamdan in 2012, the 250,000 Strategic Options exercisable at $2.55 awarded to him in 2014 and the 675,000 SARs with a grant price of $2.00 awarded to him in 2015, Mr. Hamdan also holds 160,000 Stock Options exercisable at $1.25 per share which were awarded to him in March 2007.

Management has concluded that the aggregate amount of personal benefits does not exceed 10% of the total compensation reported in column (h) of the foregoing table for the year indicated as to any Named Executive Officer named in the above table.

Table of Accrued Unpaid Salary Used to Purchase Common Shares

The following table indicates the amounts of previously accrued but unpaid salary payable utilized in the year indicated by the Named Executive Officer to purchase Common Shares via a direct purchase from Omagine, an exercise of Stock Options or an exercise of Rights in the Rights Offering.

Name	2016		2015		2014		2013		2012
Frank J. Drohan (1)	$	50,400	$	120,000	$	0	$	0	$	155,921
Charles P. Kuczynski (2)	$	0	$	0	$	0	$	0	$	11,591
William Hanley (3)	$	0	$	0	$	0	$	0	$	31,250

(1)	On April 5, 2016, $50,400 of unpaid salary owed to Mr. Drohan was offset and utilized by him for the purchase of 56,000 restricted Common Shares at the market price of $0.90 per share. On May 16, 2015, $120,000 of unpaid salary owed to Mr. Drohan was offset and utilized by him for the purchase of 100,000 restricted Common Shares at the market price of $1.20 per share. During the year ended December 31, 2012, $155,921 of unpaid salary owed to Mr. Drohan and $247,492 of principal and interest owed by Omagine to Mr. Drohan pursuant to a promissory note was offset and utilized by him for the exercise of 322,730 Rights to purchase 322,730 Common Shares at $1.25 per Common Share. At September 30, 2016, December 31, 2015, 2014, 2013 and 2012, unpaid salary payable due to Mr. Drohan was $57,155, $115,131; $310,464; $398,154; and $273,154 respectively.
(2)	During the year ended December 31, 2012, $11,591 of unpaid salary owed to Mr. Kuczynski and $51,497 of principal and interest owed by Omagine to Mr. Kuczynski pursuant to a promissory note was offset and utilized by him for the exercise of 50,470 Rights to purchase 50,470 Common Shares at $1.25 per Common Share. At September 30, 2016, December 31, 2015, 2014, 2013 and 2012, unpaid salary payable due to Mr. Kuczynski was $141,121, $137,905; $171,575; $163,575; and $145,658 respectively.
(3)	During the year ended December 31, 2012, $31,250 of unpaid salary owed to Mr. Hanley was offset and utilized by him for the exercise of 25,000 Rights to purchase 25,000 Common Shares at $1.25 per Common Share. At September 30, 2016, December 31, 2015, 2014, 2013, and 2012, unpaid accrued officer’s compensation due to Mr. Hanley was $169,600; $138,798, $155,883; $165,883; and $102,550 respectively.

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Director Compensation

Directors of Omagine who are employees of the Company do not receive additional compensation for their services as directors. Independent Directors are compensated for their services as directors of Omagine. The following table sets forth information relating to the aggregate compensation received by Independent Directors of the Registrant for services in all capacities during the Registrant's fiscal year ended December 31, 2016.

Director Compensation Table

(a)	(b)		(c)		(d)		(e)		(f)
Name	Fees Earned or Paid in Cash ($)		Stock Awards ($) (3)		Option Awards ($) (1)		All Other Compensation ($)		Total ($)
Louis Lombardo (2)	$	51,500	$	50,000	$	8,020	$	0	$	109,520
Jack Smith (2)	$	51,500	$	50,000	$	0	$	0	$	101,500
Alan Matus (2)	$	51,500	$	50,000	$	0	$	0	$	101,500

(1)	Column (d) represents the dollar amount recognized as compensation expense for financial statement reporting purposes under ASC 718, and not an amount paid to or realized by the named director. There can be no assurance that the amounts determined by ASC 718 will ever be realized by the named director. Assumptions used in the calculation of the amounts specified in Column (d) are included in Note 1 – STOCK BASED COMPENSATION and Note 7 – STOCK OPTIONS to the Company’s unaudited financial statements for the period ended September 30, 2016.
(2)	Messrs. Lombardo, Smith and Matus each accrued quarterly director fees totaling $50,000 ($12,500 accrued on January 1, 2016, April 1, 2016, July 1, 2016 and October 1, 2016).  On April 6, 2016 each of them purchased 27,778 restricted shares of the Company's Common Stock at the $0.90 per share closing price of the Company's Common Stock on April 5, 2016 in exchange for $25,000 of accrued but unpaid director's fees due to each of them from the Company.
(3)	Messrs. Lombardo, Smith and Matus were each issued 38,462 restricted shares of the Company's Common Stock on January 15, 2016 in payment of the 50% non-cash payment of the $100,000 annual retainer paid to all independent directors valued at the last sale price of $1.30 of the Company's Common Stock on December 31, 2015, the last trading day of the prior fiscal year.

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Independent Directors are compensated for their services as directors as follows:

Effective September 1, 2015, two additional Independent Directors, Mr. Jack Smith and Mr. Alan Matus, were appointed to the Board of Directors. Mr. Smith and Mr. Matus were each issued 25,000 restricted Common Shares in compensation for their services as directors for the period beginning September 1, 2015 and ending December 31, 2015.

Pursuant to a resolution of the Board of Directors, effective January 1, 2016 Independent Directors will be reimbursed for their travel expenses associated with attendance at Board, Committee and Annual meetings and will be compensated on an annual basis for their services as directors as shown in the chart below:

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Independent Director Annual Compensation and Fees

(Effective for annual periods beginning on January 1, 2016)

Compensation Item	Amount
Annual Retainer (1/2 cash - 1/2 Common Shares):
(i) Cash (1)	$	50,000
(ii) Restricted Common Shares (2)	$	50,000
Attendance Fees:
Annual Meeting in person	$	750
Per Board Meeting (in person or via teleconference)	$	500
Per Committee Meeting (in person or via teleconference)	$	500

(1)	Payable quarterly; $12,500 on the first business day of each fiscal quarter.
(2)	Issued on the first business day of each fiscal year and valued at the last sale price of the Common Stock on the final trading day of the fiscal year immediately preceding issuance.

Compensation Discussion and Analysis

As previously disclosed, the Company plans to contract with a recognized executive compensation consulting firm (the “Compensation Consultant”) for the purpose of creating and implementing a comprehensive performance based compensation plan for its executives and senior staff. This compensation plan will be designed to align executive compensation with the achievement by the Company of its long-term goals and objectives.

Prior to the date hereof and in order to successfully implement its business plan, the Company sought to retain and strategically incentivize certain executives, directors and consultants (collectively, the “Company Executives”) on an ad hoc basis via the issuance to them of the Strategic Options and payment to them of a one-time cash bonus in compensation for the extraordinary efforts and personal and professional risks, both financial and otherwise, that they undertook for many years in order to pursue the Company’s then primary strategic objective of signing the DA with the Government.

The Board recognizes the extraordinary advances made in the Company’s prospects but at the same time is aware that the Company’s shareholders have not yet seen the benefit of any significant share price appreciation. In light of this and the continued delays in development of the Omagine Project, the Directors examined alternative ways to align the award of the previously proposed cash bonus payments more directly with the financial interests of its shareholders.

Such cash bonuses were only to be awarded if the DA was signed. The Board was and is of the opinion that such cash bonuses were well deserved but is also cognizant of the ongoing project delays. Alternative plans were explored to align such cash bonus awards not only with the Company Executives’ efforts through the DA signing date but also with the actual results of such efforts. The Board views the price of the Company’s publicly traded Common Shares as the most accurate indicator of such results. Moreover, the Directors believe that continuing efforts by such Company Executives are required to attain a share price that more closely aligns with the Board’s expectations.

The Board explored methodologies to structure such cash bonus payments in a manner more closely aligned with our shareholders’ interests so that the financial benefits from events at the Company are experienced not only by the Company Executives but by all our shareholders as well. Accordingly, pursuant to a resolution of the Board on August 31, 2015 an incentive compensation arrangement was implemented with respect to six Company Executives, not as fixed cash payments as previously contemplated, but in the form of stock appreciation rights (“Stock Appreciation Rights” or “SARs”) as outlined in the following grant schedule:

Stock Appreciation Rights (SARs)
Name	Number of SARs		Grant Price		Date of Grant	Expiration Date
Frank Drohan		675,000	$	2.00	8/31/2015	12/31/2017
Charles Kuczynski		60,000	$	2.00	8/31/2015	12/31/2017
Louis Lombardo		15,000	$	2.00	8/31/2015	12/31/2017
William Hanley		15,000	$	2.00	8/31/2015	12/31/2017
Agron Telaku		15,000	$	2.00	8/31/2015	12/31/2017
Sam Hamdan		675,000	$	2.00	8/31/2015	12/31/2017

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SARs provide for financial gain to the holder derived from appreciation in the price of the Company’s Common Stock above the exercise price of the SAR from the date that SARs are granted until the date that SARs are exercised. All 1,455,000 SARs granted to six Company Executives in the above table (i) vested on the date of grant, (ii) holders are not required to be employees of or consultants to the Company at the time if exercise, (iii) have an exercise price of $2.00 per SAR (which was $0.40 greater than the closing stock price on the date of grant) and (iv) upon exercise SAR’s are payable only in the Company’s Common Shares. No cash settlement is permissible for these 1,455,000 SARs. SARs holders are not required to pay an exercise price. Upon exercise the holder receives an amount of Common Shares equivalent to the increase in the stock price of the Common Shares.

SARs may be exercised at any time prior to 5 P.M. Eastern Time in the United States on December 31, 2017 in whole or in part by the holder thereof by delivery of a written notice to Omagine (the “Notice of Exercise”) of such holder’s election to exercise such SARs, which Notice of Exercise shall:

1)	i.      specify the number of SARs (in whole SARs only) to be exercised and the Grant Price,
	ii.     include the surrender of the relevant certificate representing such SARs (or an indemnification undertaking with respect to such SARs in the case of the loss, theft or destruction of such certificate).
	Such documentation shall be delivered by such holder to a common carrier for overnight delivery to Omagine as soon as practicable following the date of such Notice of Exercise, but in no event later than December 30, 2017.

2)	By delivering a Notice of Exercise the holder is not required to pay any exercise price for the SARs and upon exercise will receive the “Net Number” of Common Shares determined according to the following formula:
	Net Number of Common Shares = C * [(A-B)/A]
	For purposes of the foregoing formula:
	A = market price of Common Shares at exercise date
	B = the Grant Price of $2.00
	C = the number of SARs exercised at any one time
	N = the number of Common Shares issuable upon any one exercise

Equity Compensation Plan Information

The 2003 Plan and the 2014 Plan

Omagine’s shareholders approved the reservation by Omagine of 2,500,000 Common Shares for issuance under the 2003 Omagine Inc. Stock Option Plan (the ”2003 Plan”). The 2003 Plan expired on August 31, 2013. (See: Exhibit 10.19).

On March 6, 2014, the Board of Directors approved the adoption of the 2014 Omagine Inc. Stock Option Plan (the “2014 Plan”). Pursuant to the 2014 Plan, 3,000,000 Common Shares were reserved for issuance (See: Exhibit 10.33). The 2014 Plan was amended to increase the reservation of 3,000,000 Common Shares for issuance to 5,000,000 Common Shares and to permit issuance of stock appreciation rights (“SARs”). The Amended Omagine, Inc. 2014 Stock Option Plan (“Amended 2014 Plan”) is attached as Exhibit 10.34. Omagine intends to seek its shareholders’ ratification of the adoption by Omagine of the Amended 2014 Plan.

Both the 2003 Plan and the 2014 Plan are designed to attract, retain and motivate employees, directors, consultants and other professional advisors of Omagine and its subsidiaries (collectively, the “Recipients”) by giving such Recipients the opportunity to acquire stock ownership in Omagine through the issuance of stock options (“Stock Options”) to purchase Common Shares.

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Omagine has registered for resale the 2.5 million Common Shares reserved for issuance under the 2003 Plan by filing a registration statement with the SEC on Form S-8 (the “S-8 Registration”) and on September 12, 2012, Omagine filed a post-effective amendment to the S-8 Registration.

At September 30, 2016 there were 2,279,000 unexpired Stock Options issued and unexercised under the 2003 Plan and all such Stock Options remain valid until the earlier of their exercise or expiration date. Under the Amended 2014 Plan, there were 990,000 Stock Options of which 950,000 are Strategic Options and 1,455,000 SARs issued, outstanding and unexercised at September 30, 2016.

A total of 3,269,000 Stock Options were issued, outstanding and unexercised as of September 30, 2016 and the date hereof of which 2,915,000 are Strategic Options. A total of 1,455,000 SARs were issued, outstanding and unexercised at September 30, 2016 and as of the date hereof.

The Strategic Options

In January and April 2012, pursuant to the 2003 Plan and a resolution of the Board of Directors, fourteen individuals who were either employees, directors or consultants to Omagine at such time and whose continued service was deemed by the Board of Directors to be particularly crucial to attaining LLC’s then primary strategic goal of signing the DA with the Government of Oman were granted an aggregate of 2,015,000 Strategic Options each of which is exercisable at $1.70 per Common Share. The subsequent resignation of a then independent director resulted in the cancellation of 50,000 of such Strategic Options.

On December 29, 2014, pursuant to the 2014 Plan and a resolution of the Board of Directors, six of the aforementioned fourteen individuals were granted an aggregate of 950,000 additional Strategic Options each of which is exercisable at $2.55 per Common Share.

To maintain the incentive for the retention and sustained service to the Company of its mission-critical employees and consultants in the face of the previously and presently reported continued delays, the Board of Directors authorized multiple extensions of the expiration date of the Strategic Options. All Strategic Options presently expire at 5 pm in New York on December 31, 2017. 

1,965,000 Strategic Options are exercisable at $1.70 per Common Share and 950,000 Strategic Options are exercisable at $2.55 per Common Share (such exercise prices are collectively referred to herein as the “Exercise Price”). Of the 2,915,000 Strategic Options issued and outstanding as of the date hereof, an aggregate of 2,685,000 have been granted to Omagine and LLC officers and 125,000 have been granted to Omagine independent directors.

All Strategic Options are fully vested, provide for a cashless exercise feature, expire on December 31, 2017 and (except with respect to Strategic Options held by the estate of a deceased former director) require the holder thereof to be an employee or director of, or a consultant to, the Company at the time of exercise.

Strategic Options may be exercised at any time prior to 5 P.M. Eastern Time in the United States on December 31, 2017 by either: (1) paying the Exercise Price in cash to Omagine, or (2) electing to pay the Exercise Price via the cashless exercise feature of the Strategic Options, as follows:

1) Strategic Options may be exercised in whole or in part by the holder thereof by delivery of a written notice to Omagine (the “Exercise Notice”), of such holder’s election to exercise such Strategic Options, which Exercise Notice shall:

i. specify the number of Common Shares (“Option Shares”) to be purchased,

ii. be accompanied by payment to Omagine of an amount equal to the Exercise Price multiplied by the number of Option Shares for which the Strategic Options are being exercised (the “Aggregate Option Exercise Price”) in cash or wire transfer of immediately available funds, and

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iii. include the surrender of the relevant certificate representing such Strategic Options (or an indemnification undertaking with respect to such Strategic Options in the case of the loss, theft or destruction of such certificate).

Such documentation and payment shall be delivered by such holder to a common carrier for overnight delivery to Omagine as soon as practicable following the date of such Exercise Notice, but in no event later than December 30, 2017 (“Cash Basis”),

or

2) by delivering an Exercise Notice and in lieu of making payment of the Aggregate Option Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number” of Common Shares determined according to the following formula (the “Cashless Exercise”):

Net Number =	(A x B) – (A x C)
	B

For purposes of the foregoing formula:

A =	the total number of Option Shares with respect to which the relevant Strategic Options are then being exercised.
B =	the closing bid price of a Common Share on the date of exercise of the relevant Strategic Options.
C =	the Exercise Price in United States currency.

Stock Options Other Than Strategic Options

On April 13, 2012, pursuant to the 2003 Plan, an Omagine independent director was granted 2,000 Stock Options exercisable at $1.70 per Common Share and expiring on April 12, 2017.

On January 15, 2013, pursuant to the 2003 Plan, an Omagine independent director was granted 2,000 Stock Options exercisable at $1.38 per Common Share and expiring on January 14, 2018.

On April 8, 2013, the estate of a former Omagine director exercised 4,000 Stock Options; 2,000 at $0.51 per Common Share and 2,000 at $0.85 per Common Share.

On March 28, 2014, pursuant to the 2014 Plan, four persons were granted an aggregate of 40,000 Stock Options exercisable at $1.80 per Common Share and expiring on March 27, 2019. One such person is an Omagine independent director and one is an Omagine officer.

On June 30, 2015, a former Omagine director exercised 2,000 Stock Options at $0.51 per Common Share.

On May 16, 2016, an Omagine independent director exercised 2,000 Stock Options at $0.85 per Common Share.

On May 16, 2016, a former Omagine director had 2,000 unexercised Stock Options exercisable at $0.85 per Common Share expire.

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Stock Options Granted to the Named Executive Officers

The following table shows the number of Common Shares covered by exercisable and un-exercisable Stock Options issued pursuant to the 2003 Plan and held by the Named Executive Officers on September 30, 2016 and as of the date hereof. There can be no assurance that the Grant Date Fair Value of Stock Option awards will ever be realized by such Named Executive Officers.

(a)	(b)		(c)		(d)		(e)
Name	Number of Common Shares Underlying Unexercised Options (#) Exercisable		Number of Common Shares Underlying Unexercised Options (#) Un-exercisable		Option Exercise Price		Option Expiration Date
Frank Drohan (1)		750,000		0	$	1.70	December 31, 2017
		100,000		0	$	2.60	September 22, 2018
Charles Kuczynski (2)		250,000		0	$	1.70	December 31, 2017
		50,000		0	$	2.60	September 22, 2018
William Hanley (3)		60,000		0	$	1.70	December 31, 2017
Sam Hamdan (4)		750,000		0	$	1.70	December 31, 2017
		160,000		0	$	1.25	March 30, 2017

(1)	In September 2008, 100,000 Stock Options, vesting ratably over five years, expiring after ten years and exercisable at $2.60 per Common Share, were granted to Omagine's President & Chief Executive Officer. In January and April of 2012, an aggregate of 750,000 Strategic Options, vesting 50% upon grant and 50% on July 1, 2012, now expiring on December 31, 2017 and exercisable at $1.70 per Common Share were granted to Omagine's President & Chief Executive Officer. On December 30, 2014, 500,000 Strategic Options, vesting upon grant, now expiring on December 31, 2017 and exercisable at $2.55 per Common Share were granted to Omagine's President & Chief Executive Officer.
(2)	In September 2008, 50,000 Stock Options, vesting ratably over five years, expiring after ten years and exercisable at $2.60 per Common Share, were granted to Omagine's Vice-President & Secretary. In January 2012, 250,000 Strategic Options, vesting 50% upon grant and 50% on July 1, 2012, now expiring on December 31, 2017 and exercisable at $1.70 per Common Share were granted to Omagine's Vice-President & Secretary. On December 30, 2014, 75,000 Strategic Options, vesting upon grant, now expiring on December 31, 2017 and exercisable at $2.55 per Common Share were granted to Omagine's Vice-President & Secretary.
(3)	In January 2012, 60,000 Strategic Options, vesting 50% upon grant and 50% on July 1, 2012, now expiring on December 31, 2017 and exercisable at $1.70 per Common Share were granted to Omagine's Controller & Principal Accounting Officer. On March 28, 2014, 10,000 Stock Options, vesting upon grant, expiring on March 27, 2019 and exercisable at $1.80 per Common Share, were granted to Omagine's Controller & Principal Accounting Officer. On December 30, 2014, 50,000 Strategic Options, vesting upon grant, now expiring on December 31, 2017 and exercisable at $2.55 per Common Share were granted to Omagine's Controller & Principal Accounting Officer.
(4)	In March 2007, 160,000 Stock Options, vesting ratably over five years, expiring after ten years and exercisable at $1.25 per Common Share, were granted to a consultant to Omagine who is also the Deputy Managing Director of LLC. In January 2012, 750,000 Strategic Options, vesting 50% upon grant and 50% on July 1, 2012, now expiring on December 31, 2017 and exercisable at $1.70 per Common Share were granted to the Deputy Managing Director of LLC. On December 30, 2014, 250,000 Strategic Options, vesting upon grant, now expiring on December 31, 2017 and exercisable at $2.55 per Common Share were granted to the Deputy Managing Director of LLC.

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The following table shows the number of Common Shares covered by unexpired non-qualified Stock Options issued to the Named Executive Officers under the 2003 Plan and the Amended 2014 Amended Plan and unexercised on December 31, 2016 and as of the date hereof.

Name	Number of Options		Exercise Price		Date of Grant	Expiration Date
Frank Drohan		100,000	$	2.60	9/23/2008	9/22/2018
Frank Drohan		739,000	$	1.70	1/2/2012	12/31/2017
Frank Drohan		11,000	$	1.70	4/13/2012	12/31/2017
Frank Drohan		500,000	$	2.55	12/29/2014	12/31/2017
Charles Kuczynski		50,000	$	2.60	9/23/2008	9/22/2018
Charles Kuczynski		250,000	$	1.70	1/2/2012	12/31/2017
Charles Kuczynski		75,000	$	2.55	12/30/2014	12/31/2017
William Hanley		60,000	$	1.70	1/2/2012	12/31/2017
William Hanley		10,000	$	1.80	3/28/2014	3/27/2019
William Hanley		50,000	$	2.55	12/30/2014	12/31/2017
Sam Hamdan		160,000	$	1.25	3/19/2007	3/31/2017
Sam Hamdan		750,000	$	1.70	1/2/2012	12/31/2017
Sam Hamdan		250,000	$	2.55	12/30/2014	12/31/2017

Stock Options Granted to Independent Directors

The following table shows the number of Common Shares covered by unexpired non-qualified Stock Options issued to Independent Directors of Omagine under the 2003 Plan and the Amended 2014 Plan and unexercised as of December 31, 2016 and as of the date hereof.

Name	Number of Options		Exercise Price		Date of Grant	Expiration Date
Louis Lombardo		50,000	$	1.70	1/2/2012	12/31/2017
Louis Lombardo		2,000	$	1.70	4/13/2012	4/12/2017
Louis Lombardo		2,000	$	1.38	1/15/2013	1/14/2018
Louis Lombardo		10,000	$	1.80	3/28/2014	3/27/2019
Louis Lombardo		25,000	$	2.55	12/30/2014	12/31/2017
Estate of Salvatore Bucchere		50,000	$	1.70	1/2/2012	12/31/2017

On December 30, 2014, 25,000 Strategic Options, vesting upon grant, now expiring on December 31, 2017 and exercisable at $2.55 per Common Share were granted to Louis Lombardo.

Mr. Lombardo presently holds 89,000 fully vested Stock Options (2,000 exercisable at $1.70 expiring on April 12, 2017; 2,000 exercisable at $1.38 expiring on January 14, 2018; 10,000 exercisable at $1.80 expiring on March 27, 2019; 50,000 Strategic Options exercisable at $1.70 expiring on December 31, 2017 and 25,000 Strategic Options exercisable at $2.55 expiring on December 31, 2017). Mr. Lombardo’s 75,000 Strategic Options require him to be a Director of Omagine at the time of the exercise of any Strategic Options.

Mr. Bucchere was an Independent Director at the time of his death on April 9, 2012. Pursuant to the 2003 Plan, all Stock Options then held by Mr. Bucchere immediately vested and were assigned an expiration date of April 8, 2013. Subsequently pursuant to resolutions of the Board of Directors, the expiration date for all Strategic Options (including the 50,000 Strategic Options held by the estate of Mr. Bucchere) was extended to December 31, 2017. Mr. Bucchere’s estate presently holds 50,000 fully vested Strategic Options exercisable at $1.70 per Common Share and expiring on December 31, 2017.

Report on the Re-pricing of Any Options or Stock Appreciation Rights

There was no re-pricing of any Stock Options or Stock Appreciation Rights during fiscal year 2015 or during any subsequent period through the date hereof. In December 2013, Omagine extended the expiration date of all Strategic Options from December 31, 2013 to December 31, 2014. (See: “Equity Compensation Plan Information – The Strategic Options” above and “Note 7 – Stock Options” to Omagine's audited financial statements for the fiscal year ended December 31, 2015). In December 2014, Omagine extended the expiration date of all Strategic Options from December 31, 2014 to December 31, 2015 and again on August 12, 2015, Omagine extended the expiration date of all Strategic Options from December 31, 2015 to December 31, 2016 and again in December 2016, Omagine extended the expiration date of all Strategic Options from December 31, 2016 to December 31, 2017.

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Employment Agreements

The Company presently has no employment agreements with any person.

Pursuant to a prior employment agreement with Omagine (the “Drohan Agreement”), Omagine was obligated to employ its President and Chief Executive Officer, Mr. Frank J. Drohan, at an annual base salary of $125,000 plus an additional amount based on a combination of Omagine’s net sales and earnings before taxes. By mutual agreement between Omagine and Mr. Drohan, the Drohan Agreement was modified to provide that Omagine could from time to time suspend salary payments to Mr. Drohan and Mr. Drohan would continue to provide services to Omagine pursuant to the Drohan Agreement and Omagine would accrue Mr. Drohan’s unpaid salary. Omagine has from time to time fully or partially suspended and accrued salary payments due to Mr. Drohan. For the years ended December 31, 2015 and 2014, Omagine had continued to accrue salary payable to its President on the basis of an annual salary of $125,000. On April 24, 2014, Omagine paid $187,691 of unpaid salary payable to Mr. Drohan. At December 31, 2015 and December 31, 2014, unpaid accrued officer’s compensation due to Mr. Drohan was $115,131 and $310,464 respectively. During 2015, $120,000 of accrued but unpaid officer’s compensation due to Mr. Drohan by Omagine was offset and utilized by Mr. Drohan for the purchase of 100,000 restricted Common Shares at the then market price of $1.20 per Common Share. Omagine has agreed to pay any remaining unpaid and accrued salary to Mr. Drohan without interest when and if Omagine has the financial resources to do so. On September 23, 2008 the Board of Directors granted 100,000 non-qualified Stock Options to Mr. Drohan which vested ratably over the five years after the grant date and which are exercisable at $2.60 per Common Share. All 100,000 of such Stock Options are fully vested as of the date hereof. Expiration of all such Stock Options is ten years from the date of grant. In January and April of 2012 the Board of Directors authorized the grant to Mr. Drohan of an aggregate of 750,000 Strategic Options exercisable at $1.70 per Common Share. On December 30, 2014 pursuant to a resolution of the Board of Directors, Omagine granted Mr. Drohan an additional 500,000 Strategic Options exercisable at $2.55 per Common Share. Mr. Drohan’s Strategic Options are fully vested as of the date hereof and require him to be an employee of Omagine at the time of the exercise of any Strategic Options. All Strategic Options have a cashless exercise feature and may be exercised in whole or in part at any time before their expiry date of December 31, 2017. All unexercised Strategic Options will expire on December 31, 2017. The Board of Directors determined in 2012 that when and if the Development Agreement for the Omagine Project was signed by LLC and the Government, Omagine would award a substantial cash bonus to Mr. Drohan. The Development Agreement for the Omagine Project was signed by LLC and the Government on October 2, 2014 and, in lieu of such cash bonus, the Board of Directors, in a resolution dated August 31, 2015, granted Mr. Drohan 675,000 Stock Appreciation Rights (“SARs”) at a grant price of $2.00 and all such SARs were fully vested as of the grant date. All SARs expire on December 31, 2017 and there is no requirement for Mr. Drohan to be an employee of Omagine at the time of exercise of any SARs. Omagine presently plans to enter into a new employment agreement with Mr. Drohan although the terms of such employment agreement have not yet been determined.

Pursuant to a prior employment agreement with Omagine (the “Kuczynski Agreement”), Omagine was obligated to employ its Vice-President & Secretary, Mr. Charles P. Kuczynski, at an annual base salary of $75,000, plus an additional bonus based on a combination of Omagine’s net sales and earnings before taxes. Mr. Kuczynski is presently employed by Omagine at an annual salary of $100,000 and Omagine has from time to time fully or partially suspended and accrued salary payments due to Mr. Kuczynski and Mr. Kuczynski has continued to provide services to Omagine. For the years ended December 31, 2015 and 2014, Omagine partially paid and partially accrued officer’s compensation of $100,000 due in each such year to Mr. Kuczynski. At December 31, 2015 and December 31, 2014, unpaid accrued officer’s compensation due to Mr. Kuczynski was $137,905 and $171,575 respectively. Omagine has agreed to pay any remaining unpaid and accrued salary to Mr. Kuczynski without interest when and if Omagine has the financial resources to do so. On September 23, 2008 the Board of Directors granted 50,000 non-qualified Stock Options to Mr. Kuczynski which vested ratably over the five years after the grant date and which are exercisable at $2.60 per Common Share. All 50,000 of such Stock Options are fully vested as of the date hereof. Expiration of all such Stock Options is ten years from the date of grant. Pursuant to a January 2012 resolution of the Board of Directors, Omagine granted 250,000 Strategic Options exercisable at $1.70 per Common Share to Mr. Kuczynski. On December 30, 2014 pursuant to a resolution of the Board of Directors, Omagine granted Mr. Kuczynski an additional 75,000 Strategic Options exercisable at $2.55 per Common Share. Mr. Kuczynski’s Strategic Options are fully vested as of the date hereof and require him to be an employee of Omagine at the time of the exercise of any Strategic Options. All Strategic Options have a cashless exercise feature and may be exercised in whole or in part at any time before their expiry date of December 31, 2017. All unexercised Strategic Options will expire on December 31, 2017. The Board of Directors determined in 2012 that when and if the Development Agreement for the Omagine Project was signed by LLC and the Government, Omagine would award a substantial cash bonus to Mr. Kuczynski. The Development Agreement for the Omagine Project was signed by LLC and the Government on October 2, 2014 and, in lieu of such cash bonus, the Board of Directors, in a resolution dated August 31, 2015, granted Mr. Kuczynski 60,000 SARs at a grant price of $2.00 and all such SARs were fully vested as of the grant date. All SARs expire on December 31, 2017 and there is no requirement for Mr. Kuczynski to be an employee of Omagine at the time of exercise of any SARs. Omagine presently plans to enter into a new employment agreement with Mr. Kuczynski although the terms of such employment agreement have not yet been determined.

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Employment Benefits

Omagine sponsors a 401(k) retirement plan for all eligible employees and provides and pays for group medical insurance for all employees choosing to participate in its group medical insurance plan.

The Registrant adopted the Omagine 401(k) Plan DTD 10-01-2008 (the "401(k) Plan") which is qualified under Section 401(k) of the Internal Revenue Code as a pre-tax plan for eligible employees of Omagine. Omagine does not presently match any employee contributions made to the 401(k) Plan. The Registrant made the maximum allowable discretionary contribution to all eligible employees participating in the 401(k) Plan in 2014, 2015 and 2016 in the form of 73,315, 36,483 and 61,001 Common Shares respectively. Future discretionary contributions and/or matching of employee contributions by the Registrant, if any, will be made pursuant to the recommendation of Omagine's Board of Directors.

Omagine entered into an annual consulting agreement in 2007 with Mr. Sam Hamdan which expires on December 31, 2017 (the “Hamdan Agreement”). Pursuant to the Hamdan Agreement: (i) Mr. Hamdan provides consulting services to Omagine, (ii) under certain circumstances and conditions precedent, Mr. Hamdan may become the President of Omagine, and (iii) Omagine issued Mr. Hamdan Stock Options to purchase up to 160,000 Common Shares at $1.25 per Common Share (the “Hamdan Options”). The Hamdan Options vested ratably over the 5 year period beginning on April 1, 2007 and they expire on March 30, 2017. The Hamdan Options are exercisable only if at the time of such exercise: (i) the Hamdan Agreement is in effect, or (ii) Mr. Hamdan is an employee of the Company. The Hamdan Agreement was annually renewed since 2007 without further compensation to Mr. Hamdan other than the $22,000, $72,000 and $68,000 of consulting fees paid to Mr. Hamdan during 2014, 2015 and 2016. Upon the fifth annual renewal of the Hamdan Agreement in 2012 and pursuant to a resolution of the Board of Directors, Mr. Hamdan was granted 750,000 Strategic Options (See: Exhibit 10.3). Upon the eighth annual renewal of the Hamdan Agreement in 2015 and pursuant to a resolution of the Board of Directors, Mr. Hamdan was granted an additional 250,000 Strategic Options (See: Exhibit 10.5). Mr. Hamdan’s Strategic Options are fully vested and require him to be an employee of or a consultant to the Company at the time of the exercise of any of his Strategic Options. All unexercised Strategic Options will expire on December 31, 2017. Mr. Hamdan also serves without compensation as the Deputy Managing Director of the Company’s 60% owned subsidiary, Omagine LLC. The Board of Directors determined in 2012 that when and if the Development Agreement for the Omagine Project was signed by LLC and the Government, Omagine would award a substantial cash bonus to Mr. Hamdan. The Development Agreement for the Omagine Project was signed by LLC and the Government on October 2, 2014 and, in lieu of such cash bonus, the Board of Directors, in a resolution dated August 31, 2015, granted Mr. Hamdan 675,000 SARs at a grant price of $2.00 and all such SARs were fully vested as of the grant date. All SARs expire on December 31, 2017 and there is no requirement for Mr. Hamdan to be an employee or consultant of Omagine at the time of exercise of any SARs.

In determining its compensation policies and decisions subsequent hereto, Omagine shall seek a shareholder advisory vote on its executive compensation policy as required by Section 14A of the Exchange Act.

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Compensation Committee Interlocks and Insider Participation

No person who was a member of the compensation committee during 2015 and through the date hereof was an officer or employee of the Registrant or a former officer or employee of the Registrant. Other than the $150,000 loan to Omagine made by Mr. Lombardo and the $100,000 loan to Omagine made by an entity controlled by Mr. Smith and Mr. Matus, no person who was a member of the compensation committee during 2015 and through the date hereof is a party to any related party transaction with the Registrant (See: “Certain Relationships and Related Transactions and Director Independence”).

During the fiscal year ended December 31, 2015 and through the date hereof, no executive officer of the Registrant served as a:

i.	member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on the compensation committee or board of directors of the Registrant, or
ii.	director of another entity, one of whose executive officers served on the compensation committee of the Registrant, or
iii.	member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of the Registrant.

On September 1, 2015, the Board of Directors appointed Jack A. Smith and Alan M. Matus as Independent Directors. The current members of the Compensation Committee - Louis J. Lombardo, Alan M. Matus and Jack A. Smith – are all Independent Directors. Mr. Smith chairs the Compensation Committee.

Board leadership structure and role in risk oversight.

The Board of Directors filled board vacancies effective September 1, 2015 with the appointments of Jack A. Smith and Alan M. Matus as Independent Directors. Three of the five members of the Board are now independent directors. Mr. Smith is the lead Independent Director who serves as the non-exclusive intermediary between independent directors and management. Mr. Smith is the Chairman of the Compensation Committee and a member of the Audit Committee. Mr. Matus is the Chairman of the Audit Committee and an audit committee financial expert. Mr. Kuczynski, an employee, director and Vice-President of Omagine, facilitates the internal communications between the Company’s President and CEO (who is often located overseas in Oman) and the three Independent Directors to keep them informed of current Company issues, events and risks. The Board continues as in the past to exercise its oversight function, including its risk oversight, on both a formal and informal basis between and among its directors. Omagine’s Board of Directors has determined that this board structure is appropriate and effective in carrying out its oversight tasks relevant to the Company’s activities and the risks it faces.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of February 6, 2017: (i) the number of Common Shares beneficially owned by (a) owners of more than five percent of outstanding Common Shares who are known to Omagine, (b) the officers of Omagine and LLC individually, (c) the directors of Omagine individually, (d) the officers and directors of Omagine and LLC as a group, and (ii) the percentage ownership of the outstanding Common Shares represented by the foregoing.

(a)	(b)		(c)
	Beneficial
	Ownership		Percent
Name and Address	(1)(11)		(1)
Frank J. Drohan (2)(4)		4,222,029		18.1	%
Charles P. Kuczynski (2)(5)		1,128,847		5.2	%
Louis J. Lombardo (2)(6)		525,773		2.4	%
Jack A. Smith (2)		370,574		1.7	%
Alan M. Matus (2)		334,603		1.6	%
Mohammed K. Al-Sada (3)(7)		1,669,754		7.7	%
William Hanley (3)(8)		307,551		1.4	%
Sam Hamdan (3)(9)		1,169,576		5.2	%
Roger Tempest (10)		1,462,911		6.8	%
All officers and Directors as a Group of 7 Persons		8,058,953		31.7	%

(1)	Applicable percentage ownership in column (c) is based on 21,293,178 Common Shares outstanding as of February 6, 2017 and on Common Shares owned by the named individual including Common Shares underlying Stock Options, Warrants, SARs and convertible notes owned by the named individual that are exercisable for Common Shares within 60 days of February 6, 2017. Beneficial ownership and Common Shares outstanding are determined in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended (the “Act”). Common Shares underlying Stock Options, Warrants or convertible notes that are currently exercisable or convertible or exercisable or convertible within 60 days of February 6, 2017 are deemed to be outstanding and beneficially owned by the person holding such Stock Options, Warrants, SARs or convertible notes for the purpose of computing the percentage of outstanding Common Shares owned by such person, but are not deemed to be outstanding for the purpose of computing the percentage of outstanding Common Shares owned by any other person.
(2)	The address for each of these individuals is c/o Omagine and each is a director of Omagine. Mr. Drohan and Mr. Kuczynski are officers of Omagine.
(3)	The address for each of these individuals is c/o Omagine. Mr. Hanley is an officer of Omagine and Mr. Hamdan is an officer of LLC.
(4)	Amount in column (b) for Mr. Drohan includes 2,226,569 Common Shares owned of record as of February 6, 2017 by Mr. Drohan plus 1,995,460 Common Shares with respect to which Mr. Drohan has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued Common Shares underlying (i) 100,000 Stock Options exercisable at $2.60 per Common Share, (ii) 750,000 Strategic Options exercisable at $1.70 per Common Share, (iii) 500,000 Strategic Options exercisable at $2.55 per Common Share, (iv) 322,730 Strategic Warrants exercisable at $5.00 per Common Share, (v) 322,730 Strategic Warrants exercisable at $10.00 per Common Share, and (vi) excludes 675,000 Common Shares issuable upon exercise of SARs because all such SARs exercisable at $2.00 per Common Share are out-of-the-money based on the Company's closing stock price as of February 6, 2017.
(5)	Amount in column (b) for Mr. Kuczynski includes 652,907 Common Shares owned of record as of February 6, 2017 by Mr. Kuczynski plus 475,940 Common Shares with respect to which Mr. Kuczynski has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued Common Shares underlying (i) 50,000 Stock Options exercisable at $2.60 per Common Share, (ii) 250,000 Strategic Options exercisable at $1.70 per Common Share, (iii) 75,000 Strategic Options exercisable at $2.55 per Common Share, (iv) 50,470 Strategic Warrants exercisable at $5.00 per Common Share, (v) 50,470 Strategic Warrants exercisable at $10.00 per Common Share, and (vi) excludes 60,000 Common Shares issuable upon exercise of SARs because all such SARs exercisable at $2.00 per Common Share are out-of-the-money based on the Company's closing stock price as of February 6, 2017.

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(6)	Amount in column (b) for Mr. Lombardo includes 312,806 Common Shares owned of record as of February 6, 2017 by Mr. Lombardo plus 211,455 Common Shares with respect to which Mr. Lombardo has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued Common Shares underlying (i) 2,000 Stock Options exercisable at $1.70 per Common Share, (ii) 2,000 Stock Options exercisable at $1.38 per Common Share, (iii) 10,000 Stock Options exercisable at $1.80 per Common Share, (iv) 50,000 Strategic Options exercisable at $1.70 per Common Share, (v) 25,000 Strategic Options exercisable at $2.55 per Common Share, (vi) 13,230 Strategic Warrants exercisable at $5.00 per Common Share, (vii) 13,230 Strategic Warrants exercisable at $10.00 per Common Share, and (viii) a convertible promissory note in the principal amount of $150,000 which together with $89,987 of accrued interest thereon (as of September 30, 2016) which is convertible at $2.50 per share into 95,995 Common Shares, and (ix) excludes 15,000 Common Shares issuable upon exercise of SARs because all such SARs exercisable at $2.00 per Common Share are out-of-the-money based on the Company's closing stock price as of February 6, 2017.
(7)	Amount in column (b) for Mr. Al-Sada includes 1,228,634 Common Shares owned of record as of February 6, 2017 by Mr. Al-Sada plus 441,120 Common Shares with respect to which Mr. Al-Sada has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued Common Shares underlying (i) 220,560 Strategic Warrants exercisable at $5.00 per Common Share, and (ii) 220,560 Strategic Warrants exercisable at $10.00 per Common Share.
(8)	Amount in column (b) for Mr. Hanley includes 122,547 Common Shares owned of record as of February 6, 2017 by Mr. Hanley plus 170,000 Common Shares with respect to which Mr. Hanley has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued Common Shares underlying (i) 10,000 Stock Options exercisable at $1.80 per Common Share, (ii) 60,000 Strategic Options exercisable at $1.70 per Common Share, (iii) 50,000 Strategic Options exercisable at $2.55 per Common Share, (iv) 25,000 Strategic Warrants exercisable at $5.00 per Common Share, (v) 25,000 Strategic Warrants exercisable at $10.00 per Common Share, and (vi) excludes 15,000 Common Shares issuable upon exercise of SARs because all such SARs exercisable at $2.00 per Common Share are out-of-the-money based on the Company's closing stock price as of February 6, 2017.
(9)	Amount in column (b) for Mr. Hamdan includes 3,950 Common Shares owned of record as of August 31, 2016 by Mr. Hamdan plus 1,160,000 Common Shares with respect to which Mr. Hamdan has the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Act and are unissued Common Shares underlying (i) 160,000 Stock Options exercisable at $1.25 per Common Share, (ii) 750,000 Strategic Options exercisable at $1.70 per Common Share, (iii) 250,000 Strategic Options exercisable at $2.55 per Common Share, and (iv) excludes 675,000 Common Shares issuable upon exercise of SARs because all such SARs exercisable at $2.00 per Common Share are out-of-the-money based on the Company's closing stock price as of February 6, 2017.
(10)	Amount in column (b) for Mr. Tempest includes 1,312,911 Common Shares owned of record or beneficially as of February 6, 2017 by Mr. Tempest (of which 792,375 shares are owned of record by two affiliates of Mr. Tempest and deemed to be beneficially owned by Mr. Tempest).
(11)	Subject to community property laws where applicable, each beneficial owner named in column (a) has sole voting and investment power over the Common Shares beneficially owned by him listed in column (b).

Change in Control Arrangements

No change in control arrangements existed at December 31, 2015 or as of the date hereof.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with related persons

There were no transactions during the Registrant's 2015, 2014 or 2013 fiscal years or through the date hereof, nor is there any currently proposed transaction, in which the Registrant or any of its subsidiaries was or is to be a participant and in which any related person had or will have a direct or indirect material interest, except as follows:

Effective January 1, 2015 the son of Omagine’s President was hired as a full time Company employee for website design and similar technology consulting services which employment ended December 31, 2015.

Tranzishen LLC is an entity owned by Mr. Sam Hamdan who is a consultant to Omagine and the Deputy Managing Director of our 60% owned subsidiary Omagine LLC. In April 2016, the Company paid a $300,000 sponsorship fee to Tranzishen LLC for Omagine to serve as the Title Sponsor of the 2016 World Summit on Innovation and Entrepreneurship hosted by the United Nations at UN headquarters in New York City from May 19 to May 23, 2016.

Mr. Hamdan and Mr. Drohan intend to form a new corporation to be owned by them (“Newco”) which will not compete with Omagine.

Related Party Payables

At December 31, 2016, 2015, 2014 and 2013 Omagine has included $861,922; $640,693; $863,831; and $933,837 respectively of related party payables in its balance sheet. These amounts consisted of:

(i) convertible notes payable (“Notes”) and accrued interest in the aggregate amounts of $345,549; $228,726; $213,726 and $ 198,726 respectively, and

(ii) unpaid salary and unreimbursed expenses due to Omagine officers and directors in the aggregate amounts of $516,373; $401,962; $650,105; and $735,111 respectively.

The Notes are attached hereto as Exhibits 10.12, 10.13 and 10.44. Such Notes, unpaid salary and unreimbursed expenses are due and owing as follows:

Notes and accrued interest payable to officers and directors of Omagine:

	December 31,
	2016		2015		2014		2013
Due to Louis J. Lombardo, a director of Omagine, interest at 10%, due on demand, convertible into common stock at a conversion price of $2.50 per share:
Principal	$	150,000	$	150,000	$	150,000	$	150,000
Accrued interest		93,768		78,726		63,726		48,726
Due to SMAT, Corp., a Florida corporation controlled by Jack A. Smith and Alan M. Matus, directors of Omagine, interest at 5%, due on demand, convertible into common stock at a conversion price of $0.75 per share:
Principal		100,000		0		0		0
Accrued Interest		1,781		0		0		0
Grand Total	$	345,549	$	228,726	$	213,726	$	198,726

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Unpaid salary and unreimbursed expenses due to officers and directors of Omagine:

	December 31
	2016		2015		2014		2013
Due to Frank J. Drohan, a director and the president of Omagine	$	96,352	$	125,132	$	315,133	$	399,329
Due to Charles P. Kuczynski, a director and the secretary of Omagine		149,121		137,905		171,575	$	163,575
Due to William Hanley, the controller of Omagine		182,100		137,930		158,147		168,207
Due to Louis J. Lombardo, a director of Omagine		34,300		9,500		5,250		4,000
Due to Alan M. Matus, a director of Omagine		27,250		750		0		0
Due to Jack A. Smith, a director of Omagine		27,250		750		0		0
Totals	$	516,373	$	411,967	$	650,105	$	735,111

Total Related Party Payables

	December 31
	2016		2015		2014		2013
Notes Payable		345,549		228,726		213,726		198,726
Salary & Expenses Payable		516,373		411,967		650,105		735,111
Totals	$	861,922	$	640,693	$	863,831	$	933,837

Director Independence

Omagine complies with the standards of "independence" under the NASDAQ Marketplace Rules. Accordingly, a director will only qualify as an "independent director" if, in the opinion of our Board of Directors, that person does not have a material relationship with our Company which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. A director who is, or at any time during the past three years, was employed by Omagine or by any parent or subsidiary of Omagine, shall not be considered independent. Accordingly Louis J. Lombardo, Jack Smith and Alan Matus meet the definition of an "independent director" under NASDAQ Marketplace Rule 5605(a)(2). As of the date hereof three of the Registrant’s five directors, Mr. Lombardo, Mr. Smith and Mr. Matus are independent.

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DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Under our Certificate of Incorporation, our directors will not be personally liable to us or to our shareholders for monetary damages for any breach of their fiduciary duty as a director, except liability for the following:

● Any breach of their duty of loyalty to our Company or to our stockholders.

● Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law.

● Unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law.

● Any transaction from which the director derived an improper personal benefit.

We believe that these limitation of liability provisions are necessary to attract and retain qualified persons as directors and officers.

The limitation of liability provisions in our Certificate of Incorporation may discourage shareholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

WHERE YOU CAN FIND MORE INFORMATION

We are filing with the SEC a Post-Effective Amendment No. 3 to a Registration Statement on Form S-1/A under the Securities Act, of which this Prospectus is a part, covering the securities being offered. As permitted by the SEC, this Prospectus does not contain all of the information set forth in the Registration Statement or the exhibits and schedules filed therewith. For further information with respect to us and the securities covered by this Prospectus, please see the Registration Statement and the exhibits filed with the Registration Statement. A copy of the Registration Statement and the exhibits filed with the Registration Statement may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for more information about the operation of the public reference room. The SEC also maintains an internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov.

We are subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, and, in accordance therewith, we file periodic reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information are available for inspection and copying at the public reference room and website of the SEC referred to above. Such periodic reports, proxy statements and other information are also available for inspection and copying at our Company website. The address of our website is www.omagine.com.

87

February ___, 2017

 

OMAGINE, INC.

3,085,822 Shares of Common Stock

PROSPECTUS

We have not authorized any dealer, salesperson or other person to give you written information other than this Prospectus or to make representations as to matters not stated in this Prospectus. You must not rely on unauthorized information. This Prospectus is not an offer to sell these securities or our solicitation of your offer to buy these securities in any jurisdiction where that would not be permitted or legal. Neither the delivery of this Prospectus nor any sales made hereunder after the date of this Prospectus shall create an implication that the information contained herein or the affairs of Omagine have not changed since the date of this Prospectus.

OMAGINE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2016			2015
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	12,423		$	324,703
Inventory (Note 2)
Land under development		490,813,363			490,813,363
Total inventory held for sale		490,813,363			490,813,363
Prepaid expenses and other current assets		11,090			1,767
Total Current Assets		490,836,876			491,139,833
PROPERTY AND EQUIPMENT:
Real estate held for investment (Note 2)
Total investment in real estate		227,800,637			227,800,637
Office and computer equipment		160,002			160,002
Less accumulated depreciation and amortization		(152,527	)		(148,894	)
Total Property and Equipment		227,808,112			227,811,745
OTHER ASSETS		4,057			33,762
TOTAL ASSETS	$	718,649,045		$	718,985,340
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Convertible notes payable and accrued interest	$	482,110		$	397,929
Notes payable and accrued interest - YA II PN, Ltd. (less unamortized discount of $57,500 and $20,833, respectively)		514,842			204,167
Accounts payable		776,526			340,290
Accrued officers payroll		367,877			389,834
Accrued expenses and other current liabilities		165,546			155,330
Total Current Liabilities		2,306,901			1,487,550
Long Term Liabilities		-			-
TOTAL LIABILITIES		2,306,901			1,487,550
STOCKHOLDERS' EQUITY
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: 20,062,648 shares in 2016 and 18,728,313 in 2015		20,062			18,728
Capital in excess of par value		469,794,059			468,651,654
Deficit		(40,502,569	)		(38,342,692	)
Total Omagine, Inc. stockholders' equity		429,311,552			430,327,690
Noncontrolling interests in Omagine LLC		287,030,592			287,170,100
Total Stockholders' Equity		716,342,144			717,497,790
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	718,649,045		$	718,985,340

See accompanying notes to consolidated financial statements.

F-1

OMAGINE, INC. AND  SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
REVENUE:
Total revenue	$	-		$	-		$	-		$	-
OPERATING EXPENSES:
Officers and directors compensation (including stock-based compensation of  $135, $1,880,765, $301,655 and $1,957,285, respectively)		113,885			1,976,515			578,238			2,240,535
Professional fees		266,276			9,375			342,757			142,394
Consulting fees (including stock-based compensation of $25,000, $1,343,924, $25,000 and $1,355,105, respectively)		28,458			1,414,848			466,251			1,745,904
Commitment fees (All stock-based compensation)		150,000			-			150,000			-
Travel		114,604			117,281			389,203			423,875
Occupancy		14,690			45,683			45,657			124,419
Other selling general and administrative		50,677			125,585			203,898			286,651
Total Costs and Expenses		738,590			3,689,287			2,176,004			4,963,778
OPERATING LOSS		(738,590	)		(3,689,287	)		(2,176,004	)		(4,963,778	)
OTHER (EXPENSE) INCOME
Amortization of debt discounts		(25,000	)		(12,500	)		(63,333	)		(28,800	)
Interest expense		(26,678	)		(18,643	)		(60,048	)		(44,843	)
Other (Expense) - Net		(51,678	)		(31,143	)		(123,381	)		(73,643	)
NET LOSS		(790,268	)		(3,720,430	)		(2,299,385	)		(5,037,421	)
Add net loss attributable to noncontrolling interests in Omagine LLC		113,223			24,752			139,508			102,160
NET LOSS ATTRIBUTABLE TO OMAGINE, INC.	$	(677,045	)	$	(3,695,678	)	$	(2,159,877	)	$	(4,935,261	)
LOSS PER SHARE - BASIC AND DILUTED	$	(0.03	)	$	(0.21	)	$	(0.11	)	$	(0.29	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
- BASIC AND DILUTED		19,850,406			17,417,560			19,561,559			17,240,703

See accompanying notes to consolidated financial statements.

F-2

OMAGINE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

	Common Stock
	Issued and Outstanding.						Capital in						Noncontrolling
				$0.001 Par			Excess of						Interests in
	Shares			Value			Par Value			Deficit			Omagine LLC			Total
Balances at December 31, 2013		14,935,038		$	14,935		$	25,987,795		$	(27,508,439	)	$	(25,952	)	$	(1,531,661	)
Stock grant issued to law firm in satisfaction of $15,812 of accounts payable		34,374			34			26,214			-			-			26,248
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement ( SEDA)		218,941			219			309,781			-			-			310,000
Issuance of Common Stock for SEDA commitment fees		85,822			86			149,914			-			-			150,000
Issuance of Common Stock for 401(k) Plan contribution		73,315			73			76,177			-			-			76,250
Issuance of Common Stock for cash		1,004,629			1,004			1,486,096			-			-			1,487,100
Issuance of Common Stock for finders' fees on restricted Common Stock sales		46,000			47			76,121			-			-			76,168
Exercise of Tempest Warrants		490,000			490			663,010			-			-			663,500
Cancellation of shares issued to stockholder relations agent		(10,000	)		(10	)		(9,010	)		-			-			(9,020	)
Stock Option expense		-			-			3,486,856			-			-			3,486,856
Adjustments for noncontrolling interests in Omagine LLC		-			-			-			-			(53,669	)		(53,669	)
Net loss		-			-			-			(5,160,960	)		-			(5,160,960	)
Balances at December 31, 2014		16,878,119		$	16,878		$	32,252,954		$	(32,669,399	)	$	(79,621	)	$	(479,188	)
Issuance of Common Stock for 401(k) Plan contribution		36,483			37			76,213			-			-			76,250
Stock grant to consultant for services rendered		5,000			5			9,445			-			-			9,450
Issuance of Common Stock for cash		206,281			206			219,794			-			-			220,000
Issuance of Common Stock to an Executive Officer in  payment of salaries payable		100,000			100			119,900			-			-			120,000
Stock Options exercised by former Director		2,000			2			1,018			-			-			1,020
Exercise of Tempest Warrants		160,603			161			252,879			-			-			253,040
Issuance of Common Stock for finders' fees on restricted Common Stock sales		41,245			41			72,459			-			-			72,500
Issuance of Common Stock for Directors' Compensation for services September 1, 2015 to December 31, 2015		50,000			50			99,950			-			-			100,000
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA)		17,696			18			24,982			-			-			25,000
Issuance of Restricted Common Stock for cash		1,230,886			1,230			1,238,470			-			-			1,239,700
Stock Option expense		-			-			4,001			-			-			4,001
Stock Option expense - Extension of Strategic Options (1,965,000 to December 31, 2016)		-			-			915,493			-			-			915,493
Stock Option expense - Extension of Strategic Options (950,000 to December 31, 2016)		-			-			541,215			-			-			541,215
Stock Option expense - Stock Appreciation Rights (1,455,000 expiring December 31, 2017)		-			-			1,654,481			-			-			1,654,481
Payment-in-Kind capital contribution of land by noncontrolling interest in Omagine LLC		-			-			431,168,400			-			287,445,600			-718,614,000
Adjustments for noncontrolling interests in Omagine LLC		-			-			-			-			(195,879	)		(195,879	)
Net loss		-			-			-			(5,673,293	)		-			(5,673,293	)
Balances at December 31, 2015		18,728,313		$	18,728		$	468,651,654		$	(38,342,692	)	$	287,170,100		$	717,497,790
Issuance of Common Stock for 401(k) Plan contribution		61,001			61			76,189			-			-			76,250
Issuance of Common Stock for Directors' Stock Compensation for services January 1, 2016 to December  31, 2016		115,386			116			149,884			-			-			150,000
Stock Option expense		-			-			405			-			-			405
Issuance of Common Stock to an Executive Officer in  payment of salaries payable		56,000			56			50,344			-			-			50,400
Issuance of Common Stock for Directors' Cash Compensation for services January 1 2016, to June 30, 2016		83,334			83			74,917			-			-			75,000
Issuance of Restricted Common Stock for cash		769,488			770			558,230			-			-			559,000
Conversion of Convertible Notes payable liability into Common Stock		24,207			24			30,960			-			-			30,984
Issuance of Common Stock to a Director for the exercise of  stock options		2,000			2			1,698			-			-			1,700
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA)		31,289			31			24,969			-			-			25,000
Issuance of Common Stock to consultant for services		30,340			30			24,970			-			-			25,000
Issuance of Common Stock for SEDA commitment fees		161,290			161			149,839			-			-			150,000
Adjustments to noncontrolling interests in Omagine LLC		-			-			-			-			(139,508	)		(139,508	)
Net loss		-			-			-			(2,159,877	)		-			(2,159,877	)
Balances at September 30, 2016 (Unaudited)		20,062,648		$	20,062		$	469,794,059		$	(40,502,569	)	$	287,030,592		$	716,342,144

See accompanying notes to consolidated financial statements. 

F-3

OMAGINE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to Omagine, Inc.	$	(2,159,877	)	$	(4,935,261	)
Adjustments to  reconcile net loss to net cash flows used by operating activities:
Net loss attributable to noncontrolling interests in Omagine LLC		(139,508	)		(102,160	)
Depreciation and amortization		66,966			32,337
Stock-based compensation related to stock options		405			3,114,190
Issuance of Common Stock for finders' fees on restricted Common Stock sales		-			12,500
Issuance of Common Stock for consulting fees		25,000			9,450
Issuance of Common Stock for 401(k) Plan contributions		76,250			76,250
Issuance of Common Stock for Directors' fees		225,000			100,000
Issuance of Common Stock for commitment fees		150,000			-
Changes in operating assets and liabilities:
Prepaid expenses, other current assets and other assets		20,382			(3,436	)
Accrued interest on notes payable		17,507			21,698
Accounts payable		436,236			160,791
Accrued officers' payroll		28,443			(142,573	)
Accrued expenses and other current liabilities		10,216			(30,964	)
Net cash flows used by operating activities		(1,242,980	)		(1,687,178	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		-			(6,398	)
Net cash flows used by investing activities		-			(6,398	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on 2014 note payable to YA II PN, Ltd.		-			(225,000	)
Proceeds from sale of Common Stock		584,000			259,700
Proceeds of 2015 note payable to YA II PN, Ltd. Net of $50,000 commitment fee		-			450,000
Proceeds from exercise of stock options		1,700			1,020
Principal payments on 2015 note payable to YA II PN, Ltd.		(225,000	)		(130,000	)
Proceeds from the sale of Common Stock Warrants		-			250,000
Proceeds of issuance of 2016 note payable to YA II PN, Ltd. Net of $60,000 commitment fee		540,000			-
Principal payments on 2016 $600,000 note payable to YA II PN, Ltd.		(315,000	)		-
Proceeds of issuance of an additional 2016 note payable to YA II PN, Ltd. net of $40,000 commitment fee		360,000			-
Principal payments on 2016 $400,000 note payable to YA II PN, Ltd.		(115,000	)		-
Proceeds of issuance of convertible note payable		100,000			-
Net cash flows provided by financing activities		930,700			605,720
NET (DECREASE) INCREASE  IN CASH		(312,280	)		(1,087,856	)
CASH BEGINNING OF PERIOD		324,703			1,113,679
CASH END OF PERIOD	$	12,423		$	25,823
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid	$	600		$	2,197
Interest paid	$	56,451		$	19,089
NON-CASH FINANCING ACTIVITIES
Issuance of Common Stock to an Executive Officer in payment of salaries payable	$	50,400		$	120,000
Issuance of Common Stock in satisfaction of convertible note payable ($15,000) and accrued interest ($15,984)	$	30,984		$	-
Payment-in-kind capital contribution of land by noncontrolling interest in Omagine LLC pursuant to Omagine LLC Stockholder Agreement	$	-		$	718,614,000

See accompanying notes to consolidated financial statements.

F-4

OMAGINE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Nature of the Business

Omagine, Inc. (“Omagine”) is a holding company incorporated in Delaware in October 2004 which operates through its wholly owned subsidiary, Journey of Light, Inc., a New York corporation (“JOL”) and its 60% owned subsidiary Omagine LLC, a limited liability company incorporated under the laws of the Sultanate of Oman (“LLC”). Omagine, JOL and LLC are collectively referred to herein as the “Company”. JOL was acquired by Omagine in October 2005. LLC is the Omani real estate development company organized by Omagine to do business in Oman.

The Company is focused on entertainment, hospitality and real-estate development opportunities in the Middle East and North Africa (the “MENA Region”). On October 2, 2014, LLC signed a Development Agreement with the Government of Oman (the “Government”) for the development of the Omagine Project. On July 2, 2015, a usufruct over one million square meters of beachfront land (the “Land Rights”) was registered in LLC'’s name with the Government. On November 29, 2015, LLC executed a Murabaha Facility Agreement with Masraf Al Rayan Bank (Qatar) for a $25 million loan to finance the first phase of the Omagine Project consisting of design, development and initial construction activities. The loan, which is subject to satisfaction of certain conditions precedent to closing, would bear interest at an annual rate equal to the 12 month LIBOR rate plus 1% and would be payable one year from the closing date. One condition precedent to closing is that the loan be secured by a $25,000,000 cash deposit in an LLC account at the Qatari bank. Contingent upon the closing of such loan and/or contingent upon the general contractor advancing $10 million to LLC upon execution of the construction contract, commencement of these first phase activities is expected to begin promptly thereafter. (See Note 9 – “Omagine Project”).

Interim Financial Statements

The consolidated balance sheet for 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 amended annual report on Form 10-K for the fiscal year ended December 31, 2015 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 are not necessarily indicative of the operating results for the respective full years.

Certain footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) have been omitted in accordance with the published rules and regulations of the Securities and Exchange Commission (“SEC”). 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-K for the fiscal year ended December 31, 2015 filed with the SEC on April 14, 2016.

Summary of Significant Accounting Policies

Principles of Consolidation - The consolidated financial statements include the accounts of Omagine, JOL and LLC. LLC is an Omani limited liability company organized under the laws of the Sultanate of Oman. All inter-company transactions have been eliminated in consolidation.

Financial Instruments - Financial instruments include cash, convertible notes payable and accrued interest, notes payable and accrued interest, accounts payable, accrued officers’ payroll and accrued expenses and other current liabilities. The amounts reported for financial instruments are considered to be reasonable approximations of their fair values, based on market information available to management.

Cash and Cash Equivalents – The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At September 30, 2016 and December 31, 2015, cash included approximately $4,500 and $36,000 respectively in an Oman bank account not covered by FDIC insurance.

Inventory – Inventory is stated at cost. At September 30, 2016 and December 31, 2015, inventory consists only of the land under development acquired on July 2, 2015 (which was costed at the fair value of the property at the date of acquisition). The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $490,813,363 in inventory resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Property, Plant and Equipment - Property, plant and equipment (“PP&E”) are stated at cost. PP&E consists of land under development which is held for investment; furniture and fixtures; and office machinery and equipment. PP&E (including buildings and structures after they are completed and put into service) are depreciated on a straight-line basis over their respective useful service lives. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $227,800,637 in PP&E resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

F-5

Stockholders’ Equity - Stockholders’ equity consists of common stock, capital in excess of par value, deficit, and non-controlling interests in LLC. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $718,614,000 in stockholders’ equity resulting from LLC’s July 2, 2015 acquisition of the Land Rights (a $431,168,400 increase in Omagine stockholders’ equity and a $287,445,600 increase in non-controlling interests in LLC). (See: Note 2 – “Inventory and Property”).

Estimates and Uncertainties - The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results as determined at a later date could differ from those estimates. In recording $718,614,000 in the accompanying consolidated financial statements for the year ended December 31, 2015 as the value of the non-cash consideration received by LLC as Land Rights, management relied to a great extent upon the written opinions of three expert valuation firms engaged by LLC to value such Land Rights. Furthermore, in allocating such Land Value to inventory and land under development, management relied to a great extent upon the written opinion of an expert independent accounting firm engaged by LLC to advise it on the proper accounting to record the Land Value in LLC’s financial statements. Both LLC’s independent auditor and the Company’s independent auditor are in agreement with and have consented to the accounting indicated in the accompanying consolidated financial statements for the year ended December 31, 2015. (See: Note 2 – “Inventory and Property”).

Revenue Recognition - The Company follows the guidelines of SEC Staff Accounting Bulletin No. 101,”Revenue Recognition in Financial Statements” (SAB101). LLC signed a development agreement for the Omagine Project with the Government of Oman in October 2014, and will recognize revenue ratably over the development period of the Omagine Project measured by methods appropriate to the services or products provided.

Income Taxes - Omagine and JOL are subject to United States (“U.S.”) income taxes at both the federal and state level and LLC is subject to income taxes in Oman. Separate state income tax returns are filed with each state in the U.S. in which Omagine or any subsidiary of Omagine is incorporated or qualified as a foreign corporation. LLC files an income tax return in Oman. Other than with respect to LLC, the Company is not presently subject to income taxes in any foreign country. The Company reports interest and penalties as income tax expense. Deferred tax assets and liabilities are recognized based on differences between the book and tax bases of assets and liabilities using presently enacted income tax rates. The Company establishes a provision for U.S. income taxes by applying the provisions of the applicable enacted tax laws to taxable income, if any, for the relevant period. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Stock-based Compensation - Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification 718, “Compensation – Stock Compensation” (“ASC 718”). For stock options granted, Omagine has recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For such stock option awards, Omagine has recognized compensation expense using a straight-line amortization method over the requisite service period. ASC 718 requires that stock-based compensation expense be based on awards that are ultimately expected to vest. Stock option expense for the nine month periods ended September 30, 2016 and 2015 were $405 and $3,114,190, respectively. (See Note 7).

Earnings (Loss) Per Share - Basic earnings (loss) per share of Omagine’s $0.001 par value common stock (“Common Stock”) is based upon the weighted-average number of shares of Common Stock (“Common Shares”) outstanding during the relevant period. Diluted earnings (loss) per share is based upon the weighted-average number of Common Shares and dilutive securities (stock options, warrants, stock appreciation rights and convertible notes) outstanding during the relevant period. Dilutive securities having an anti-dilutive effect on diluted earnings (loss) per share are excluded from the calculation.

For the nine month periods ended September 30, 2016 and 2015, the Common Shares underlying the following dilutive securities were excluded from the calculation of diluted shares outstanding as the effect of their inclusion would be anti-dilutive:

	2016		2015
Convertible Notes		286,663		156,399
Stock Options		3,269,000		3,273,000
Stock Appreciation Rights		1,455,000		1,455,000
Warrants		6,422,124		6,773,896
Total Common Shares Issuable		11,432,787		11,658,295

Non-controlling Interests in Omagine LLC - As of the date of this report LLC is owned 60% by Omagine. In May 2011, Omagine, JOL and three new investors (the “New Investors”) entered into a shareholders’ agreement (the “Shareholder Agreement”) pursuant to which Omagine’s 100% ownership of LLC was reduced to 60%.

F-6

The New Investors are:

i.

The Office of Royal Court Affairs (“RCA”), an Omani organization, and

ii.

Two subsidiaries of Consolidated Contractors International Company, SAL (“CCIC”). CCIC is a 60 year old Lebanese multi-national company headquartered in Athens, Greece having approximately five and one-half (5.5) billion dollars in annual revenue, one hundred thirty thousand (130,000) employees worldwide, and operating subsidiaries in among other places, every country in the Middle East. The two CCIC subsidiaries which are LLC shareholders are:

1.	Consolidated Contracting Company S.A. (“CCC-Panama”), a wholly owned subsidiary of CCIC and is its investment arm, and
2.	Consolidated Contractors (Oman) Company LLC, CCIC’s operating subsidiary in Oman which is a construction company with approximately 13,000 employees.

As of the date hereof, the shareholders of LLC and their associated ownership percentages as registered with the Government of Oman are as follows:

LLC Shareholder	Percent Ownership
Omagine		60	%
RCA		25	%
CCC-Panama		10	%
CCC-Oman		5	%
Total:		100	%

Recent Accounting Pronouncements

On August 27, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity's ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity and consistency of related disclosures and improve convergence with IFRS (which emphasize management's responsibility for performing the going concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRS will continue to differ. This ASU 2014-15 is effective for annual periods ending after December 16, 2016, and interim periods thereafter; early adoption is permitted. The Company does not believe that this pronouncement will have a material impact on our financial statement disclosures.

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

NOTE 2 – INVENTORY AND PROPERTY

The Company’s consolidated financial statements for the nine months ended September 30, 2016 reflect $718,614,000 of land under development which the Company has allocated to inventory ($490,813,363) and property ($227,800,637). This $718,614,000 of land under development was purchased by LLC on July 2, 2015 pursuant to the terms of the Shareholder Agreement whereby an LLC shareholder agreed to transfer the Land Rights over one million square meters of beachfront land to LLC in exchange for the issuance to such shareholder of 663,750 Omagine LLC shares (the “LLC Shares”). Since the Land Rights represented a non-cash payment for the LLC Shares, it was necessary to value the Land Rights.

Three expert real estate valuation companies were engaged by LLC to independently value the Land Rights in accordance with the professional standards specified by the Royal Institution of Chartered Surveyors (“RICS”) and International Financial Reporting Standards (“IFRS”). The average of the three Land Rights valuations was 276,666,667 Omani Rials ($718,614,000).

LLC engaged the services of PricewaterhouseCoopers LLP (“PwC”) as its IFRS accounting consultant to definitively determine the correct method of recording the $718,614,000 average value of its Land Rights in its IFRS compliant financial statements. After receiving PwC’s written opinion, LLC then consulted with its independent auditor, Deloitte & Touche (M.E.) & Co. LLC (“Deloitte”) with respect to the matter and received Deloitte’s written opinion agreeing with the PwC opinion. Both PwC and Deloitte independently concluded that the Land Rights should be recorded as capital, work-in-process (inventory) and land on LLC’s financial statements. With respect to the Company’s consolidated financial statements, the Company’s independent auditor in the U.S. has likewise concurred that, pursuant to US GAAP, the Land Rights should also be recorded as capital, inventory and land.

F-7

In determining the allocations to inventory and to land, LLC followed the advice of Deloitte by computing the percentage (x) calculated by dividing (y) the area of the land LLC definitively knew it intended to sell, by (z) the total area of land constituting the Omagine Site, and then multiplying that percentage (x) by $718,614,000 to get the correct number (N) for inventory. The correct number for land was then calculated by subtracting N from $718,614,000. Using its detailed internal financial model, management calculated (x) to be equal to 68.3%, thereby making the inventory number $490,813,363 and the land number $227,800,637. In its consolidated financial statements therefore, the Company has divided the Land Rights between land under development which is held for sale (inventory) and land under development which is held for investment (PP&E). These percentage allocations may be modified over time as the more precise land uses become apparent during and after the master planning and construction processes.

As more fully described in Note 1 and in Note 9 (See: “the Omagine LLC Shareholder Agreement section of Note 9), financing for the Omagine Project has not yet been secured. If such financing is not obtained, LLC may not be able to complete the Omagine Project and may not be able to recover the $718,614,000 value of the land under development described above.

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of:

	September 30,		December 31,
	2016		2015
Prepaid rent (New York office)	$	1,859	$	1,767
Prepaid Rent (Muscat, Oman Office)		8,970		-
Other prepaid expenses		261		-
Total	$	11,090	$	1,767

NOTE 4 – CONVERTIBLE NOTES PAYABLE AND ACCRUED INTEREST

Convertible notes payable and accrued interest thereon consist of:

	September 30,		December 31,
	2016		2015
Due to a director of Omagine, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal	$	150,000	$	150,000
Accrued Interest		89,987		78,727
Due to investors, interest at 15% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		35,000		50,000
Accrued Interest		39,842		51,195
Due to investors, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		16,760		18,007
Due to entity owned by two directors of Omagine, interest at 5%  per annum, due on December 24, 2016 convertible into Common Stock at a conversion price of $0.75 per Common Share:
Principal		100,000
Accrued Interest		521		-
Total	$	482,110	$	397,929

F-8

NOTE 5 – NOTES PAYABLE AND ACCRUED INTEREST – YA II PN, LTD. (p/k/a YA GLOBAL MASTER SPV, LTD.)

In July 2013, Omagine borrowed $200,000 from YA II PN, Ltd. (“YA”) (p/k/a YA Global Master SPV, Ltd.) via an unsecured loan (the “2013 YA Loan”) and on April 23, 2014 Omagine paid the 2013 YA Loan balance and accrued interest thereon due at April 23, 2014 in full and borrowed an additional $500,000 from YA via a second unsecured loan (the “2014 YA Loan”) and on April 22, 2015 Omagine paid the 2014 YA Loan balance and the accrued interest thereon in full. On May 20, 2015, Omagine borrowed an additional $500,000 from YA via a third unsecured loan (the “2015 YA Loan”). On March 15, 2016 Omagine paid the 2015 Loan balance and the accrued interest thereon in full and borrowed an additional $600,000 from YA via a fourth unsecured loan (the “March 2016 YA Loan”). On June 22, 2016, Omagine borrowed an additional $400,000 from YA via a fifth unsecured loan (the “June 2016 YA Loan”).

Notes payable and accrued interest thereon due to YA consist of:

	September 30,			December 31,
	2016			2015
2015 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($50,000 in July 2015, $40,000 monthly August 2015 to October 2015, $35,000 monthly November 2015 to February 2016, $40,000 monthly March 2016 to May 2016 and $70,000 on June 1, 2016)	$	-		$	225,000
March 2016 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($60,000 in April 2016 and May 2016, $50,000 monthly June to August 2015, $45,000 in September 2016, $35,000 in October and November 2016,$40,000 in December 2016, $45,000 in January 2017, $60,000 in February 2017 and $70,000 in March of 2017)		285,000			-
June 2016 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($40,000 in July  and August 2016, $35,000 monthly September to November 2016, $25,000 monthly, December 2016 to February 2017 and $35,000 monthly March to June 2017)		285,000			-
Less:  Unamortized debt discount at September 30, 2016 and December 31, 2015		(57,500	)		(20,833	)
Principal, net		512,500			204,167
Accrued interest		2,342			-
Total	$	514,842		$	204,167

NOTE 6 – COMMON STOCK

With respect to the issuances of the Common Shares listed below:

1.	see Note 9 under ”Equity Finance Agreements” with respect to sales of Common Shares made to YA II PN, Ltd. (p/n/a YA Global Master SPV, Ltd.) (”YA”) pursuant to the Standby Equity Distribution Agreement (“2014 SEDA”).
2.	where issuances of restricted Common Shares occurred at non-discounted valuations, it is so noted and all such non-discounted valuations were based on the closing price of a Common Share on the relevant date.

F-9

3.

where issuances of restricted Common Shares occurred at discounted valuations, it is so noted and all such discounted valuations were calculated using the Finnerty Method based on the closing price of a Common Share on the relevant date less a 17% restricted stock discount for 2014 issuances, an 18% restricted stock discount for 2015 issuances and a 25% restricted stock discount for 2016 issuances that were or will be issued.

4

where issuances of restricted Common Shares occurred at agreed upon negotiated prices, the sale proceeds or value of services rendered are so noted.

On January 16, 2016, Omagine contributed an aggregate of 61,001 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On January 16, 2016, Omagine issued 38,462 restricted Common Shares to each of three independent directors for services to be rendered from January 1, 2016 to December 31, 2016 for an aggregate value of $150,000.

On April 5, 2016, the president of the Company purchased 56,000 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on such date of purchase. The total purchase price of $50,400 was paid to the Company by the $50,400 reduction in the accrued salary and expenses owed by the Company to the president.

On April 6, 2016, the three independent directors of the Company each purchased 27,778 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on April 5, 2016 for an aggregate of 83,334 Common Shares purchased. The aggregate purchase price of $75,000 was paid to the Company by the $25,000 reduction in accrued director’s fees owed by the Company to each of the independent directors.

On April 12, 2016, the Company sold 700,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $504,000.

On April 22, 2016, the holders of a Convertible Note converted $30,984 of principal and accrued interest into 24,207 shares of Common Stock.

On May 17, 2016, an Independent Director exercised Stock Options at $0.85 to purchase 2,000 shares of Common Stock.

On June 15, 2016, pursuant to the SEDA, Omagine sold 31,289 Common Shares to YA for proceeds of $25,000.

On July 29, 2016, Omagine sold 10,684 restricted Common shares to an accredited investor for proceeds of $10,000.

On August 19, 2016, Omagine sold 13,245 restricted Common Shares to an accredited investor for proceeds of $10,000.

On August 30, 2016, Omagine sold 11,312 restricted Common Shares to an accredited investor for proceeds of $10,000.

On September 16, 2016, Omagine sold 34,247 restricted Common Shares to an accredited investor for proceeds of $25,000.

On September 19, 2016 Omagine paid a consultant 30,340 restricted Common Shares at a value of $25,000.

On September 21, 2016, Omagine issued 161,290 restricted Common Shares to YA in satisfaction of a $150,000 commitment fee due in connection with the extension of the 2014 SEDA to February 1, 2019.

On January 5, 2015, Omagine contributed an aggregate of 36,483 restricted Common Shares at the discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On February 23, 2015, Omagine paid a consultant 5,000 restricted Common Shares at the discounted valuation of $9,450.

On March 26, 2015, Omagine sold 6,281 restricted Common Shares to an accredited investor for proceeds of $10,000.

On March 26, 2015, Omagine sold 200,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $210,000.

On May 16, 2015, Omagine sold 100,000 restricted Common Shares to an officer and director for proceeds of $120,000.

On June 29, 2015, the Non-US investor (described below in connection with a June 24, 2014 transaction) exercised 158,228 Tempest Warrants at an exercise price of $1.58 for proceeds of $250,000.

On June 29, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 158,228 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,911 restricted Common Shares valued at $12,500.

On June 30, 2015, a former director exercised 2,000 stock options for proceeds of $1,020.

On September 1, 2015, two new Directors were each issued 25,000 restricted Common Shares at a value of $50,000 each for services to be rendered from September 1 to December 31, 2015.

F-10

On September 3, 2015, pursuant to the SEDA, Omagine sold 17,696 Common Shares to YA for proceeds of $25,000.

On September 14, 2015, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $14,700.

On October 8, 2015, 2,375 Tempest Warrants were transferred to an affiliate of the Non-U.S. Investor, a “Non-U.S. Affiliate”. On October 8, 2015, such Non-U.S. Affiliate exercised such 2,375 Tempest Warrants at an exercise price of $1.28 per Common Share for proceeds to Omagine of $3,040.

On October 26, 2015, Omagine sold an aggregate of 1,200,000 restricted Common Shares to three non-U.S. persons who are accredited investors (500,000 restricted Common Shares each to two investors and 200,000 restricted Common Shares to one investor) for aggregate proceeds to Omagine of $1,200,000.

On November 16, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the October 26, 2015 aforementioned sale of 1,200,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 33,334 restricted Common Shares valued at the discounted valuation of $60,000.

On November 16, 2015, Omagine sold 20,886 restricted Common Shares to an accredited investor for proceeds to Omagine of $25,000.

On January 10, 2014, Omagine paid a law firm for legal services rendered by issuing such law firm 34,374 restricted Common Shares at the discounted valuation of $26,248, which value was $10,436 in excess of the $15,812 owed by Omagine to such law firm at that date.

On January 8, 2014 pursuant to the SEDA, Omagine sold 29,687 Common Shares to YA for proceeds of $25,000.

On January 17, 2014 pursuant to the SEDA, Omagine sold 24,912 Common Shares to YA for proceeds of $20,000.

On January 24, 2014 pursuant to the SEDA, Omagine sold 31,705 Common Shares to YA for proceeds of $25,000.

On February 13, 2014, Omagine contributed an aggregate of 73,315 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine Inc. 401(k) Plan.

On February 14, 2014 pursuant to the SEDA, Omagine sold 68,493 Common Shares to YA for proceeds of $150,000.

On March 14, 2014, Omagine sold 70,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $70,000.

On March 14, 2014, Omagine paid a finder’s fee to a non-U.S. person (a “non-U.S. Finder”) in connection with the aforementioned sale of 70,000 restricted Common Shares to a non-U.S. person. Such finder’s fee was satisfied by issuing such non-U.S. Finder 3,500 restricted Common Shares at the discounted valuation of $6,101.

On March 21, 2014 pursuant to the SEDA, Omagine sold 13,597 Common Shares to YA for proceeds of $25,000.

On April 11, 2014, Omagine sold 150,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $150,000. At September 30, 2014, such non-U.S. person owned 1,195,300 Common Shares, or approximately 7.4% of the Common Shares then outstanding, and 441,120 Strategic Warrants (See Note 7).

On April 11, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 150,000 restricted Common Shares to a non-U.S. person. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,500 restricted Common Shares at the discounted valuation of $10,147.

On April 22, 2014, Omagine issued 85,822 restricted Common Shares to an affiliate of YA in satisfaction of a $150,000 commitment fee due in connection with the 2014 SEDA.

On May 6, 2014 pursuant to the SEDA, Omagine sold 32,270 Common Shares to YA for proceeds of $50,000.

On June 24, 2014, Omagine sold 362,308 restricted Common Shares and issued 1,000,000 Tempest Warrants (See Note 7) to a non-U.S. person who is an accredited investor (the “Non-U.S. Investor”) for proceeds of $422,100.

On June 24, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale to the non-U.S. Investor (See Note 7). Such finder’s fee was satisfied by paying such non-U.S. Finder $20,000 in cash and issuing such non-U.S. Finder 15,000 restricted Common Shares at the discounted valuation of $19,920.

On August 15, 2014, the Non-U.S. Investor transferred 240,000 Tempest Warrants to an affiliate of his which is also a non-U.S. person (the “Non-U.S. Affiliate”) and such Non-U.S. Affiliate exercised such 240,000 Tempest Warrants at an exercise price of $1.40 per Common Share for proceeds to Omagine of $336,000. On August 25, 2014, Omagine paid a finder’s fee of $16,800 to a non-U.S. Finder in connection with such Tempest Warrant exercise.

On September 3, 2014, in exchange for a $3,000 cash settlement payment, the Company cancelled 10,000 restricted Common Shares valued at the non-discounted valuation of $9,020 issued to a consultant for services rendered.

F-11

On October 2, 2014, the Non-U.S. Investor transferred 250,000 Tempest Warrants to the Non-U.S. Affiliate and the Non-U.S. Affiliate exercised such 250,000 Tempest Warrants at an exercise price of $1.31 per Common Share for proceeds to Omagine of $327,500. On October 6, 2014, Omagine paid a finder’s fee of $16,375 to a Non-U.S. Finder in connection with such Tempest Warrant exercise by the Non-U.S. Affiliate.

On November 7, 2014, Omagine sold 14,881 restricted Common Shares to a non-U.S. person who is a civil engineer of CCC-Oman and an accredited investor for proceeds of $30,000.

On November 10, 2014, Omagine sold 7,440 restricted Common shares to a non-U.S. person who is a civil engineer of CCC-Oman and an accredited investor for proceeds of $15,000.

On November 20, 2014, Omagine sold an aggregate of 400,000 restricted Common Shares at $2.00 per share to two non-U.S. persons who are accredited investors (150,000 shares to one investor and 250,000 shares to the other investor) for aggregate proceeds of $800,000. The two non-U.S. persons are family members of an Omagine stockholder who owned approximately 7.1% of the Common Shares outstanding at December 31, 2014.

On November 21, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 400,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 20,000 restricted Common Shares valued at $40,000.

NOTE 7 – STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND WARRANTS

Stock Options/Stock Appreciation Rights

Omagine’s shareholders approved the reservation by Omagine of 2,500,000 Common Shares for issuance under the 2003 Omagine, Inc. Stock Option Plan (the “2003 Plan”). The 2003 Plan expired on August 31, 2013. On March 6, 2014, the Board of Directors approved the adoption of the 2014 Omagine, Inc. Stock Option Plan (the “2014 Plan”).

Both the 2003 Plan and the 2014 Plan are designed to attract, retain and motivate employees, directors, consultants and other professional advisors of Omagine and its subsidiaries (collectively, the “Recipients”) by giving such Recipients the opportunity to acquire stock ownership in Omagine through the issuance of stock options (“Stock Options”) to purchase Common Shares.

Omagine has registered for resale the 2.5 million Common Shares reserved for issuance under the 2003 Plan by filing a registration statement with the SEC on Form S-8. At September 30, 2016, there were 2,279,000 unexpired Stock Options issued but unexercised under the 2003 Plan and all such Stock Options remain valid until the earlier of their exercise date or expiration date.

Pursuant to the 2014 Plan, 3,000,000 Common Shares were reserved for issuance. The 2014 Plan was amended to increase the reservation of 3,000,000 Common Shares for issuance to 5,000,000 Common Shares and to permit issuance of stock appreciation rights (“The Amended 2014 Plan”). Omagine intends to seek its shareholders’ ratification of the adoption by Omagine of the Amended 2014 Plan. At September 30, 2016, there were 990,000 unexpired Stock Options and 1,455,000 Stock Appreciation Rights (“SARs”) issued but unexercised under the Amended 2014 Plan.

A summary of Stock Option and SARs activity for the nine month periods ended September 30, 2016 and 2015 pursuant to both the 2003 Plan and the 2014 Plan is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2015		3,275,000		$	1.97		1.24	$	1,923,170
Exercised in Q2 2015		(2,000	)	$	0.51		-		-
Granted in Q3 2015		1,455,000		$	2.00		2.29		-
Outstanding September 30, 2015		4,728,000		$	1.98		1.67	$	59,440
Exercisable at September 30, 2015		4,728,000		$	1.98		1.67	$	59,440
Outstanding at January 1, 2016		4,728,000		$	1.98		1.41	$	26,240
Exercised in Q2 2016		(2,000	)	$	0.85
Expired Q2 2016		(2,000	)	$	0.85
Outstanding September 30, 2016		4,724,000		$	1.98		0.65	$	-
Exercisable at September 30, 2016		4,724,000		$	1.98		0.65	$	-

F-12

Of the 4,724,000 Stock Options outstanding at September 30, 2016, 2,915,000 of such Stock Options were issued by Omagine in January 2012 and December 2014 as “Strategic Options” to officers, directors and consultants of Omagine whose continued service was deemed by the Board of Directors to be particularly crucial to attaining LLC’s then strategic goal of signing the Development Agreement (“DA”) with the Government of Oman and in recognition of those efforts during 2014 and beyond. The Strategic Options are fully vested, provide for a cashless exercise feature and currently expire on December 31, 2016; 1,965,000 of the Strategic Options are exercisable at $1.70 and 950,000 are exercisable at $2.55. To continue to incentivize the retention and sustained service to the Company of its mission-critical employees and consultants, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended by Omagine in December 2012 to December 31, 2013 (the “First Extension“) and in December 2013 to December 31, 2014 (the “Second Extension”) and in December 2014 to December 31, 2015 (the “Third Extension”) and on August 12, 2015 to December 31, 2016 (the “Fourth Extension”). The December 31, 2015 expiration date of the 950,000 Strategic Options issued December 29, 2014 was extended on August 12, 2015 to December 31, 2016 (“First Extension”).

Of the 2,915,000 Strategic Options, an aggregate of 1,685,000 were granted to Omagine’s three officers, an aggregate of 125,000 were granted to Omagine’s independent directors and 1,000,000 were granted to the Deputy Managing Director of LLC who, pursuant to a March 2007 consulting agreement expiring on December 31, 2016, is also a consultant to the Company. The Deputy Managing Director of LLC also holds 160,000 Stock Options granted pursuant to his consulting agreement which are not Strategic Options, exercisable at $1.25 per share and expiring on March 31, 2017. 

Of the 1,455,000 Stock Appreciation Rights, an aggregate of 750,000 were granted to three officers of Omagine, 15,000 were granted to one independent director and 675,000 were granted to the Deputy Managing Director of LLC.

The $671,440 estimated fair value of the Second Extension was calculated using the Black Scholes option pricing model and the following assumptions (i) $0.89 share price, (ii) 378 day term of the Second Extension, (iii) 144% expected volatility, (iv) 0.13% (378 day term) risk free interest rate, and such $671,440 was expensed evenly over the 378 day requisite service period of the Second Extension (December 19, 2013 through December 31, 2014).

On December 13, 2014, Omagine granted to six persons an aggregate of 950,000 fully vested Strategic Options with a cashless exercise feature (625,000 to three officers, 25,000 to one director and 300,000 to two consultants) exercisable at $2.55 per share and expiring on December 31, 2015. The $1,277,370 estimated fair value of the 950,000 Strategic Options was calculated using the Black Scholes option pricing model and the following assumptions: (i) $2.52 share price, (ii) 368 day term, (iii) 147% expected volatility, (iv) 0.25% (368 day term) risk free interest rate and was expensed in full in the quarterly period ended December 31, 2014.

On December 29, 2014, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended from December 31, 2014 to December 31, 2015 (the “Third Extension”). The $1,504,404 estimated fair value of the Third Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $2.52 share price, (ii) 368 day term, (iii) 147% expected volatility, (iv) 0.25% (368 day term) risk free interest rate and was expensed in full in the quarterly period ended December 31, 2014.

On August 12, 2015, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended from December 31, 2015 to December 31, 2016 (the “Fourth Extension”). The $915,493 estimated fair value of the Fourth Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.91 share price, (ii) 507 day term, (iii) 147% expected volatility, (iv) 0.32% (507 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

On August 12, 2015, the expiration date of the 950,000 Strategic Options issued in December of 2014 was extended from December 31, 2015 to December 31, 2016 (the “First Extension”). The $541,215 estimated fair value of the First Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.91 share price, (ii) 507 day term, (iii) 147% expected volatility, (iv) 0.32% (507 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

F-13

On March 28, 2014, Omagine granted to four persons an aggregate of 40,000 Stock Options exercisable at $1.80 per share and expiring on March 27, 2019. One such person is an Omagine independent director, one is an Omagine officer and two are consultants. The $55,376 estimated fair value of the 40,000 Stock Options was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.80 share price, (ii) a 5 year term, (iii) 106% expected volatility and (iv) 1.75% (5 year term) risk free interest rate. $51,914 of such estimated fair value was expensed in the year ended December 31, 2014, and $3,462 was expensed in the year ended December 31, 2015.

On June 30, 2015, a former Omagine director exercised 2,000 stock options at $0.51 per share.

On August 31, 2015, Omagine granted an aggregate of 1,455,000 Stock Appreciation Rights (“SARs”) to six persons exercisable at $2.00 per share and expiring on December 31, 2017. Of the 1,455,000 SARs, an aggregate of 750,000 were granted to three officers of Omagine, 15,000 were granted to one independent director and 675,000 were granted to the Deputy Managing Director of LLC. The $1,654,481 estimated fair value of the SARs was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.60 share price, (ii) 854 day term, (iii) 147% expected volatility, (iv) 0.28% (854 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

A summary of non-vested Stock Options and the Common Shares underlying such Stock Options for the nine month periods ended September 30, 2016 and 2015 is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Non-vested shares at January 1, 2015		10,000		$	1.80		4.30
Vested in Q1 2015		(10,000	)	$	1.80		4.30
Non-vested shares at September 30, 2015		-			-		-
Non-vested shares at January 1, 2016		-			-		-
Non-vested shares at September 30, 2016		-			-		-

Issued and outstanding Stock Options and SAR’s (all non-qualified) as of September 30, 2016 are as follows:

Year Granted		Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
	2007		160,000		160,000	$	1.25		March 31, 2017
	2008		150,000		150,000	$	2.60		September 23, 2018
	2012		1,965,000		1,965,000	$	1.70		December 31, 2016
	2012		2,000		2,000	$	1.70		April 12, 2017
	2013		2,000		2,000	$	1.38		January 14, 2018
	2014		40,000		40,000	$	1.80		March  27, 2019
	2014		950,000		950,000	$	2.55		December 31, 2016
	2015		1,455,000		1,455,000	$	2.00		December 31, 2017
	Totals		4,724,000		4,724,000

F-14

A summary of information about Stock Options and SARs outstanding at September 30, 2016 is as follows:

		Stock Options Outstanding						Exercisable
Range of Exercise Prices		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Number of Shares		Weighted Average Exercise Price
	$ 1.01 - $2.00		3,624,000		1.80		0.70		3,624,000		1.80
	$ 2.01 - $3.00		1,100,000		2.56		0.49		1,100,000		2.56
Totals			4,724,000	$	1.98		0.65		4,724,000	$	1.98

As of September 30, 2016, there was $675 of unrecognized compensation costs relating to unexpired Stock Options. That cost is expected to be recognized $135 in 2016 and $540 in 2017.

Warrants

As of September 30, 2016, Omagine had 6,422,124 Common Stock purchase warrants (“Warrants”) issued and outstanding. The Warrants do not contain any price protection provisions that would require them to be classified as liabilities (subject to re-measurement at fair value each time a balance sheet is presented) rather than presented as a component of stockholders’ equity.

The Tempest Warrants

On June 24, 2014, in connection with the sale of 362,308 restricted Common Shares to an investor (See Note 6), Omagine issued 1,000,000 Warrants to such investor, each of which were exercisable for the purchase of one restricted Common Share at a per Common Share exercise price equal to the greater of: (a) $1.00 per Common Share, or (b) 80% of the closing sale price for a Common Share on the trading day immediately preceding the relevant exercise date (the “Tempest Warrants”). Both the exercise price of the Tempest Warrants and the number of Common Shares issuable upon exercise of the Tempest Warrants were subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock, or a dividend, reclassification, reorganization, or spin off.

On August 15, 2014, 240,000 Tempest Warrants were transferred to an affiliate of the investor. The affiliate exercised the 240,000 Tempest Warrants at an exercise price of $1.40 per Common Share for proceeds of $336,000. On October 2, 2014, a further 250,000 Tempest Warrants were exercised by such affiliate at an exercise price of $1.31 per Common Share for proceeds of $327,500. On June 29, 2015, the investor exercised 158,228 of the Tempest Warrants at an exercise price of $1.58 per Common Share for proceeds of $250,000. In conjunction with this June 29, 2015 exercise, Omagine agreed with the investor to file a registration statement with the SEC to register all the aforementioned Common Shares presently owned by the investor and his affiliate as well as the remaining 351,772 Common Shares underlying the remaining 351,772 Tempest Warrants outstanding at that time. On October 8, 2015, 2,375 Tempest Warrants were transferred to an affiliate, a “Non-U.S. Affiliate”. On October 8, 2015, such Non-U.S. Affiliate exercised such 2,375 Tempest Warrants at an exercise price of $1.28 per Common Share for proceeds to Omagine of $3,040. The balance of all 349,397 unexercised Tempest Warrants expired on June 23, 2016.

The Strategic Warrants

Omagine has 6,422,124 Warrants outstanding, 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $5.00 and 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $10.00 (collectively, the “Strategic Warrants”).

F-15

Omagine filed a post-effective amendment to its registration statement on Form S-1 (Commission File No. 333-183852) whereby the Strategic Warrants and the 6,422,124 Common Shares underlying the Strategic Warrants were registered by Omagine (the “Warrant Registration”). The Warrant Registration was declared effective by the SEC and its effective status expired. Omagine filed another post-effective amendment to the Warrant Registration on February 11, 2015 which was declared effective by the SEC on February 13, 2015 and its effective status expired. Omagine filed another post-effective amendment to the Warrant Registration on January 14, 2016 which was declared effective by the SEC on January 25, 2016 (the “Updated Warrant Registration”). As of the date hereof, the effective status of the Updated Warrant Registration expired and the Company intends to file a post-effective amendment to such Registration Statement with the SEC in order to again register the Common Shares issuable upon the exercise of the Strategic Warrants. Neither the exercise prices of the Strategic Warrants nor the number of Common Shares issuable upon exercise of the Strategic Warrants are subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock, or a dividend, reclassification, reorganization, or spinoff.

On August 18, 2014, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended for a third time to June 30, 2015 and again on January 5, 2015, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended to December 31, 2015. Again on August 12, 2015, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended to December 31, 2016. All other terms and conditions of the Strategic Warrants remained the same. All Strategic Warrants expire on December 31, 2016 unless redeemed earlier by Omagine upon 30 days prior written notice to the Strategic Warrant holders.

NOTE 8 – U.S. INCOME TAXES

Deferred U.S. tax assets are comprised of the following:

	September 30,			December 31,
	2016			2015
U.S. federal net operating loss carry forwards	$	6,807,000		$	6,375,000
U.S. state and city net operating loss carry forwards, net of U.S. federal tax benefit		1,945,000			1,822,000
		8,752,000			8,197,000
Less: Valuation allowance		(8,752,000	)		(8,197,000	)
Total	$	-		$	-

Management has determined, based on the Company's current condition, that a full valuation allowance is appropriate at September 30, 2016. At September 30, 2016, the Company had U.S. federal net operating loss carry forwards of approximately $19,448,000 expiring in various amounts from fiscal year 2017 to fiscal year 2036.

Current U.S. income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs. 

The Company believes that it has no uncertain tax positions and no unrecognized tax benefits at September 30, 2016 and December 31, 2015.

NOTE 9 – COMMITMENTS

Leases

Omagine leases its executive office in New York under a month to month lease from an unaffiliated third party. LLC leases office space in Muscat, Oman from an unaffiliated third party under a one year lease which commenced in January 2016 and which provides for an annual rental of $35,880. The Company’s rent expense for the nine month periods ended September 30, 2016 and 2015 was $45,657 and $124,419, respectively.

Employment Agreements

The Company presently has no employment agreements with any person.

Pursuant to a prior employment agreement, Omagine was obligated to employ its President and Chief Executive Officer at an annual base salary of $125,000 plus an additional amount based on a combination of net sales and earnings before taxes. Omagine plans to enter into a new employment agreement with its President although the terms of such employment agreement have not yet been determined. Omagine had continued to accrue salary payable to its President through December 31, 2014 and on January 1, 2015 the Company recommenced its bi-monthly payroll for employees, including for its President on the basis of an annual salary of $125,000. On May 1, 2015 the Company paid its President $87,781 of accrued officer’s payroll and on May 16, 2015 the Company applied $120,000 of accrued officer’s payroll in exchange for the purchase of 100,000 restricted Common Shares of Omagine, Inc. stock at a purchase price of $1.20 per share. On April 5, 2016 the Company applied $50,400 of accrued officer’s payroll in exchange for the purchase of 56,000 restricted Common Shares of Omagine Inc. stock at a purchase price of $0.90 per share. On June 14, 2016 the Company paid its President $55,601 of accrued officer’s payroll. At September 30, 2016 and December 31, 2015, Omagine had unpaid accrued officer’s compensation due to its President of $57,155 and $115,131, respectively.

F-16

Pursuant to a prior employment agreement, Omagine was obligated to employ its Vice-President and Secretary at an annual base salary of $100,000. Omagine plans to enter into a new employment agreement with its Vice-President although the terms of such employment agreement have not yet been determined. On January 1, 2015 the Company recommenced its bi-monthly payroll for employees, including for its Vice-President on the basis of an annual salary of $100,000. On March 26, 2015 the Company paid its Vice-President $33,000 of accrued officer’s payroll. On September 9, 2015, October 2, 2015 and December 7, 2015, the Company paid its Vice-President accrued officers’ payroll of $2,000, $3,200 and $2,500, respectively. On June 23, 2016 the Company paid its Vice-President $32,000 of accrued officer’s payroll and on July 28, 2016 the Company paid an additional $2,700. At September 30, 2016 and December 31, 2015, Omagine had unpaid accrued officer’s compensation due to its Vice-President of $141,122 and $137,905, respectively.

On January 1, 2015 the Company recommenced its bi-monthly payroll for its Controller on the basis of an annual salary of $80,000. On January 14, 2015 the Company paid its Controller $25,000 of accrued officer’s payroll. At September 30, 2016 and December 31, 2015, Omagine had unpaid accrued officer’s compensation due to its Controller of $169,600 and $136,798, respectively.

Contingent Fee Payment Obligation

Depending on circumstances, LLC may execute an agreement with Michael Baker International (”Baker”) to hire Baker as its Program Manager and/or Project Manager (the potential “PM Contract”). Omagine has employed Baker to provide design and engineering services through the feasibility and engineering study phases of the Omagine Project. As part of its compensation agreement with Baker, Omagine agreed that it would be obligated to pay Baker the sum of $72,000 (the “Contingent Fee”) after LLC signed the DA with the Government of Oman. Omagine paid Baker the Contingent Fee in October 2015.

Equity Financing Agreements

Omagine, Inc. and YA were parties to a Stand-By Equity Distribution Agreement (the “2011 SEDA”) which was due to expire on September 1, 2014. On July 21, 2014, the 2011 SEDA was terminated by the mutual consent of Omagine and YA.

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement on generally the same terms and conditions as the 2011 SEDA (the”2014 SEDA“). Unless earlier terminated in accordance with its terms, the 2014 SEDA was to terminate automatically on the earlier of (i) the first day of the month next following the 24-month anniversary of the “Effective Date” (as hereinafter defined) (i.e. February 1, 2017), or (ii) the date on which YA shall have made payment to Omagine of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000. On September 20, 2016, the Company and YA entered into an agreement amending the SEDA extending the term of the 2014 SEDA to February 1, 2019 or to such date on which YA shall have made payment to Omagine of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000 (the “Second SEDA Amendment”). On April 22, 2014, in satisfaction of a $150,000 commitment fee due pursuant to the 2014 SEDA, Omagine issued 85,822 restricted Common Shares to YA Global II SPV, LLC, which is an affiliate of YA (the “Affiliate”). On September 21, 2016 in satisfaction of a $150,000 commitment fee due pursuant to the Second SEDA Amendment, Omagine issued 161,290 restricted Common shares to the YA Affiliate. (See Note 6)

Pursuant to the terms of the 2014 SEDA, Omagine may in its sole discretion, and upon giving written notice to YA (an ”Advance Notice”), periodically sell Common Shares to YA (“Shares”) at a per Share price (“Purchase Price”) equal to 95% of the lowest daily volume weighted average price (the “VWAP”) for a Common Share as quoted by Bloomberg, L.P. during the five (5) consecutive Trading Days (as such term is defined in the 2014 SEDA) immediately subsequent to the date of the relevant Advance Notice (the “Pricing Period”).

Omagine is not obligated to sell any Shares to YA but may, over the term of the 2014 SEDA and in its sole discretion, sell to YA that number of Shares valued at the Purchase Price from time to time in effect that equals up to five million dollars ($5,000,000) in the aggregate. YA is obligated under the 2014 SEDA to purchase such Shares from Omagine subject to certain conditions including (i) Omagine filing a registration statement with the SEC to register the resale by YA of the Shares sold to YA under the 2014 SEDA (“Registration Statement”), (ii) the SEC declaring such Registration Statement effective (the date of such declaration by the SEC being the “Effective Date”), (iii) Omagine certifying to YA at the time of each Advance Notice that Omagine has performed all covenants and agreements to be performed and has complied with all obligations and conditions contained in the 2014 SEDA, (iv) periodic sales of Shares to YA must be separated by a time period of at least five Trading Days, and (v) the dollar value of any individual periodic sale of Shares designated by Omagine in any Advance Notice may not exceed the greater of (a) two hundred thousand dollars ($200,000), or (b) the average of the ”Daily Value Traded” for each of the five (5) Trading Days immediately preceding the date of the relevant Advance Notice, where Daily Value Traded is the product obtained by multiplying the number representing the daily trading volume of Common Shares for such Trading Day by the VWAP for a Common Share on such Trading Day.

Omagine Project

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 just west of the capital city of Muscat and nearby Muscat International Airport (the “Omagine Site”). LLC has signed a Development Agreement (“DA”) and a Usufruct Agreement (“UA”) for the Omagine Project with the Government of Oman. (See “Development Agreement and Usufruct Agreement” below). The Omagine Project is planned to be an integration of cultural, heritage, entertainment and residential components including a high-culture theme park and associated buildings, shopping and retail establishments, restaurants and approximately 2,100 residences.

Development Agreement and Usufruct Agreement

Omagine’s 60% owned subsidiary, LLC, signed a DA with the Government of Oman in October 2014 for the development in Oman by LLC of the Omagine Project. The legal effectiveness of the DA was conditional upon its ratification by Oman’s Ministry of Finance, which Ratification occurred in March 2015. On July 1, 2015 (the “Operative Date”), the Government and LLC entered into the UA with respect to the land constituting the Omagine Site.

F-17

The Land Rights give LLC extensive rights over the land constituting the Omagine Site including the right to sell such land on a freehold basis. On July 2, 2015, the UA was registered by the Government and a Land Rights registration fee of 20,250 Omani Rials ($52,650) was paid by LLC to the Government (and expensed in the consolidated statements of operations for the three months ended September 30, 2015), which registration legally perfected LLC’s ownership of the Land Rights.

The five year period commencing on the Operative Date is a rent free period and thereafter LLC will pay annual rent to the Government based on only the built but unsold commercial area of the Omagine Project (approximately 150,000 square meters) or approximately 45,000 Omani Rials ($117,000) per year based on the current annual per square meter fee of 0.300 Omani Rials ($0.78). The term of the DA is 20 years and the term of the UA is 50 years (renewable) commencing from the Operative Date. The UA and the DA provisions relevant to the UA survive the expiration of the term of the DA.

The Operative Date of July 1, 2015 is the date from which all time periods for the execution by LLC of various tasks enumerated in the DA are to be measured. The continued legal effectiveness of the DA subsequent to the Operative Date is dependent upon the following milestone dates being achieved (any or all of which may be extended or waived by the Government): (1) LLC’s delivery to the Government within twelve months from the Operative Date of a term sheet with lenders for the financing of the first phase, any other phase or all of the Project, (2) LLC’s submission to the Ministry of Tourism of a social impact assessment within 8 months of the Operative Date and the Government’s approval thereof within 12 months of the Operative Date, (3) the Government’s approval within 12 months of the Operative Date of the development control plan for the Omagine Project, and (4) the transformation of LLC into a joint stock company within 12 months of the Operative Date. Company management has had informal discussions with the concerned government officials and management is confident that given the present economic conditions in the region (of which the Government is keenly aware), the Company will be granted an extension of time on many of such due dates similar to the extension of the Operative Date to July 1. 2015 already previously granted by the Government.

Pursuant to the DA, LLC must substantially complete the construction of the seven Pearl buildings and one hotel (the “Minimum Build Obligation” or “MBO”) within 5 years of the Operative Date. Any material breach by LLC of its obligation to perform the MBO would constitute an event of default under the DA. The DA specifies that the principal construction contracts should be executed within one year of the Operative Date. LLC is required to provide written notice to the Government in certain circumstances, such as LLC’s change in an anticipated milestone date that would result in a substantial achievement of work to occur later than 60 days after such milestone date. The DA provides that the Government is required to grant reasonable requests for the extension of the terms of the DA in such circumstances.

The foregoing discussion of the terms of the DA and UA is not meant to be definitive or complete and is qualified in its entirety by reference to the complete texts of the DA and UA as filed by the Company with the SEC.

Omagine LLC Shareholder Agreement

Omagine and JOL organized LLC in Oman and capitalized it with an initial investment of twenty thousand (20,000) Omani Rials ($52,000). On April 20, 2011, Omagine, JOL and the New Investors entered into a shareholder agreement relating to LLC (the “Shareholder Agreement”).

Pursuant to the Shareholder Agreement, Omagine invested an additional 70,000 Omani Rials ($182,000) into LLC and agreed to make a further additional investment into LLC of 210,000 Omani Rials ($546,000) after the execution of the DA (the “OMAG Final Equity Investment”). As of December 31, 2015, Omagine had invested 300,000 Omani Rials ($780,000) into LLC. Pursuant to the Shareholder Agreement, RCA invested the value of the Land Rights as a non-cash “payment-in-kind” capital contribution to LLC on July 2, 2015.

Further pursuant to the Shareholder Agreement, the New Investors invested an aggregate of 60,000 Omani Rials ($156,000) into LLC and agreed, subject to certain conditions precedent, to make further additional investments into LLC in the aggregate amount of 26,628,125 Omani Rials ($69,233,125).

The CCC Deferred Investment Obligation and the OMAG Option

The conditions precedent to CCC and RCA being required to make their agreed $69,233,125 aggregate additional investments (their “Deferred Equity Investments”) into LLC include (1) the execution of a construction contract on or before July 1, 2016 between LLC and CCC-Oman (the “CCC-Contract”) and (2) execution of a legally binding agreement between LLC and a lender pursuant to which such lender agrees to provide Debt Financing for the first phase or any or all phases of the Omagine Project in an amount sufficient to finance the first phase of the Omagine Project’s construction plus the installment payments due to Omagine for its Success Fee and Pre-Development Expense Amount.(the “First Financing Agreement Date”).

The First Financing Agreement Date occurred on November 29, 2015 but the CCC-Contract was not executed on or before July 1, 2016 nor has it been executed yet as of the date hereof and the LLC Shareholders are presently re-negotiating portions of the Shareholder Agreement (an “Amended and Restated Shareholder Agreement”).

The failure to execute the CCC-Contract by July 1, 2016 does not relieve RCA of its continuing obligation under the Shareholder Agreement (irrespective of such CCC-Contract failure) to make RCA’s approximately $20 million Deferred Investment into LLC; but it may (under certain conditions) relieve CCC of its obligation under the Shareholder Agreement to make its approximately $49 million Deferred Investment into LLC.

Additionally pursuant to the Shareholder Agreement, such failure of the CCC-Contract to occur on or before July 1, 2016 automatically and without any further action required by any party, triggered and activated on July 2, 2016 an option in favor of Omagine, Inc. (the “OMAG Option”) to purchase all LLC Shares presently owned by CCC at any time of OMAG’s choosing prior to July 1, 2017 at a price equal to CCC’s original purchase price of 22,500 Omani Rials ($58,500). Furthermore pursuant to the Shareholder Agreement, neither CCC-Oman nor CCC-Panama is permitted to sell any of such LLC Shares presently owned by them prior to July 2, 2017 to any Person other than Omagine, Inc., or to a purchaser designated by Omagine, Inc., in a sale made pursuant to the exercise of the OMAG Option.

Although the LLC Shareholders are presently negotiating an Amended and Restated Shareholder Agreement, there is no assurance that it will happen. If agreement is not reached by the LLC Shareholders on the matters presently under discussion, or if alternative financing is not obtained, or if alternative shareholder arrangements are not agreed, LLC may not be able to complete the Omagine Project and may not be able to recover the $718,614,000 value of the Land Rights included in the Company’s Consolidated Balance Sheet at September 30, 2016 (See Note 2).

F-18

Further pursuant to the Shareholder Agreement, LLC is required to pay Omagine a Success Fee of $10,000,000 in five equal annual installments beginning on or within 10 days after the Draw Date and a Pre-Development Expense Amount to be determined (presently estimated at $17,920,114) payable 50% on or within 10 days after the Draw Date and 50% in five equal annual installments beginning on the first anniversary of the Draw Date. The Draw Date is defined as “the date upon which LLC draws and receives the first amount of Debt Financing pursuant to a Financing Agreement”. It is possible that the payment terms for the Pre-Development Expense Amount and the Success Fee may be modified if and only if the LLC Shareholders agree to an Amended and Restated Shareholder Agreement. 

NOTE 10 – RELATED PARTY TRANSACTIONS 

At September 30, 2016 and December 31, 2015, respectively, Omagine’s accounts payable included $52,585 and $32,148 due to its officers and directors. 

For the nine months ended September 30, 2016 and 2015, the Company expensed a total of $68,000 and $47,000, respectively, for consulting fees paid to an entity controlled by the Deputy Managing Director of LLC. 

In April 2016, the Company paid a $300,000 sponsorship fee to the same such entity controlled by the Deputy Managing Director of Omagine LLC for the Company to serve as the Title Sponsor Partner of the 2016 World Summit on Innovation and Entrepreneurship hosted by the United Nations at UN headquarters in New York City from May 19 to May 23, 2016. 

NOTE 11 – SUBSEQUENT EVENTS

On October 14, 2016, the Company entered into a Convertible Promissory Note with an accredited investor for the principal amount of $50,000 with interest at 5% per annum, due on April 14, 2017 and convertible into the Company’s Common Stock at a conversion price of $0.65 per Common Share.

On October 17, 2016, the Company entered into an Interest Free Promissory Note with an accredited investor for the principal amount of $75,000, due on December 13, 2016, and in lieu of any interest due and payable on the principal amount of the Note, the Company issued to the Note Holder 150,000 Common Stock Purchase Warrants exercisable at the greater of (a) $0.50, or (b) 80% of the Market Price on the Trading Day immediately preceding the relevant Exercise Date.

On November 1, 2016, Omagine sold 20,000 restricted Common Shares to an accredited investor for proceeds of $10,000 and also sold 10,000 restricted Common Shares to an independent director who is also an accredited investor for proceeds of $5,000.

On November 4, 2016, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $5,000.

On November 8, 2016, Omagine sold an aggregate of 20,000 restricted Common Shares to two accredited investors for aggregate proceeds of 10,000.

On November 14, 2016, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $5,000.

On November 14, 2016, the Company entered into an interest free Convertible Promissory Note with an accredited investor for the principal amount of $185,000 due on May 15, 2017, six months from the funding date of November 16, 2016, convertible into the Company’s Common Stock only in the case of non-payment or in the Event of Default at a Conversion Price equal to 60% of the three lowest daily Volume Weighted Average Prices for the Company’s Common Stock during the twenty trading days immediately preceding the Conversion. The Company may prepay the Note in whole or in part at any time without penalty. After deduction of a $30,000 original issue discount (OID) and legal fees of $5,000, the Company received net proceeds of $150,000 on November 16, 2016. (See: Exhibits 10.42 and 10.43, the Note Purchase Agreement and the Securities Purchase Agreement).

On December 5, 2016, Omagine sold 300,000 restricted Common Shares to an accredited investor for proceeds of $150,000 which was paid to the Company by the cancellation and payment in full of the Company’s $75,000 Promissory Note dated October 17, 2016 and the remaining $75,000 of the purchase price was paid to the Company in cash.

On December 7, 2016, the Company entered into a new Note for a $750,000 loan to the Company and a new Note Purchase Agreement with YA II PN, Ltd. (together, the “December 2016 Loan Agreement”). Pursuant to the December 2016 Loan Agreement the Company agreed to pay off the aggregate of the $432,710 balance due under the March 2016 Loan Agreement and the June 2016 Loan Agreement and to pay a $75,000 commitment fee. The December 2016 Loan Agreement is for a term of one year at an annual interest rate of 10%. The $242,290 proceeds of the December 2016 Loan Agreement were received by the Company on December 7, 2016.

On December 9, 2016, the Board of Directors extended the expiration date of all 6,422,124 presently issued and outstanding Strategic Warrants (3,211,062 exercisable at $5 per Common Share and 3,211,062 exercisable at $10 per Common Share) from December 31, 2016 to December 31, 2017.

On December 9, 2016, the Board of Directors extended the expiration date of all 2,915,000 presently issued and outstanding Strategic Options from December 31, 2016 to December 31, 2017.

On January 4, 2017, Omagine contributed 123,782 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On January 4, 2017, Omagine issued 81,169 restricted Common Shares valued at $50,000 to each of the Corporation’s three independent directors based on the $0.616 closing price of the Corporation’s Common Stock on December 30, 2016.

On January 13, 2017, Omagine sold 18,051 restricted Common Shares to an accredited investor for proceeds of $10,000

On January 20, 2017, Omagine sold 25,000 restricted Common Shares to an accredited investor for proceeds of $12,500.

On January 25, 2017, Omagine sold 20,000 restricted Common Shares to an accredited investor for proceeds of $10,000.

On February 1, 2017, the president of the Company purchased 100,000 restricted Common Shares based on the $0.62 closing price of Omagine’s Common Stock on January 31, 2017 minus the Finnerty discount of 18% for proceeds of $51,000.

On February 2, 2017, three independent Company directors each purchased 94,340 restricted Common Shares and the Company’s vice president purchased 47,170 restricted Common Shares based on the $$0.6414 closing price of Omagine’s Common Shares on February 1, 2017 minus the Finnerty discount of 18% for aggregate proceeds of $175,000.

F-19

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Omagine, Inc.

I have audited the accompanying consolidated balance sheets of Omagine, Inc. and subsidiaries (the "Company") as of December 31, 2015 and 2014 and the related consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Omagine, Inc. and subsidiaries as of December 31, 2015 and 2014 and the results of their operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

/s/ Michael T. Studer CPA P.C.

April 14, 2016

Freeport, New York

F-20

OMAGINE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2015			2014
ASSETS
CURRENT ASSETS:
Cash	$	324,703		$	1,113,679
Inventory (Note 2)
Land under development		490,813,363			–
Total inventory held for sale		490,813,363			–
Prepaid expenses and other current assets		1,767			5,780
Total Current Assets		491,139,833			1,119,459
PROPERTY AND EQUIPMENT:
Real estate held for investment (Note 2)
Total investment in real estate		227,800,637			–
Office and computer equipment		160,002			153,604
Less accumulated depreciation and amortization		(148,894	)		(144,036	)
Total Property and Equipment		227,811,745			9,568
OTHER ASSETS		33,762			31,982
TOTAL ASSETS	$	718,985,340		$	1,161,009
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Convertible notes payable and accrued interest	$	397,929		$	370,429
Note payable and accrued interest - YA Global Master SPV, Ltd.
(less unamortized discount of $20,833 and $12,133, respectively)		204,167			214,778
Accounts payable		340,290			257,736
Accrued officers payroll		389,834			637,922
Accrued expenses and other current liabilities		155,330			159,332
Total Current Liabilities		1,487,550			1,640,197
Long Term Liabilities		–			–
TOTAL LIABILITIES		1,487,550			1,640,197
STOCKHOLDERS' EQUITY (DEFICIT)
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: 18,728,313 shares in 2015 and 16,878,119 in 2014		18,728			16,878
Capital in excess of par value		468,651,654			32,252,954
Deficit		(38,342,692	)		(32,669,399	)
Total Omagine, Inc. stockholders' equity (deficit)		430,327,690			(399,567	)
Noncontrolling interests in Omagine LLC		287,170,100			(79,621	)
Total Stockholders' Equity (Deficit)		717,497,790			(479,188	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	718,985,340		$	1,161,009

See accompanying notes to consolidated financial statements.

F-21

OMAGINE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS 

	Year Ended December 31,
	2015			2014
REVENUE:
Total revenue	$	–		$	–
OPERATING EXPENSES:
Officers and directors compensation (including stock-based compensation of $1,957,420 and $2,251,830, respectively)		2,336,670			2,559,580
Professional fees (including stock-based compensation of $0 and $10,436, respectively)		355,816			176,996
Consulting fees (including stock-based compensation of $1,415,971 and $1,388,699, respectively)		2,024,553			1,557,103
Commitment fees (all stock-based compensation)		–			150,000
Travel		526,080			239,134
Occupancy		167,113			159,382
Other selling general and administrative		357,969			271,046
Total Costs and Expenses		5,768,201			5,113,241
OPERATING LOSS		(5,768,201	)		(5,113,241	)
OTHER (EXPENSE) INCOME
Amortization of debt discounts		(41,300	)		(40,199	)
Interest expense		(59,671	)		(61,189	)
Other (Expense) - Net		(100,971	)		(101,388	)
NET LOSS		(5,869,172	)		(5,214,629	)
Add net loss attributable to noncontrolling interests in Omagine LLC		195,879			53,669
NET LOSS ATTRIBUTABLE TO OMAGINE, INC.	$	(5,673,293	)	$	(5,160,960	)
LOSS PER SHARE - BASIC AND DILUTED	$	(0.32	)	$	(0.32	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		17,485,927			16,273,965

See accompanying notes to consolidated financial statements.

F-22

OMAGINE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY  (DEFICIT)

	Common Stock
	Issued and Outstanding						Capital in						Noncontrolling
				$0.001 Par			Excess of						Interests in
	Shares			Value			Par Value			Deficit			Omagine LLC			Total
Balances at December 31, 2013		14,935,038		$	14,935		$	25,987,795		$	(27,508,439	)	$	(25,952	)	$	(1,531,661	)
Stock grant issued to law firm in satisfaction of $15,812 of accounts payable		34,374			34			26,214			–			–			26,248
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA)		218,941			219			309,781			–			–			310,000
Issuance of Common Stock for SEDA commitment fees		85,822			86			149,914			–			–			150,000
Issuance of Common Stock for 401(k) Plan contribution		73,315			73			76,177			–			–			76,250
Issuance of Common Stock for cash		1,004,629			1,004			1,486,096			–			–			1,487,100
Issuance of Common Stock for finders' fees on restricted Common Stock sales		46,000			47			76,121			–			–			76,168
Exercise of Tempest Warrants		490,000			490			663,010			–			–			663,500
Cancellation of shares issued to stockholder relations agent		(10,000	)		(10	)		(9,010	)		–			–			(9,020	)
Stock Option expense		–			–			3,486,856			–			–			3,486,856
Adjustments for noncontrolling interests in Omagine LLC		–			–			–			–			(53,669	)		(53,669	)
Net loss		–			–			–			(5,160,960	)		–			(5,160,960	)
Balances at December 31, 2014		16,878,119		$	16,878		$	32,252,954		$	(32,669,399	)	$	(79,621	)	$	(479,188	)
Issuance of Common Stock for 401(k) Plan contribution		36,483			37			76,213			–			–			76,250
Stock grant to consultant for services rendered		5,000			5			9,445			–			–			9,450
Issuance of Common Stock for cash		206,281			206			219,794			–			–			220,000
Issuance of Common Stock to an Executive Officer in  payment of salaries payable		100,000			100			119,900			–			–			120,000
Stock Options exercised by former Director		2,000			2			1,018			–			–			1,020
Exercise of Tempest Warrants		160,603			161			252,879			–			–			253,040
Issuance of Common Stock for finders' fees on restricted Common Stock sales		41,245			41			72,459			–			–			72,500
Issuance of Common Stock for Directors' Compensation for services September 1, 2015 to December 31, 2015		50,000			50			99,950			–			–			100,000
Issuance of Common Stock under New Standby Equity Distribution Agreement (New SEDA)		17,696			18			24,982			–			–			25,000
Issuance of Restricted Common Stock for cash		1,230,886			1,230			1,238,470			–			–			1,239,700
Stock Option expense		–			–			4,001			–			–			4,001
Stock Option expense - Extension of Strategic Options (1,965,000 to December 31, 2016)		–			–			915,493			–			–			915,493
Stock Option expense - Extension of Strategic Options (950,000 to December 31, 2016)		–			–			541,215			–			–			541,215
Stock Option expense - Stock Appreciation Rights (1,455,000 expiring December 31, 2017)		–			–			1,654,481			–			–			1,654,481
Payment-in-Kind capital contribution of land by noncontrolling interest in Omagine LLC		–			–			431,168,400			–			287,445,600			–718,614,000
Adjustments for noncontrolling interests in Omagine LLC		–			–			–			–			(195,879	)		(195,879	)
Net loss		–			–			–			(5,673,293	)		–			(5,673,293	)
Balances at December 31, 2015		18,728,313		$	18,728		$	468,651,654		$	(38,342,692	)	$	287,170,100		$	717,497,790

See accompanying notes to consolidated financial statements.

F-23

OMAGINE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to Omagine, Inc.	$	(5,673,293	)	$	(5,160,960	)
Adjustments to  reconcile net loss to net cash flows used by operating activities:
Net loss attributable to noncontrolling interests in Omagine LLC		(195,879	)		(53,669	)
Depreciation and amortization		46,158			45,327
Stock-based compensation related to stock options		3,115,190			3,486,856
Stock-based compensation related to issuance of Common Stock for stockholder investor relations, including amortization of $0 and $10,275 in 2015 and 2014 respectively, arising from grants to service providers		–			10,275
Issuance of Common Stock for finders' fees on restricted Common Stock sales		72,500			76,168
Issuance of Common Stock for consulting fees		9,450			–
Excess of fair value of Common Stock issued to law firm in excess of liability satisfied - charged to legal fees		–			10,436
Issuance of Common Stock for 401(k) Plan contributions		76,250			76,250
Issuance  of Common Stock in satisfaction of SEDA commitment fees		–			150,000
Issuance of restricted Common stock to two new Directors as compensation for services September 1, 2015 to December 31, 2015		100,000			–
Cancellation of restricted Common Stock to stockholder relations agent		–			(9,020	)
Changes in operating assets and liabilities:
Prepaid expenses, other current assets and other assets		2,233			(7,780	)
Accrued interest on notes payable		25,589			22,947
Accounts payable		82,554			26,691
Accrued officers' payroll		(128,088	)		(89,690	)
Accrued expenses and other current liabilities		(4,002	)		41,959
Net cash flows used by operating activities		(2,471,338	)		(1,374,210	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(6,398	)		(3,434	)
Net cash flows used by investing activities		(6,398	)		(3,434	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of issuance of 2014 note payable to YA Global
Master SPV, Ltd. net of $39,000 commitment fee		–			461,000
Principal payments on 2013 note payable to YA Global Master SPV, Ltd.		–			(175,000	)
Principal payments on 2014 note payable to YA Global Master SPV, Ltd.		(225,000	)		(275,000	)
Proceeds of issuance of 2015 note payable to YA Global
Master SPV, Ltd. net of $50,000 commitment fee		450,000			–
Principal payments on 2015 note payable to YA Global Master SPV, Ltd.		(275,000	)		–
Proceeds from sale of Common Stock		1,484,700			1,797,100
Proceeds from the exercise of Common Stock Warrants		253,040			663,500
Proceeds from the exercise of stock options		1,020			–
Net cash flows provided by financing activities		1,688,760			2,471,600
NET (DECREASE) INCREASE  IN CASH		(788,976	)		1,093,956
CASH BEGINNING OF PERIOD		1,113,679			19,723
CASH END OF PERIOD	$	324,703		$	1,113,679
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid	$	2,197		$	1,078
Interest paid	$	29,565		$	33,791
NON - CASH FINANCING ACTIVITIES:
Excess of fair value of Common Stock issued to law firm in excess of liability satisfied - charged to legal fees	$	–		$	10,436
Issuance of Common stock to an Executive Officer in payment of salaries payable	$	120,000		$	–
Payment-in-Kind capital contribution of land by noncontrolling interest in Omagine LLC pursuant to Omagine LLC Stockholder Agreement	$	718,614,000		$	–

See accompanying notes to consolidated financial statements.

F-24

OMAGINE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Nature of the Business

Omagine, Inc. (“Omagine”) is a holding company incorporated in Delaware in October 2004 which operates through its wholly owned subsidiary, Journey of Light, Inc., a New York corporation (“JOL”) and its 60% owned subsidiary Omagine LLC, a limited liability company incorporated under the laws of the Sultanate of Oman (“LLC”). Omagine, JOL and LLC are collectively referred to herein as the “Company”. JOL was acquired by Omagine in October 2005. LLC is the Omani real estate development company organized by Omagine to do business in Oman.

The Company is focused on entertainment, hospitality and real-estate development opportunities in the Middle East and North Africa (the “MENA Region”). On October 2, 2014, LLC signed a Development Agreement with the Government of Oman (the “Government”) for the development of the Omagine Project. On July 2, 2015, a usufruct over one million square meters of beachfront land (the “Land Rights”) was registered in LLCs name with the Government. The Company is in receipt of a loan offer from a bank for a $25 million loan to finance the first phase of the Omagine Project consisting of design, development and initial construction activities. Contingent upon the closing of such loan, commencement of these first phase activities is expected to begin promptly thereafter. (See Note 9 – “Omagine Project”).

Summary of Significant Accounting Policies

Principles of Consolidation - The consolidated financial statements include the accounts of Omagine, JOL and LLC. LLC is an Omani limited liability company organized under the laws of the Sultanate of Oman. All inter-company transactions have been eliminated in consolidation.

Financial Instruments - Financial instruments include cash, convertible notes payable and accrued interest, note payable and accrued interest, accounts payable, accrued officers’ payroll and accrued expenses and other current liabilities. The amounts reported for financial instruments are considered to be reasonable approximations of their fair values, based on market information available to management.

Cash and Cash Equivalents - The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At December 31, 2015 and 2014, cash included approximately $36,000 and $11,200 respectively in an Oman bank account not covered by FDIC insurance.

Inventory - Inventory is stated at cost. At December 31, 2015, inventory consists only of the land under development acquired on July 2, 2015 (which was costed at the fair value of the property at the date of acquisition). The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $490,813,363 in inventory resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Property, Plant and Equipment - Property, plant and equipment (“PP&E”) are stated at cost. PP&E consists of land under development which is held for investment; furniture and fixtures; and office machinery and equipment. PP&E (including buildings and structures after they are completed and put into service) are depreciated on a straight-line basis over their respective useful service lives. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $227,800,637 in PP&E resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Stockholders’ Equity - Stockholders’ equity consists of common stock, capital in excess of par value, retained earnings, and non-controlling interests in LLC. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $718,614,000 in stockholders’ equity resulting from LLC’s July 2, 2015 acquisition of the Land Rights (a $431,168,400 increase in Omagine stockholders’ equity and a $287,445,600 increase in non-controlling interests in LLC). (See: Note 2 – “Inventory and Property”).

Estimates and Uncertainties - The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results as determined at a later date could differ from those estimates. In recording $718,614,000 in the accompanying consolidated financial statements for the year ended December 31, 2015 as the value of the non-cash consideration received by LLC as Land Rights, management relied to a great extent upon the written opinions of three expert valuation firms engaged by LLC to value such Land Rights. Furthermore, in allocating such Land Value to inventory and land under development, management relied to a great extent upon the written opinion of an expert independent accounting firm engaged by LLC to advise it on the proper accounting to record the Land Value in LLC’s financial statements. Both LLC’s independent auditor and the Company’s independent auditor are in agreement with and have consented to the accounting indicated in the accompanying consolidated financial statements for the year ended December 31, 2015. (See: Note 2 – “Inventory and Property”).

F-25

Revenue Recognition - The Company follows the guidelines of SEC Staff Accounting Bulletin No. 101, ”Revenue Recognition in Financial Statements” (SAB101). LLC signed a development agreement for the Omagine Project with the Government of Oman in October 2014, and will recognize revenue ratably over the development period of the Omagine Project measured by methods appropriate to the services or products provided.

Income Taxes - Omagine and JOL are subject to United States (“U.S.”) income taxes at both the federal and state level and LLC is subject to income taxes in Oman. Separate state income tax returns are filed with each state in the U.S. in which Omagine or any subsidiary of Omagine is incorporated or qualified as a foreign corporation. LLC files an income tax return in Oman. Other than with respect to LLC, the Company is not presently subject to income taxes in any foreign country. The Company reports interest and penalties as income tax expense. Deferred tax assets and liabilities are recognized based on differences between the book and tax bases of assets and liabilities using presently enacted income tax rates. The Company establishes a provision for U.S. income taxes by applying the provisions of the applicable enacted tax laws to taxable income, if any, for the relevant period. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Stock-based Compensation - Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification 718, “Compensation – Stock Compensation” (“ASC 718”). For stock options granted, Omagine has recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For such stock option awards, Omagine has recognized compensation expense using a straight-line amortization method over the requisite service period. ASC 718 requires that stock-based compensation expense be based on awards that are ultimately expected to vest. Stock option expense for the years ended December 31, 2015 and 2014 were $3,115,190 and $3,486,856, respectively. (See Note 7).

Earnings (Loss) Per Share - Basic earnings (loss) per share of Omagine’s $0.001 par value common stock (“Common Stock”) is based upon the weighted-average number of shares of Common Stock (“Common Shares”) outstanding during the relevant period. Diluted earnings (loss) per share is based upon the weighted-average number of Common Shares and dilutive securities (stock options, warrants, stock appreciation rights and convertible notes) outstanding during the relevant period. Dilutive securities having an anti-dilutive effect on diluted earnings (loss) per share are excluded from the calculation.

For the years ended December 31, 2015 and 2014, the Common Shares underlying the following dilutive securities were excluded from the calculation of diluted shares outstanding as the effect of their inclusion would be anti-dilutive:

	2015		2014
Convertible Notes		159,171		148,173
Stock Options		3,273,000		3,265,000
Stock Appreciation Rights		1,455,000		–
Warrants		6,771,521		6,932,124
Total Common Shares Issuable		11,658,692		10,345,297

Non-controlling Interests in Omagine LLC - As of the date of this report LLC is owned 60% by Omagine. In May 2011, Omagine, JOL and three new investors (the “New Investors”) entered into a shareholders’ agreement (the “Shareholder Agreement”) pursuant to which Omagine’s 100% ownership of LLC was reduced to 60%.

The New Investors are:

i.

The Office of Royal Court Affairs (“RCA”), an Omani organization, and

ii.

Two subsidiaries of Consolidated Contractors International Company, SAL (“CCIC”). CCIC is a 60 year old Lebanese multi-national company headquartered in Athens, Greece having approximately five and one-half (5.5) billion dollars in annual revenue, one hundred thirty thousand (130,000) employees worldwide, and operating subsidiaries in among other places, every country in the Middle East. The two CCIC subsidiaries which are LLC shareholders are: 1.      Consolidated Contracting Company S.A. (“CCC-Panama”), a wholly owned subsidiary of CCIC and is its investment arm, and 2.      Consolidated Contractors (Oman) Company LLC, CCIC’s operating subsidiary in Oman which is a construction company with approximately 13,000 employees.

F-26

As of the date hereof, the shareholders of LLC and their associated ownership percentages as registered with the Government of Oman are as follows:

LLC Shareholder	Percent Ownership
Omagine		60	%
RCA		25	%
CCC-Panama		10	%
CCC-Oman		5	%
Total:		100	%

Recent Accounting Pronouncements

On August 27, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity's ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity and consistency of related disclosures and improve convergence with IFRSs (which emphasize management's responsibility for performing the going concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRSs will continue to differ. This ASU 2014-15 is effective for annual periods ending after December 16, 2016, and interim periods thereafter; early adoption is permitted. The Company does not believe that this pronouncement will have a material impact on our financial statement disclosures.

In June 2014, the FASB issued ASU 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities and eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company is required to adopt this new standard on a retrospective basis for the year ending December 31, 2015, and interim periods therein; however, early application is permitted. The Company has elected to adopt the new reporting standard for financial statements filed commencing with the 10-Q for the period ended September 30, 2014. Other than simplifying the presentation of the Company’s financial statements and needed disclosures, the adoption of ASU 2014-10 has not affected the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, ”Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists” (”ASU 2013-11”), which states that entities should present the unrecognized tax benefit as a reduction of the deferred tax asset for a net operating loss (”NOL”) or similar tax loss or tax credit carry forward rather than as a liability when the uncertain tax position would reduce the NOL or other carry forward under the tax law. The Company adopted this new standard on a prospective basis in the first interim reporting period of fiscal 2015. The adoption of ASU 2013-11 has not materially affected its consolidated financial statements.

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

NOTE 2 – INVENTORY AND PROPERTY

The Company’s consolidated financial statements for the year ended December 31, 2015 reflect $718,614,000 of land under development which the Company has allocated to inventory ($490,813,363) and property ($227,800,637). This $718,614,000 of land under development was purchased by LLC on July 2, 2015 pursuant to the terms of the Shareholder Agreement whereby an LLC shareholder agreed to transfer the Land Rights over one million square meters of beachfront land to LLC in exchange for the issuance to such shareholder of 663,750 Omagine LLC shares (the “LLC Shares”). Since the Land Rights represented a non-cash payment for the LLC Shares, it was necessary to value the Land Rights.

Three expert real estate valuation companies were engaged by LLC to independently value the Land Rights in accordance with the professional standards specified by the Royal Institution of Chartered Surveyors (“RICS”) and International Financial Reporting Standards (“IFRS”). The average of the three Land Rights valuations was 276,666,667 Omani Rials ($718,614,000).

F-27

LLC engaged the services of PricewaterhouseCoopers LLP (“PwC”) as its IFRS accounting consultant to definitively determine the correct method of recording the $718,614,000 average value of its Land Rights in its IFRS compliant financial statements. After receiving PwC’s written opinion, LLC then consulted with its independent auditor, Deloitte & Touche (M.E.) & Co. LLC (“Deloitte”) with respect to the matter and received Deloitte’s written opinion agreeing with the PwC opinion. Both PwC and Deloitte independently concluded that the Land Rights should be recorded as capital, work-in-process (inventory) and land on LLC’s financial statements. With respect to the Company’s consolidated financial statements, the Company’s independent auditor in the U.S. has likewise concurred that, pursuant to US GAAP, the Land Rights should also be recorded as capital, inventory and land.

In determining the allocations to inventory and to land, LLC followed the advice of Deloitte by computing the percentage (x) calculated by dividing (y) the area of the land LLC definitively knew it intended to sell, by (z) the total area of land constituting the Omagine Site, and then multiplying that percentage (x) by $718,614,000 to get the correct number (N) for inventory. The correct number for land was then calculated by subtracting N from $718,614,000. Using its detailed internal financial model, management calculated (x) to be equal to 68.3%, thereby making the inventory number $490,813,363 and the land number $227,800,637. In its consolidated financial statements therefore, the Company has divided the Land Rights between land under development which is held for sale (inventory) and land under development which is held for investment (PP&E). These percentage allocations may be modified over time as the more precise land uses become apparent during and after the master planning and construction processes.

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of:

	December 31,		December 31,
	2015		2014
Travel Advances	$	–	$	5,000
Prepaid office salaries (Muscat, Oman office)		–		780
Prepaid rent (New York office)		1,767		–
Total	$	1,767	$	5,780

NOTE 4 – CONVERTIBLE NOTES PAYABLE AND ACCRUED INTEREST

Convertible notes payable and accrued interest thereon consist of:

	December 31,		December 31,
	2015		2014
Due to a director of Omagine, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal	$	150,000	$	150,000
Accrued Interest		78,727		63,726
Due to investors, interest at 15% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		51,195		43,696
Due to investors, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		18,007		13,007
Total	$	397,929	$	370,429

F-28

NOTE 5 – NOTES PAYABLE AND ACCRUED INTEREST – YA GLOBAL MASTER SPV, LTD.

In July 2013, Omagine borrowed $200,000 from YA Global Master SPV, Ltd. (“YA”) via an unsecured loan (the “2013 YA Loan”) and on April 23, 2014 Omagine paid the 2013 YA Loan balance and accrued interest thereon due at April 23, 2014 in full and borrowed an additional $500,000 from YA via a second unsecured loan (the “2014 YA Loan”) and on April 22, 2015 Omagine paid the 2014 YA Loan balance and the accrued interest thereon in full. On May 20, 2015, Omagine borrowed an additional $500,000 from YA via a third unsecured loan (the “2015 YA Loan”).

Notes payable and accrued interest thereon due to YA consist of:

	December 31,			December 31,
	2015			2014
2015 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($50,000 in July 2015, $40,000 monthly August 2015 to October 2015, $35,000 monthly November 2015 to February 2016, $40,000 monthly March 2016 to May 2016 and $70,000 on June 1, 2016)	$	225,000		$	–
2014 YA Loan - interest at 10% per annum, due and repaid in monthly installments of principal and interest through April 2015		–			225,000
Less:  Unamortized debt discount at December 31, 2015 and  2014		(20,833	)		(12,133	)
Principal, net		204,167			212,867
Accrued interest		–			1,911
Total	$	204,167		$	214,778

NOTE 6 – COMMON STOCK

With respect to the issuances of the Common Shares listed below:

1.	see Note 9 under ”Equity Finance Agreements” with respect to sales of Common Shares made to YA Global Master SPV, Ltd. (”YA”) pursuant to the Standby Equity Distribution Agreement (“2014 SEDA”).
2.	where issuances of restricted Common Shares occurred at non-discounted valuations, it is so noted and all such non-discounted valuations were based on the closing price of a Common Share on the relevant date.
3.	where issuances of restricted Common Shares occurred at discounted valuations, it is so noted and all such discounted valuations were calculated using the Finnerty Method based on the closing price of a Common Share on the relevant date less a 17% restricted stock discount for 2014 issuances and an 18% restricted stock discount for 2015 issuances.
4.	where issuances of restricted Common Shares occurred at agreed upon negotiated prices, the sale proceeds or value of services rendered are so noted.

F-29

On January 5, 2015, Omagine contributed an aggregate of 36,483 restricted Common Shares at the discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On February 23, 2015, Omagine paid a consultant 5,000 restricted Common Shares at the discounted valuation of $9,450.

On March 26, 2015, Omagine sold 6,281 restricted Common Shares to an accredited investor for proceeds of $10,000.

On March 26, 2015, Omagine sold 200,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $210,000.

On May 16, 2015, Omagine sold 100,000 restricted Common Shares to an officer and director for proceeds of $120,000.

On June 29, 2015, the Non-US investor (described below in connection with a June 24, 2014 transaction) exercised 158,228 Tempest Warrants at an exercise price of $1.58 for proceeds of $250,000.

On June 29, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 158,228 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,911 restricted Common Shares valued at $12,500.

On June 30, 2015, a former director exercised 2,000 stock options for proceeds of $1,020.

On September 1, 2015, two new Directors were each issued 25,000 restricted Common Shares at a value of $50,000 each for services to be rendered from September 1 to December 31, 2015.

On September 3, 2015, pursuant to the SEDA, Omagine sold 17,696 Common Shares to YA for proceeds of $25,000.

On September 14, 2015, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $14,700.

On October 8, 2015, 2,375 Tempest Warrants were transferred to an affiliate of the Non-U.S. Investor, a “Non-U.S. Affiliate”. On October 8, 2015, such Non-U.S. Affiliate exercised such 2,375 Tempest Warrants at an exercise price of $1.28 per Common Share for proceeds to Omagine of $3,040.

On October 26, 2105, Omagine sold an aggregate of 1,200,000 restricted Common Shares to three non-U.S. persons who are accredited investors (500,000 restricted Common Shares each to two investors and 200,000 restricted Common Shares to one investor) for aggregate proceeds to Omagine of $1,200,000.

On November 16, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the October 26, 2015 aforementioned sale of 1,200,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 33,334 restricted Common Shares valued at the discounted valuation of $60,000.

On November 16, 2015, Omagine sold 20,886 restricted Common Shares to an accredited investor for proceeds to Omagine of $25,000.

On January 10, 2014, Omagine paid a law firm for legal services rendered by issuing such law firm 34,374 restricted Common Shares at the discounted valuation of $26,248, which value was $10,436 in excess of the $15,812 owed by Omagine to such law firm at that date.

On January 8, 2014 pursuant to the SEDA, Omagine sold 29,687 Common Shares to YA for proceeds of $25,000.

On January 17, 2014 pursuant to the SEDA, Omagine sold 24,912 Common Shares to YA for proceeds of $20,000.

On January 24, 2014 pursuant to the SEDA, Omagine sold 31,705 Common Shares to YA for proceeds of $25,000.

On February 13, 2014, Omagine contributed an aggregate of 73,315 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine Inc. 401(k) Plan.

On February 14, 2014 pursuant to the SEDA, Omagine sold 68,493 Common Shares to YA for proceeds of $150,000.

On March 14, 2014, Omagine sold 70,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $70,000.

On March 14, 2014, Omagine paid a finder’s fee to a non-U.S. person (a “non-U.S. Finder”) in connection with the aforementioned sale of 70,000 restricted Common Shares to a non-U.S. person. Such finder’s fee was satisfied by issuing such non-U.S. Finder 3,500 restricted Common Shares at the discounted valuation of $6,101.

On March 21, 2014 pursuant to the SEDA, Omagine sold 13,597 Common Shares to YA for proceeds of $25,000.

F-30

On April 11, 2014, Omagine sold 150,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $150,000. At September 30, 2014, such non-U.S. person owned 1,195,300 Common Shares, or approximately 7.4% of the Common Shares then outstanding, and 441,120 Strategic Warrants (See Note 7).

On April 11, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 150,000 restricted Common Shares to a non-U.S. person. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,500 restricted Common Shares at the discounted valuation of $10,147.

On April 22, 2014, Omagine issued 85,822 restricted Common Shares to an affiliate of YA in satisfaction of a $150,000 commitment fee due in connection with the 2014 SEDA.

On May 6, 2014 pursuant to the SEDA, Omagine sold 32,270 Common Shares to YA for proceeds of $50,000.

On June 24, 2014, Omagine sold 362,308 restricted Common Shares and issued 1,000,000 Tempest Warrants (See Note 7) to a non-U.S. person who is an accredited investor (the “Non-U.S. Investor”) for proceeds of $422,100.

On June 24, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale to the non-U.S. Investor (See Note 7). Such finder’s fee was satisfied by paying such non-U.S. Finder $20,000 in cash and issuing such non-U.S. Finder 15,000 restricted Common Shares at the discounted valuation of $19,920.

On August 15, 2014, the Non-U.S. Investor transferred 240,000 Tempest Warrants to an affiliate of his which is also a non-U.S. person (the “Non-U.S. Affiliate”) and such Non-U.S. Affiliate exercised such 240,000 Tempest Warrants at an exercise price of $1.40 per Common Share for proceeds to Omagine of $336,000. On August 25, 2014, Omagine paid a finder’s fee of $16,800 to a non-U.S. Finder in connection with such Tempest Warrant exercise.

On September 3, 2014, in exchange for a $3,000 cash settlement payment, the Company cancelled 10,000 restricted Common Shares valued at the non-discounted valuation of $9,020 issued to a consultant for services rendered.

On October 2, 2014, the Non-U.S. Investor transferred 250,000 Tempest Warrants to the Non-U.S. Affiliate and the Non-U.S. Affiliate exercised such 250,000 Tempest Warrants at an exercise price of $1.31 per Common Share for proceeds to Omagine of $327,500. On October 6, 2014, Omagine paid a finder’s fee of $16,375 to a Non-U.S. Finder in connection with such Tempest Warrant exercise by the Non-U.S. Affiliate.

On November 7, 2014, Omagine sold 14,881 restricted Common Shares to a non-U.S. person who is a civil engineer of CCC-Oman and an accredited investor for proceeds of $30,000.

On November 10, 2014, Omagine sold 7,440 restricted Common shares to a non-U.S. person who is a civil engineer of CCC-Oman and an accredited investor for proceeds of $15,000.

On November 20, 2014, Omagine sold an aggregate of 400,000 restricted Common Shares at $2.00 per share to two non-U.S. persons who are accredited investors (150,000 shares to one investor and 250,000 shares to the other investor) for aggregate proceeds of $800,000. The two non-U.S. persons are family members of an Omagine stockholder who owned approximately 7.1% of the Common Shares outstanding at December 31, 2014.

On November 21, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 400,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 20,000 restricted Common Shares valued at $40,000.

NOTE 7 – STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND WARRANTS

Stock Options/Stock Appreciation Rights

Omagine’s shareholders approved the reservation by Omagine of 2,500,000 Common Shares for issuance under the 2003 Omagine, Inc. Stock Option Plan (the “2003 Plan”). The 2003 Plan expired on August 31, 2013. On March 6, 2014, the Board of Directors approved the adoption of the 2014 Omagine, Inc. Stock Option Plan (the “2014 Plan”).

Both the 2003 Plan and the 2014 Plan are designed to attract, retain and motivate employees, directors, consultants and other professional advisors of Omagine and its subsidiaries (collectively, the “Recipients”) by giving such Recipients the opportunity to acquire stock ownership in Omagine through the issuance of stock options (“Stock Options”) to purchase Common Shares.

Omagine has registered for resale the 2.5 million Common Shares reserved for issuance under the 2003 Plan by filing a registration statement with the SEC on Form S-8. At December 31, 2015, there were 2,283,000 unexpired Stock Options issued but unexercised under the 2003 Plan and all such Stock Options remain valid until the earlier of their exercise date or expiration date.

Pursuant to the 2014 Plan, 3,000,000 Common Shares were reserved for issuance. The 2014 Plan was amended to increase the reservation of 3,000,000 Common Shares for issuance to 5,000,000 Common Shares and to permit issuance of stock appreciation rights (“The Amended 2014 Plan”). Omagine intends to seek its shareholders’ ratification of the adoption by Omagine of the Amended 2014 Plan. At December 31, 2015, there were 990,000 unexpired Stock Options and 1,455,000 Stock Appreciation Rights (“SARs”) issued but unexercised under the Amended 2014 Plan.

F-31

A summary of Stock Option and SARs activity for the years ended December 31, 2015 and 2014 pursuant to both the 2003 Plan and the 2014 Plan is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2014		2,285,000		$	1.72		1.43	$	1,100
Granted in Q1 2014		40,000		$	1.80		5.06		–
Granted in Q4 2014		950,000		$	2.55		1.01		–
Outstanding December  31, 2014		3,275,000		$	1.97		1.24	$	1,923,170
Exercisable at December 31, 2014		3,265,000		$	1.97		1.24	$	1,915,670
Outstanding at January 1, 2015		3,275,000		$	1.97		1.24	$	1,923,170
Exercised in Q2 2015		(2,000	)	$	0.51		–		–
Granted in Q3 2015		1,455,000		$	2.00		2.03		–
Outstanding December 31, 2015		4,728,000		$	1.98		1.41	$	26,240
Exercisable at December 31, 2015		4,728,000		$	1.98		1.41	$	26,240

Of the 3,273,000 Stock Options outstanding at December 31, 2015, 2,915,000 of such Stock Options were issued by Omagine in January 2012 and December 2014 as “Strategic Options” to officers, directors and consultants of Omagine whose continued service was deemed by the Board of Directors to be particularly crucial to attaining LLC’s then strategic goal of signing the Development Agreement (“DA”) with the Government of Oman and in recognition of those efforts during 2014 and beyond. The Strategic Options are fully vested, provide for a cashless exercise feature and currently expire on December 31, 2016; 1,965,000 of the Strategic Options are exercisable at $1.70 and 950,000 are exercisable at $2.55. To continue to incentivize the retention and sustained service to the Company of its mission-critical employees and consultants, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended by Omagine in December 2012 to December 31, 2013 (the “First Extension“) and in December 2013 to December 31, 2014 (the “Second Extension”) and in December 2014 to December 31, 2015 (the “Third Extension”) and on August 12, 2015 to December 31, 2016 (the “ Fourth Extension”).

Of the 2,915,000 Strategic Options, an aggregate of 1,685,000 were granted to Omagine’s three officers, an aggregate of 125,000 were granted to Omagine’s independent directors and 1,000,000 were granted to the Deputy Managing Director of LLC who, pursuant to a March 2007 consulting agreement expiring on December 31, 2016, is also a consultant to the Company. The Deputy Managing Director of LLC also holds 160,000 Stock Options granted pursuant to his consulting agreement which are not Strategic Options, exercisable at $1.25 per share and expiring on March 31, 2017. 

Of the 1,455,000 Stock Appreciation Rights, an aggregate of 750,000 were granted to three officers of Omagine, 15,000 were granted to one independent director and 675,000 were granted to the Deputy Managing Director of LLC.

The $1,373,326 estimated fair value of the First Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.77 share price, (ii) 370 day term of the First Extension, (iii) 125% expected volatility, (iv) 0.16% (370 day term) risk free interest rate and such $1,373,326 was expensed evenly by Omagine over the 370 day requisite service period of the First Extension (December 27, 2012 through December 31, 2013). The estimated fair value of the issuance in 2012 of the Strategic Options was $1,685,629.

The $671,440 estimated fair value of the Second Extension was calculated using the Black Scholes option pricing model and the following assumptions (i) $0.89 share price, (ii) 378 day term of the Second Extension, (iii) 144% expected volatility, (iv) 0.13% (378 day term) risk free interest rate, and such $671,440 was expensed evenly over the 378 day requisite service period of the Second Extension (December 19, 2013 through December 31, 2014).

F-32

On December 13, 2014, Omagine granted to six persons an aggregate of 950,000 fully vested Strategic Options with a cashless exercise feature (625,000 to three officers, 25,000 to one director and 300,000 to two consultants) exercisable at $2.55 per share and expiring on December 31, 2015. The $1,277,370 estimated fair value of the 950,000 Strategic Options was calculated using the Black Scholes option pricing model and the following assumptions: (i) $2.52 share price, (ii) 368 day term, (iii) 147% expected volatility, (iv) 0.25% (368 day term) risk free interest rate and was expensed in full in the quarterly period ended December 31, 2014.

On December 29, 2014, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended from December 31, 2014 to December 31, 2015 (the “Third Extension”). The $1,504,404 estimated fair value of the Third Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $2.52 share price, (ii) 368 day term, (iii) 147% expected volatility, (iv) 0.25% (368 day term) risk free interest rate and was expensed in full in the quarterly period ended December 31, 2014.

On August 12, 2015, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended from December 31, 2015 to December 31, 2016 (the “Fourth Extension”). The $915,493 estimated fair value of the Fourth Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.91 share price, (ii) 507 day term, (iii) 147% expected volatility, (iv) 0.32% (507 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

On August 12, 2015, the expiration date of the 950,000 Strategic Options issued in December of 2014 was extended from December 31, 2015 to December 31, 2016 (the “First Extension”). The $541,215 estimated fair value of the First Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.91 share price, (ii) 507 day term, (iii) 147% expected volatility, (iv) 0.32% (507 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

On January 15, 2013 an Omagine independent director was granted 2,000 Stock Options exercisable at $1.38 per share and expiring on January 14, 2018.

 On March 28, 2014, Omagine granted to four persons an aggregate of 40,000 Stock Options exercisable at $1.80 per share and expiring on March 27, 2019. One such person is an Omagine independent director, one is an Omagine officer and two are consultants. The $55,376 estimated fair value of the 40,000 Stock Options was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.80 share price, (ii) a 5 year term, (iii) 106% expected volatility and (iv) 1.75% (5 year term) risk free interest rate. $51,914 of such estimated fair value was expensed in the year ended December 31, 2014, and $3,462 was expensed in the year ended December 31, 2015.

On June 30, 2015, a former Omagine director exercised 2,000 stock options at $0.51 per share.

On August 31, 2015, Omagine granted an aggregate of 1,455,000 Stock Appreciation Rights (“SARs”) to six persons exercisable at $2.00 per share and expiring on December 31, 2017. Of the 1,455,000 SARs, an aggregate of 750,000 were granted to three officers of Omagine, 15,000 were granted to one independent director and 675,000 were granted to the Deputy Managing Director of LLC. The $1,654,481 estimated fair value of the SARs was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.60 share price, (ii) 854 day term, (iii) 147% expected volatility, (iv) 0.28% (854 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

A summary of non-vested Stock Options and the Common Shares underlying such Stock Options for the years ended December 31, 2015 and 2014 is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Non-vested shares at January 1, 2014		–			–		–
Granted in Q1 2014		40,000		$	1.80		5.00
Vested in Q1 2014		(30,000	)	$	1.80		4.81
Non-vested shares at December 31, 2014		10,000		$	1.80		4.30
Non-vested shares at January 1, 2015		10,000		$	1.80		4.30
Vested in Q1 2015		(10,000	)	$	1.80		4.30
Non-vested shares at December 31, 2015		–			–		–

F-33

Issued and outstanding Stock Options and SARs (all non-qualified) as of December 31, 2015 are as follows:

Year Granted		Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
	2007		160,000		160,000	$	1.25	March 31, 2017
	2008		150,000		150,000	$	2.60	September 23, 2018
	2011		4,000		4,000	$	0.85	May 16, 2016
	2012		1,965,000		1,965,000	$	1.70	December 31, 2016
	2012		2,000		2,000	$	1.70	April 12, 2017
	2013		2,000		2,000	$	1.38	January 14, 2018
	2014		40,000		40,000	$	1.80	March  27, 2019
			950,000		950,000	$	2.55	December 31, 2016
	2015		1,455,000		1,455,000	$	2.00	December 31, 2017
	Totals		4,728,000		4,728,000

A summary of information about Stock Options and SARs outstanding at December 31, 2015 is as follows:

		Stock Options Outstanding						Exercisable
Range of Exercise Prices		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Number of Shares		Weighted Average Exercise Price
$	0.50 - $1.00		4,000	$	0.85		0.38		4,000	$	0.85
$	1.01 - $2.00		3,624,000		1.80		1.46		3,624,000		1.80
$	2.01 - $3.00		1,100,000		2.56		1.26		1,100,000		2.56
	Totals		4,728,000	$	1.98		1.41		4,728,000	$	1.98

As of December 31, 2015, there was $1,080 of unrecognized compensation costs relating to unexpired Stock Options. That cost is expected to be recognized $540 in 2016 and $540 in 2017.

F-34

Warrants

As of December 31, 2015, Omagine had 6,771,521 Common Stock purchase warrants (“Warrants”) issued and outstanding. The Warrants do not contain any price protection provisions that would require them to be classified as liabilities (subject to re-measurement at fair value each time a balance sheet is presented) rather than presented as a component of stockholders’ equity.

The Tempest Warrants

On June 24, 2014, in connection with the sale of 362,308 restricted Common Shares to an investor (See Note 6), Omagine issued 1,000,000 Warrants to such investor, each of which are exercisable for the purchase of one restricted Common Share at a per Common Share exercise price equal to the greater of: (a) $1.00 per Common Share, or (b) 80% of the closing sale price for a Common Share on the trading day immediately preceding the relevant exercise date (the “Tempest Warrants”). Both the exercise price of the Tempest Warrants and the number of Common Shares issuable upon exercise of the Tempest Warrants are subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock, or a dividend, reclassification, reorganization, or spin off.

The Tempest Warrants and the Common Shares issuable upon exercise of the Tempest Warrants are “restricted securities” as that term is defined in the Securities Law. The Tempest Warrants expire on June 23, 2016 and are not redeemable by Omagine.

On August 15, 2014, 240,000 Tempest Warrants were transferred to an affiliate of the investor. The affiliate exercised the 240,000 Tempest Warrants at an exercise price of $1.40 per Common Share for proceeds of $336,000. On October 2, 2014, a further 250,000 Tempest Warrants were exercised by such affiliate at an exercise price of $1.31 per Common Share for proceeds of $327,500. On June 29, 2015, the investor exercised 158,228 of the Tempest Warrants at an exercise price of $1.58 per Common Share for proceeds of $250,000. In conjunction with this June 29, 2015 exercise, Omagine agreed with the investor to file a registration statement with the SEC to register all the aforementioned Common Shares presently owned by the investor and his affiliate as well as the remaining 351,772 Common Shares underlying the remaining 351,772 Tempest Warrants outstanding at that time. On October 8, 2015, 2,375 Tempest Warrants were transferred to an affiliate, a “Non-U.S. Affiliate”. On October 8, 2015, such Non-U.S. Affiliate exercised such 2,375 Tempest Warrants at an exercise price of $1.28 per Common Share for proceeds to Omagine of $3,040. As of the date of this report there are 349,397 Tempest Warrants outstanding. (See Note 11).

The Strategic Warrants

Omagine has 6,422,124 Warrants outstanding, 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $5.00 and 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $10.00 (collectively, the “Strategic Warrants”).

Omagine filed a post-effective amendment to its registration statement on Form S-1 (Commission File No. 333-183852) whereby the Strategic Warrants and the 6,422,124 Common Shares underlying the Strategic Warrants were registered by Omagine (the “Warrant Registration”). The Warrant Registration was declared effective by the SEC and its effective status expired. Omagine filed another post-effective amendment to the Warrant Registration on February 11, 2015 which was declared effective by the SEC on February 13, 2015 and its effective status expired. Omagine filed another post-effective amendment to the Warrant Registration on January 14, 2016 which was declared effective by the SEC on January 25, 2016 (the “Updated Warrant Registration”). The effective status of the Updated Warrant Registration will expire October 21, 2016. Neither the exercise prices of the Strategic Warrants nor the number of Common Shares issuable upon exercise of the Strategic Warrants are subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock, or a dividend, reclassification, reorganization, or spinoff.

On August 18, 2014, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended for a third time to June 30, 2015 and again on January 5, 2015, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended to December 31, 2015. Again on August 12, 2015, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended to December 31, 2016. All other terms and conditions of the Strategic Warrants remained the same. All Strategic Warrants expire on December 31, 2016 unless redeemed earlier by Omagine upon 30 days prior written notice to the Strategic Warrant holders.

NOTE 8 – U.S. INCOME TAXES

Deferred U.S. tax assets are comprised of the following:

	December 31,			December 31,
	2015			2014
U.S. federal net operating loss carry forwards	$	6,375,000		$	5,293,000
U.S. state and city net operating loss carry forwards, net of U.S. federal tax benefit		1,822,000			1,512,000
		8,197,000			6,805,000
Less: Valuation allowance		(8,197,000	)		(6,805,000	)
Total	$	–		$	–

F-35

Management has determined, based on the Company's current condition, that a full valuation allowance is appropriate at December 31, 2015.

At December 31, 2015, the Company had U.S. federal net operating loss carry forwards of approximately $18,215,000 expiring in various amounts from fiscal year 2017 to fiscal year 2035.

Current U.S. income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs. 

The Company believes that it has no uncertain tax positions and no unrecognized tax benefits at December 31, 2015 and 2014.

NOTE 9 – COMMITMENTS

Leases

Omagine leases its executive office in New York under a month to month lease from an unaffiliated third party. LLC leases office space in Muscat, Oman from an unaffiliated third party under a one year prepaid lease which commenced in January 2015 and which provides for an annual rental of $35,880. The Company’s rent expense for the years ended December 31, 2015 and 2014 was $167,113 and $159,382, respectively.

Employment Agreements

The Company presently has no employment agreements with any person.

Pursuant to a prior employment agreement, Omagine was obligated to employ its President and Chief Executive Officer at an annual base salary of $125,000 plus an additional amount based on a combination of net sales and earnings before taxes. Omagine plans to enter into a new employment agreement with its President although the terms of such employment agreement have not yet been determined. Omagine had continued to accrue salary payable to its President through December 31, 2014 and on January 1, 2015 the Company recommenced its bi-monthly payroll for employees, including for its President on the basis of an annual salary of $125,000. On May 1, 2015 the Company paid its President $87,781 of accrued officer’s payroll and on May 16, 2015 the Company applied $120,000 of accrued officer’s payroll in exchange for the purchase of 100,000 restricted Common Shares of Omagine, Inc. stock at a purchase price of $1.20 per share. At December 31, 2015 and 2014, Omagine had unpaid accrued officer’s compensation due to its President of $115,131 and $310,464, respectively.

Pursuant to a prior employment agreement, Omagine was obligated to employ its Vice-President and Secretary at an annual base salary of $100,000. Omagine plans to enter into a new employment agreement with its Vice-President although the terms of such employment agreement have not yet been determined. On January 1, 2015 the Company recommenced its bi-monthly payroll for employees, including for its Vice-President on the basis of an annual salary of $100,000. On March 26, 2015 the Company paid its Vice-President $33,000 of accrued officer’s payroll. On September 9, 2015, October 2, 2015 and December 7, 2015, the Company paid its Vice-President accrued officers’ payroll of $2,000, $3,200 and $2,500, respectively. At December 31, 2015 and 2014, Omagine had unpaid accrued officer’s compensation due to its Vice-President of $137,905 and $171,575, respectively.

On January 1, 2015 the Company recommenced its bi-monthly payroll for its Controller on the basis of an annual salary of $80,000. On January 14, 2015 the Company paid its Controller $25,000 of accrued officer’s payroll. At December 31, 2015 and 2014, Omagine had unpaid accrued officer’s compensation due to its Controller of $136,798 and $155,883, respectively.

Contingent Fee Payment Obligation

Depending on circumstances, LLC may execute an agreement with Michael Baker International (”Baker”) to hire Baker as its Program Manager and/or Project Manager (the potential “PM Contract”). Omagine has employed Baker to provide design and engineering services through the feasibility and engineering study phases of the Omagine Project. As part of its compensation agreement with Baker, Omagine agreed that it would be obligated to pay Baker the sum of $72,000 (the “Contingent Fee”) after LLC signed the DA with the Government of Oman. Omagine paid Baker the Contingent Fee in October 2015.

Equity Financing Agreements

Omagine, Inc. and YA were parties to a Stand-By Equity Distribution Agreement (the “2011 SEDA”) which was due to expire on September 1, 2014. On July 21, 2014, the 2011 SEDA was terminated by the mutual consent of Omagine and YA.

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement on generally the same terms and conditions as the 2011 SEDA (the”2014 SEDA“). Unless earlier terminated in accordance with its terms, the 2014 SEDA shall terminate automatically on the earlier of (i) the first day of the month next following the 24-month anniversary of the “Effective Date” (as hereinafter defined), or (ii) the date on which YA shall have made payment to Omagine of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000. On April 22, 2014, in satisfaction of a $150,000 commitment fee due pursuant to the 2014 SEDA, Omagine issued 85,822 restricted Common Shares to YA Global II SPV, LLC, which is an affiliate of YA (See Note 6).

F-36

Pursuant to the terms of the 2014 SEDA, Omagine may in its sole discretion, and upon giving written notice to YA (an ”Advance Notice”), periodically sell Common Shares to YA (“Shares”) at a per Share price (“Purchase Price”) equal to 95% of the lowest daily volume weighted average price (the “VWAP”) for a Common Share as quoted by Bloomberg, L.P. during the five (5) consecutive Trading Days (as such term is defined in the 2014 SEDA) immediately subsequent to the date of the relevant Advance Notice (the “Pricing Period”).

Omagine is not obligated to sell any Shares to YA but may, over the term of the 2014 SEDA and in its sole discretion, sell to YA that number of Shares valued at the Purchase Price from time to time in effect that equals up to five million dollars ($5,000,000) in the aggregate. YA is obligated under the 2014 SEDA to purchase such Shares from Omagine subject to certain conditions including (i) Omagine filing a registration statement with the SEC to register the resale by YA of the Shares sold to YA under the 2014 SEDA (“Registration Statement”), (ii) the SEC declaring such Registration Statement effective (the date of such declaration by the SEC being the “Effective Date”), (iii) Omagine certifying to YA at the time of each Advance Notice that Omagine has performed all covenants and agreements to be performed and has complied with all obligations and conditions contained in the 2014 SEDA, (iv) periodic sales of Shares to YA must be separated by a time period of at least five Trading Days, and (v) the dollar value of any individual periodic sale of Shares designated by Omagine in any Advance Notice may not exceed the greater of (a) two hundred thousand dollars ($200,000), or (b) the average of the ”Daily Value Traded” for each of the five (5) Trading Days immediately preceding the date of the relevant Advance Notice, where Daily Value Traded is the product obtained by multiplying the number representing the daily trading volume of Common Shares for such Trading Day by the VWAP for a Common Share on such Trading Day.

Omagine Project

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 just west of the capital city of Muscat and nearby Muscat International Airport (the “Omagine Site”). LLC has signed a Development Agreement (“DA”) and a Usufruct Agreement (“UA”) for the Omagine Project with the Government of Oman. (See “Development Agreement and Usufruct Agreement” below). The Omagine Project is planned to be an integration of cultural, heritage, entertainment and residential components including a high-culture theme park and associated buildings, shopping and retail establishments, restaurants and approximately 2,100 residences.

Development Agreement and Usufruct Agreement

Omagine’s 60% owned subsidiary, LLC, signed a DA with the Government of Oman in October 2014 for the development in Oman by LLC of the Omagine Project. The legal effectiveness of the DA was conditional upon its ratification by Oman’s Ministry of Finance, which Ratification occurred in March 2015. On July 1, 2015 (the “Operative Date”), the Government and LLC entered into the UA with respect to the land constituting the Omagine Site.

The Land Rights give LLC extensive rights over the land constituting the Omagine Site including the right to sell such land on a freehold basis. On July 2, 2015, the UA was registered by the Government and a Land Rights registration fee of 20,250 Omani Rials ($52,650) was paid by LLC to the Government (and expensed in the accompanying consolidated statements of operations for the year ended December 31, 2015), which registration legally perfected LLC’s ownership of the Land Rights.

The five year period commencing on the Operative Date is a rent free period and thereafter LLC will pay annual rent to the Government based on only the built but unsold commercial area of the Omagine Project (approximately 150,000 square meters) or approximately 45,000 Omani Rials ($117,000) per year based on the current annual per square meter fee of 0.300 Omani Rials ($0.78). The term of the DA is 20 years and the term of the UA is 50 years (renewable) commencing from the Operative Date. The UA and the DA provisions relevant to the UA survive the expiration of the term of the DA.

The Operative Date of July 1, 2015 is the date from which all time periods for the execution by LLC of various tasks enumerated in the DA are to be measured. The continued legal effectiveness of the DA subsequent to the Operative Date is dependent upon the following milestone dates being achieved (any or all of which may be extended or waived by the Government): (1) LLC’s delivery to the Government within twelve months from the Operative Date of a term sheet with lenders for the financing of the first phase, any other phase or all of the Project, (2) LLC’s submission to the Ministry of Tourism of a social impact assessment within 8 months of the Operative Date and the Government’s approval thereof within 12 months of the Operative Date, (3) the Government’s approval within 12 months of the Operative Date of the development control plan for the Omagine Project and (4) the transformation of LLC into a joint stock company within 12 months of the Operative Date.

Pursuant to the DA, LLC must substantially complete the construction of the seven Pearl buildings and one hotel (the “Minimum Build Obligation” or “MBO”) within 5 years of the Operative Date. Any material breach by LLC of its obligation to perform the MBO would constitute an event of default under the DA. The DA specifies that the principal construction contracts should be executed within one year of the Operative Date. LLC is required to provide written notice to the Government in certain circumstances, such as LLC’s change in an anticipated milestone date that would result in a substantial achievement of work to occur later than 60 days after such milestone date. The DA provides that the Government is required to grant reasonable requests for the extension of the terms of the DA in such circumstances.

The foregoing discussion of the terms of the DA and UA is not meant to be definitive or complete and is qualified in its entirety by reference to the complete texts of the DA and UA as filed by the Company with the SEC.

F-37

Omagine LLC Shareholder Agreement

Omagine and JOL organized LLC in Oman and capitalized it with an initial investment of twenty thousand (20,000) Omani Rials ($52,000). Subsequently, Omagine, JOL and the New Investors entered into a shareholder agreement relating to LLC (the “Shareholder Agreement”).

Pursuant to the Shareholder Agreement, Omagine invested an additional 70,000 Omani Rials ($182,000) into LLC and agreed to make a further additional investment into LLC of 210,000 Omani Rials ($546,000) after the execution of the DA (the “OMAG Final Equity Investment”). As of December 31, 2015, Omagine had (a) invested 90,000 Omani Rials ($234,000) into LLC, and (b) made an aggregate of 210,000 Omani Rials ($546,000) of cash advances to LLC against the OMAG Final Equity Investment.

Further pursuant to the Shareholder Agreement, the New Investors invested an aggregate of 60,000 Omani Rials ($156,000) into LLC and agreed, subject to certain conditions precedent, to make further additional investments into LLC in the aggregate amount of 26,628,125 Omani Rials ($69,233,125). Additionally, pursuant to the Shareholder Agreement, RCA agreed to invest the Land Rights as a non-cash “payment-in-kind” capital contribution to LLC. The Land Rights represents the value to LLC of the land previously owned by His Majesty Sultan Qaboos bin Said, the ruler of Oman, which His Majesty transferred to MOT on condition it be used for development of the Omagine Project.

NOTE 10 – RELATED PARTY TRANSACTIONS

At December 31, 2015 and 2014 respectively, Omagine’s accounts payable included $32,148 and $13,603 due to its officers and directors.

For the year ended December 31, 2015, the Company expensed a total of $223,000 for consulting fees paid to an entity controlled by the Deputy Managing Director of LLC.

NOTE 11 – SUBSEQUENT EVENTS

On January 15, 2016, Omagine contributed 61,001 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On January 15, 2016, Omagine issued 38,462 restricted Common Shares valued at $50,000 to each of the Corporation’s three independent directors based on the $1.30 closing price of the Corporation’s Common Stock on December 31, 2015 for the 50% non-cash payment of the $100,000 annual retainer due them.

On March 15, 2016, Omagine and an investment fund, YA II PN, Ltd. (p/k/a YA Global Master SPV, Ltd.) (“YA II”) entered into a loan agreement (the “2016 Loan Agreement”) pursuant to which the Company borrowed six hundred thousand dollars ($600,000) for a term of one year at an annual interest rate of ten percent (10%). The Company previously entered into a $500,000 loan agreement with YA II on May 25, 2015 (the “2015 Loan Agreement”). Pursuant to the 2016 Loan Agreement the Company agreed to pay (a) the remaining $150,000 principal balance and remaining accrued interest of $575 on its 2015 Loan Agreement due as of March 15, 2016, and (b) agreed to pay a $60,000 commitment fee to YA Global II SPV LLC, an affiliate of YA II. The $389,425 proceeds of the 2016 Loan Agreement were received on March 15, 2016. YA II is also a party to the Standby Equity Distribution Agreement with the Company executed on April 22, 2014 (the “2014 SEDA).

On April 5, 2016, the president of the Company purchased 56,000 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on April 5, 2016. The total purchase price of $50,400 was paid to the Company by the $50,400 reduction in the accrued salary and expenses owed by the Company to the president.

On April 6, 2016, three independent directors of the Company each purchased 27,778 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on April 5, 2016 for an aggregate of 83,334 Common Shares purchased. The aggregate purchase price of $75,000 was paid to the Company by the $25,000 reduction in accrued director’s fees owed by the Company to each of the independent directors.

On April 12, 2016, the Company sold 700,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $504,000.

F-38

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. - Other Expenses of Issuance and Distribution

The following table sets forth an itemization of all estimated expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered:

Nature of Expense:	Amount
SEC Registration Fee	$	1,101
Accounting fees and expenses	$	1,000
Legal fees and expenses	$	2,000
Miscellaneous	$	250
Total*	$	4,351

* Estimated

Item 14. - Indemnification of Directors and Officers

Under our Certificate of Incorporation, our directors will not be personally liable to us or our shareholders for monetary damages for any breach of fiduciary duties as directors, except liability for the following:

● Any breach of their duty of loyalty to our Company or our stockholders.

●  Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law.

●  Unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law.

●  Any transaction from which the director derived an improper personal benefit.

We believe that these limitation of liability provisions are necessary to attract and retain qualified persons as directors and officers.

The limitation of liability provisions in our Certificate of Incorporation may discourage shareholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 15. - Recent Sales of Unregistered Securities

In connection with the Prior SEDAs and with the issuance by us of the Tempest Warrant and the Common Shares listed below, we relied upon the exemption from securities registration afforded by Section 4(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of our Company or executive officers or directors of our Company and transfer was restricted by our Company in accordance with the requirements of the Securities Act. In addition to representations by the below-referenced persons, we made independent determinations that all of the below-referenced persons were accredited or sophisticated investors, that they were capable of analyzing the merits and risks of their investment and that they understood the speculative nature of their investment. Furthermore, all of the below-referenced persons were provided with access to our SEC filings. (See: Note 6 to Omagine’s unaudited financial statements for the quarterly period ended September 30, 2016 included in this Prospectus).

On January 4, 2017, Omagine contributed 123,782 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On January 4, 2017, Omagine issued 81,169 restricted Common Shares valued at $50,000 to each of the Corporation’s three independent directors based on the $0.616 closing price of the Corporation’s Common Stock on December 30, 2016.

On January 13, 2017, Omagine sold 18,051 restricted Common Shares to an accredited investor for proceeds of $10,000 

On January 20, 2017, Omagine sold 25,000 restricted Common Shares to an accredited investor for proceeds of $12,500.

On January 25, 2017, Omagine sold 20,000 restricted Common Shares to an accredited investor for proceeds of $10,000 

On February 1, 2017, the president of the Company purchased 100,000 restricted Common Shares based on the $0.62 closing price of Omagine’s Common Stock on January 31, 2017 minus the Finnerty discount of 18% for proceeds of $51,000.

On February 2, 2017, three independent Company directors each purchased 94,340 restricted Common Shares and the Company’s vice president purchased 47,170 restricted Common Shares based on the $$0.6414 closing price of Omagine’s Common Shares on February 1, 2017 minus the Finnerty discount of 18% for aggregate proceeds of $175,000.

II-1

On April 5, 2016, the president of the Company purchased 56,000 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on April 5, 2016 for proceeds of $50,400.

On April 6, 2016, three independent directors of the Company each purchased 27,778 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on April 5, 2016 for an aggregate of 83,334 Common Shares purchased for aggregate proceeds of $75,000. 

On April 12, 2016, the Company sold 700,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $504,000.

On April 22, 2016, the holders of a Convertible Note converted $30,984 of principal and accrued interest into 24,207 shares of Common Stock.

On July 29, 2016, the Company sold 10,684 restricted Common Shares to an accredited investor for proceeds of $10,000.

On August 19, 2016, the Company sold 13,245 restricted Common Shares to an accredited investor for proceeds of $10,000.

On August 31, 2016, the Company sold 11,312 restricted Common Shares to an accredited investor for proceeds of $10,000.

On September 21, 2016, the Company issued 161,290 restricted Common Shares to YA Global SPV, Ltd., an affiliate of YA II PN, Ltd. (formerly YA Global Master SPV Ltd.) in satisfaction of a $150,000 SEDA commitment fee in consideration for the two year extension of the 2014 SEDA.

On November 1, 2016, Omagine sold 20,000 restricted Common Shares to an accredited investor for proceeds of $10,000, and also sold 10,000 restricted Common Shares to an independent director who is also an accredited investor for proceeds of $5,000.

On November 4, 2016, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $5,000.

On November 8, 2016, Omagine sold an aggregate of 20,000 restricted Common Shares to two accredited investors for aggregate proceeds of $10,000.

On November 14, 2016, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $5,000.

On December 5, 2016, Omagine sold 300,000 restricted Common Shares to an accredited investor for proceeds of $150,000.

On December 5, 2016, Omagine sold 300,000 restricted Common Shares to an accredited investor for proceeds of $150,000.

On January 5, 2015, Omagine contributed an aggregate of 36,483 restricted Common Shares valued at $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On February 23, 2015, Omagine paid a consultant 5,000 restricted Common Shares at the discounted valuation of $9,450.

On March 26, 2015, Omagine sold 6,281 restricted Common Shares to an accredited investor for proceeds of $10,000.

On March 26, 2015, Omagine sold 200,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $210,000.

On May 16, 2015, Omagine sold 100,000 Common Shares to an officer and director for proceeds of $120,000.

On June 29, 2015, the Non-US investor (described below in connection with a June 24, 2014 transaction) exercised 158,228 Tempest Warrants at an exercise price of $1.58 for proceeds of $250,000 (which was collected July 2, 2015).

On June 29, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 158,228 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,911 restricted Common Shares valued at $12,500.

On September 2, 2015 pursuant to the SEDA, Omagine sold 17,696 Common Shares to YA for proceeds of $25,000.

On September 22, 2015, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $14,700.

On October 8, 2015, pursuant to the exercise of 2,375 Tempest Warrants which were transferred to an affiliate of Tempest, Omagine sold 2,375 restricted Common Shares to such affiliate at $1.28 per Common Share for proceeds of $3,040.

On October 26, 2015, Omagine sold an aggregate of 1,200,000 restricted Common Shares to three non-U.S. persons who are accredited investors (500,000 restricted Common Shares each to two investors and 200,000 restricted Common Shares to one investor) for aggregate proceeds to Omagine of $1,200,000.

On November 16, 2015, in connection with the aforementioned sale of 1,200,000 restricted Common Shares to three non-U.S. persons, Omagine paid a finder’s fee to another non-U.S. person. This finder’s fee was satisfied by issuing such other non-U.S. person 33,334 restricted Common Shares valued at $60,000 (based on the November 16, 2015 market price of $1.80 per share).

On November 16, 2015, Omagine sold 20,886 restricted Common Shares to an accredited investor for proceeds to Omagine of $25,000.

On January 8, 2014 pursuant to the SEDA, Omagine sold 29,687 Common Shares to YA for proceeds of $25,000.

On January 10, 2014, Omagine paid a law firm for legal services rendered by issuing such law firm 34,374 restricted Common Shares valued at $26,248, which value was $10,346 in excess of the $15,812 owed by Omagine to such law firm at that date.

On January 17, 2014 pursuant to the SEDA, Omagine sold 24,912 Common Shares to YA for proceeds of $20,000.

II-2

On January 24, 2014 pursuant to the SEDA, Omagine sold 31,705 Common Shares to YA for proceeds of $25,000.

On February 13, 2014, Omagine contributed an aggregate of 73,315 restricted Common Shares valued at $76,250 to all eligible employees of the Omagine Inc. 401(k) Plan.

On February 14, 2014 pursuant to the SEDA, Omagine sold 68,493 Common Shares to YA for proceeds of $150,000.

On March 14, 2014, Omagine sold 70,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $70,000.

On March 14, 2014, Omagine paid a finder’s fee to a non-U.S. person (a “non-U.S. Finder”) in connection with the aforementioned sale of 70,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 3,500 restricted Common Shares valued at $6,101.

On March 21, 2014 pursuant to the SEDA, Omagine sold 13,597 Common Shares to YA for proceeds of $25,000.

On April 11, 2014, Omagine sold 150,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $150,000. At June 30, 2014, such non-U.S. person owned 1,195,300 Common Shares or approximately 7.5% of the Common Shares then outstanding and 441,120 Strategic Warrants.

On April 11, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 150,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,500 restricted Common Shares valued at $10,147.

On April 22, 2014, Omagine issued 85,822 restricted Common Shares to an affiliate of YA in satisfaction of a $150,000 commitment fee due in connection with the 2014 SEDA.

On May 6, 2014 pursuant to the SEDA, Omagine sold 32,270 Common Shares to YA for proceeds of $50,000.

On June 24, 2014, Omagine sold 362,308 restricted Common Shares and issued 1,000,000 Tempest Warrants to a non-U.S. person who is an accredited investor for proceeds $422,100.

On June 24, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 362,308 restricted Common Shares and issuance of 1,000,000 Tempest Warrants. Such finder’s fee was satisfied by paying such non-U.S. Finder $20,000 in cash and issuing such non-U.S. Finder 15,000 restricted Common Shares valued at $19,920.

On August 15, 2014, pursuant to the exercise of 240,000 Tempest Warrants at $1.40 per share, Omagine sold 240,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds $336,000.

On October 2, 2014, pursuant to the exercise of 250,000 Tempest Warrants at $1.31 per share, Omagine sold 250,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds $327,500.

On November 20, 2014, Omagine sold an aggregate of 400,000 restricted Common Shares to two non-U.S. persons who are accredited investors (150,000 shares to one investor and 250,000 shares to the other investor) for aggregate proceeds $800,000.

On November 21, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 400,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 20,000 restricted Common Shares valued at $40,000.

On December 18, 2013 pursuant to the SEDA, Omagine sold 18,277 Common Shares to YA for proceeds of $15,000.

On December 24, 2013, Omagine paid a consultant for services rendered by issuing such consultant 19,988 restricted Common Shares valued at $18,189.

II-3

Item 16. - Exhibits and Financial Statement Schedules

The exhibits and financial statement schedules filed as part of this Registration Statement are as follows:

(a) List of Exhibits

See the Exhibit List below

(b) Financial Statement Schedules

No financial statement schedules are filed because the required information is not applicable or is included in the consolidated financial statements or related notes.

(a) Exhibit List

The following exhibits are included as part of this Form S-1. References to “Omagine” in this Exhibit List mean Omagine, Inc., a Delaware U.S. corporation.

Exhibit
Numbers	Description
3(i)	Restated Certificate of Incorporation of Omagine dated June 2, 2010 (7)
3(ii)	By-laws of Omagine (1)
4.1	The Subscription and Warrant Agent Agreement dated January 31, 2012 between Omagine and Continental Stock Transfer & Trust Company (11)
4.2	Specimen of $5 Warrant Certificate (11)
4.3	Specimen of $10 Warrant Certificate (11)
4.4	The Tempest Warrants (17)
5.1	Legal Opinion of Sichenzia Ross Friedman Ference LLP **
10.1	The December 9, 2007 CCIC and CCC Agreement (3)
10.2	The March 19, 2007 Hamdan Agreement (2)
10.3	The December 2013 amendment extending the March 19, 2007 Hamdan Agreement (19)
10.4	The December 2014 amendment extending the March 19, 2007 Hamdan Agreement (22)
10.5	The December 2015 amendment extending the March 19, 2007 Hamdan Agreement (27)
10.6	The April 20, 2011 Shareholder Agreement (9)
10.7	The Development Agreement dated October 2, 2014 (20)
10.8	The Usufruct Agreement Dated July 1, 2015 (23)
10.9	An English Translation of the Letter Dated July 2, 2015  (24)
10.10	Convertible Promissory Note payable to Frank J. Drohan (14)
10.11	Convertible Promissory Note payable to Charles P. Kuczynski (14)
10.12	Convertible Promissory Note No. 1 payable to Louis Lombardo (14)
10.13	Convertible Promissory Note No. 2 payable to Louis Lombardo (14)
10.14	The December 8, 2008 SEDA Agreement between Omagine and YA (4)
10.15	The May 4, 2011 SEDA Agreement between Omagine and YA (8)
10.16	The June 21, 2011 Amendment Agreement to the May 4, 2011 SEDA Agreement (10)
10.17	The May 22, 2012 Waiver Letter dated re: the May 4, 2011 SEDA Agreement  (13)

II-4

Exhibit
Numbers	Description
10.18	The April 22, 2014 SEDA Agreement between Omagine and YA (18)
10.19	The July 16, 2014 Termination Agreement terminating the May 4, 2011 SEDA Agreement (17)
10.20	The October 10, 2014 SEDA Amendment (21)
10.21	The 2013 YA Note Purchase Agreement and Amended Schedule III thereto (16)
10.22	The 2014 YA Note Purchase Agreement dated April 22, 2014 (18)
10.23	The April 22, 2014 Omagine $500,000 Promissory Note in favor of YA (18)
10.24	The April 22, 2014 Closing Statement signed by Omagine and YA (18)
10.25	The 2015 YA Note Purchase Agreement dated May 20, 2015 (24)
10.26	The May 20, 2015 Omagine $500,000 Promissory Note in favor of YA (24)
10.27	The May 20, 2015 Closing Statement signed by Omagine and YA (24)
10.28	The March 2016 YA Note Purchase Agreement dated March 15, 2016 (26)
10.29	The March 15, 2016 Omagine $600,000 Promissory Note in favor of YA (26)
10.30	The March 15, 2016 Closing Statement signed by Omagine and YA (26)
10.31	The Omagine Inc. 401(k) Adoption Agreement (5)
10.32	The Amended Omagine Inc. 2003 Stock Option Plan (6)
10.33	The Omagine Inc. 2014 Stock Option Plan (19)
10.34	The Amended Omagine Inc. 2014 Stock Option Plan (25)
10.35	Lease expiring December 31, 2015 between Omagine and the Empire State Building LLC (15)
10.36	The Masraf Al Rayan Term Sheet (27)
10.37	The Murabaha Facility Agreement between Omagine LLC and Masraf Al Rayan Bank (27)
10.38	The June 2016 YA Note Purchase Agreement dated June 22, 2016 (28)
10.39	The June 22, 2016 Omagine $400,000 Promissory Note in favor of YA (28)
10.40	The June 22, 2016 Closing Statement signed by Omagine and YA (28)
10.41	The September 20, 2016 SEDA Amendment Agreement between Omagine and YA (29)
10.42	The November 14, 2016 Convertible Promissory Note between Omagine and St. George Investments LLC (30)
10.43	The November 14, 2016 Note Purchase Agreement between Omagine and St. George Investments LLC (30)
10.44	Convertible Promissory Note payable to SMAT Inc.  (32)
10.45	Note Purchase Agreement dated December 7, 2016 by and between Omagine, Inc. and YA II PN, Ltd. (31)
10.46	Promissory Note in the principal amount of $750,000 dated December 7, 2016 and issued by Omagine, Inc. in favor of YA II PN, Ltd. (31)
10.47	Closing Statement dated December 7, 2016 signed by Omagine, Inc. and YA II PN, Ltd. (31)
10.48	The December 2016 amendment extending the March 19, 2007 Hamdan Agreement *
14	The Code of Ethics (3)
21	Subsidiaries of the Registrant (14)
23.1	Consent of Michael T. Studer CPA, P.C. *
23.2	Consent of Sichenzia Ross Friedman Ference LLP (included in Exhibit 5.1)
24	Power of Attorney **
99.1	A PDF Reference Copy of Exhibit 10.7, Development Agreement (20)
99.2	A PDF Reference Copy of Exhibit 10.8, Usufruct Agreement  (24)
99.3	A PDF Reference Copy of the Original Arabic Version of Exhibit 10.10  (24)
99.4	The Savills Final Valuation Report (24)
99.5	The DTZ Final Evaluation Report  (24)
99.6	The JLL Final Valuation Report  (24)
EX-101.INS	XBRL INSTANCE DOCUMENT*
EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT*
EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION DOCUMENT*
EX-101.DEF	XBRL TAXONOMY EXTENSION DEFINITION DOCUMENT*
EX-101.LAB	XBRL TAXONOMY EXTENSION LABELS DOCUMENT*
EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION DOCUMENT*

* Filed herewith

** Previously filed

II-5

(1)	Previously filed with the SEC on November 18, 2005 as an exhibit to Omagine’s quarterly Report on Form 10-QSB for the period ended September 30, 2005 and incorporated herein by reference thereto.
(2)	Previously filed with the SEC on April 17, 2007 as an exhibit to the Company’s Report on Form 10-KSB for the fiscal year ended December 31, 2006 and incorporated herein by reference thereto.
(3)	Previously filed with the SEC on April 14, 2008 as an exhibit to Omagine’s Report on Form 10-KSB for the fiscal year ended December 31, 2007 and incorporated herein by reference thereto.
(4)	Previously filed with the SEC on December 31, 2008 as an exhibit to Omagine’s current Report on Form 8-K and incorporated herein by reference thereto.
(5)	Previously filed with the SEC on February 25, 2009 as an exhibit to Omagine’s Report on Form 10-K for the fiscal year ended December 31, 2008 and incorporated herein by reference thereto.
(6)	Previously filed with the SEC on April 14, 2010 as an exhibit to Omagine’s Report on Form 10-K for the fiscal year ended December 31, 2009 and incorporated herein by reference thereto.
(7)	Previously filed with the SEC on July 20, 2010 as an exhibit to Omagine’s Report on Form 10-Q for the period ended June 30, 2010 and incorporated herein by reference thereto.
(8)	Previously filed with the SEC on May 5, 2011 as an exhibit to Omagine’s current Report on Form 8-K and incorporated herein by reference thereto.
(9)	Previously filed with the SEC on November 8, 2011 as an exhibit to Omagine’s quarterly Report on Form 10-Q for the period ended September 30, 2011 and incorporated herein by reference thereto and a reference copy was filed as an exhibit to Omagine’s current Report on Form 8-K filed with the SEC on May 31, 2011.
(10)	Previously filed with the SEC on June 21, 2011 as an exhibit to Omagine’s current Report on Form 8-K and incorporated herein by reference thereto.
(11)	Previously filed with the SEC on February 7, 2012 as an exhibit to Omagine’s registration statement on Form S-1/A (File No. 333-179040) and incorporated herein by reference thereto.
(12)	Previously filed with the SEC on January 17, 2012 as an exhibit to Omagine’s registration statement on Form S-1 (Commission File No. 333-179040) and incorporated herein by reference thereto.
(13)	Previously filed with the SEC on September 12, 2012 as an exhibit to Omagine’s Post-Effective Amendment No. 2 to its registration statement on Form S-1 (File No. 333-175168) and incorporated herein by reference thereto.
(14)	Previously filed with the SEC on January 22, 2013 as an exhibit to Omagine’s Amendment Number 2 on Form 10-K/A amending (a) Omagine’s Report on Form 10-K filed with the SEC on April 16, 2012 for the fiscal year ended December 31, 2011 (the “Original Filing”), and (b) Amendment No. 1 to the Original Filing filed on Form 10-K/A with the SEC on May 17, 2012, and incorporated herein by reference thereto.
(15)	Previously filed with the SEC on April 1, 2013 as an exhibit to Omagine’s Report on Form 10-K for the fiscal year ended December 31, 2012 and incorporated herein by reference thereto.
(16)	Previously filed the 2013 YA Note Purchase Agreement with the SEC on August 5, 2013 as an exhibit to the Company's quarterly Report on Form 10-Q for the period ended June 30, 2013 and it is incorporated herein by reference thereto; and previously filed the Amended Schedule III to the 2013 YA Note Purchase Agreement with the SEC on November 19, 2013 as an exhibit to the Company's quarterly Report on Form 10-Q for the period ended September 30, 2013 and it is incorporated herein by reference thereto.
(17)	Previously filed with the SEC on July 31, 2014 as an exhibit to Omagine’s quarterly Report on Form 10-Q for the period ended June 30, 2014 and incorporated herein by reference thereto.
(18)	Previously filed with the SEC on April 28, 2014 as an exhibit to the Company's current Report on Form 8-K and incorporated herein by reference thereto.
(19)	Previously filed with the SEC on April 15, 2014 as an exhibit to the Company’s Report on Form 10-K for the fiscal year ended December 31, 2013 and incorporated herein by reference thereto.
(20)	Previously filed with the SEC on October 2, 2014 as an exhibit to Omagine’s current Report on Form 8-K and incorporated herein by reference thereto.
(21)	Previously filed with the SEC on October 10, 2014 as an exhibit to Omagine’s current Report on Form 8-K and incorporated herein by reference thereto.
(22)	Previously filed with the SEC on January 8, 2015 as an exhibit to Omagine’s registration statement on Form S-1/A (File No. 333-199383) and incorporated herein by reference thereto.
(23)	Previously filed with the SEC on July 9, 2015 as an exhibit to Omagine's current Report on Form 8-K and incorporated herein by reference thereto.
(24)	Previously filed with the SEC on May 21, 2015 as an exhibit to Omagine's current Report on Form 8-K and incorporated herein by reference thereto.
(25)	Previously filed with the SEC on November 23, 2015 as an exhibit to the Company's Report on Form 10-Q for the period ended September 30, 2015 and incorporated by reference thereto.
(26)	Previously filed with the SEC on March 16, 2016 as an exhibit to the Company's current Report on Form 8-K and incorporated herein by reference thereto.
(27)	Previously filed with the SEC on April 14, 2016 as an exhibit to the Company’s Report on Form 10-K for the fiscal year ended December 31, 2015 and incorporated herein by reference thereto.
(28)	Previously filed with the SEC on June 23, 2016 as an exhibit to the Company's current report on Form 8-K and incorporated herein by reference thereto.
(29)	Previously filed with the SEC on September 21, 2016 as an exhibit to the Company's current report on Form 8-K and incorporated herein by reference thereto.
(30)	Previously filed with the SEC on November 21, 2016 as an exhibit to the Company's Report on Form 10-Q for the period ended September 30, 2016 and incorporated by reference thereto.
(31)	Previously filed with the SEC on December 8, 2016 as an exhibit to the Company's current report on Form 8-K and incorporated herein by reference thereto.
(32)	Previously filed with the SEC on January 10, 2017 as an exhibit to Omagine’s registration statement on Form S-1/A (File No. 333-199383) and incorporated herein by reference thereto.

II-6

Item 17. - Undertakings

The undersigned Registrant hereby undertakes to:

1)	File, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to:
	i.	Include any Prospectus required by Section 10(a)(3) of the Securities Act;
	ii.	Reflect in the Prospectus any facts or events which, individually or together, represent a fundamental change in the information in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of Prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and
	iii.	Include any additional or changed material information on the plan of distribution.
2)	For determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering.
3)	File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
4)	For purposes of determining any liability under the Securities Act, treat the information omitted from the form of Prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act as part of this Registration Statement as of the time it was declared effective.
5)	For the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution of the securities: The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
	i.	Any preliminary Prospectus or Prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to the Rule 424;
	ii.	Any free writing Prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;
	iii.	The portion of any other free writing Prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and
	iv.	Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
6)	For determining any liability under the Securities Act, treat each post-effective amendment that contains a form of Prospectus as a new registration statement for the securities offered in the Registration Statement, and that offering of the securities at that time as the initial bona fide offering of those securities.
7)	Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
8)	Each Prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or Prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or Prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the Registration Statement or Prospectus that was part of the registration statement or made in any document immediately prior to such date of first use.

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this post-effective amendment to this Registration Statement on Form S-1/A to be signed on its behalf by the undersigned, thereunto duly authorized in the City of New York, State of New York, on February 6, 2017.

OMAGINE, INC.
A Delaware corporation
By:	/s/ Frank J. Drohan
	Frank J. Drohan
	Chief Executive Officer, Chief Financial Officer and Chairman (Principal Executive Officer and Principal Financial Officer)

Signature		Date
/s/ Frank J. Drohan	Chief Executive Officer, Chief Financial Officer and	February 6, 2017
Frank J. Drohan	Chairman (Principal Executive Officer and Principal Financial Officer)
/s/ Charles P. Kuczynski	Vice-President, Secretary and Director	February 6, 2017
Charles P. Kuczynski
/s/ Louis J. Lombardo	Director	February 6, 2017
Louis J. Lombardo
/s/ Jack A. Smith	Director	February 6, 2017
Jack A. Smith
/s/ Alan M. Matus	Director	February 6, 2017
Alan M. Matus
/s/ William Hanley	Controller; Principal Accounting Officer	February 6, 2017
William Hanley

II-8

EX-10.48

Exhibit 10.48

AMENDMENT AGREEMENT

This amendment agreement dated as of December 30, 2016 (the “Amendment Agreement”) is an amendment to that certain consulting agreement (the “March Agreement”) dated March 19, 2007 between Omagine, Inc., a Delaware corporation (the “Company”) and Sam Hamdan, an individual (“Hamdan”).

The Company and Hamdan acknowledge that the March Agreement was most recently amended on December 30, 2015.

All capitalized terms in this Amendment Agreement shall, unless otherwise indicated herein, have the meanings assigned to them in the March Agreement.

The Parties hereby agree as follows:

1) The words in Section 2(ii) of the March Agreement are hereby deleted in their entirety and replaced by the following words: “December 31, 2017, or”, and

2) Pursuant to a resolution of the Board of Directors:

a. the expiration date of Hamdan’s 750,000 stock options (the “January 2012 Options”) has been extended to December 31, 2017, and

b. the expiration date of Hamdan’s additional 250,000 Options granted to Hamdan on December 29, 2014 (the “December 2014 Options”) which vested on the grant date and are exercisable at $2.55 per share and which are identical in all other respects to the January 2012 Options, has also been extended to December 31, 2017, and

3) All other terms and conditions of the March Agreement remain in full force and effect.

IN WITNESS WHEREOF, the Parties have executed this Amendment Agreement as of December 30, 2016.

Sam Hamdan		Omagine, Inc.
		a Delaware corporation
By:	/s/ Sam Hamdan	By:	/s/ Charles P. Kuczynski
	Sam Hamdan		Charles P. Kuczynski
			Vice-President

1

Exhibit A

CASHLESS EXERCISE OF JANUARY 2012 & DECEMBER 2014 OPTIONS

January 2012 Options and December 2014 Options (the “Options”) which are vested may be exercised in whole or in part by Hamdan at any time on any Business Day prior to 5 P.M. Eastern Time in the United States on December 31, 2017 (the “Expiration Date”):

i. by delivery of a written notice to the Company (the “Exercise Notice”), of Hamdan’s election to exercise such Options, which notice shall specify the number of shares of Common Stock (“Shares”) to be purchased, payment to the Company of an amount equal to $1.70 per Share or $2.55 per Share, as the case may be, multiplied by the number of Shares for which the Options are being exercised  (the “Aggregate Exercise Price”) in cash or wire transfer of immediately available funds and the surrender of the relevant certificate representing such Options (or an indemnification undertaking with respect to such Options in the case of the loss, theft or destruction of such certificate). Such documentation and payment shall be delivered by Hamdan to a common carrier for overnight delivery to the Company as soon as practicable following such date, but in no event later than one business day prior to the Expiration Date (“Cash Basis”) or

ii. by delivering an Exercise Notice and in lieu of making payment of the Aggregate Exercise Price in cash or wire transfer, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (the “Cashless Exercise”):

Net Number	=	(A x B) – (A x C)
		B

For purposes of the foregoing formula:

A = the total number of Shares with respect to which the relevant Options are then being exercised.

B = the Closing Bid Price of the Common Stock on the date of exercise of the relevant Options.

C = the Exercise Price. The Parties agree that the Exercise Price for January 2012 Options is one dollar and seventy cents ($1.70) in United States currency and the Exercise Price for December 2014 Options is two dollars and fifty five cents ($2.55) in United States currency.

2

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

I hereby consent to the use in this Post-Effective Amendment No. 4 of the Registration Statement of Omagine, Inc. on Form S-1 of my report dated April 14, 2016, appearing in the Prospectus, which is part of this Registration Statement. I also consent to the reference to the firm under the heading “Experts” in such Prospectus.

/s/ Michael T. Studer CPA P.C.

Michael T. Studer CPA P.C.

Freeport, New York

February 6, 2017

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Omagine, Inc.
Entity Central Index Key	0000820600
Trading Symbol	omag
Amendment Flag	true
Amendment Description	The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the United States Securities & Exchange Commission, acting pursuant to said Section 8(a), may determine.
Document Type	S-1
Document Period End Date	Sep. 30, 2016
Entity Filer Category	Smaller Reporting Company

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash	$ 12,423	$ 324,703	$ 1,113,679
Inventory (Note 2)
Land under development	490,813,363	490,813,363
Total inventory held for sale	490,813,363	490,813,363
Prepaid expenses and other current assets	11,090	1,767	5,780
Total Current Assets	490,836,876	491,139,833	1,119,459
PROPERTY AND EQUIPMENT:
Real estate held for investment (Note 2) Total investment in real estate	227,800,637	227,800,637
Office and computer equipment	160,002	160,002	153,604
Less accumulated depreciation and amortization	(152,527)	(148,894)	(144,036)
Total Property and Equipment	227,808,112	227,811,745	9,568
OTHER ASSETS	4,057	33,762	31,982
TOTAL ASSETS	718,649,045	718,985,340	1,161,009
CURRENT LIABILITIES:
Convertible notes payable and accrued interest	482,110	397,929	370,429
Note payable and accrued interest	514,842	204,167	214,778
Accounts payable	776,526	340,290	257,736
Accrued officers payroll	367,877	389,834	637,922
Accrued expenses and other current liabilities	165,546	155,330	159,332
Total Current Liabilities	2,306,901	1,487,550	1,640,197
Long Term Liabilities
TOTAL LIABILITIES	2,306,901	1,487,550	1,640,197
STOCKHOLDERS' EQUITY
Preferred stock, value
Common stock, value	20,062	18,728	16,878
Capital in excess of par value	469,794,059	468,651,654	32,252,954
Deficit	(40,502,569)	(38,342,692)	(32,669,399)
Total Omagine, Inc. stockholders' equity	429,311,552	430,327,690	(399,567)
Noncontrolling interests in Omagine LLC	287,030,592	287,170,100	(79,621)
Total Stockholders' Equity	716,342,144	717,497,790	(479,188)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 718,649,045	$ 718,985,340	$ 1,161,009

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Statement Of Financial Position [Abstract]
Unamortized discount	$ 57,500	$ 20,833	$ 12,133
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized	850,000	850,000	850,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000	50,000,000
Common stock, shares issued	20,062,648	18,728,313	16,878,119
Common stock, shares outstanding	20,062,648	18,728,313	16,878,119

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
REVENUE:
Total revenue
OPERATING EXPENSES:
Officers and directors compensation (including stock-based compensation of $135, $1,880,765, $301,655 and $1,957,285, respectively)	113,885	1,976,515	578,238	2,240,535	2,336,670	2,559,580
Professional fees	266,276	9,375	342,757	142,394	355,816	176,996
Consulting fees (including stock-based compensation of $25,000, $1,343,924, $25,000 and $1,355,105, respectively)	28,458	1,414,848	466,251	1,745,904	2,024,553	1,557,103
Commitment fees (All stock-based compensation)	150,000		150,000			150,000
Travel	114,604	117,281	389,203	423,875	526,080	239,134
Occupancy	14,690	45,683	45,657	124,419	167,113	159,382
Other selling general and administrative	50,677	125,585	203,898	286,651	357,969	271,046
Total Costs and Expenses	738,590	3,689,287	2,176,004	4,963,778	5,768,201	5,113,241
OPERATING LOSS	(738,590)	(3,689,287)	(2,176,004)	(4,963,778)	(5,768,201)	(5,113,241)
OTHER (EXPENSE) INCOME
Amortization of debt discounts	(25,000)	(12,500)	(63,333)	(28,800)	(41,300)	(40,199)
Interest expense	(26,678)	(18,643)	(60,048)	(44,843)	(59,671)	(61,189)
Other (Expense) - Net	(51,678)	(31,143)	(123,381)	(73,643)	(100,971)	(101,388)
NET LOSS	(790,268)	(3,720,430)	(2,299,385)	(5,037,421)	(5,869,172)	(5,214,629)
Add net loss attributable to noncontrolling interests in Omagine LLC	113,223	24,752	139,508	102,160	195,879	53,669
Net loss attributable to Omagine, Inc.	$ (677,045)	$ (3,695,678)	$ (2,159,877)	$ (4,935,261)	$ (5,673,293)	$ (5,160,960)
LOSS PER SHARE - BASIC AND DILUTED	$ (0.03)	$ (0.21)	$ (0.11)	$ (0.29)	$ (0.32)	$ (0.32)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
- BASIC AND DILUTED	19,850,406	17,417,560	19,561,559	17,240,703	17,485,927	16,273,965

XML

Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Income Statement [Abstract]
Stock-based compensation, officers and directors	$ 135	$ 1,880,765	$ 301,655	$ 1,957,285	$ 1,957,420	$ 2,251,830
Stock - based compensation professional fees					0	10,436
Stock-based compensation, consulting fees	$ 25,000	$ 1,343,924	$ 25,000	$ 1,355,105	$ 1,415,971	$ 1,388,699

XML

Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($)	Total	Common Stock Issued and Outstanding $0.001 Par Value	Capital in Excess of Par Value	Deficit	Noncontrolling Interests in Omagine LLC
Balances at Dec. 31, 2013	$ (1,531,661)	$ 14,935	$ 25,987,795	$ (27,508,439)	$ (25,952)
Balances (in shares) at Dec. 31, 2013		14,935,038
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock grant issued to law firm in satisfaction of $15,812 of accounts payable	26,248	$ 34	26,214
Stock grant issued to law firm in satisfaction of $15,812 of accounts payable, Shares		34,374
Issuance of Common Stock for 401(k) Plan contribution	76,250	$ 73	76,177
Issuance of Common Stock for 401(k) Plan contribution, Shares		73,315
Issuance of Common Stock for cash	1,487,100	$ 1,004	1,486,096
Issuance of Common Stock for cash, Shares		1,004,629
Issuance of Common Stock for finders' fees on restricted Common Stock sales	76,168	$ 47	76,121
Issuance of Common Stock for finders' fees on restricted Common Stock sales, Shares		46,000
Exercise of Tempest Warrants	663,500	$ 490	663,010
Exercise of Tempest Warrants, Shares		490,000
Cancellation of shares issued to stockholder relations agent	(9,020)	$ (10)	(9,010)
Cancellation of shares issued to stockholder relations agent, Shares		(10,000)
Stock Option expense	3,486,856		3,486,856
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA)	310,000	$ 219	309,781
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA), Shares		218,941
Issuance of Common Stock for SEDA commitment fees	150,000	$ 86	149,914
Issuance of Common Stock for SEDA commitment fees, Shares		85,822
Adjustments to noncontrolling interests in Omagine LLC	(53,669)				(53,669)
Net loss	(5,160,960)			(5,160,960)
Balances at Dec. 31, 2014	(479,188)	$ 16,878	32,252,954	(32,669,399)	(79,621)
Balances (in shares) at Dec. 31, 2014		16,878,119
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Common Stock for 401(k) Plan contribution	76,250	$ 37	76,213
Issuance of Common Stock for 401(k) Plan contribution, Shares		36,483
Stock grant to consultant for services rendered	9,450	$ 5	9,445
Stock grant to consultant for services rendered, Shares		5,000
Issuance of Common Stock for cash	220,000	$ 206	219,794
Issuance of Common Stock for cash, Shares		206,281
Stock Options exercised by former Director	1,020	$ 2	1,018
Stock Options exercised by former Director, Shares		2,000
Issuance of Common Stock for finders' fees on restricted Common Stock sales	72,500	$ 41	72,459
Issuance of Common Stock for finders' fees on restricted Common Stock sales, Shares		41,245
Exercise of Tempest Warrants	253,040	$ 161	252,879
Exercise of Tempest Warrants, Shares		160,603
Issuance of Common Stock for Directors' Compensation for services September 1, 2015 to December 31, 2015	100,000	$ 50	99,950
Issuance of Common Stock for Directors' Compensation for services September 1, 2015 to December 31, 2015, Shares		50,000
Stock Option expense	4,001		4,001
Issuance of Common Stock to an Executive Officer in payment of salaries payable	120,000	$ 100	119,900
Issuance of Common Stock to an Executive Officer in payment of salaries payable, Shares		100,000
Issuance of Restricted Common Stock for cash	1,239,700	$ 1,230	1,238,470
Issuance of Restricted Common Stock for cash, Shares		1,230,886
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA)	25,000	$ 18	24,982
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA), Shares		17,696
Stock Option expense - Extension of Strategic Options (1,965,000 to December 31, 2016)	915,493		915,493
Stock Option expense - Extension of Strategic Options (950,000 to December 31, 2016)	541,215		541,215
Stock Option expense - Stock Appreciation Rights (1,455,000 expiring December 31, 2017)	1,654,481		1,654,481
Payment-in-Kind capital contribution of land by noncontrolling interest in Omagine LLC	(718,614,000)		431,168,400		287,445,600
Adjustments to noncontrolling interests in Omagine LLC	(195,879)				(195,879)
Net loss	(5,673,293)			(5,673,293)
Balances at Dec. 31, 2015	717,497,790	$ 18,728	468,651,654	(38,342,692)	287,170,100
Balances (in shares) at Dec. 31, 2015		18,728,313
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Common Stock for 401(k) Plan contribution	76,250	$ 61	76,189
Issuance of Common Stock for 401(k) Plan contribution, Shares		61,001
Issuance of Common Stock for Directors' Stock Compensation for services January 1, 2016 to December 31, 2016	150,000	$ 116	149,884
Issuance of Common Stock for Directors' Stock Compensation for services January 1, 2016 to December 31, 2016, Shares		115,386
Stock Option expense	405		405
Issuance of Common Stock to an Executive Officer in payment of salaries payable	50,400	$ 56	50,344
Issuance of Common Stock to an Executive Officer in payment of salaries payable, Shares		56,000
Issuance of Common Stock for Directors' Cash Compensation for services January 1 2016, to June 30, 2016	75,000	$ 83	74,917
Issuance of Common Stock for Directors' Cash Compensation for services January 1 2016, to June 30, 2016, Shares		83,334
Issuance of Restricted Common Stock for cash	559,000	$ 770	558,230
Issuance of Restricted Common Stock for cash, Shares		769,488
Conversion of Convertible Notes payable liability into Common Stock	30,984	$ 24	30,960
Conversion of Convertible Notes payable liability into Common Stock, Shares		24,207
Issuance of Common Stock to a Director for the exercise of stock options	1,700	$ 2	1,698
Issuance of Common Stock to a Director for the exercise of stock options, Shares		2,000
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA)	25,000	$ 31	24,969
Issuance of Common Stock under 2014 Standby Equity Distribution Agreement (SEDA), Shares		31,289
Issuance of Common Stock to consultant for services	25,000	$ 30	24,970
Issuance of Common Stock to consultant for services, Shares		30,340
Issuance of Common Stock for SEDA commitment fees	150,000	$ 161	149,839
Issuance of Common Stock for SEDA commitment fees, Shares		161,290
Adjustments to noncontrolling interests in Omagine LLC	(139,508)				(139,508)
Net loss	(2,159,877)			(2,159,877)
Balances at Sep. 30, 2016	$ 716,342,144	$ 20,062	$ 469,794,059	$ (40,502,569)	$ 287,030,592
Balances (in shares) at Sep. 30, 2016		20,062,648

XML

Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Statement of Stockholders' Equity [Abstract]
Accounts payable of stock grant issued		$ 15,812
Extension of strategic options	1,965,000
Extension of strategic options	950,000
Stock appreciation rights	1,455,000

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to Omagine, Inc.	$ (2,159,877)	$ (4,935,261)	$ (5,673,293)	$ (5,160,960)
Adjustments to reconcile net loss to net cash flows used by operating activities:
Net loss attributable to noncontrolling interests in Omagine LLC	(139,508)	(102,160)	(195,879)	(53,669)
Depreciation and amortization	66,966	32,337	46,158	45,327
Stock-based compensation related to stock options	405	3,114,190	3,115,190	3,486,856
Stock-based compensation related to issuance of Common Stock for stockholder investor relations, including amortization of $0 and $10,275 in 2015 and 2014 respectively, arising from grants to service providers				10,275
Issuance of Common Stock for finders' fees on restricted Common Stock sales		12,500	72,500	76,168
Issuance of Common Stock for consulting fees	25,000	9,450	9,450
Excess of fair value of Common Stock issued to law firm in excess of liability satisfied - charged to legal fees				10,436
Issuance of Common Stock for 401(k) Plan contributions	76,250	76,250	76,250	76,250
Issuance of Common Stock for Directors' fees	225,000	100,000	100,000
Issuance of Common Stock for commitment fees	150,000			150,000
Cancellation of restricted Common Stock to stockholder relations agent				(9,020)
Changes in operating assets and liabilities:
Prepaid expenses, other current assets and other assets	20,382	(3,436)	2,233	(7,780)
Accrued interest on notes payable	17,507	21,698	25,589	22,947
Accounts payable	436,236	160,791	82,554	26,691
Accrued officers' payroll	28,443	(142,573)	(128,088)	(89,690)
Accrued expenses and other current liabilities	10,216	(30,964)	(4,002)	41,959
Net cash flows used by operating activities	(1,242,980)	(1,687,178)	(2,471,338)	(1,374,210)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(6,398)	(6,398)	(3,434)
Net cash flows used by investing activities		(6,398)	(6,398)	(3,434)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on 2013 note payable to YA Global Master SPV, Ltd.				(175,000)
Principal payments on 2014 note payable to YA II PN, Ltd.		(225,000)	(225,000)	(275,000)
Proceeds from sale of Common Stock	584,000	259,700	1,484,700	1,797,100
Proceeds of 2015 note payable to YA II PN, Ltd. Net of commitment fee		450,000		461,000
Proceeds from exercise of stock options	1,700	1,020	1,020
Principal payments on 2015 note payable to YA II PN, Ltd.	(225,000)	(130,000)	(275,000)
Proceeds from the sale of Common Stock Warrants		250,000	253,040	663,500
Proceeds of issuance of 2016 note payable to YA II PN, Ltd. Net of $60,000 commitment fee	540,000
Principal payments on 2016 $600,000 note payable to YA II PN, Ltd.	(315,000)
Proceeds of issuance of an additional 2016 note payable to YA II PN, Ltd. net of commitment fee	360,000		450,000
Principal payments on 2016 $400,000 note payable to YA II PN, Ltd.	(115,000)
Proceeds of issuance of convertible note payable	100,000
Net cash flows provided by financing activities	930,700	605,720	1,688,760	2,471,600
NET (DECREASE) INCREASE IN CASH	(312,280)	(1,087,856)	(788,976)	1,093,956
CASH BEGINNING OF PERIOD	324,703	1,113,679	1,113,679	19,723
CASH END OF PERIOD	12,423	25,823	324,703	1,113,679
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid	600	2,197	2,197	1,078
Interest paid	56,451	19,089	29,565	33,791
NON-CASH FINANCING ACTIVITIES
Excess of fair value of Common Stock issued to law firm in excess of liability satisfied - charged to legal fees				10,436
Issuance of Common Stock to an Executive Officer in payment of salaries payable	50,400	120,000	120,000
Issuance of Common Stockin satisfaction of convertible note payable ($15,000) and accrued interest ($15,984)	30,984
Payment-in-kind capital contribution of land by noncontrolling interest in Omagine LLC pursuant to Omagine LLC Stockholder Agreement		$ 718,614,000	$ 718,614,000

XML

Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Statement Of Cash Flows [Abstract]
Amortization of stock-based compensation			$ 0	$ 10,275
Note payable for commitment fees	$ 60,000	$ 50,000	$ 50,000	$ 39,000
Principal payments on note payable	600,000
Additional note payable for commitment fees	40,000
Principal payments on notes payable	400,000
Convertible note payable	15,000
Accrued interest	$ 15,984

XML

Nature of the Business and Summary of Significant Accounting Policies

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Nature of the Business and Summary of Significant Accounting Policies [Abstract]

NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Nature of the Business

Omagine, Inc. (“Omagine”) is a holding company incorporated in Delaware in October 2004 which operates through its wholly owned subsidiary, Journey of Light, Inc., a New York corporation (“JOL”) and its 60% owned subsidiary Omagine LLC, a limited liability company incorporated under the laws of the Sultanate of Oman (“LLC”). Omagine, JOL and LLC are collectively referred to herein as the “Company”. JOL was acquired by Omagine in October 2005. LLC is the Omani real estate development company organized by Omagine to do business in Oman.

The Company is focused on entertainment, hospitality and real-estate development opportunities in the Middle East and North Africa (the “MENA Region”). On October 2, 2014, LLC signed a Development Agreement with the Government of Oman (the “Government”) for the development of the Omagine Project. On July 2, 2015, a usufruct over one million square meters of beachfront land (the “Land Rights”) was registered in LLC'’s name with the Government. On November 29, 2015, LLC executed a Murabaha Facility Agreement with Masraf Al Rayan Bank (Qatar) for a $25 million loan to finance the first phase of the Omagine Project consisting of design, development and initial construction activities. The loan, which is subject to satisfaction of certain conditions precedent to closing, would bear interest at an annual rate equal to the 12 month LIBOR rate plus 1% and would be payable one year from the closing date. One condition precedent to closing is that the loan be secured by a $25,000,000 cash deposit in an LLC account at the Qatari bank. Contingent upon the closing of such loan and/or contingent upon the general contractor advancing $10 million to LLC upon execution of the construction contract, commencement of these first phase activities is expected to begin promptly thereafter. (See Note 9 – “Omagine Project”).

Interim Financial Statements

The consolidated balance sheet for 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 amended annual report on Form 10-K for the fiscal year ended December 31, 2015 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 are not necessarily indicative of the operating results for the respective full years.

Certain footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) have been omitted in accordance with the published rules and regulations of the Securities and Exchange Commission (“SEC”). 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-K for the fiscal year ended December 31, 2015 filed with the SEC on April 14, 2016.

Summary of Significant Accounting Policies

Principles of Consolidation - The consolidated financial statements include the accounts of Omagine, JOL and LLC. LLC is an Omani limited liability company organized under the laws of the Sultanate of Oman. All inter-company transactions have been eliminated in consolidation.

Financial Instruments - Financial instruments include cash, convertible notes payable and accrued interest, notes payable and accrued interest, accounts payable, accrued officers’ payroll and accrued expenses and other current liabilities. The amounts reported for financial instruments are considered to be reasonable approximations of their fair values, based on market information available to management.

Cash and Cash Equivalents – The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At September 30, 2016 and December 31, 2015, cash included approximately $4,500 and $36,000 respectively in an Oman bank account not covered by FDIC insurance.

Inventory – Inventory is stated at cost. At September 30, 2016 and December 31, 2015, inventory consists only of the land under development acquired on July 2, 2015 (which was costed at the fair value of the property at the date of acquisition). The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $490,813,363 in inventory resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Property, Plant and Equipment - Property, plant and equipment (“PP&E”) are stated at cost. PP&E consists of land under development which is held for investment; furniture and fixtures; and office machinery and equipment. PP&E (including buildings and structures after they are completed and put into service) are depreciated on a straight-line basis over their respective useful service lives. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $227,800,637 in PP&E resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Stockholders’ Equity - Stockholders’ equity consists of common stock, capital in excess of par value, deficit, and non-controlling interests in LLC. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $718,614,000 in stockholders’ equity resulting from LLC’s July 2, 2015 acquisition of the Land Rights (a $431,168,400 increase in Omagine stockholders’ equity and a $287,445,600 increase in non-controlling interests in LLC). (See: Note 2 – “Inventory and Property”).

Estimates and Uncertainties - The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results as determined at a later date could differ from those estimates. In recording $718,614,000 in the accompanying consolidated financial statements for the year ended December 31, 2015 as the value of the non-cash consideration received by LLC as Land Rights, management relied to a great extent upon the written opinions of three expert valuation firms engaged by LLC to value such Land Rights. Furthermore, in allocating such Land Value to inventory and land under development, management relied to a great extent upon the written opinion of an expert independent accounting firm engaged by LLC to advise it on the proper accounting to record the Land Value in LLC’s financial statements. Both LLC’s independent auditor and the Company’s independent auditor are in agreement with and have consented to the accounting indicated in the accompanying consolidated financial statements for the year ended December 31, 2015. (See: Note 2 – “Inventory and Property”).

Revenue Recognition - The Company follows the guidelines of SEC Staff Accounting Bulletin No. 101,”Revenue Recognition in Financial Statements” (SAB101). LLC signed a development agreement for the Omagine Project with the Government of Oman in October 2014, and will recognize revenue ratably over the development period of the Omagine Project measured by methods appropriate to the services or products provided.

Income Taxes - Omagine and JOL are subject to United States (“U.S.”) income taxes at both the federal and state level and LLC is subject to income taxes in Oman. Separate state income tax returns are filed with each state in the U.S. in which Omagine or any subsidiary of Omagine is incorporated or qualified as a foreign corporation. LLC files an income tax return in Oman. Other than with respect to LLC, the Company is not presently subject to income taxes in any foreign country. The Company reports interest and penalties as income tax expense. Deferred tax assets and liabilities are recognized based on differences between the book and tax bases of assets and liabilities using presently enacted income tax rates. The Company establishes a provision for U.S. income taxes by applying the provisions of the applicable enacted tax laws to taxable income, if any, for the relevant period. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Stock-based Compensation - Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification 718, “Compensation – Stock Compensation” (“ASC 718”). For stock options granted, Omagine has recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For such stock option awards, Omagine has recognized compensation expense using a straight-line amortization method over the requisite service period. ASC 718 requires that stock-based compensation expense be based on awards that are ultimately expected to vest. Stock option expense for the nine month periods ended September 30, 2016 and 2015 were $405 and $3,114,190, respectively. (See Note 7).

Earnings (Loss) Per Share - Basic earnings (loss) per share of Omagine’s $0.001 par value common stock (“Common Stock”) is based upon the weighted-average number of shares of Common Stock (“Common Shares”) outstanding during the relevant period. Diluted earnings (loss) per share is based upon the weighted-average number of Common Shares and dilutive securities (stock options, warrants, stock appreciation rights and convertible notes) outstanding during the relevant period. Dilutive securities having an anti-dilutive effect on diluted earnings (loss) per share are excluded from the calculation.

For the nine month periods ended September 30, 2016 and 2015, the Common Shares underlying the following dilutive securities were excluded from the calculation of diluted shares outstanding as the effect of their inclusion would be anti-dilutive:

	2016		2015
Convertible Notes		286,663		156,399
Stock Options		3,269,000		3,273,000
Stock Appreciation Rights		1,455,000		1,455,000
Warrants		6,422,124		6,773,896
Total Common Shares Issuable		11,432,787		11,658,295

Non-controlling Interests in Omagine LLC - As of the date of this report LLC is owned 60% by Omagine. In May 2011, Omagine, JOL and three new investors (the “New Investors”) entered into a shareholders’ agreement (the “Shareholder Agreement”) pursuant to which Omagine’s 100% ownership of LLC was reduced to 60%.

The New Investors are:

i.

The Office of Royal Court Affairs (“RCA”), an Omani organization, and

ii.

Two subsidiaries of Consolidated Contractors International Company, SAL (“CCIC”). CCIC is a 60 year old Lebanese multi-national company headquartered in Athens, Greece having approximately five and one-half (5.5) billion dollars in annual revenue, one hundred thirty thousand (130,000) employees worldwide, and operating subsidiaries in among other places, every country in the Middle East. The two CCIC subsidiaries which are LLC shareholders are:

1.	Consolidated Contracting Company S.A. (“CCC-Panama”), a wholly owned subsidiary of CCIC and is its investment arm, and
2.	Consolidated Contractors (Oman) Company LLC, CCIC’s operating subsidiary in Oman which is a construction company with approximately 13,000 employees.

As of the date hereof, the shareholders of LLC and their associated ownership percentages as registered with the Government of Oman are as follows:

LLC Shareholder	Percent  Ownership
Omagine		60	%
RCA		25	%
CCC-Panama		10	%
CCC-Oman		5	%
Total:		100	%

Recent Accounting Pronouncements

On August 27, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity's ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity and consistency of related disclosures and improve convergence with IFRS (which emphasize management's responsibility for performing the going concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRS will continue to differ. This ASU 2014-15 is effective for annual periods ending after December 16, 2016, and interim periods thereafter; early adoption is permitted. The Company does not believe that this pronouncement will have a material impact on our financial statement disclosures.

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

NOTE 1 - NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Nature of the Business

Omagine, Inc. (“Omagine”) is a holding company incorporated in Delaware in October 2004 which operates through its wholly owned subsidiary, Journey of Light, Inc., a New York corporation (“JOL”) and its 60% owned subsidiary Omagine LLC, a limited liability company incorporated under the laws of the Sultanate of Oman (“LLC”). Omagine, JOL and LLC are collectively referred to herein as the “Company”. JOL was acquired by Omagine in October 2005. LLC is the Omani real estate development company organized by Omagine to do business in Oman.

The Company is focused on entertainment, hospitality and real-estate development opportunities in the Middle East and North Africa (the “MENA Region”). On October 2, 2014, LLC signed a Development Agreement with the Government of Oman (the “Government”) for the development of the Omagine Project. On July 2, 2015, a usufruct over one million square meters of beachfront land (the “Land Rights”) was registered in LLCs name with the Government. The Company is in receipt of a loan offer from a bank for a $25 million loan to finance the first phase of the Omagine Project consisting of design, development and initial construction activities. Contingent upon the closing of such loan, commencement of these first phase activities is expected to begin promptly thereafter. (See Note 9 – “Omagine Project”).

Summary of Significant Accounting Policies

Principles of Consolidation - The consolidated financial statements include the accounts of Omagine, JOL and LLC. LLC is an Omani limited liability company organized under the laws of the Sultanate of Oman. All inter-company transactions have been eliminated in consolidation.

Financial Instruments - Financial instruments include cash, convertible notes payable and accrued interest, note payable and accrued interest, accounts payable, accrued officers’ payroll and accrued expenses and other current liabilities. The amounts reported for financial instruments are considered to be reasonable approximations of their fair values, based on market information available to management.

Cash and Cash Equivalents - The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At December 31, 2015 and 2014, cash included approximately $36,000 and $11,200 respectively in an Oman bank account not covered by FDIC insurance.

Inventory - Inventory is stated at cost. At December 31, 2015, inventory consists only of the land under development acquired on July 2, 2015 (which was costed at the fair value of the property at the date of acquisition). The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $490,813,363 in inventory resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Property, Plant and Equipment - Property, plant and equipment (“PP&E”) are stated at cost. PP&E consists of land under development which is held for investment; furniture and fixtures; and office machinery and equipment. PP&E (including buildings and structures after they are completed and put into service) are depreciated on a straight-line basis over their respective useful service lives. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $227,800,637 in PP&E resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Stockholders’ Equity - Stockholders’ equity consists of common stock, capital in excess of par value, retained earnings, and non-controlling interests in LLC. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $718,614,000 in stockholders’ equity resulting from LLC’s July 2, 2015 acquisition of the Land Rights (a $431,168,400 increase in Omagine stockholders’ equity and a $287,445,600 increase in non-controlling interests in LLC). (See: Note 2 – “Inventory and Property”).

Estimates and Uncertainties - The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results as determined at a later date could differ from those estimates. In recording $718,614,000 in the accompanying consolidated financial statements for the year ended December 31, 2015 as the value of the non-cash consideration received by LLC as Land Rights, management relied to a great extent upon the written opinions of three expert valuation firms engaged by LLC to value such Land Rights. Furthermore, in allocating such Land Value to inventory and land under development, management relied to a great extent upon the written opinion of an expert independent accounting firm engaged by LLC to advise it on the proper accounting to record the Land Value in LLC’s financial statements. Both LLC’s independent auditor and the Company’s independent auditor are in agreement with and have consented to the accounting indicated in the accompanying consolidated financial statements for the year ended December 31, 2015. (See: Note 2 – “Inventory and Property”).

Revenue Recognition - The Company follows the guidelines of SEC Staff Accounting Bulletin No. 101, ”Revenue Recognition in Financial Statements” (SAB101). LLC signed a development agreement for the Omagine Project with the Government of Oman in October 2014, and will recognize revenue ratably over the development period of the Omagine Project measured by methods appropriate to the services or products provided.

Income Taxes - Omagine and JOL are subject to United States (“U.S.”) income taxes at both the federal and state level and LLC is subject to income taxes in Oman. Separate state income tax returns are filed with each state in the U.S. in which Omagine or any subsidiary of Omagine is incorporated or qualified as a foreign corporation. LLC files an income tax return in Oman. Other than with respect to LLC, the Company is not presently subject to income taxes in any foreign country. The Company reports interest and penalties as income tax expense. Deferred tax assets and liabilities are recognized based on differences between the book and tax bases of assets and liabilities using presently enacted income tax rates. The Company establishes a provision for U.S. income taxes by applying the provisions of the applicable enacted tax laws to taxable income, if any, for the relevant period. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Stock-based Compensation - Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification 718, “Compensation – Stock Compensation” (“ASC 718”). For stock options granted, Omagine has recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For such stock option awards, Omagine has recognized compensation expense using a straight-line amortization method over the requisite service period. ASC 718 requires that stock-based compensation expense be based on awards that are ultimately expected to vest. Stock option expense for the years ended December 31, 2015 and 2014 were $3,115,190 and $3,486,856, respectively. (See Note 7).

Earnings (Loss) Per Share - Basic earnings (loss) per share of Omagine’s $0.001 par value common stock (“Common Stock”) is based upon the weighted-average number of shares of Common Stock (“Common Shares”) outstanding during the relevant period. Diluted earnings (loss) per share is based upon the weighted-average number of Common Shares and dilutive securities (stock options, warrants, stock appreciation rights and convertible notes) outstanding during the relevant period. Dilutive securities having an anti-dilutive effect on diluted earnings (loss) per share are excluded from the calculation.

For the years ended December 31, 2015 and 2014, the Common Shares underlying the following dilutive securities were excluded from the calculation of diluted shares outstanding as the effect of their inclusion would be anti-dilutive:

	2015		2014
Convertible Notes		159,171		148,173
Stock Options		3,273,000		3,265,000
Stock Appreciation Rights		1,455,000		–
Warrants		6,771,521		6,932,124
Total Common Shares Issuable		11,658,692		10,345,297

Non-controlling Interests in Omagine LLC - As of the date of this report LLC is owned 60% by Omagine. In May 2011, Omagine, JOL and three new investors (the “New Investors”) entered into a shareholders’ agreement (the “Shareholder Agreement”) pursuant to which Omagine’s 100% ownership of LLC was reduced to 60%.

The New Investors are:

i.

The Office of Royal Court Affairs (“RCA”), an Omani organization, and

ii.

Two subsidiaries of Consolidated Contractors International Company, SAL (“CCIC”). CCIC is a 60 year old Lebanese multi-national company headquartered in Athens, Greece having approximately five and one-half (5.5) billion dollars in annual revenue, one hundred thirty thousand (130,000) employees worldwide, and operating subsidiaries in among other places, every country in the Middle East. The two CCIC subsidiaries which are LLC shareholders are: 1.      Consolidated Contracting Company S.A. (“CCC-Panama”), a wholly owned subsidiary of CCIC and is its investment arm, and 2.      Consolidated Contractors (Oman) Company LLC, CCIC’s operating subsidiary in Oman which is a construction company with approximately 13,000 employees.

As of the date hereof, the shareholders of LLC and their associated ownership percentages as registered with the Government of Oman are as follows:

LLC Shareholder	Percent  Ownership
Omagine		60	%
RCA		25	%
CCC-Panama		10	%
CCC-Oman		5	%
Total:		100	%

Recent Accounting Pronouncements

On August 27, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity's ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity and consistency of related disclosures and improve convergence with IFRSs (which emphasize management's responsibility for performing the going concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRSs will continue to differ. This ASU 2014-15 is effective for annual periods ending after December 16, 2016, and interim periods thereafter; early adoption is permitted. The Company does not believe that this pronouncement will have a material impact on our financial statement disclosures.

In June 2014, the FASB issued ASU 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities and eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company is required to adopt this new standard on a retrospective basis for the year ending December 31, 2015, and interim periods therein; however, early application is permitted. The Company has elected to adopt the new reporting standard for financial statements filed commencing with the 10-Q for the period ended September 30, 2014. Other than simplifying the presentation of the Company’s financial statements and needed disclosures, the adoption of ASU 2014-10 has not affected the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, ”Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists” (”ASU 2013-11”), which states that entities should present the unrecognized tax benefit as a reduction of the deferred tax asset for a net operating loss (”NOL”) or similar tax loss or tax credit carry forward rather than as a liability when the uncertain tax position would reduce the NOL or other carry forward under the tax law. The Company adopted this new standard on a prospective basis in the first interim reporting period of fiscal 2015. The adoption of ASU 2013-11 has not materially affected its consolidated financial statements.

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

XML

Inventory and Property

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Inventory and Property [Abstract]

INVENTORY AND PROPERTY

NOTE 2 – INVENTORY AND PROPERTY

The Company’s consolidated financial statements for the nine months ended September 30, 2016 reflect $718,614,000 of land under development which the Company has allocated to inventory ($490,813,363) and property ($227,800,637). This $718,614,000 of land under development was purchased by LLC on July 2, 2015 pursuant to the terms of the Shareholder Agreement whereby an LLC shareholder agreed to transfer the Land Rights over one million square meters of beachfront land to LLC in exchange for the issuance to such shareholder of 663,750 Omagine LLC shares (the “LLC Shares”). Since the Land Rights represented a non-cash payment for the LLC Shares, it was necessary to value the Land Rights.

Three expert real estate valuation companies were engaged by LLC to independently value the Land Rights in accordance with the professional standards specified by the Royal Institution of Chartered Surveyors (“RICS”) and International Financial Reporting Standards (“IFRS”). The average of the three Land Rights valuations was 276,666,667 Omani Rials ($718,614,000).

LLC engaged the services of PricewaterhouseCoopers LLP (“PwC”) as its IFRS accounting consultant to definitively determine the correct method of recording the $718,614,000 average value of its Land Rights in its IFRS compliant financial statements. After receiving PwC’s written opinion, LLC then consulted with its independent auditor, Deloitte & Touche (M.E.) & Co. LLC (“Deloitte”) with respect to the matter and received Deloitte’s written opinion agreeing with the PwC opinion. Both PwC and Deloitte independently concluded that the Land Rights should be recorded as capital, work-in-process (inventory) and land on LLC’s financial statements. With respect to the Company’s consolidated financial statements, the Company’s independent auditor in the U.S. has likewise concurred that, pursuant to US GAAP, the Land Rights should also be recorded as capital, inventory and land.

In determining the allocations to inventory and to land, LLC followed the advice of Deloitte by computing the percentage (x) calculated by dividing (y) the area of the land LLC definitively knew it intended to sell, by (z) the total area of land constituting the Omagine Site, and then multiplying that percentage (x) by $718,614,000 to get the correct number (N) for inventory. The correct number for land was then calculated by subtracting N from $718,614,000. Using its detailed internal financial model, management calculated (x) to be equal to 68.3%, thereby making the inventory number $490,813,363 and the land number $227,800,637. In its consolidated financial statements therefore, the Company has divided the Land Rights between land under development which is held for sale (inventory) and land under development which is held for investment (PP&E). These percentage allocations may be modified over time as the more precise land uses become apparent during and after the master planning and construction processes.

As more fully described in Note 1 and in Note 9 (See: “the Omagine LLC Shareholder Agreement section of Note 9), financing for the Omagine Project has not yet been secured. If such financing is not obtained, LLC may not be able to complete the Omagine Project and may not be able to recover the $718,614,000 value of the land under development described above.

NOTE 2 – INVENTORY AND PROPERTY

The Company’s consolidated financial statements for the year ended December 31, 2015 reflect $718,614,000 of land under development which the Company has allocated to inventory ($490,813,363) and property ($227,800,637). This $718,614,000 of land under development was purchased by LLC on July 2, 2015 pursuant to the terms of the Shareholder Agreement whereby an LLC shareholder agreed to transfer the Land Rights over one million square meters of beachfront land to LLC in exchange for the issuance to such shareholder of 663,750 Omagine LLC shares (the “LLC Shares”). Since the Land Rights represented a non-cash payment for the LLC Shares, it was necessary to value the Land Rights.

Three expert real estate valuation companies were engaged by LLC to independently value the Land Rights in accordance with the professional standards specified by the Royal Institution of Chartered Surveyors (“RICS”) and International Financial Reporting Standards (“IFRS”). The average of the three Land Rights valuations was 276,666,667 Omani Rials ($718,614,000).

LLC engaged the services of PricewaterhouseCoopers LLP (“PwC”) as its IFRS accounting consultant to definitively determine the correct method of recording the $718,614,000 average value of its Land Rights in its IFRS compliant financial statements. After receiving PwC’s written opinion, LLC then consulted with its independent auditor, Deloitte & Touche (M.E.) & Co. LLC (“Deloitte”) with respect to the matter and received Deloitte’s written opinion agreeing with the PwC opinion. Both PwC and Deloitte independently concluded that the Land Rights should be recorded as capital, work-in-process (inventory) and land on LLC’s financial statements. With respect to the Company’s consolidated financial statements, the Company’s independent auditor in the U.S. has likewise concurred that, pursuant to US GAAP, the Land Rights should also be recorded as capital, inventory and land.

In determining the allocations to inventory and to land, LLC followed the advice of Deloitte by computing the percentage (x) calculated by dividing (y) the area of the land LLC definitively knew it intended to sell, by (z) the total area of land constituting the Omagine Site, and then multiplying that percentage (x) by $718,614,000 to get the correct number (N) for inventory. The correct number for land was then calculated by subtracting N from $718,614,000. Using its detailed internal financial model, management calculated (x) to be equal to 68.3%, thereby making the inventory number $490,813,363 and the land number $227,800,637. In its consolidated financial statements therefore, the Company has divided the Land Rights between land under development which is held for sale (inventory) and land under development which is held for investment (PP&E). These percentage allocations may be modified over time as the more precise land uses become apparent during and after the master planning and construction processes.

XML

Prepaid Expenses and Other Current Assets

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Prepaid Expenses and Other Current Assets [Abstract]

PREPAID EXPENSES AND OTHER CURRENT ASSETS

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of:

	September 30,		December 31,
	2016		2015
Prepaid rent (New York office)	$	1,859	$	1,767
Prepaid Rent (Muscat, Oman Office)		8,970		-
Other prepaid expenses		261		-
Total	$	11,090	$	1,767

NOTE 3 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of:

	December 31,		December 31,
	2015		2014
Travel Advances	$	–	$	5,000
Prepaid office salaries (Muscat, Oman office)		–		780
Prepaid rent (New York office)		1,767		–
Total	$	1,767	$	5,780

XML

Convertible Notes Payable and Accrued Interest

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Convertible Notes Payable and Accrued Interest/ Notes Payable and Accrued Interest - Ya Global Master Spv, Ltd. [Abstract]

CONVERTIBLE NOTES PAYABLE AND ACCRUED INTEREST

NOTE 4 – CONVERTIBLE NOTES PAYABLE AND ACCRUED INTEREST

Convertible notes payable and accrued interest thereon consist of:

	September 30,		December 31,
	2016		2015
Due to a director of Omagine, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal	$	150,000	$	150,000
Accrued Interest		89,987		78,727
Due to investors, interest at 15% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		35,000		50,000
Accrued Interest		39,842		51,195
Due to investors, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		16,760		18,007
Due to entity owned by two directors of Omagine, interest at 5%  per annum, due on December 24, 2016 convertible into Common Stock at a conversion price of $0.75 per Common Share:
Principal		100,000
Accrued Interest		521		-
Total	$	482,110	$	397,929

NOTE 4 – CONVERTIBLE NOTES PAYABLE AND ACCRUED INTEREST

Convertible notes payable and accrued interest thereon consist of:

	December 31,		December 31,
	2015		2014
Due to a director of Omagine, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal	$	150,000	$	150,000
Accrued Interest		78,727		63,726
Due to investors, interest at 15% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		51,195		43,696
Due to investors, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		18,007		13,007
Total	$	397,929	$	370,429

XML

Notes Payable and Accrued Interest - Ya Global Master Spv, Ltd.

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Convertible Notes Payable and Accrued Interest/ Notes Payable and Accrued Interest - Ya Global Master Spv, Ltd. [Abstract]

NOTES PAYABLE AND ACCRUED INTEREST - YA GLOBAL MASTER SPV, LTD.

NOTE 5 – NOTES PAYABLE AND ACCRUED INTEREST – YA II PN, LTD. (p/k/a YA GLOBAL MASTER SPV, LTD.)

In July 2013, Omagine borrowed $200,000 from YA II PN, Ltd. (“YA”) (p/k/a YA Global Master SPV, Ltd.) via an unsecured loan (the “2013 YA Loan”) and on April 23, 2014 Omagine paid the 2013 YA Loan balance and accrued interest thereon due at April 23, 2014 in full and borrowed an additional $500,000 from YA via a second unsecured loan (the “2014 YA Loan”) and on April 22, 2015 Omagine paid the 2014 YA Loan balance and the accrued interest thereon in full. On May 20, 2015, Omagine borrowed an additional $500,000 from YA via a third unsecured loan (the “2015 YA Loan”). On March 15, 2016 Omagine paid the 2015 Loan balance and the accrued interest thereon in full and borrowed an additional $600,000 from YA via a fourth unsecured loan (the “March 2016 YA Loan”). On June 22, 2016, Omagine borrowed an additional $400,000 from YA via a fifth unsecured loan (the “June 2016 YA Loan”).

Notes payable and accrued interest thereon due to YA consist of:

	September 30,			December 31,
	2016			2015
2015 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($50,000 in July 2015, $40,000 monthly August 2015 to October 2015, $35,000 monthly November 2015 to February 2016, $40,000 monthly March 2016 to May 2016 and $70,000 on June 1, 2016)	$	-		$	225,000
March 2016 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($60,000 in April 2016 and May 2016, $50,000 monthly June to August 2015, $45,000 in September 2016, $35,000 in October and November 2016,$40,000 in December 2016, $45,000 in January 2017, $60,000 in February 2017 and $70,000 in March of 2017)		285,000			-
June 2016 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($40,000 in July  and August 2016, $35,000 monthly September to November 2016, $25,000 monthly, December 2016 to February 2017 and $35,000 monthly March to June 2017)		285,000			-
Less:  Unamortized debt discount at September 30, 2016 and December 31, 2015		(57,500	)		(20,833	)
Principal, net		512,500			204,167
Accrued interest		2,342			-
Total	$	514,842		$	204,167

NOTE 5 – NOTES PAYABLE AND ACCRUED INTEREST – YA GLOBAL MASTER SPV, LTD.

In July 2013, Omagine borrowed $200,000 from YA Global Master SPV, Ltd. (“YA”) via an unsecured loan (the “2013 YA Loan”) and on April 23, 2014 Omagine paid the 2013 YA Loan balance and accrued interest thereon due at April 23, 2014 in full and borrowed an additional $500,000 from YA via a second unsecured loan (the “2014 YA Loan”) and on April 22, 2015 Omagine paid the 2014 YA Loan balance and the accrued interest thereon in full. On May 20, 2015, Omagine borrowed an additional $500,000 from YA via a third unsecured loan (the “2015 YA Loan”).

Notes payable and accrued interest thereon due to YA consist of:

	December 31,			December 31,
	2015			2014
2015 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($50,000 in July 2015, $40,000 monthly August 2015 to October 2015, $35,000 monthly November 2015 to February 2016, $40,000 monthly March 2016 to May 2016 and $70,000 on June 1, 2016)	$	225,000		$	–
2014 YA Loan - interest at 10% per annum, due and repaid in monthly installments of principal and interest through April 2015		–			225,000
Less:  Unamortized debt discount at December 31, 2015 and  2014		(20,833	)		(12,133	)
Principal, net		204,167			212,867
Accrued interest		–			1,911
Total	$	204,167		$	214,778

XML

Common Stock

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Common Stock [Abstract]

COMMON STOCK

NOTE 6 – COMMON STOCK

With respect to the issuances of the Common Shares listed below:

1.	see Note 9 under ”Equity Finance Agreements” with respect to sales of Common Shares made to YA II PN, Ltd. (p/n/a YA Global Master SPV, Ltd.) (”YA”) pursuant to the Standby Equity Distribution Agreement (“2014 SEDA”).
2.	where issuances of restricted Common Shares occurred at non-discounted valuations, it is so noted and all such non-discounted valuations were based on the closing price of a Common Share on the relevant date.

3.

where issuances of restricted Common Shares occurred at discounted valuations, it is so noted and all such discounted valuations were calculated using the Finnerty Method based on the closing price of a Common Share on the relevant date less a 17% restricted stock discount for 2014 issuances, an 18% restricted stock discount for 2015 issuances and a 25% restricted stock discount for 2016 issuances that were or will be issued.

4

where issuances of restricted Common Shares occurred at agreed upon negotiated prices, the sale proceeds or value of services rendered are so noted.

On January 16, 2016, Omagine contributed an aggregate of 61,001 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On January 16, 2016, Omagine issued 38,462 restricted Common Shares to each of three independent directors for services to be rendered from January 1, 2016 to December 31, 2016 for an aggregate value of $150,000.

On April 5, 2016, the president of the Company purchased 56,000 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on such date of purchase. The total purchase price of $50,400 was paid to the Company by the $50,400 reduction in the accrued salary and expenses owed by the Company to the president.

On April 6, 2016, the three independent directors of the Company each purchased 27,778 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on April 5, 2016 for an aggregate of 83,334 Common Shares purchased. The aggregate purchase price of $75,000 was paid to the Company by the $25,000 reduction in accrued director’s fees owed by the Company to each of the independent directors.

On April 12, 2016, the Company sold 700,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $504,000.

On April 22, 2016, the holders of a Convertible Note converted $30,984 of principal and accrued interest into 24,207 shares of Common Stock.

On May 17, 2016, an Independent Director exercised Stock Options at $0.85 to purchase 2,000 shares of Common Stock.

On June 15, 2016, pursuant to the SEDA, Omagine sold 31,289 Common Shares to YA for proceeds of $25,000.

On July 29, 2016, Omagine sold 10,684 restricted Common shares to an accredited investor for proceeds of $10,000.

On August 19, 2016, Omagine sold 13,245 restricted Common Shares to an accredited investor for proceeds of $10,000.

On August 30, 2016, Omagine sold 11,312 restricted Common Shares to an accredited investor for proceeds of $10,000.

On September 16, 2016, Omagine sold 34,247 restricted Common Shares to an accredited investor for proceeds of $25,000.

On September 19, 2016 Omagine paid a consultant 30,340 restricted Common Shares at a value of $25,000.

On September 21, 2016, Omagine issued 161,290 restricted Common Shares to YA in satisfaction of a $150,000 commitment fee due in connection with the extension of the 2014 SEDA to February 1, 2019.

On January 5, 2015, Omagine contributed an aggregate of 36,483 restricted Common Shares at the discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On February 23, 2015, Omagine paid a consultant 5,000 restricted Common Shares at the discounted valuation of $9,450.

On March 26, 2015, Omagine sold 6,281 restricted Common Shares to an accredited investor for proceeds of $10,000.

On March 26, 2015, Omagine sold 200,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $210,000.

On May 16, 2015, Omagine sold 100,000 restricted Common Shares to an officer and director for proceeds of $120,000.

On June 29, 2015, the Non-US investor (described below in connection with a June 24, 2014 transaction) exercised 158,228 Tempest Warrants at an exercise price of $1.58 for proceeds of $250,000.

On June 29, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 158,228 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,911 restricted Common Shares valued at $12,500.

On June 30, 2015, a former director exercised 2,000 stock options for proceeds of $1,020.

On September 1, 2015, two new Directors were each issued 25,000 restricted Common Shares at a value of $50,000 each for services to be rendered from September 1 to December 31, 2015.

On September 3, 2015, pursuant to the SEDA, Omagine sold 17,696 Common Shares to YA for proceeds of $25,000.

On September 14, 2015, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $14,700.

On October 8, 2015, 2,375 Tempest Warrants were transferred to an affiliate of the Non-U.S. Investor, a “Non-U.S. Affiliate”. On October 8, 2015, such Non-U.S. Affiliate exercised such 2,375 Tempest Warrants at an exercise price of $1.28 per Common Share for proceeds to Omagine of $3,040.

On October 26, 2015, Omagine sold an aggregate of 1,200,000 restricted Common Shares to three non-U.S. persons who are accredited investors (500,000 restricted Common Shares each to two investors and 200,000 restricted Common Shares to one investor) for aggregate proceeds to Omagine of $1,200,000.

On November 16, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the October 26, 2015 aforementioned sale of 1,200,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 33,334 restricted Common Shares valued at the discounted valuation of $60,000.

On November 16, 2015, Omagine sold 20,886 restricted Common Shares to an accredited investor for proceeds to Omagine of $25,000.

On January 10, 2014, Omagine paid a law firm for legal services rendered by issuing such law firm 34,374 restricted Common Shares at the discounted valuation of $26,248, which value was $10,436 in excess of the $15,812 owed by Omagine to such law firm at that date.

On January 8, 2014 pursuant to the SEDA, Omagine sold 29,687 Common Shares to YA for proceeds of $25,000.

On January 17, 2014 pursuant to the SEDA, Omagine sold 24,912 Common Shares to YA for proceeds of $20,000.

On January 24, 2014 pursuant to the SEDA, Omagine sold 31,705 Common Shares to YA for proceeds of $25,000.

On February 13, 2014, Omagine contributed an aggregate of 73,315 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine Inc. 401(k) Plan.

On February 14, 2014 pursuant to the SEDA, Omagine sold 68,493 Common Shares to YA for proceeds of $150,000.

On March 14, 2014, Omagine sold 70,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $70,000.

On March 14, 2014, Omagine paid a finder’s fee to a non-U.S. person (a “non-U.S. Finder”) in connection with the aforementioned sale of 70,000 restricted Common Shares to a non-U.S. person. Such finder’s fee was satisfied by issuing such non-U.S. Finder 3,500 restricted Common Shares at the discounted valuation of $6,101.

On March 21, 2014 pursuant to the SEDA, Omagine sold 13,597 Common Shares to YA for proceeds of $25,000.

On April 11, 2014, Omagine sold 150,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $150,000. At September 30, 2014, such non-U.S. person owned 1,195,300 Common Shares, or approximately 7.4% of the Common Shares then outstanding, and 441,120 Strategic Warrants (See Note 7).

On April 11, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 150,000 restricted Common Shares to a non-U.S. person. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,500 restricted Common Shares at the discounted valuation of $10,147.

On April 22, 2014, Omagine issued 85,822 restricted Common Shares to an affiliate of YA in satisfaction of a $150,000 commitment fee due in connection with the 2014 SEDA.

On May 6, 2014 pursuant to the SEDA, Omagine sold 32,270 Common Shares to YA for proceeds of $50,000.

On June 24, 2014, Omagine sold 362,308 restricted Common Shares and issued 1,000,000 Tempest Warrants (See Note 7) to a non-U.S. person who is an accredited investor (the “Non-U.S. Investor”) for proceeds of $422,100.

On June 24, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale to the non-U.S. Investor (See Note 7). Such finder’s fee was satisfied by paying such non-U.S. Finder $20,000 in cash and issuing such non-U.S. Finder 15,000 restricted Common Shares at the discounted valuation of $19,920.

On August 15, 2014, the Non-U.S. Investor transferred 240,000 Tempest Warrants to an affiliate of his which is also a non-U.S. person (the “Non-U.S. Affiliate”) and such Non-U.S. Affiliate exercised such 240,000 Tempest Warrants at an exercise price of $1.40 per Common Share for proceeds to Omagine of $336,000. On August 25, 2014, Omagine paid a finder’s fee of $16,800 to a non-U.S. Finder in connection with such Tempest Warrant exercise.

On September 3, 2014, in exchange for a $3,000 cash settlement payment, the Company cancelled 10,000 restricted Common Shares valued at the non-discounted valuation of $9,020 issued to a consultant for services rendered.

On October 2, 2014, the Non-U.S. Investor transferred 250,000 Tempest Warrants to the Non-U.S. Affiliate and the Non-U.S. Affiliate exercised such 250,000 Tempest Warrants at an exercise price of $1.31 per Common Share for proceeds to Omagine of $327,500. On October 6, 2014, Omagine paid a finder’s fee of $16,375 to a Non-U.S. Finder in connection with such Tempest Warrant exercise by the Non-U.S. Affiliate.

On November 7, 2014, Omagine sold 14,881 restricted Common Shares to a non-U.S. person who is a civil engineer of CCC-Oman and an accredited investor for proceeds of $30,000.

On November 10, 2014, Omagine sold 7,440 restricted Common shares to a non-U.S. person who is a civil engineer of CCC-Oman and an accredited investor for proceeds of $15,000.

On November 20, 2014, Omagine sold an aggregate of 400,000 restricted Common Shares at $2.00 per share to two non-U.S. persons who are accredited investors (150,000 shares to one investor and 250,000 shares to the other investor) for aggregate proceeds of $800,000. The two non-U.S. persons are family members of an Omagine stockholder who owned approximately 7.1% of the Common Shares outstanding at December 31, 2014.

On November 21, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 400,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 20,000 restricted Common Shares valued at $40,000.

NOTE 6 – COMMON STOCK

With respect to the issuances of the Common Shares listed below:

1.	see Note 9 under ”Equity Finance Agreements” with respect to sales of Common Shares made to YA Global Master SPV, Ltd. (”YA”) pursuant to the Standby Equity Distribution Agreement (“2014 SEDA”).
2.	where issuances of restricted Common Shares occurred at non-discounted valuations, it is so noted and all such non-discounted valuations were based on the closing price of a Common Share on the relevant date.
3.	where issuances of restricted Common Shares occurred at discounted valuations, it is so noted and all such discounted valuations were calculated using the Finnerty Method based on the closing price of a Common Share on the relevant date less a 17% restricted stock discount for 2014 issuances and an 18% restricted stock discount for 2015 issuances.
4.	where issuances of restricted Common Shares occurred at agreed upon negotiated prices, the sale proceeds or value of services rendered are so noted.

On January 5, 2015, Omagine contributed an aggregate of 36,483 restricted Common Shares at the discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On February 23, 2015, Omagine paid a consultant 5,000 restricted Common Shares at the discounted valuation of $9,450.

On March 26, 2015, Omagine sold 6,281 restricted Common Shares to an accredited investor for proceeds of $10,000.

On March 26, 2015, Omagine sold 200,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $210,000.

On May 16, 2015, Omagine sold 100,000 restricted Common Shares to an officer and director for proceeds of $120,000.

On June 29, 2015, the Non-US investor (described below in connection with a June 24, 2014 transaction) exercised 158,228 Tempest Warrants at an exercise price of $1.58 for proceeds of $250,000.

On June 29, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 158,228 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,911 restricted Common Shares valued at $12,500.

On June 30, 2015, a former director exercised 2,000 stock options for proceeds of $1,020.

On September 1, 2015, two new Directors were each issued 25,000 restricted Common Shares at a value of $50,000 each for services to be rendered from September 1 to December 31, 2015.

On September 3, 2015, pursuant to the SEDA, Omagine sold 17,696 Common Shares to YA for proceeds of $25,000.

On September 14, 2015, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $14,700.

On October 8, 2015, 2,375 Tempest Warrants were transferred to an affiliate of the Non-U.S. Investor, a “Non-U.S. Affiliate”. On October 8, 2015, such Non-U.S. Affiliate exercised such 2,375 Tempest Warrants at an exercise price of $1.28 per Common Share for proceeds to Omagine of $3,040.

On October 26, 2105, Omagine sold an aggregate of 1,200,000 restricted Common Shares to three non-U.S. persons who are accredited investors (500,000 restricted Common Shares each to two investors and 200,000 restricted Common Shares to one investor) for aggregate proceeds to Omagine of $1,200,000.

On November 16, 2015, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the October 26, 2015 aforementioned sale of 1,200,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 33,334 restricted Common Shares valued at the discounted valuation of $60,000.

On November 16, 2015, Omagine sold 20,886 restricted Common Shares to an accredited investor for proceeds to Omagine of $25,000.

On January 10, 2014, Omagine paid a law firm for legal services rendered by issuing such law firm 34,374 restricted Common Shares at the discounted valuation of $26,248, which value was $10,436 in excess of the $15,812 owed by Omagine to such law firm at that date.

On January 8, 2014 pursuant to the SEDA, Omagine sold 29,687 Common Shares to YA for proceeds of $25,000.

On January 17, 2014 pursuant to the SEDA, Omagine sold 24,912 Common Shares to YA for proceeds of $20,000.

On January 24, 2014 pursuant to the SEDA, Omagine sold 31,705 Common Shares to YA for proceeds of $25,000.

On February 13, 2014, Omagine contributed an aggregate of 73,315 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine Inc. 401(k) Plan.

On February 14, 2014 pursuant to the SEDA, Omagine sold 68,493 Common Shares to YA for proceeds of $150,000.

On March 14, 2014, Omagine sold 70,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $70,000.

On March 14, 2014, Omagine paid a finder’s fee to a non-U.S. person (a “non-U.S. Finder”) in connection with the aforementioned sale of 70,000 restricted Common Shares to a non-U.S. person. Such finder’s fee was satisfied by issuing such non-U.S. Finder 3,500 restricted Common Shares at the discounted valuation of $6,101.

On March 21, 2014 pursuant to the SEDA, Omagine sold 13,597 Common Shares to YA for proceeds of $25,000.

On April 11, 2014, Omagine sold 150,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $150,000. At September 30, 2014, such non-U.S. person owned 1,195,300 Common Shares, or approximately 7.4% of the Common Shares then outstanding, and 441,120 Strategic Warrants (See Note 7).

On April 11, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 150,000 restricted Common Shares to a non-U.S. person. Such finder’s fee was satisfied by issuing such non-U.S. Finder 7,500 restricted Common Shares at the discounted valuation of $10,147.

On April 22, 2014, Omagine issued 85,822 restricted Common Shares to an affiliate of YA in satisfaction of a $150,000 commitment fee due in connection with the 2014 SEDA.

On May 6, 2014 pursuant to the SEDA, Omagine sold 32,270 Common Shares to YA for proceeds of $50,000.

On June 24, 2014, Omagine sold 362,308 restricted Common Shares and issued 1,000,000 Tempest Warrants (See Note 7) to a non-U.S. person who is an accredited investor (the “Non-U.S. Investor”) for proceeds of $422,100.

On June 24, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale to the non-U.S. Investor (See Note 7). Such finder’s fee was satisfied by paying such non-U.S. Finder $20,000 in cash and issuing such non-U.S. Finder 15,000 restricted Common Shares at the discounted valuation of $19,920.

On August 15, 2014, the Non-U.S. Investor transferred 240,000 Tempest Warrants to an affiliate of his which is also a non-U.S. person (the “Non-U.S. Affiliate”) and such Non-U.S. Affiliate exercised such 240,000 Tempest Warrants at an exercise price of $1.40 per Common Share for proceeds to Omagine of $336,000. On August 25, 2014, Omagine paid a finder’s fee of $16,800 to a non-U.S. Finder in connection with such Tempest Warrant exercise.

On September 3, 2014, in exchange for a $3,000 cash settlement payment, the Company cancelled 10,000 restricted Common Shares valued at the non-discounted valuation of $9,020 issued to a consultant for services rendered.

On October 2, 2014, the Non-U.S. Investor transferred 250,000 Tempest Warrants to the Non-U.S. Affiliate and the Non-U.S. Affiliate exercised such 250,000 Tempest Warrants at an exercise price of $1.31 per Common Share for proceeds to Omagine of $327,500. On October 6, 2014, Omagine paid a finder’s fee of $16,375 to a Non-U.S. Finder in connection with such Tempest Warrant exercise by the Non-U.S. Affiliate.

On November 7, 2014, Omagine sold 14,881 restricted Common Shares to a non-U.S. person who is a civil engineer of CCC-Oman and an accredited investor for proceeds of $30,000.

On November 10, 2014, Omagine sold 7,440 restricted Common shares to a non-U.S. person who is a civil engineer of CCC-Oman and an accredited investor for proceeds of $15,000.

On November 20, 2014, Omagine sold an aggregate of 400,000 restricted Common Shares at $2.00 per share to two non-U.S. persons who are accredited investors (150,000 shares to one investor and 250,000 shares to the other investor) for aggregate proceeds of $800,000. The two non-U.S. persons are family members of an Omagine stockholder who owned approximately 7.1% of the Common Shares outstanding at December 31, 2014.

On November 21, 2014, Omagine paid a finder’s fee to a non-U.S. Finder in connection with the aforementioned sale of 400,000 restricted Common Shares. Such finder’s fee was satisfied by issuing such non-U.S. Finder 20,000 restricted Common Shares valued at $40,000.

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Stock Options, Stock Appreciation Rights and Warrants

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Stock Options, Stock Appreciation Rights and Warrants [Abstract]

STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND WARRANTS

NOTE 7 – STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND WARRANTS

Stock Options/Stock Appreciation Rights

Omagine’s shareholders approved the reservation by Omagine of 2,500,000 Common Shares for issuance under the 2003 Omagine, Inc. Stock Option Plan (the “2003 Plan”). The 2003 Plan expired on August 31, 2013. On March 6, 2014, the Board of Directors approved the adoption of the 2014 Omagine, Inc. Stock Option Plan (the “2014 Plan”).

Both the 2003 Plan and the 2014 Plan are designed to attract, retain and motivate employees, directors, consultants and other professional advisors of Omagine and its subsidiaries (collectively, the “Recipients”) by giving such Recipients the opportunity to acquire stock ownership in Omagine through the issuance of stock options (“Stock Options”) to purchase Common Shares.

Omagine has registered for resale the 2.5 million Common Shares reserved for issuance under the 2003 Plan by filing a registration statement with the SEC on Form S-8. At September 30, 2016, there were 2,279,000 unexpired Stock Options issued but unexercised under the 2003 Plan and all such Stock Options remain valid until the earlier of their exercise date or expiration date.

Pursuant to the 2014 Plan, 3,000,000 Common Shares were reserved for issuance. The 2014 Plan was amended to increase the reservation of 3,000,000 Common Shares for issuance to 5,000,000 Common Shares and to permit issuance of stock appreciation rights (“The Amended 2014 Plan”). Omagine intends to seek its shareholders’ ratification of the adoption by Omagine of the Amended 2014 Plan. At September 30, 2016, there were 990,000 unexpired Stock Options and 1,455,000 Stock Appreciation Rights (“SARs”) issued but unexercised under the Amended 2014 Plan.

A summary of Stock Option and SARs activity for the nine month periods ended September 30, 2016 and 2015 pursuant to both the 2003 Plan and the 2014 Plan is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term  (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2015		3,275,000		$	1.97		1.24	$	1,923,170
Exercised in Q2 2015		(2,000	)	$	0.51		-		-
Granted in Q3 2015		1,455,000		$	2.00		2.29		-
Outstanding September 30, 2015		4,728,000		$	1.98		1.67	$	59,440
Exercisable at September 30, 2015		4,728,000		$	1.98		1.67	$	59,440
Outstanding at January 1, 2016		4,728,000		$	1.98		1.41	$	26,240
Exercised in Q2 2016		(2,000	)	$	0.85
Expired Q2 2016		(2,000	)	$	0.85
Outstanding September 30, 2016		4,724,000		$	1.98		0.65	$	-
Exercisable at September 30, 2016		4,724,000		$	1.98		0.65	$	-

Of the 4,724,000 Stock Options outstanding at September 30, 2016, 2,915,000 of such Stock Options were issued by Omagine in January 2012 and December 2014 as “Strategic Options” to officers, directors and consultants of Omagine whose continued service was deemed by the Board of Directors to be particularly crucial to attaining LLC’s then strategic goal of signing the Development Agreement (“DA”) with the Government of Oman and in recognition of those efforts during 2014 and beyond. The Strategic Options are fully vested, provide for a cashless exercise feature and currently expire on December 31, 2016; 1,965,000 of the Strategic Options are exercisable at $1.70 and 950,000 are exercisable at $2.55. To continue to incentivize the retention and sustained service to the Company of its mission-critical employees and consultants, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended by Omagine in December 2012 to December 31, 2013 (the “First Extension“) and in December 2013 to December 31, 2014 (the “Second Extension”) and in December 2014 to December 31, 2015 (the “Third Extension”) and on August 12, 2015 to December 31, 2016 (the “Fourth Extension”). The December 31, 2015 expiration date of the 950,000 Strategic Options issued December 29, 2014 was extended on August 12, 2015 to December 31, 2016 (“First Extension”).

Of the 2,915,000 Strategic Options, an aggregate of 1,685,000 were granted to Omagine’s three officers, an aggregate of 125,000 were granted to Omagine’s independent directors and 1,000,000 were granted to the Deputy Managing Director of LLC who, pursuant to a March 2007 consulting agreement expiring on December 31, 2016, is also a consultant to the Company. The Deputy Managing Director of LLC also holds 160,000 Stock Options granted pursuant to his consulting agreement which are not Strategic Options, exercisable at $1.25 per share and expiring on March 31, 2017. 

Of the 1,455,000 Stock Appreciation Rights, an aggregate of 750,000 were granted to three officers of Omagine, 15,000 were granted to one independent director and 675,000 were granted to the Deputy Managing Director of LLC.

The $671,440 estimated fair value of the Second Extension was calculated using the Black Scholes option pricing model and the following assumptions (i) $0.89 share price, (ii) 378 day term of the Second Extension, (iii) 144% expected volatility, (iv) 0.13% (378 day term) risk free interest rate, and such $671,440 was expensed evenly over the 378 day requisite service period of the Second Extension (December 19, 2013 through December 31, 2014).

On December 13, 2014, Omagine granted to six persons an aggregate of 950,000 fully vested Strategic Options with a cashless exercise feature (625,000 to three officers, 25,000 to one director and 300,000 to two consultants) exercisable at $2.55 per share and expiring on December 31, 2015. The $1,277,370 estimated fair value of the 950,000 Strategic Options was calculated using the Black Scholes option pricing model and the following assumptions: (i) $2.52 share price, (ii) 368 day term, (iii) 147% expected volatility, (iv) 0.25% (368 day term) risk free interest rate and was expensed in full in the quarterly period ended December 31, 2014.

On December 29, 2014, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended from December 31, 2014 to December 31, 2015 (the “Third Extension”). The $1,504,404 estimated fair value of the Third Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $2.52 share price, (ii) 368 day term, (iii) 147% expected volatility, (iv) 0.25% (368 day term) risk free interest rate and was expensed in full in the quarterly period ended December 31, 2014.

On August 12, 2015, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended from December 31, 2015 to December 31, 2016 (the “Fourth Extension”). The $915,493 estimated fair value of the Fourth Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.91 share price, (ii) 507 day term, (iii) 147% expected volatility, (iv) 0.32% (507 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

On August 12, 2015, the expiration date of the 950,000 Strategic Options issued in December of 2014 was extended from December 31, 2015 to December 31, 2016 (the “First Extension”). The $541,215 estimated fair value of the First Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.91 share price, (ii) 507 day term, (iii) 147% expected volatility, (iv) 0.32% (507 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

On March 28, 2014, Omagine granted to four persons an aggregate of 40,000 Stock Options exercisable at $1.80 per share and expiring on March 27, 2019. One such person is an Omagine independent director, one is an Omagine officer and two are consultants. The $55,376 estimated fair value of the 40,000 Stock Options was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.80 share price, (ii) a 5 year term, (iii) 106% expected volatility and (iv) 1.75% (5 year term) risk free interest rate. $51,914 of such estimated fair value was expensed in the year ended December 31, 2014, and $3,462 was expensed in the year ended December 31, 2015.

On June 30, 2015, a former Omagine director exercised 2,000 stock options at $0.51 per share.

On August 31, 2015, Omagine granted an aggregate of 1,455,000 Stock Appreciation Rights (“SARs”) to six persons exercisable at $2.00 per share and expiring on December 31, 2017. Of the 1,455,000 SARs, an aggregate of 750,000 were granted to three officers of Omagine, 15,000 were granted to one independent director and 675,000 were granted to the Deputy Managing Director of LLC. The $1,654,481 estimated fair value of the SARs was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.60 share price, (ii) 854 day term, (iii) 147% expected volatility, (iv) 0.28% (854 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

A summary of non-vested Stock Options and the Common Shares underlying such Stock Options for the nine month periods ended September 30, 2016 and 2015 is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term  (in years)
Non-vested shares at January 1, 2015		10,000		$	1.80		4.30
Vested in Q1 2015		(10,000	)	$	1.80		4.30
Non-vested shares at September 30, 2015		-			-		-
Non-vested shares at January 1, 2016		-			-		-
Non-vested shares at September 30, 2016		-			-		-

Issued and outstanding Stock Options and SAR’s (all non-qualified) as of September 30, 2016 are as follows:

Year Granted		Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
	2007		160,000		160,000	$	1.25		March 31, 2017
	2008		150,000		150,000	$	2.60		September 23, 2018
	2012		1,965,000		1,965,000	$	1.70		December 31, 2016
	2012		2,000		2,000	$	1.70		April 12, 2017
	2013		2,000		2,000	$	1.38		January 14, 2018
	2014		40,000		40,000	$	1.80		March  27, 2019
	2014		950,000		950,000	$	2.55		December 31, 2016
	2015		1,455,000		1,455,000	$	2.00		December 31, 2017
	Totals		4,724,000		4,724,000

A summary of information about Stock Options and SARs outstanding at September 30, 2016 is as follows:

		Stock Options Outstanding						Exercisable
Range of Exercise Prices		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Number of Shares		Weighted Average Exercise Price
	$ 1.01 - $2.00		3,624,000		1.80		0.70		3,624,000		1.80
	$ 2.01 - $3.00		1,100,000		2.56		0.49		1,100,000		2.56
Totals			4,724,000	$	1.98		0.65		4,724,000	$	1.98

As of September 30, 2016, there was $675 of unrecognized compensation costs relating to unexpired Stock Options. That cost is expected to be recognized $135 in 2016 and $540 in 2017.

Warrants

As of September 30, 2016, Omagine had 6,422,124 Common Stock purchase warrants (“Warrants”) issued and outstanding. The Warrants do not contain any price protection provisions that would require them to be classified as liabilities (subject to re-measurement at fair value each time a balance sheet is presented) rather than presented as a component of stockholders’ equity.

The Tempest Warrants

On June 24, 2014, in connection with the sale of 362,308 restricted Common Shares to an investor (See Note 6), Omagine issued 1,000,000 Warrants to such investor, each of which were exercisable for the purchase of one restricted Common Share at a per Common Share exercise price equal to the greater of: (a) $1.00 per Common Share, or (b) 80% of the closing sale price for a Common Share on the trading day immediately preceding the relevant exercise date (the “Tempest Warrants”). Both the exercise price of the Tempest Warrants and the number of Common Shares issuable upon exercise of the Tempest Warrants were subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock, or a dividend, reclassification, reorganization, or spin off.

On August 15, 2014, 240,000 Tempest Warrants were transferred to an affiliate of the investor. The affiliate exercised the 240,000 Tempest Warrants at an exercise price of $1.40 per Common Share for proceeds of $336,000. On October 2, 2014, a further 250,000 Tempest Warrants were exercised by such affiliate at an exercise price of $1.31 per Common Share for proceeds of $327,500. On June 29, 2015, the investor exercised 158,228 of the Tempest Warrants at an exercise price of $1.58 per Common Share for proceeds of $250,000. In conjunction with this June 29, 2015 exercise, Omagine agreed with the investor to file a registration statement with the SEC to register all the aforementioned Common Shares presently owned by the investor and his affiliate as well as the remaining 351,772 Common Shares underlying the remaining 351,772 Tempest Warrants outstanding at that time. On October 8, 2015, 2,375 Tempest Warrants were transferred to an affiliate, a “Non-U.S. Affiliate”. On October 8, 2015, such Non-U.S. Affiliate exercised such 2,375 Tempest Warrants at an exercise price of $1.28 per Common Share for proceeds to Omagine of $3,040. The balance of all 349,397 unexercised Tempest Warrants expired on June 23, 2016.

The Strategic Warrants

Omagine has 6,422,124 Warrants outstanding, 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $5.00 and 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $10.00 (collectively, the “Strategic Warrants”).

Omagine filed a post-effective amendment to its registration statement on Form S-1 (Commission File No. 333-183852) whereby the Strategic Warrants and the 6,422,124 Common Shares underlying the Strategic Warrants were registered by Omagine (the “Warrant Registration”). The Warrant Registration was declared effective by the SEC and its effective status expired. Omagine filed another post-effective amendment to the Warrant Registration on February 11, 2015 which was declared effective by the SEC on February 13, 2015 and its effective status expired. Omagine filed another post-effective amendment to the Warrant Registration on January 14, 2016 which was declared effective by the SEC on January 25, 2016 (the “Updated Warrant Registration”). As of the date hereof, the effective status of the Updated Warrant Registration expired and the Company intends to file a post-effective amendment to such Registration Statement with the SEC in order to again register the Common Shares issuable upon the exercise of the Strategic Warrants. Neither the exercise prices of the Strategic Warrants nor the number of Common Shares issuable upon exercise of the Strategic Warrants are subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock, or a dividend, reclassification, reorganization, or spinoff.

On August 18, 2014, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended for a third time to June 30, 2015 and again on January 5, 2015, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended to December 31, 2015. Again on August 12, 2015, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended to December 31, 2016. All other terms and conditions of the Strategic Warrants remained the same. All Strategic Warrants expire on December 31, 2016 unless redeemed earlier by Omagine upon 30 days prior written notice to the Strategic Warrant holders.

NOTE 7 – STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND WARRANTS

Stock Options/Stock Appreciation Rights

Omagine’s shareholders approved the reservation by Omagine of 2,500,000 Common Shares for issuance under the 2003 Omagine, Inc. Stock Option Plan (the “2003 Plan”). The 2003 Plan expired on August 31, 2013. On March 6, 2014, the Board of Directors approved the adoption of the 2014 Omagine, Inc. Stock Option Plan (the “2014 Plan”).

Both the 2003 Plan and the 2014 Plan are designed to attract, retain and motivate employees, directors, consultants and other professional advisors of Omagine and its subsidiaries (collectively, the “Recipients”) by giving such Recipients the opportunity to acquire stock ownership in Omagine through the issuance of stock options (“Stock Options”) to purchase Common Shares.

Omagine has registered for resale the 2.5 million Common Shares reserved for issuance under the 2003 Plan by filing a registration statement with the SEC on Form S-8. At December 31, 2015, there were 2,283,000 unexpired Stock Options issued but unexercised under the 2003 Plan and all such Stock Options remain valid until the earlier of their exercise date or expiration date.

Pursuant to the 2014 Plan, 3,000,000 Common Shares were reserved for issuance. The 2014 Plan was amended to increase the reservation of 3,000,000 Common Shares for issuance to 5,000,000 Common Shares and to permit issuance of stock appreciation rights (“The Amended 2014 Plan”). Omagine intends to seek its shareholders’ ratification of the adoption by Omagine of the Amended 2014 Plan. At December 31, 2015, there were 990,000 unexpired Stock Options and 1,455,000 Stock Appreciation Rights (“SARs”) issued but unexercised under the Amended 2014 Plan.

A summary of Stock Option and SARs activity for the years ended December 31, 2015 and 2014 pursuant to both the 2003 Plan and the 2014 Plan is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2014		2,285,000		$	1.72		1.43	$	1,100
Granted in Q1 2014		40,000		$	1.80		5.06		–
Granted in Q4 2014		950,000		$	2.55		1.01		–
Outstanding December  31, 2014		3,275,000		$	1.97		1.24	$	1,923,170
Exercisable at December 31, 2014		3,265,000		$	1.97		1.24	$	1,915,670
Outstanding at January 1, 2015		3,275,000		$	1.97		1.24	$	1,923,170
Exercised in Q2 2015		(2,000	)	$	0.51		–		–
Granted in Q3 2015		1,455,000		$	2.00		2.03		–
Outstanding December 31, 2015		4,728,000		$	1.98		1.41	$	26,240
Exercisable at December 31, 2015		4,728,000		$	1.98		1.41	$	26,240

Of the 3,273,000 Stock Options outstanding at December 31, 2015, 2,915,000 of such Stock Options were issued by Omagine in January 2012 and December 2014 as “Strategic Options” to officers, directors and consultants of Omagine whose continued service was deemed by the Board of Directors to be particularly crucial to attaining LLC’s then strategic goal of signing the Development Agreement (“DA”) with the Government of Oman and in recognition of those efforts during 2014 and beyond. The Strategic Options are fully vested, provide for a cashless exercise feature and currently expire on December 31, 2016; 1,965,000 of the Strategic Options are exercisable at $1.70 and 950,000 are exercisable at $2.55. To continue to incentivize the retention and sustained service to the Company of its mission-critical employees and consultants, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended by Omagine in December 2012 to December 31, 2013 (the “First Extension“) and in December 2013 to December 31, 2014 (the “Second Extension”) and in December 2014 to December 31, 2015 (the “Third Extension”) and on August 12, 2015 to December 31, 2016 (the “ Fourth Extension”).

Of the 2,915,000 Strategic Options, an aggregate of 1,685,000 were granted to Omagine’s three officers, an aggregate of 125,000 were granted to Omagine’s independent directors and 1,000,000 were granted to the Deputy Managing Director of LLC who, pursuant to a March 2007 consulting agreement expiring on December 31, 2016, is also a consultant to the Company. The Deputy Managing Director of LLC also holds 160,000 Stock Options granted pursuant to his consulting agreement which are not Strategic Options, exercisable at $1.25 per share and expiring on March 31, 2017. 

Of the 1,455,000 Stock Appreciation Rights, an aggregate of 750,000 were granted to three officers of Omagine, 15,000 were granted to one independent director and 675,000 were granted to the Deputy Managing Director of LLC.

The $1,373,326 estimated fair value of the First Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.77 share price, (ii) 370 day term of the First Extension, (iii) 125% expected volatility, (iv) 0.16% (370 day term) risk free interest rate and such $1,373,326 was expensed evenly by Omagine over the 370 day requisite service period of the First Extension (December 27, 2012 through December 31, 2013). The estimated fair value of the issuance in 2012 of the Strategic Options was $1,685,629.

The $671,440 estimated fair value of the Second Extension was calculated using the Black Scholes option pricing model and the following assumptions (i) $0.89 share price, (ii) 378 day term of the Second Extension, (iii) 144% expected volatility, (iv) 0.13% (378 day term) risk free interest rate, and such $671,440 was expensed evenly over the 378 day requisite service period of the Second Extension (December 19, 2013 through December 31, 2014).

On December 13, 2014, Omagine granted to six persons an aggregate of 950,000 fully vested Strategic Options with a cashless exercise feature (625,000 to three officers, 25,000 to one director and 300,000 to two consultants) exercisable at $2.55 per share and expiring on December 31, 2015. The $1,277,370 estimated fair value of the 950,000 Strategic Options was calculated using the Black Scholes option pricing model and the following assumptions: (i) $2.52 share price, (ii) 368 day term, (iii) 147% expected volatility, (iv) 0.25% (368 day term) risk free interest rate and was expensed in full in the quarterly period ended December 31, 2014.

On December 29, 2014, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended from December 31, 2014 to December 31, 2015 (the “Third Extension”). The $1,504,404 estimated fair value of the Third Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $2.52 share price, (ii) 368 day term, (iii) 147% expected volatility, (iv) 0.25% (368 day term) risk free interest rate and was expensed in full in the quarterly period ended December 31, 2014.

On August 12, 2015, the expiration date of the 1,965,000 Strategic Options issued in January 2012 was extended from December 31, 2015 to December 31, 2016 (the “Fourth Extension”). The $915,493 estimated fair value of the Fourth Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.91 share price, (ii) 507 day term, (iii) 147% expected volatility, (iv) 0.32% (507 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

On August 12, 2015, the expiration date of the 950,000 Strategic Options issued in December of 2014 was extended from December 31, 2015 to December 31, 2016 (the “First Extension”). The $541,215 estimated fair value of the First Extension was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.91 share price, (ii) 507 day term, (iii) 147% expected volatility, (iv) 0.32% (507 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

On January 15, 2013 an Omagine independent director was granted 2,000 Stock Options exercisable at $1.38 per share and expiring on January 14, 2018.

 On March 28, 2014, Omagine granted to four persons an aggregate of 40,000 Stock Options exercisable at $1.80 per share and expiring on March 27, 2019. One such person is an Omagine independent director, one is an Omagine officer and two are consultants. The $55,376 estimated fair value of the 40,000 Stock Options was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.80 share price, (ii) a 5 year term, (iii) 106% expected volatility and (iv) 1.75% (5 year term) risk free interest rate. $51,914 of such estimated fair value was expensed in the year ended December 31, 2014, and $3,462 was expensed in the year ended December 31, 2015.

On June 30, 2015, a former Omagine director exercised 2,000 stock options at $0.51 per share.

On August 31, 2015, Omagine granted an aggregate of 1,455,000 Stock Appreciation Rights (“SARs”) to six persons exercisable at $2.00 per share and expiring on December 31, 2017. Of the 1,455,000 SARs, an aggregate of 750,000 were granted to three officers of Omagine, 15,000 were granted to one independent director and 675,000 were granted to the Deputy Managing Director of LLC. The $1,654,481 estimated fair value of the SARs was calculated using the Black Scholes option pricing model and the following assumptions: (i) $1.60 share price, (ii) 854 day term, (iii) 147% expected volatility, (iv) 0.28% (854 day term) risk free interest rate and was expensed in full in the quarterly period ended September 30, 2015.

A summary of non-vested Stock Options and the Common Shares underlying such Stock Options for the years ended December 31, 2015 and 2014 is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Non-vested shares at January 1, 2014		–			–		–
Granted in Q1 2014		40,000		$	1.80		5.00
Vested in Q1 2014		(30,000	)	$	1.80		4.81
Non-vested shares at December 31, 2014		10,000		$	1.80		4.30
Non-vested shares at January 1, 2015		10,000		$	1.80		4.30
Vested in Q1 2015		(10,000	)	$	1.80		4.30
Non-vested shares at December 31, 2015		–			–		–

Issued and outstanding Stock Options and SARs (all non-qualified) as of December 31, 2015 are as follows:

Year Granted		Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
	2007		160,000		160,000	$	1.25	March 31, 2017
	2008		150,000		150,000	$	2.60	September 23, 2018
	2011		4,000		4,000	$	0.85	May 16, 2016
	2012		1,965,000		1,965,000	$	1.70	December 31, 2016
	2012		2,000		2,000	$	1.70	April 12, 2017
	2013		2,000		2,000	$	1.38	January 14, 2018
	2014		40,000		40,000	$	1.80	March  27, 2019
			950,000		950,000	$	2.55	December 31, 2016
	2015		1,455,000		1,455,000	$	2.00	December 31, 2017
	Totals		4,728,000		4,728,000

A summary of information about Stock Options and SARs outstanding at December 31, 2015 is as follows:

		Stock Options Outstanding						Exercisable
Range of Exercise Prices		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Number of Shares		Weighted Average Exercise Price
$	0.50 - $1.00		4,000	$	0.85		0.38		4,000	$	0.85
$	1.01 - $2.00		3,624,000		1.80		1.46		3,624,000		1.80
$	2.01 - $3.00		1,100,000		2.56		1.26		1,100,000		2.56
	Totals		4,728,000	$	1.98		1.41		4,728,000	$	1.98

As of December 31, 2015, there was $1,080 of unrecognized compensation costs relating to unexpired Stock Options. That cost is expected to be recognized $540 in 2016 and $540 in 2017.

Warrants

As of December 31, 2015, Omagine had 6,771,521 Common Stock purchase warrants (“Warrants”) issued and outstanding. The Warrants do not contain any price protection provisions that would require them to be classified as liabilities (subject to re-measurement at fair value each time a balance sheet is presented) rather than presented as a component of stockholders’ equity.

The Tempest Warrants

On June 24, 2014, in connection with the sale of 362,308 restricted Common Shares to an investor (See Note 6), Omagine issued 1,000,000 Warrants to such investor, each of which are exercisable for the purchase of one restricted Common Share at a per Common Share exercise price equal to the greater of: (a) $1.00 per Common Share, or (b) 80% of the closing sale price for a Common Share on the trading day immediately preceding the relevant exercise date (the “Tempest Warrants”). Both the exercise price of the Tempest Warrants and the number of Common Shares issuable upon exercise of the Tempest Warrants are subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock, or a dividend, reclassification, reorganization, or spin off.

The Tempest Warrants and the Common Shares issuable upon exercise of the Tempest Warrants are “restricted securities” as that term is defined in the Securities Law. The Tempest Warrants expire on June 23, 2016 and are not redeemable by Omagine.

On August 15, 2014, 240,000 Tempest Warrants were transferred to an affiliate of the investor. The affiliate exercised the 240,000 Tempest Warrants at an exercise price of $1.40 per Common Share for proceeds of $336,000. On October 2, 2014, a further 250,000 Tempest Warrants were exercised by such affiliate at an exercise price of $1.31 per Common Share for proceeds of $327,500. On June 29, 2015, the investor exercised 158,228 of the Tempest Warrants at an exercise price of $1.58 per Common Share for proceeds of $250,000. In conjunction with this June 29, 2015 exercise, Omagine agreed with the investor to file a registration statement with the SEC to register all the aforementioned Common Shares presently owned by the investor and his affiliate as well as the remaining 351,772 Common Shares underlying the remaining 351,772 Tempest Warrants outstanding at that time. On October 8, 2015, 2,375 Tempest Warrants were transferred to an affiliate, a “Non-U.S. Affiliate”. On October 8, 2015, such Non-U.S. Affiliate exercised such 2,375 Tempest Warrants at an exercise price of $1.28 per Common Share for proceeds to Omagine of $3,040. As of the date of this report there are 349,397 Tempest Warrants outstanding. (See Note 11).

The Strategic Warrants

Omagine has 6,422,124 Warrants outstanding, 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $5.00 and 3,211,062 of which are exercisable for the purchase of one Common Share at a per Common Share exercise price of $10.00 (collectively, the “Strategic Warrants”).

Omagine filed a post-effective amendment to its registration statement on Form S-1 (Commission File No. 333-183852) whereby the Strategic Warrants and the 6,422,124 Common Shares underlying the Strategic Warrants were registered by Omagine (the “Warrant Registration”). The Warrant Registration was declared effective by the SEC and its effective status expired. Omagine filed another post-effective amendment to the Warrant Registration on February 11, 2015 which was declared effective by the SEC on February 13, 2015 and its effective status expired. Omagine filed another post-effective amendment to the Warrant Registration on January 14, 2016 which was declared effective by the SEC on January 25, 2016 (the “Updated Warrant Registration”). The effective status of the Updated Warrant Registration will expire October 21, 2016. Neither the exercise prices of the Strategic Warrants nor the number of Common Shares issuable upon exercise of the Strategic Warrants are subject to adjustment in the event of a stock split, combination or subdivision of the Common Stock, or a dividend, reclassification, reorganization, or spinoff.

On August 18, 2014, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended for a third time to June 30, 2015 and again on January 5, 2015, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended to December 31, 2015. Again on August 12, 2015, pursuant to a resolution of the Board of Directors, the expiration date for all Strategic Warrants was extended to December 31, 2016. All other terms and conditions of the Strategic Warrants remained the same. All Strategic Warrants expire on December 31, 2016 unless redeemed earlier by Omagine upon 30 days prior written notice to the Strategic Warrant holders.

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U.S. Income Taxes

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

U.S. Income Taxes [Abstract]

U.S. INCOME TAXES

NOTE 8 – U.S. INCOME TAXES

Deferred U.S. tax assets are comprised of the following:

	September 30,			December 31,
	2016			2015
U.S. federal net operating loss carry forwards	$	6,807,000		$	6,375,000
U.S. state and city net operating loss carry forwards, net of U.S. federal tax benefit		1,945,000			1,822,000
		8,752,000			8,197,000
Less: Valuation allowance		(8,752,000	)		(8,197,000	)
Total	$	-		$	-

Management has determined, based on the Company's current condition, that a full valuation allowance is appropriate at September 30, 2016. At September 30, 2016, the Company had U.S. federal net operating loss carry forwards of approximately $19,448,000 expiring in various amounts from fiscal year 2017 to fiscal year 2036.

Current U.S. income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs. 

The Company believes that it has no uncertain tax positions and no unrecognized tax benefits at September 30, 2016 and December 31, 2015.

NOTE 8 – U.S. INCOME TAXES

Deferred U.S. tax assets are comprised of the following:

	December 31,			December 31,
	2015			2014
U.S. federal net operating loss carry forwards	$	6,375,000		$	5,293,000
U.S. state and city net operating loss carry forwards, net of U.S. federal tax benefit		1,822,000			1,512,000
		8,197,000			6,805,000
Less: Valuation allowance		(8,197,000	)		(6,805,000	)
Total	$	–		$	–

Management has determined, based on the Company's current condition, that a full valuation allowance is appropriate at December 31, 2015.

At December 31, 2015, the Company had U.S. federal net operating loss carry forwards of approximately $18,215,000 expiring in various amounts from fiscal year 2017 to fiscal year 2035.

Current U.S. income tax law limits the amount of loss available to offset against future taxable income when a substantial change in ownership occurs. 

The Company believes that it has no uncertain tax positions and no unrecognized tax benefits at December 31, 2015 and 2014.

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Commitments

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Commitments [Abstract]

COMMITMENTS

NOTE 9 – COMMITMENTS

Leases

Omagine leases its executive office in New York under a month to month lease from an unaffiliated third party. LLC leases office space in Muscat, Oman from an unaffiliated third party under a one year lease which commenced in January 2016 and which provides for an annual rental of $35,880. The Company’s rent expense for the nine month periods ended September 30, 2016 and 2015 was $45,657 and $124,419, respectively.

Employment Agreements

The Company presently has no employment agreements with any person.

Pursuant to a prior employment agreement, Omagine was obligated to employ its President and Chief Executive Officer at an annual base salary of $125,000 plus an additional amount based on a combination of net sales and earnings before taxes. Omagine plans to enter into a new employment agreement with its President although the terms of such employment agreement have not yet been determined. Omagine had continued to accrue salary payable to its President through December 31, 2014 and on January 1, 2015 the Company recommenced its bi-monthly payroll for employees, including for its President on the basis of an annual salary of $125,000. On May 1, 2015 the Company paid its President $87,781 of accrued officer’s payroll and on May 16, 2015 the Company applied $120,000 of accrued officer’s payroll in exchange for the purchase of 100,000 restricted Common Shares of Omagine, Inc. stock at a purchase price of $1.20 per share. On April 5, 2016 the Company applied $50,400 of accrued officer’s payroll in exchange for the purchase of 56,000 restricted Common Shares of Omagine Inc. stock at a purchase price of $0.90 per share. On June 14, 2016 the Company paid its President $55,601 of accrued officer’s payroll. At September 30, 2016 and December 31, 2015, Omagine had unpaid accrued officer’s compensation due to its President of $57,155 and $115,131, respectively.

Pursuant to a prior employment agreement, Omagine was obligated to employ its Vice-President and Secretary at an annual base salary of $100,000. Omagine plans to enter into a new employment agreement with its Vice-President although the terms of such employment agreement have not yet been determined. On January 1, 2015 the Company recommenced its bi-monthly payroll for employees, including for its Vice-President on the basis of an annual salary of $100,000. On March 26, 2015 the Company paid its Vice-President $33,000 of accrued officer’s payroll. On September 9, 2015, October 2, 2015 and December 7, 2015, the Company paid its Vice-President accrued officers’ payroll of $2,000, $3,200 and $2,500, respectively. On June 23, 2016 the Company paid its Vice-President $32,000 of accrued officer’s payroll and on July 28, 2016 the Company paid an additional $2,700. At September 30, 2016 and December 31, 2015, Omagine had unpaid accrued officer’s compensation due to its Vice-President of $141,122 and $137,905, respectively.

On January 1, 2015 the Company recommenced its bi-monthly payroll for its Controller on the basis of an annual salary of $80,000. On January 14, 2015 the Company paid its Controller $25,000 of accrued officer’s payroll. At September 30, 2016 and December 31, 2015, Omagine had unpaid accrued officer’s compensation due to its Controller of $169,600 and $136,798, respectively.

Contingent Fee Payment Obligation

Depending on circumstances, LLC may execute an agreement with Michael Baker International (”Baker”) to hire Baker as its Program Manager and/or Project Manager (the potential “PM Contract”). Omagine has employed Baker to provide design and engineering services through the feasibility and engineering study phases of the Omagine Project. As part of its compensation agreement with Baker, Omagine agreed that it would be obligated to pay Baker the sum of $72,000 (the “Contingent Fee”) after LLC signed the DA with the Government of Oman. Omagine paid Baker the Contingent Fee in October 2015.

Equity Financing Agreements

Omagine, Inc. and YA were parties to a Stand-By Equity Distribution Agreement (the “2011 SEDA”) which was due to expire on September 1, 2014. On July 21, 2014, the 2011 SEDA was terminated by the mutual consent of Omagine and YA.

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement on generally the same terms and conditions as the 2011 SEDA (the”2014 SEDA“). Unless earlier terminated in accordance with its terms, the 2014 SEDA was to terminate automatically on the earlier of (i) the first day of the month next following the 24-month anniversary of the “Effective Date” (as hereinafter defined) (i.e. February 1, 2017), or (ii) the date on which YA shall have made payment to Omagine of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000. On September 20, 2016, the Company and YA entered into an agreement amending the SEDA extending the term of the 2014 SEDA to February 1, 2019 or to such date on which YA shall have made payment to Omagine of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000 (the “Second SEDA Amendment”). On April 22, 2014, in satisfaction of a $150,000 commitment fee due pursuant to the 2014 SEDA, Omagine issued 85,822 restricted Common Shares to YA Global II SPV, LLC, which is an affiliate of YA (the “Affiliate”). On September 21, 2016 in satisfaction of a $150,000 commitment fee due pursuant to the Second SEDA Amendment, Omagine issued 161,290 restricted Common shares to the YA Affiliate. (See Note 6)

Pursuant to the terms of the 2014 SEDA, Omagine may in its sole discretion, and upon giving written notice to YA (an ”Advance Notice”), periodically sell Common Shares to YA (“Shares”) at a per Share price (“Purchase Price”) equal to 95% of the lowest daily volume weighted average price (the “VWAP”) for a Common Share as quoted by Bloomberg, L.P. during the five (5) consecutive Trading Days (as such term is defined in the 2014 SEDA) immediately subsequent to the date of the relevant Advance Notice (the “Pricing Period”).

Omagine is not obligated to sell any Shares to YA but may, over the term of the 2014 SEDA and in its sole discretion, sell to YA that number of Shares valued at the Purchase Price from time to time in effect that equals up to five million dollars ($5,000,000) in the aggregate. YA is obligated under the 2014 SEDA to purchase such Shares from Omagine subject to certain conditions including (i) Omagine filing a registration statement with the SEC to register the resale by YA of the Shares sold to YA under the 2014 SEDA (“Registration Statement”), (ii) the SEC declaring such Registration Statement effective (the date of such declaration by the SEC being the “Effective Date”), (iii) Omagine certifying to YA at the time of each Advance Notice that Omagine has performed all covenants and agreements to be performed and has complied with all obligations and conditions contained in the 2014 SEDA, (iv) periodic sales of Shares to YA must be separated by a time period of at least five Trading Days, and (v) the dollar value of any individual periodic sale of Shares designated by Omagine in any Advance Notice may not exceed the greater of (a) two hundred thousand dollars ($200,000), or (b) the average of the ”Daily Value Traded” for each of the five (5) Trading Days immediately preceding the date of the relevant Advance Notice, where Daily Value Traded is the product obtained by multiplying the number representing the daily trading volume of Common Shares for such Trading Day by the VWAP for a Common Share on such Trading Day.

Omagine Project

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 just west of the capital city of Muscat and nearby Muscat International Airport (the “Omagine Site”). LLC has signed a Development Agreement (“DA”) and a Usufruct Agreement (“UA”) for the Omagine Project with the Government of Oman. (See “Development Agreement and Usufruct Agreement” below). The Omagine Project is planned to be an integration of cultural, heritage, entertainment and residential components including a high-culture theme park and associated buildings, shopping and retail establishments, restaurants and approximately 2,100 residences.

Development Agreement and Usufruct Agreement

Omagine’s 60% owned subsidiary, LLC, signed a DA with the Government of Oman in October 2014 for the development in Oman by LLC of the Omagine Project. The legal effectiveness of the DA was conditional upon its ratification by Oman’s Ministry of Finance, which Ratification occurred in March 2015. On July 1, 2015 (the “Operative Date”), the Government and LLC entered into the UA with respect to the land constituting the Omagine Site.

The Land Rights give LLC extensive rights over the land constituting the Omagine Site including the right to sell such land on a freehold basis. On July 2, 2015, the UA was registered by the Government and a Land Rights registration fee of 20,250 Omani Rials ($52,650) was paid by LLC to the Government (and expensed in the consolidated statements of operations for the three months ended September 30, 2015), which registration legally perfected LLC’s ownership of the Land Rights.

The five year period commencing on the Operative Date is a rent free period and thereafter LLC will pay annual rent to the Government based on only the built but unsold commercial area of the Omagine Project (approximately 150,000 square meters) or approximately 45,000 Omani Rials ($117,000) per year based on the current annual per square meter fee of 0.300 Omani Rials ($0.78). The term of the DA is 20 years and the term of the UA is 50 years (renewable) commencing from the Operative Date. The UA and the DA provisions relevant to the UA survive the expiration of the term of the DA.

The Operative Date of July 1, 2015 is the date from which all time periods for the execution by LLC of various tasks enumerated in the DA are to be measured. The continued legal effectiveness of the DA subsequent to the Operative Date is dependent upon the following milestone dates being achieved (any or all of which may be extended or waived by the Government): (1) LLC’s delivery to the Government within twelve months from the Operative Date of a term sheet with lenders for the financing of the first phase, any other phase or all of the Project, (2) LLC’s submission to the Ministry of Tourism of a social impact assessment within 8 months of the Operative Date and the Government’s approval thereof within 12 months of the Operative Date, (3) the Government’s approval within 12 months of the Operative Date of the development control plan for the Omagine Project, and (4) the transformation of LLC into a joint stock company within 12 months of the Operative Date. Company management has had informal discussions with the concerned government officials and management is confident that given the present economic conditions in the region (of which the Government is keenly aware), the Company will be granted an extension of time on many of such due dates similar to the extension of the Operative Date to July 1. 2015 already previously granted by the Government.

Pursuant to the DA, LLC must substantially complete the construction of the seven Pearl buildings and one hotel (the “Minimum Build Obligation” or “MBO”) within 5 years of the Operative Date. Any material breach by LLC of its obligation to perform the MBO would constitute an event of default under the DA. The DA specifies that the principal construction contracts should be executed within one year of the Operative Date. LLC is required to provide written notice to the Government in certain circumstances, such as LLC’s change in an anticipated milestone date that would result in a substantial achievement of work to occur later than 60 days after such milestone date. The DA provides that the Government is required to grant reasonable requests for the extension of the terms of the DA in such circumstances.

The foregoing discussion of the terms of the DA and UA is not meant to be definitive or complete and is qualified in its entirety by reference to the complete texts of the DA and UA as filed by the Company with the SEC.

Omagine LLC Shareholder Agreement

Omagine and JOL organized LLC in Oman and capitalized it with an initial investment of twenty thousand (20,000) Omani Rials ($52,000). On April 20, 2011, Omagine, JOL and the New Investors entered into a shareholder agreement relating to LLC (the “Shareholder Agreement”).

Pursuant to the Shareholder Agreement, Omagine invested an additional 70,000 Omani Rials ($182,000) into LLC and agreed to make a further additional investment into LLC of 210,000 Omani Rials ($546,000) after the execution of the DA (the “OMAG Final Equity Investment”). As of December 31, 2015, Omagine had invested 300,000 Omani Rials ($780,000) into LLC. Pursuant to the Shareholder Agreement, RCA invested the value of the Land Rights as a non-cash “payment-in-kind” capital contribution to LLC on July 2, 2015.

Further pursuant to the Shareholder Agreement, the New Investors invested an aggregate of 60,000 Omani Rials ($156,000) into LLC and agreed, subject to certain conditions precedent, to make further additional investments into LLC in the aggregate amount of 26,628,125 Omani Rials ($69,233,125).

The CCC Deferred Investment Obligation and the OMAG Option

The conditions precedent to CCC and RCA being required to make their agreed $69,233,125 aggregate additional investments (their “Deferred Equity Investments”) into LLC include (1) the execution of a construction contract on or before July 1, 2016 between LLC and CCC-Oman (the “CCC-Contract”) and (2) execution of a legally binding agreement between LLC and a lender pursuant to which such lender agrees to provide Debt Financing for the first phase or any or all phases of the Omagine Project in an amount sufficient to finance the first phase of the Omagine Project’s construction plus the installment payments due to Omagine for its Success Fee and Pre-Development Expense Amount.(the “First Financing Agreement Date”).

The First Financing Agreement Date occurred on November 29, 2015 but the CCC-Contract was not executed on or before July 1, 2016 nor has it been executed yet as of the date hereof and the LLC Shareholders are presently re-negotiating portions of the Shareholder Agreement (an “Amended and Restated Shareholder Agreement”).

The failure to execute the CCC-Contract by July 1, 2016 does not relieve RCA of its continuing obligation under the Shareholder Agreement (irrespective of such CCC-Contract failure) to make RCA’s approximately $20 million Deferred Investment into LLC; but it may (under certain conditions) relieve CCC of its obligation under the Shareholder Agreement to make its approximately $49 million Deferred Investment into LLC.

Additionally pursuant to the Shareholder Agreement, such failure of the CCC-Contract to occur on or before July 1, 2016 automatically and without any further action required by any party, triggered and activated on July 2, 2016 an option in favor of Omagine, Inc. (the “OMAG Option”) to purchase all LLC Shares presently owned by CCC at any time of OMAG’s choosing prior to July 1, 2017 at a price equal to CCC’s original purchase price of 22,500 Omani Rials ($58,500). Furthermore pursuant to the Shareholder Agreement, neither CCC-Oman nor CCC-Panama is permitted to sell any of such LLC Shares presently owned by them prior to July 2, 2017 to any Person other than Omagine, Inc., or to a purchaser designated by Omagine, Inc., in a sale made pursuant to the exercise of the OMAG Option.

Although the LLC Shareholders are presently negotiating an Amended and Restated Shareholder Agreement, there is no assurance that it will happen. If agreement is not reached by the LLC Shareholders on the matters presently under discussion, or if alternative financing is not obtained, or if alternative shareholder arrangements are not agreed, LLC may not be able to complete the Omagine Project and may not be able to recover the $718,614,000 value of the Land Rights included in the Company’s Consolidated Balance Sheet at September 30, 2016 (See Note 2).

Further pursuant to the Shareholder Agreement, LLC is required to pay Omagine a Success Fee of $10,000,000 in five equal annual installments beginning on or within 10 days after the Draw Date and a Pre-Development Expense Amount to be determined (presently estimated at $17,920,114) payable 50% on or within 10 days after the Draw Date and 50% in five equal annual installments beginning on the first anniversary of the Draw Date. The Draw Date is defined as “the date upon which LLC draws and receives the first amount of Debt Financing pursuant to a Financing Agreement”. It is possible that the payment terms for the Pre-Development Expense Amount and the Success Fee may be modified if and only if the LLC Shareholders agree to an Amended and Restated Shareholder Agreement.

NOTE 9 – COMMITMENTS

Leases

Omagine leases its executive office in New York under a month to month lease from an unaffiliated third party. LLC leases office space in Muscat, Oman from an unaffiliated third party under a one year prepaid lease which commenced in January 2015 and which provides for an annual rental of $35,880. The Company’s rent expense for the years ended December 31, 2015 and 2014 was $167,113 and $159,382, respectively.

Employment Agreements

The Company presently has no employment agreements with any person.

Pursuant to a prior employment agreement, Omagine was obligated to employ its President and Chief Executive Officer at an annual base salary of $125,000 plus an additional amount based on a combination of net sales and earnings before taxes. Omagine plans to enter into a new employment agreement with its President although the terms of such employment agreement have not yet been determined. Omagine had continued to accrue salary payable to its President through December 31, 2014 and on January 1, 2015 the Company recommenced its bi-monthly payroll for employees, including for its President on the basis of an annual salary of $125,000. On May 1, 2015 the Company paid its President $87,781 of accrued officer’s payroll and on May 16, 2015 the Company applied $120,000 of accrued officer’s payroll in exchange for the purchase of 100,000 restricted Common Shares of Omagine, Inc. stock at a purchase price of $1.20 per share. At December 31, 2015 and 2014, Omagine had unpaid accrued officer’s compensation due to its President of $115,131 and $310,464, respectively.

Pursuant to a prior employment agreement, Omagine was obligated to employ its Vice-President and Secretary at an annual base salary of $100,000. Omagine plans to enter into a new employment agreement with its Vice-President although the terms of such employment agreement have not yet been determined. On January 1, 2015 the Company recommenced its bi-monthly payroll for employees, including for its Vice-President on the basis of an annual salary of $100,000. On March 26, 2015 the Company paid its Vice-President $33,000 of accrued officer’s payroll. On September 9, 2015, October 2, 2015 and December 7, 2015, the Company paid its Vice-President accrued officers’ payroll of $2,000, $3,200 and $2,500, respectively. At December 31, 2015 and 2014, Omagine had unpaid accrued officer’s compensation due to its Vice-President of $137,905 and $171,575, respectively.

On January 1, 2015 the Company recommenced its bi-monthly payroll for its Controller on the basis of an annual salary of $80,000. On January 14, 2015 the Company paid its Controller $25,000 of accrued officer’s payroll. At December 31, 2015 and 2014, Omagine had unpaid accrued officer’s compensation due to its Controller of $136,798 and $155,883, respectively.

Contingent Fee Payment Obligation

Depending on circumstances, LLC may execute an agreement with Michael Baker International (”Baker”) to hire Baker as its Program Manager and/or Project Manager (the potential “PM Contract”). Omagine has employed Baker to provide design and engineering services through the feasibility and engineering study phases of the Omagine Project. As part of its compensation agreement with Baker, Omagine agreed that it would be obligated to pay Baker the sum of $72,000 (the “Contingent Fee”) after LLC signed the DA with the Government of Oman. Omagine paid Baker the Contingent Fee in October 2015.

Equity Financing Agreements

Omagine, Inc. and YA were parties to a Stand-By Equity Distribution Agreement (the “2011 SEDA”) which was due to expire on September 1, 2014. On July 21, 2014, the 2011 SEDA was terminated by the mutual consent of Omagine and YA.

On April 22, 2014, Omagine and YA entered into a new Standby Equity Distribution Agreement on generally the same terms and conditions as the 2011 SEDA (the”2014 SEDA“). Unless earlier terminated in accordance with its terms, the 2014 SEDA shall terminate automatically on the earlier of (i) the first day of the month next following the 24-month anniversary of the “Effective Date” (as hereinafter defined), or (ii) the date on which YA shall have made payment to Omagine of Advances pursuant to the 2014 SEDA in the aggregate amount of $5,000,000. On April 22, 2014, in satisfaction of a $150,000 commitment fee due pursuant to the 2014 SEDA, Omagine issued 85,822 restricted Common Shares to YA Global II SPV, LLC, which is an affiliate of YA (See Note 6).

Pursuant to the terms of the 2014 SEDA, Omagine may in its sole discretion, and upon giving written notice to YA (an ”Advance Notice”), periodically sell Common Shares to YA (“Shares”) at a per Share price (“Purchase Price”) equal to 95% of the lowest daily volume weighted average price (the “VWAP”) for a Common Share as quoted by Bloomberg, L.P. during the five (5) consecutive Trading Days (as such term is defined in the 2014 SEDA) immediately subsequent to the date of the relevant Advance Notice (the “Pricing Period”).

Omagine is not obligated to sell any Shares to YA but may, over the term of the 2014 SEDA and in its sole discretion, sell to YA that number of Shares valued at the Purchase Price from time to time in effect that equals up to five million dollars ($5,000,000) in the aggregate. YA is obligated under the 2014 SEDA to purchase such Shares from Omagine subject to certain conditions including (i) Omagine filing a registration statement with the SEC to register the resale by YA of the Shares sold to YA under the 2014 SEDA (“Registration Statement”), (ii) the SEC declaring such Registration Statement effective (the date of such declaration by the SEC being the “Effective Date”), (iii) Omagine certifying to YA at the time of each Advance Notice that Omagine has performed all covenants and agreements to be performed and has complied with all obligations and conditions contained in the 2014 SEDA, (iv) periodic sales of Shares to YA must be separated by a time period of at least five Trading Days, and (v) the dollar value of any individual periodic sale of Shares designated by Omagine in any Advance Notice may not exceed the greater of (a) two hundred thousand dollars ($200,000), or (b) the average of the ”Daily Value Traded” for each of the five (5) Trading Days immediately preceding the date of the relevant Advance Notice, where Daily Value Traded is the product obtained by multiplying the number representing the daily trading volume of Common Shares for such Trading Day by the VWAP for a Common Share on such Trading Day.

Omagine Project

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 just west of the capital city of Muscat and nearby Muscat International Airport (the “Omagine Site”). LLC has signed a Development Agreement (“DA”) and a Usufruct Agreement (“UA”) for the Omagine Project with the Government of Oman. (See “Development Agreement and Usufruct Agreement” below). The Omagine Project is planned to be an integration of cultural, heritage, entertainment and residential components including a high-culture theme park and associated buildings, shopping and retail establishments, restaurants and approximately 2,100 residences.

Development Agreement and Usufruct Agreement

Omagine’s 60% owned subsidiary, LLC, signed a DA with the Government of Oman in October 2014 for the development in Oman by LLC of the Omagine Project. The legal effectiveness of the DA was conditional upon its ratification by Oman’s Ministry of Finance, which Ratification occurred in March 2015. On July 1, 2015 (the “Operative Date”), the Government and LLC entered into the UA with respect to the land constituting the Omagine Site.

The Land Rights give LLC extensive rights over the land constituting the Omagine Site including the right to sell such land on a freehold basis. On July 2, 2015, the UA was registered by the Government and a Land Rights registration fee of 20,250 Omani Rials ($52,650) was paid by LLC to the Government (and expensed in the accompanying consolidated statements of operations for the year ended December 31, 2015), which registration legally perfected LLC’s ownership of the Land Rights.

The five year period commencing on the Operative Date is a rent free period and thereafter LLC will pay annual rent to the Government based on only the built but unsold commercial area of the Omagine Project (approximately 150,000 square meters) or approximately 45,000 Omani Rials ($117,000) per year based on the current annual per square meter fee of 0.300 Omani Rials ($0.78). The term of the DA is 20 years and the term of the UA is 50 years (renewable) commencing from the Operative Date. The UA and the DA provisions relevant to the UA survive the expiration of the term of the DA.

The Operative Date of July 1, 2015 is the date from which all time periods for the execution by LLC of various tasks enumerated in the DA are to be measured. The continued legal effectiveness of the DA subsequent to the Operative Date is dependent upon the following milestone dates being achieved (any or all of which may be extended or waived by the Government): (1) LLC’s delivery to the Government within twelve months from the Operative Date of a term sheet with lenders for the financing of the first phase, any other phase or all of the Project, (2) LLC’s submission to the Ministry of Tourism of a social impact assessment within 8 months of the Operative Date and the Government’s approval thereof within 12 months of the Operative Date, (3) the Government’s approval within 12 months of the Operative Date of the development control plan for the Omagine Project and (4) the transformation of LLC into a joint stock company within 12 months of the Operative Date.

Pursuant to the DA, LLC must substantially complete the construction of the seven Pearl buildings and one hotel (the “Minimum Build Obligation” or “MBO”) within 5 years of the Operative Date. Any material breach by LLC of its obligation to perform the MBO would constitute an event of default under the DA. The DA specifies that the principal construction contracts should be executed within one year of the Operative Date. LLC is required to provide written notice to the Government in certain circumstances, such as LLC’s change in an anticipated milestone date that would result in a substantial achievement of work to occur later than 60 days after such milestone date. The DA provides that the Government is required to grant reasonable requests for the extension of the terms of the DA in such circumstances.

The foregoing discussion of the terms of the DA and UA is not meant to be definitive or complete and is qualified in its entirety by reference to the complete texts of the DA and UA as filed by the Company with the SEC.

Omagine LLC Shareholder Agreement

Omagine and JOL organized LLC in Oman and capitalized it with an initial investment of twenty thousand (20,000) Omani Rials ($52,000). Subsequently, Omagine, JOL and the New Investors entered into a shareholder agreement relating to LLC (the “Shareholder Agreement”).

Pursuant to the Shareholder Agreement, Omagine invested an additional 70,000 Omani Rials ($182,000) into LLC and agreed to make a further additional investment into LLC of 210,000 Omani Rials ($546,000) after the execution of the DA (the “OMAG Final Equity Investment”). As of December 31, 2015, Omagine had (a) invested 90,000 Omani Rials ($234,000) into LLC, and (b) made an aggregate of 210,000 Omani Rials ($546,000) of cash advances to LLC against the OMAG Final Equity Investment.

Further pursuant to the Shareholder Agreement, the New Investors invested an aggregate of 60,000 Omani Rials ($156,000) into LLC and agreed, subject to certain conditions precedent, to make further additional investments into LLC in the aggregate amount of 26,628,125 Omani Rials ($69,233,125). Additionally, pursuant to the Shareholder Agreement, RCA agreed to invest the Land Rights as a non-cash “payment-in-kind” capital contribution to LLC. The Land Rights represents the value to LLC of the land previously owned by His Majesty Sultan Qaboos bin Said, the ruler of Oman, which His Majesty transferred to MOT on condition it be used for development of the Omagine Project.

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Related Party Transactions

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 10 – RELATED PARTY TRANSACTIONS

At September 30, 2016 and December 31, 2015, respectively, Omagine’s accounts payable included $52,585 and $32,148 due to its officers and directors.

For the nine months ended September 30, 2016 and 2015, the Company expensed a total of $68,000 and $47,000, respectively, for consulting fees paid to an entity controlled by the Deputy Managing Director of LLC.

In April 2016, the Company paid a $300,000 sponsorship fee to the same such entity controlled by the Deputy Managing Director of Omagine LLC for the Company to serve as the Title Sponsor Partner of the 2016 World Summit on Innovation and Entrepreneurship hosted by the United Nations at UN headquarters in New York City from May 19 to May 23, 2016.

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Subsequent Events

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 11 – SUBSEQUENT EVENTS

On October 14, 2016, the Company entered into a Convertible Promissory Note with an accredited investor for the principal amount of $50,000 with interest at 5% per annum, due on April 14, 2017 and convertible into the Company’s Common Stock at a conversion price of $0.65 per Common Share.

On October 17, 2016, the Company entered into an Interest Free Promissory Note with an accredited investor for the principal amount of $75,000, due on December 13, 2016, and in lieu of any interest due and payable on the principal amount of the Note, the Company issued to the Note Holder 150,000 Common Stock Purchase Warrants exercisable at the greater of (a) $0.50, or (b) 80% of the Market Price on the Trading Day immediately preceding the relevant Exercise Date.

On November 1, 2016, Omagine sold 20,000 restricted Common Shares to an accredited investor for proceeds of $10,000 and also sold 10,000 restricted Common Shares to an independent director who is also an accredited investor for proceeds of $5,000.

On November 4, 2016, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $5,000.

On November 8, 2016, Omagine sold an aggregate of 20,000 restricted Common Shares to two accredited investors for aggregate proceeds of 10,000.

On November 14, 2016, Omagine sold 10,000 restricted Common Shares to an accredited investor for proceeds of $5,000.

On November 14, 2016, the Company entered into an interest free Convertible Promissory Note with an accredited investor for the principal amount of $185,000 due on May 15, 2017, six months from the funding date of November 16, 2016, convertible into the Company’s Common Stock only in the case of non-payment or in the Event of Default at a Conversion Price equal to 60% of the three lowest daily Volume Weighted Average Prices for the Company’s Common Stock during the twenty trading days immediately preceding the Conversion. The Company may prepay the Note in whole or in part at any time without penalty. After deduction of a $30,000 original issue discount (OID) and legal fees of $5,000, the Company received net proceeds of $150,000 on November 16, 2016. (See: Exhibits 10.42 and 10.43, the Note Purchase Agreement and the Securities Purchase Agreement).

On December 5, 2016, Omagine sold 300,000 restricted Common Shares to an accredited investor for proceeds of $150,000 which was paid to the Company by the cancellation and payment in full of the Company’s $75,000 Promissory Note dated October 17, 2016 and the remaining $75,000 of the purchase price was paid to the Company in cash.

On December 7, 2016, the Company entered into a new Note for a $750,000 loan to the Company and a new Note Purchase Agreement with YA II PN, Ltd. (together, the “December 2016 Loan Agreement”). Pursuant to the December 2016 Loan Agreement the Company agreed to pay off the aggregate of the $432,710 balance due under the March 2016 Loan Agreement and the June 2016 Loan Agreement and to pay a $75,000 commitment fee. The December 2016 Loan Agreement is for a term of one year at an annual interest rate of 10%. The $242,290 proceeds of the December 2016 Loan Agreement were received by the Company on December 7, 2016.

On December 9, 2016, the Board of Directors extended the expiration date of all 6,422,124 presently issued and outstanding Strategic Warrants (3,211,062 exercisable at $5 per Common Share and 3,211,062 exercisable at $10 per Common Share) from December 31, 2016 to December 31, 2017.

On December 9, 2016, the Board of Directors extended the expiration date of all 2,915,000 presently issued and outstanding Strategic Options from December 31, 2016 to December 31, 2017.

On January 4, 2017, Omagine contributed 123,782 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On January 4, 2017, Omagine issued 81,169 restricted Common Shares valued at $50,000 to each of the Corporation’s three independent directors based on the $0.616 closing price of the Corporation’s Common Stock on December 30, 2016.

On January 13, 2017, Omagine sold 18,051 restricted Common Shares to an accredited investor for proceeds of $10,000

On January 20, 2017, Omagine sold 25,000 restricted Common Shares to an accredited investor for proceeds of $12,500.

On January 25, 2017, Omagine sold 20,000 restricted Common Shares to an accredited investor for proceeds of $10,000.

On February 1, 2017, the president of the Company purchased 100,000 restricted Common Shares based on the $0.62 closing price of Omagine’s Common Stock on January 31, 2017 minus the Finnerty discount of 18% for proceeds of $51,000.

On February 2, 2017, three independent Company directors each purchased 94,340 restricted Common Shares and the Company’s vice president purchased 47,170 restricted Common Shares based on the $$0.6414 closing price of Omagine’s Common Shares on February 1, 2017 minus the Finnerty discount of 18% for aggregate proceeds of $175,000.

NOTE 11 – SUBSEQUENT EVENTS

On January 15, 2016, Omagine contributed 61,001 restricted Common Shares at the non-discounted valuation of $76,250 to all eligible employees of the Omagine, Inc. 401(k) Plan.

On January 15, 2016, Omagine issued 38,462 restricted Common Shares valued at $50,000 to each of the Corporation’s three independent directors based on the $1.30 closing price of the Corporation’s Common Stock on December 31, 2015 for the 50% non-cash payment of the $100,000 annual retainer due them.

On March 15, 2016, Omagine and an investment fund, YA II PN, Ltd. (p/k/a YA Global Master SPV, Ltd.) (“YA II”) entered into a loan agreement (the “2016 Loan Agreement”) pursuant to which the Company borrowed six hundred thousand dollars ($600,000) for a term of one year at an annual interest rate of ten percent (10%). The Company previously entered into a $500,000 loan agreement with YA II on May 25, 2015 (the “2015 Loan Agreement”). Pursuant to the 2016 Loan Agreement the Company agreed to pay (a) the remaining $150,000 principal balance and remaining accrued interest of $575 on its 2015 Loan Agreement due as of March 15, 2016, and (b) agreed to pay a $60,000 commitment fee to YA Global II SPV LLC, an affiliate of YA II. The $389,425 proceeds of the 2016 Loan Agreement were received on March 15, 2016. YA II is also a party to the Standby Equity Distribution Agreement with the Company executed on April 22, 2014 (the “2014 SEDA).

On April 5, 2016, the president of the Company purchased 56,000 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on April 5, 2016. The total purchase price of $50,400 was paid to the Company by the $50,400 reduction in the accrued salary and expenses owed by the Company to the president.

On April 6, 2016, three independent directors of the Company each purchased 27,778 restricted Common Shares based on the $0.90 closing price of Omagine’s Common Stock on April 5, 2016 for an aggregate of 83,334 Common Shares purchased. The aggregate purchase price of $75,000 was paid to the Company by the $25,000 reduction in accrued director’s fees owed by the Company to each of the independent directors.

On April 12, 2016, the Company sold 700,000 restricted Common Shares to a non-U.S. person who is an accredited investor for proceeds of $504,000.

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Nature of the Business and Summary of Significant Accounting Policies (Policies)

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Nature of the Business and Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation - The consolidated financial statements include the accounts of Omagine, JOL and LLC. LLC is an Omani limited liability company organized under the laws of the Sultanate of Oman. All inter-company transactions have been eliminated in consolidation.

Principles of Consolidation - The consolidated financial statements include the accounts of Omagine, JOL and LLC. LLC is an Omani limited liability company organized under the laws of the Sultanate of Oman. All inter-company transactions have been eliminated in consolidation.

Financial Instruments

Financial Instruments - Financial instruments include cash, convertible notes payable and accrued interest, notes payable and accrued interest, accounts payable, accrued officers’ payroll and accrued expenses and other current liabilities. The amounts reported for financial instruments are considered to be reasonable approximations of their fair values, based on market information available to management.

Financial Instruments - Financial instruments include cash, convertible notes payable and accrued interest, note payable and accrued interest, accounts payable, accrued officers’ payroll and accrued expenses and other current liabilities. The amounts reported for financial instruments are considered to be reasonable approximations of their fair values, based on market information available to management.

Cash and Cash Equivalents

Cash and Cash Equivalents – The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At September 30, 2016 and December 31, 2015, cash included approximately $4,500 and $36,000 respectively in an Oman bank account not covered by FDIC insurance.

Cash and Cash Equivalents – The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At December 31, 2015 and 2014, cash included approximately $36,000 and $11,200 respectively in an Oman bank account not covered by FDIC insurance.

Inventory

Inventory – Inventory is stated at cost. At September 30, 2016 and December 31, 2015, inventory consists only of the land under development acquired on July 2, 2015 (which was costed at the fair value of the property at the date of acquisition). The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $490,813,363 in inventory resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Inventory – Inventory is stated at cost. At December 31, 2015, inventory consists only of the land under development acquired on July 2, 2015 (which was costed at the fair value of the property at the date of acquisition). The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $490,813,363 in inventory resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Property, Plant and Equipment

Property, Plant and Equipment - Property, plant and equipment (“PP&E”) are stated at cost. PP&E consists of land under development which is held for investment; furniture and fixtures; and office machinery and equipment. PP&E (including buildings and structures after they are completed and put into service) are depreciated on a straight-line basis over their respective useful service lives. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $227,800,637 in PP&E resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Property, Plant and Equipment - Property, plant and equipment (“PP&E”) are stated at cost. PP&E consists of land under development which is held for investment; furniture and fixtures; and office machinery and equipment. PP&E (including buildings and structures after they are completed and put into service) are depreciated on a straight-line basis over their respective useful service lives. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $227,800,637 in PP&E resulting from LLC’s July 2, 2015 acquisition of the Land Rights. (See: Note 2 – “Inventory and Property”).

Stockholders' Equity

Stockholders’ Equity - Stockholders’ equity consists of common stock, capital in excess of par value, deficit, and non-controlling interests in LLC. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $718,614,000 in stockholders’ equity resulting from LLC’s July 2, 2015 acquisition of the Land Rights (a $431,168,400 increase in Omagine stockholders’ equity and a $287,445,600 increase in non-controlling interests in LLC). (See: Note 2 – “Inventory and Property”).

Stockholders’ Equity - Stockholders’ equity consists of common stock, capital in excess of par value, retained earnings, and non-controlling interests in LLC. The Company’s consolidated financial statements for the year ended December 31, 2015 reflect an increase of $718,614,000 in stockholders’ equity resulting from LLC’s July 2, 2015 acquisition of the Land Rights (a $431,168,400 increase in Omagine stockholders’ equity and a $287,445,600 increase in non-controlling interests in LLC). (See: Note 2 – “Inventory and Property”).

Estimates and Uncertainties

Estimates and Uncertainties - The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results as determined at a later date could differ from those estimates. In recording $718,614,000 in the accompanying consolidated financial statements for the year ended December 31, 2015 as the value of the non-cash consideration received by LLC as Land Rights, management relied to a great extent upon the written opinions of three expert valuation firms engaged by LLC to value such Land Rights. Furthermore, in allocating such Land Value to inventory and land under development, management relied to a great extent upon the written opinion of an expert independent accounting firm engaged by LLC to advise it on the proper accounting to record the Land Value in LLC’s financial statements. Both LLC’s independent auditor and the Company’s independent auditor are in agreement with and have consented to the accounting indicated in the accompanying consolidated financial statements for the year ended December 31, 2015. (See: Note 2 – “Inventory and Property”).

Estimates and Uncertainties - The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results as determined at a later date could differ from those estimates. In recording $718,614,000 in the accompanying consolidated financial statements for the year ended December 31, 2015 as the value of the non-cash consideration received by LLC as Land Rights, management relied to a great extent upon the written opinions of three expert valuation firms engaged by LLC to value such Land Rights. Furthermore, in allocating such Land Value to inventory and land under development, management relied to a great extent upon the written opinion of an expert independent accounting firm engaged by LLC to advise it on the proper accounting to record the Land Value in LLC’s financial statements. Both LLC’s independent auditor and the Company’s independent auditor are in agreement with and have consented to the accounting indicated in the accompanying consolidated financial statements for the year ended December 31, 2015. (See: Note 2 – “Inventory and Property”).

Revenue Recognition

Revenue Recognition - The Company follows the guidelines of SEC Staff Accounting Bulletin No. 101,”Revenue Recognition in Financial Statements” (SAB101). LLC signed a development agreement for the Omagine Project with the Government of Oman in October 2014, and will recognize revenue ratably over the development period of the Omagine Project measured by methods appropriate to the services or products provided.

Revenue Recognition - The Company follows the guidelines of SEC Staff Accounting Bulletin No. 101, ”Revenue Recognition in Financial Statements” (SAB101). LLC signed a development agreement for the Omagine Project with the Government of Oman in October 2014, and will recognize revenue ratably over the development period of the Omagine Project measured by methods appropriate to the services or products provided.

Income Taxes

Income Taxes - Omagine and JOL are subject to United States (“U.S.”) income taxes at both the federal and state level and LLC is subject to income taxes in Oman. Separate state income tax returns are filed with each state in the U.S. in which Omagine or any subsidiary of Omagine is incorporated or qualified as a foreign corporation. LLC files an income tax return in Oman. Other than with respect to LLC, the Company is not presently subject to income taxes in any foreign country. The Company reports interest and penalties as income tax expense. Deferred tax assets and liabilities are recognized based on differences between the book and tax bases of assets and liabilities using presently enacted income tax rates. The Company establishes a provision for U.S. income taxes by applying the provisions of the applicable enacted tax laws to taxable income, if any, for the relevant period. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Income Taxes - Omagine and JOL are subject to United States (“U.S.”) income taxes at both the federal and state level and LLC is subject to income taxes in Oman. Separate state income tax returns are filed with each state in the U.S. in which Omagine or any subsidiary of Omagine is incorporated or qualified as a foreign corporation. LLC files an income tax return in Oman. Other than with respect to LLC, the Company is not presently subject to income taxes in any foreign country. The Company reports interest and penalties as income tax expense. Deferred tax assets and liabilities are recognized based on differences between the book and tax bases of assets and liabilities using presently enacted income tax rates. The Company establishes a provision for U.S. income taxes by applying the provisions of the applicable enacted tax laws to taxable income, if any, for the relevant period. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Stock-based Compensation

Stock-based Compensation - Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification 718, “Compensation – Stock Compensation” (“ASC 718”). For stock options granted, Omagine has recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For such stock option awards, Omagine has recognized compensation expense using a straight-line amortization method over the requisite service period. ASC 718 requires that stock-based compensation expense be based on awards that are ultimately expected to vest. Stock option expense for the nine month periods ended September 30, 2016 and 2015 were $405 and $3,114,190, respectively. (See Note 7).

Stock-based Compensation - Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification 718, “Compensation – Stock Compensation” (“ASC 718”). For stock options granted, Omagine has recognized compensation expense based on the estimated grant date fair value method using the Black-Scholes valuation model. For such stock option awards, Omagine has recognized compensation expense using a straight-line amortization method over the requisite service period. ASC 718 requires that stock-based compensation expense be based on awards that are ultimately expected to vest. Stock option expense for the years ended December 31, 2015 and 2014 were $3,115,190 and $3,486,856, respectively. (See Note 7).

Earnings (Loss) Per Share

Earnings (Loss) Per Share - Basic earnings (loss) per share of Omagine’s $0.001 par value common stock (“Common Stock”) is based upon the weighted-average number of shares of Common Stock (“Common Shares”) outstanding during the relevant period. Diluted earnings (loss) per share is based upon the weighted-average number of Common Shares and dilutive securities (stock options, warrants, stock appreciation rights and convertible notes) outstanding during the relevant period. Dilutive securities having an anti-dilutive effect on diluted earnings (loss) per share are excluded from the calculation.

For the nine month periods ended September 30, 2016 and 2015, the Common Shares underlying the following dilutive securities were excluded from the calculation of diluted shares outstanding as the effect of their inclusion would be anti-dilutive:

	2016		2015
Convertible Notes		286,663		156,399
Stock Options		3,269,000		3,273,000
Stock Appreciation Rights		1,455,000		1,455,000
Warrants		6,422,124		6,773,896
Total Common Shares Issuable		11,432,787		11,658,295

Earnings (Loss) Per Share - Basic earnings (loss) per share of Omagine’s $0.001 par value common stock (“Common Stock”) is based upon the weighted-average number of shares of Common Stock (“Common Shares”) outstanding during the relevant period. Diluted earnings (loss) per share is based upon the weighted-average number of Common Shares and dilutive securities (stock options, warrants, stock appreciation rights and convertible notes) outstanding during the relevant period. Dilutive securities having an anti-dilutive effect on diluted earnings (loss) per share are excluded from the calculation.

For the years ended December 31, 2015 and 2014, the Common Shares underlying the following dilutive securities were excluded from the calculation of diluted shares outstanding as the effect of their inclusion would be anti-dilutive:

	2015		2014
Convertible Notes		159,171		148,173
Stock Options		3,273,000		3,265,000
Stock Appreciation Rights		1,455,000		–
Warrants		6,771,521		6,932,124
Total Common Shares Issuable		11,658,692		10,345,297

Non-controlling Interests in Omagine LLC

Non-controlling Interests in Omagine LLC - As of the date of this report LLC is owned 60% by Omagine. In May 2011, Omagine, JOL and three new investors (the “New Investors”) entered into a shareholders’ agreement (the “Shareholder Agreement”) pursuant to which Omagine’s 100% ownership of LLC was reduced to 60%.

The New Investors are:

i.

The Office of Royal Court Affairs (“RCA”), an Omani organization, and

ii.

Two subsidiaries of Consolidated Contractors International Company, SAL (“CCIC”). CCIC is a 60 year old Lebanese multi-national company headquartered in Athens, Greece having approximately five and one-half (5.5) billion dollars in annual revenue, one hundred thirty thousand (130,000) employees worldwide, and operating subsidiaries in among other places, every country in the Middle East. The two CCIC subsidiaries which are LLC shareholders are:

1.	Consolidated Contracting Company S.A. (“CCC-Panama”), a wholly owned subsidiary of CCIC and is its investment arm, and
2.	Consolidated Contractors (Oman) Company LLC, CCIC’s operating subsidiary in Oman which is a construction company with approximately 13,000 employees.

As of the date hereof, the shareholders of LLC and their associated ownership percentages as registered with the Government of Oman are as follows:

LLC Shareholder	Percent  Ownership
Omagine		60	%
RCA		25	%
CCC-Panama		10	%
CCC-Oman		5	%
Total:		100	%

Non-controlling Interests in Omagine LLC - As of the date of this report LLC is owned 60% by Omagine. In May 2011, Omagine, JOL and three new investors (the “New Investors”) entered into a shareholders’ agreement (the “Shareholder Agreement”) pursuant to which Omagine’s 100% ownership of LLC was reduced to 60%.

The New Investors are:

i.

The Office of Royal Court Affairs (“RCA”), an Omani organization, and

ii.

Two subsidiaries of Consolidated Contractors International Company, SAL (“CCIC”). CCIC is a 60 year old Lebanese multi-national company headquartered in Athens, Greece having approximately five and one-half (5.5) billion dollars in annual revenue, one hundred thirty thousand (130,000) employees worldwide, and operating subsidiaries in among other places, every country in the Middle East. The two CCIC subsidiaries which are LLC shareholders are: 1.      Consolidated Contracting Company S.A. (“CCC-Panama”), a wholly owned subsidiary of CCIC and is its investment arm, and 2.      Consolidated Contractors (Oman) Company LLC, CCIC’s operating subsidiary in Oman which is a construction company with approximately 13,000 employees.

As of the date hereof, the shareholders of LLC and their associated ownership percentages as registered with the Government of Oman are as follows:

LLC Shareholder	Percent  Ownership
Omagine		60	%
RCA		25	%
CCC-Panama		10	%
CCC-Oman		5	%
Total:		100	%

Recent Accounting Pronouncements

Recent Accounting Pronouncements

On August 27, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity's ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity and consistency of related disclosures and improve convergence with IFRS (which emphasize management's responsibility for performing the going concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRS will continue to differ. This ASU 2014-15 is effective for annual periods ending after December 16, 2016, and interim periods thereafter; early adoption is permitted. The Company does not believe that this pronouncement will have a material impact on our financial statement disclosures.

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

Recent Accounting Pronouncements

On August 27, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity's ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity and consistency of related disclosures and improve convergence with IFRSs (which emphasize management's responsibility for performing the going concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRSs will continue to differ. This ASU 2014-15 is effective for annual periods ending after December 16, 2016, and interim periods thereafter; early adoption is permitted. The Company does not believe that this pronouncement will have a material impact on our financial statement disclosures.

In June 2014, the FASB issued ASU 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities and eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The Company is required to adopt this new standard on a retrospective basis for the year ending December 31, 2015, and interim periods therein; however, early application is permitted. The Company has elected to adopt the new reporting standard for financial statements filed commencing with the 10-Q for the period ended September 30, 2014. Other than simplifying the presentation of the Company’s financial statements and needed disclosures, the adoption of ASU 2014-10 has not affected the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, ”Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists” (”ASU 2013-11”), which states that entities should present the unrecognized tax benefit as a reduction of the deferred tax asset for a net operating loss (”NOL”) or similar tax loss or tax credit carry forward rather than as a liability when the uncertain tax position would reduce the NOL or other carry forward under the tax law. The Company adopted this new standard on a prospective basis in the first interim reporting period of fiscal 2015. The adoption of ASU 2013-11 has not materially affected its consolidated financial statements.

Certain other accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

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Nature of the Business and Summary of Significant Accounting Policies (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Nature of the Business and Summary of Significant Accounting Policies [Abstract]

Schedule of dilutive securities

	2016		2015
Convertible Notes		286,663		156,399
Stock Options		3,269,000		3,273,000
Stock Appreciation Rights		1,455,000		1,455,000
Warrants		6,422,124		6,773,896
Total Common Shares Issuable		11,432,787		11,658,295

	2015		2014
Convertible Notes		159,171		148,173
Stock Options		3,273,000		3,265,000
Stock Appreciation Rights		1,455,000		–
Warrants		6,771,521		6,932,124
Total Common Shares Issuable		11,658,692		10,345,297

Schedule shareholders of LLC and their associated ownership percentages as registered with the Government of Oman

LLC Shareholder	Percent  Ownership
Omagine		60	%
RCA		25	%
CCC-Panama		10	%
CCC-Oman		5	%
Total:		100	%

LLC Shareholder	Percent  Ownership
Omagine		60	%
RCA		25	%
CCC-Panama		10	%
CCC-Oman		5	%
Total:		100	%

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Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Prepaid Expenses and Other Current Assets [Abstract]

Schedule of prepaid expenses and other current assets

	September 30,		December 31,
	2016		2015
Prepaid rent (New York office)	$	1,859	$	1,767
Prepaid Rent (Muscat, Oman Office)		8,970		-
Other prepaid expenses		261		-
Total	$	11,090	$	1,767

	December 31,		December 31,
	2015		2014
Travel Advances	$	–	$	5,000
Prepaid office salaries (Muscat, Oman office)		–		780
Prepaid rent (New York office)		1,767		–
Total	$	1,767	$	5,780

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Convertible Notes Payable and Accrued Interest (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Convertible Notes Payable and Accrued Interest/ Notes Payable and Accrued Interest - Ya Global Master Spv, Ltd. [Abstract]

Schedule of convertible notes payable and accrued interest

	September 30,		December 31,
	2016		2015
Due to a director of Omagine, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal	$	150,000	$	150,000
Accrued Interest		89,987		78,727
Due to investors, interest at 15% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		35,000		50,000
Accrued Interest		39,842		51,195
Due to investors, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		16,760		18,007
Due to entity owned by two directors of Omagine, interest at 5%  per annum, due on December 24, 2016 convertible into Common Stock at a conversion price of $0.75 per Common Share:
Principal		100,000
Accrued Interest		521		-
Total	$	482,110	$	397,929

	December 31,		December 31,
	2015		2014
Due to a director of Omagine, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal	$	150,000	$	150,000
Accrued Interest		78,727		63,726
Due to investors, interest at 15% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		51,195		43,696
Due to investors, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share:
Principal		50,000		50,000
Accrued Interest		18,007		13,007
Total	$	397,929	$	370,429

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Notes Payable and Accrued Interest - Ya Global Master Spv, Ltd. (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Convertible Notes Payable and Accrued Interest/ Notes Payable and Accrued Interest - Ya Global Master Spv, Ltd. [Abstract]

Schedule of notes payable and accrued interest

	September 30,			December 31,
	2016			2015
2015 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($50,000 in July 2015, $40,000 monthly August 2015 to October 2015, $35,000 monthly November 2015 to February 2016, $40,000 monthly March 2016 to May 2016 and $70,000 on June 1, 2016)	$	-		$	225,000
March 2016 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($60,000 in April 2016 and May 2016, $50,000 monthly June to August 2015, $45,000 in September 2016, $35,000 in October and November 2016,$40,000 in December 2016, $45,000 in January 2017, $60,000 in February 2017 and $70,000 in March of 2017)		285,000			-
June 2016 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($40,000 in July  and August 2016, $35,000 monthly September to November 2016, $25,000 monthly, December 2016 to February 2017 and $35,000 monthly March to June 2017)		285,000			-
Less:  Unamortized debt discount at September 30, 2016 and December 31, 2015		(57,500	)		(20,833	)
Principal, net		512,500			204,167
Accrued interest		2,342			-
Total	$	514,842		$	204,167

	December 31,			December 31,
	2015			2014
2015 YA Loan - interest at 10% per annum, due in 12 monthly installments of principal ($50,000 in July 2015, $40,000 monthly August 2015 to October 2015, $35,000 monthly November 2015 to February 2016, $40,000 monthly March 2016 to May 2016 and $70,000 on June 1, 2016)	$	225,000		$	–
2014 YA Loan - interest at 10% per annum, due and repaid in monthly installments of principal and interest through April 2015		–			225,000
Less:  Unamortized debt discount at December 31, 2015 and  2014		(20,833	)		(12,133	)
Principal, net		204,167			212,867
Accrued interest		–			1,911
Total	$	204,167		$	214,778

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Stock Options, Stock Appreciation Rights and Warrants (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

Stock Options, Stock Appreciation Rights and Warrants [Abstract]

Schedule of Stock Option and SARs activity under the plan

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term  (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2015		3,275,000		$	1.97		1.24	$	1,923,170
Exercised in Q2 2015		(2,000	)	$	0.51		-		-
Granted in Q3 2015		1,455,000		$	2.00		2.29		-
Outstanding September 30, 2015		4,728,000		$	1.98		1.67	$	59,440
Exercisable at September 30, 2015		4,728,000		$	1.98		1.67	$	59,440
Outstanding at January 1, 2016		4,728,000		$	1.98		1.41	$	26,240
Exercised in Q2 2016		(2,000	)	$	0.85
Expired Q2 2016		(2,000	)	$	0.85
Outstanding September 30, 2016		4,724,000		$	1.98		0.65	$	-
Exercisable at September 30, 2016		4,724,000		$	1.98		0.65	$	-

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2014		2,285,000		$	1.72		1.43	$	1,100
Granted in Q1 2014		40,000		$	1.80		5.06		–
Granted in Q4 2014		950,000		$	2.55		1.01		–
Outstanding December  31, 2014		3,275,000		$	1.97		1.24	$	1,923,170
Exercisable at December 31, 2014		3,265,000		$	1.97		1.24	$	1,915,670
Outstanding at January 1, 2015		3,275,000		$	1.97		1.24	$	1,923,170
Exercised in Q2 2015		(2,000	)	$	0.51		–		–
Granted in Q3 2015		1,455,000		$	2.00		2.03		–
Outstanding December 31, 2015		4,728,000		$	1.98		1.41	$	26,240
Exercisable at December 31, 2015		4,728,000		$	1.98		1.41	$	26,240

Schedule of non-vested stock options

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term  (in years)
Non-vested shares at January 1, 2015		10,000		$	1.80		4.30
Vested in Q1 2015		(10,000	)	$	1.80		4.30
Non-vested shares at September 30, 2015		-			-		-
Non-vested shares at January 1, 2016		-			-		-
Non-vested shares at September 30, 2016		-			-		-

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Non-vested shares at January 1, 2014		–			–		–
Granted in Q1 2014		40,000		$	1.80		5.00
Vested in Q1 2014		(30,000	)	$	1.80		4.81
Non-vested shares at December 31, 2014		10,000		$	1.80		4.30
Non-vested shares at January 1, 2015		10,000		$	1.80		4.30
Vested in Q1 2015		(10,000	)	$	1.80		4.30
Non-vested shares at December 31, 2015		–			–		–

Schedule of issued and outstanding Stock Options and SARs

Year Granted		Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
	2007		160,000		160,000	$	1.25		March 31, 2017
	2008		150,000		150,000	$	2.60		September 23, 2018
	2012		1,965,000		1,965,000	$	1.70		December 31, 2016
	2012		2,000		2,000	$	1.70		April 12, 2017
	2013		2,000		2,000	$	1.38		January 14, 2018
	2014		40,000		40,000	$	1.80		March  27, 2019
	2014		950,000		950,000	$	2.55		December 31, 2016
	2015		1,455,000		1,455,000	$	2.00		December 31, 2017
	Totals		4,724,000		4,724,000

Year Granted		Number Outstanding		Number Exercisable		Exercise Price		Expiration Date
	2007		160,000		160,000	$	1.25	March 31, 2017
	2008		150,000		150,000	$	2.60	September 23, 2018
	2011		4,000		4,000	$	0.85	May 16, 2016
	2012		1,965,000		1,965,000	$	1.70	December 31, 2016
	2012		2,000		2,000	$	1.70	April 12, 2017
	2013		2,000		2,000	$	1.38	January 14, 2018
	2014		40,000		40,000	$	1.80	March  27, 2019
			950,000		950,000	$	2.55	December 31, 2016
	2015		1,455,000		1,455,000	$	2.00	December 31, 2017
	Totals		4,728,000		4,728,000

Schedule of non-qualified stock options and SARs outstanding

		Stock Options Outstanding						Exercisable
Range of Exercise Prices		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Number of Shares		Weighted Average Exercise Price
	$ 1.01 - $2.00		3,624,000		1.80		0.70		3,624,000		1.80
	$ 2.01 - $3.00		1,100,000		2.56		0.49		1,100,000		2.56
Totals			4,724,000	$	1.98		0.65		4,724,000	$	1.98

		Stock Options Outstanding						Exercisable
Range of Exercise Prices		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Number of Shares		Weighted Average Exercise Price
$	0.50 - $1.00		4,000	$	0.85		0.38		4,000	$	0.85
$	1.01 - $2.00		3,624,000		1.80		1.46		3,624,000		1.80
$	2.01 - $3.00		1,100,000		2.56		1.26		1,100,000		2.56
	Totals		4,728,000	$	1.98		1.41		4,728,000	$	1.98

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U.S. Income Taxes (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2016

Dec. 31, 2015

U.S. Income Taxes [Abstract]

Schedule of deferred U.S. tax assets

	September 30,			December 31,
	2016			2015
U.S. federal net operating loss carry forwards	$	6,807,000		$	6,375,000
U.S. state and city net operating loss carry forwards, net of U.S. federal tax benefit		1,945,000			1,822,000
		8,752,000			8,197,000
Less: Valuation allowance		(8,752,000	)		(8,197,000	)
Total	$	-		$	-

	December 31,			December 31,
	2015			2014
U.S. federal net operating loss carry forwards	$	6,375,000		$	5,293,000
U.S. state and city net operating loss carry forwards, net of U.S. federal tax benefit		1,822,000			1,512,000
		8,197,000			6,805,000
Less: Valuation allowance		(8,197,000	)		(6,805,000	)
Total	$	–		$	–

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Nature of the Business and Summary of Significant Accounting Policies (Details) - shares	9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Common Shares Issuable	11,432,787	11,658,295	11,658,692	10,345,297
Convertible Notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Common Shares Issuable	286,663	156,399	159,171	148,173
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Common Shares Issuable	3,269,000	3,273,000	3,273,000	3,265,000
Stock Appreciation Rights [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Common Shares Issuable	1,455,000	1,455,000	1,455,000
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total Common Shares Issuable	6,422,124	6,773,896	6,771,521	6,932,124

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Nature of the Business and Summary of Significant Accounting Policies (Details 1)	Sep. 30, 2016	Dec. 31, 2015
Noncontrolling Interest [Line Items]
Total	100.00%	100.00%
Omagine [Member]
Noncontrolling Interest [Line Items]
Total	60.00%	60.00%
RCA [Member]
Noncontrolling Interest [Line Items]
Total	25.00%	25.00%
CCC-Panama [Member]
Noncontrolling Interest [Line Items]
Total	10.00%	10.00%
CCC-Oman [Member]
Noncontrolling Interest [Line Items]
Total	5.00%	5.00%

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Nature of the Business and Summary of Significant Accounting Policies (Details Textual) $ / shares in Units, m² in Millions	1 Months Ended		9 Months Ended		12 Months Ended
	Nov. 29, 2015 USD ($)	Jul. 31, 2015 USD ($)	Sep. 30, 2016 USD ($) decimal $ / shares	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) decimal $ / shares	Dec. 31, 2014 USD ($)	Jul. 02, 2015 m²	Dec. 31, 2013 USD ($)
Accounting Policies Textual [Abstract]
Ownership percentage owned by Omagine and JOL			60.00%		60.00%
Number of wholly owned subsidiaries dissolved whose businesses were discontinued | decimal			2		2
Loan from bank	$ 25,000,000				$ 25,000,000
Amount in Oman bank account not covered by FDIC insurance			$ 4,500		36,000	$ 11,200
Aggregate stock-based compensation expense			405	$ 3,114,190	3,115,190	3,486,856
Inventory held for sale			$ 490,813,363		$ 490,813,363
Ownership percentage owned by Omagine Inc			100.00%		100.00%
Real estate held for investment (Note 2)			$ 227,800,637		$ 227,800,637
Increase in non-controlling interests			287,030,592		287,170,100	(79,621)
Stockholders' equity			716,342,144		717,497,790	(479,188)		$ (1,531,661)
Increase in stockholders' equity		$ 431,168,400
Non-cash consideration received by LLC as Land Rights				$ 718,614,000	$ 718,614,000
Basic earnings (loss) per share | $ / shares			$ 0.001		$ 0.001
Area of beachfront land | m²							1
Interest rate and lobor rate, description			The loan, which is subject to satisfaction of certain conditions precedent to closing, would bear interest at an annual rate equal to the 12 month LIBOR rate plus 1% and would be payable one year from the closing date.
Cash deposit at qatari bank			$ 25,000,000
Advance to construction contract			$ 10,000,000
Land Rights [Member]
Accounting Policies Textual [Abstract]
Stockholders' equity		287,445,600
Increase in stockholders' equity		$ 431,168,400

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Nature of the Business and Summary of Significant Accounting Policies (Details Textual 1) $ in Billions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) decimal	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) Employee1	Dec. 31, 2014 USD ($)
Noncontrolling Interest [Line Items]
Revenue
Consolidated Contractors International Company, SAL [Member]
Noncontrolling Interest [Line Items]
Revenue			$ 5.5		$ 5.5
Number of employees			(130,000)		130,000
Consolidated Contractors (Oman) Company LLC [Member]
Noncontrolling Interest [Line Items]
Number of employees			13,000		13,000

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Inventory and Property (Details) m² in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2016 USD ($) shares	Dec. 31, 2015 USD ($) shares	Sep. 30, 2016 OMR	Dec. 31, 2015 OMR	Jul. 02, 2015 m²	Dec. 31, 2014 USD ($)
Inventory and Property [Abstract]
Land under development	$ 718,614,000	$ 718,614,000
Inventory held for sale	490,813,363	490,813,363
Property held for sale	$ 227,800,637	$ 227,800,637
Area of land | m²					1
Share issued during period for acquisitions | shares	663,750	663,750
Land rights valuations	$ 718,614,000	$ 718,614,000	OMR 276,666,667	OMR 276,666,667
Inventory and land description	(x) calculated by dividing (y) the area of the land LLC definitively knew it intended to sell, by (z) the total area of land constituting the Omagine Site, and then multiplying that percentage (x) by $718,614,000 to get the correct number (N) for inventory. The correct number for land was then calculated by subtracting N from $718,614,000. Using its detailed internal financial model, management calculated (x) to be equal to 68.3%, thereby making the inventory number $490,813,363 and the land number $227,800,637.	(x) calculated by dividing (y) the area of the land LLC definitively knew it intended to sell, by (z) the total area of land constituting the Omagine Site, and then multiplying that percentage (x) by $718,614,000 to get the correct number (N) for inventory. The correct number for land was then calculated by subtracting N from $718,614,000. Using its detailed internal financial model, management calculated (x) to be equal to 68.3%, thereby making the inventory number $490,813,363 and the land number $227,800,637.

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Prepaid Expenses and Other Current Assets (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Prepaid Expenses [Line Items]
Travel Advances			$ 5,000
Prepaid rent		1,767
Prepaid office salaries and other prepaid expenses	$ 261		780
Total	11,090	1,767	$ 5,780
New York office [Member]
Prepaid Expenses [Line Items]
Prepaid rent	1,859	1,767
Muscat, Oman Office [Member]
Prepaid Expenses [Line Items]
Prepaid rent	$ 8,970

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Convertible Notes Payable and Accrued Interest (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Total	$ 482,110	$ 397,929	$ 370,429
Due to a director of Omagine, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share: [Member]
Debt Instrument [Line Items]
Principal	150,000	150,000	150,000
Accrued Interest	89,987	78,727	63,726
Due to investors, interest at 15% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share: [Member]
Debt Instrument [Line Items]
Principal	35,000	50,000	50,000
Accrued Interest	39,842	51,195	43,696
Due to investors, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share: [Member]
Debt Instrument [Line Items]
Principal	50,000	50,000	50,000
Accrued Interest	16,760	18,007	$ 13,007
Due to entity owned by two directors of Omagine, interest at 5% per annum, due on December 24, 2016 convertible into Common Stock at a conversion price of $0.75 per Common Share:
Debt Instrument [Line Items]
Principal	100,000
Accrued Interest	$ 521

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Convertible Notes Payable and Accrued Interest (Details Textual) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Due to a director of Omagine, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share: [Member]
Debt Instrument [Line Items]
Percentage of interest on convertible notes payables	10.00%	10.00%
Conversion price	$ 2.50	$ 2.50
Due to investors, interest at 15% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share: [Member]
Debt Instrument [Line Items]
Percentage of interest on convertible notes payables	15.00%	15.00%
Conversion price	$ 2.50	$ 2.50
Due to investors, interest at 10% per annum, due on demand, convertible into Common Stock at a conversion price of $2.50 per Common Share: [Member]
Debt Instrument [Line Items]
Percentage of interest on convertible notes payables	10.00%	10.00%
Conversion price	$ 2.50	$ 2.50
Due to entity owned by two directors of Omagine, interest at 5% per annum, due on December 24, 2016 convertible into Common Stock at a conversion price of $0.75 per Common Share:
Debt Instrument [Line Items]
Percentage of interest on convertible notes payables	5.00%
Conversion price	$ 0.75

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Notes Payable and Accrued Interest - Ya Global Master Spv, Ltd. (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Convertible Note Payable and Accrued Interest [Line Items]
Less: Unamortized debt discount	$ (57,500)	$ (20,833)	$ (12,133)
Total	514,842	204,167	214,778
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Notes payable		225,000	225,000
Less: Unamortized debt discount	(57,500)	(20,833)	(12,133)
Principal, net	512,500	204,167	212,867
Accrued Interest	2,342		1,911
Total	514,842	204,167	$ 214,778
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | 2015 YA Loan [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Notes payable		225,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | March 2016 YA Loan [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Notes payable	285,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | June 2016 YA Loan [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Notes payable	$ 285,000

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Notes Payable and Accrued Interest - Ya Global Master Spv, Ltd. (Details Textual)	9 Months Ended	12 Months Ended
	Sep. 30, 2016 USD ($) decimal	Dec. 31, 2015 USD ($) decimal	Jun. 22, 2016 USD ($)	Mar. 15, 2016 USD ($)	May 20, 2015 USD ($)	Apr. 23, 2014 USD ($)	Jul. 31, 2013 USD ($)
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Unsecured loan							$ 200,000
Percentage of interest on notes payables	10.00%	10.00%
Number of installments | decimal	12	12
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | July 2015 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount		$ 50,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | August 2015 to October 2015 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount		40,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | November 2015 to February 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount		35,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | March 2016 to May 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount		40,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | June 1, 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	$ 60,000	$ 70,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | April 2016 and May 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	50,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | June to August 2015 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	45,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | September 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	35,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | October and November 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	40,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | December 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	45,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | January 2017 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	60,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | February 2017 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	70,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | March of 2017 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	40,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | July and August 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	35,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | September to November 2016 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	25,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | December 2016 to February 2017 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	25,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. [Member] | March to June 2017 [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Monthly installments of principle amount	$ 35,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. one [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Unsecured loan						$ 500,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. two [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Unsecured loan					$ 500,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. three [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Unsecured loan				$ 600,000
Notes payable and accrued interest due to YA Global Master SPV, Ltd. four [Member]
Convertible Note Payable and Accrued Interest [Line Items]
Unsecured loan			$ 400,000

XML

Common Stock (Details) - USD ($)																														1 Months Ended																		9 Months Ended		12 Months Ended
	Apr. 12, 2016	Apr. 06, 2016	Apr. 05, 2016	Oct. 26, 2015	Oct. 08, 2015	Sep. 14, 2015	Sep. 03, 2015	Sep. 01, 2015	May 16, 2015	Mar. 26, 2015	Feb. 23, 2015	Jan. 05, 2015	Nov. 21, 2014	Nov. 20, 2014	Nov. 10, 2014	Nov. 07, 2014	Oct. 06, 2014	Oct. 02, 2014	Aug. 25, 2014	Aug. 15, 2014	May 06, 2014	Apr. 11, 2014	Mar. 21, 2014	Mar. 14, 2014	Feb. 14, 2014	Jan. 24, 2014	Jan. 17, 2014	Jan. 10, 2014	Jan. 08, 2014	Sep. 21, 2016	Sep. 19, 2016	Sep. 16, 2016	Aug. 30, 2016	Aug. 19, 2016	Jul. 29, 2016	Jun. 15, 2016	May 17, 2016	Apr. 22, 2016	Jan. 16, 2016	Nov. 16, 2015	Jun. 30, 2015	Jun. 30, 2015	Sep. 30, 2014	Sep. 03, 2014	Jun. 24, 2014	Apr. 22, 2014	Feb. 13, 2014	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares													400,000	400,000				250,000				7,500		3,500																					15,000
Value of restricted stock shares issued													$ 40,000																																						$ 1,487,100	$ 75,000
Number of restricted shares issued													20,000									150,000		70,000																							73,315
Payment of finder's fee in cash																	$ 16,375		$ 16,800																									$ 3,000	$ 20,000
Proceeds from sale of Common Stock					$ 3,040									$ 800,000				$ 327,500		$ 336,000																						$ 250,000						$ 584,000	$ 259,700	$ 1,484,700	$ 1,797,100
Method of discount calculation																																																			Finnerty Method
Restricted stock discount																																																25.00%		18.00%	17.00%
Proceeds from issuance of common shares																		$ 327,500
Number of restricted common shares cancelled																																												10,000
Value of shares issued for services																						$ 10,147		$ 6,101																				$ 9,020	$ 19,920		$ 76,250
Excess shares issued to law firm at that date																																																			$ 26,248
Warrants exercise price					$ 1.28													$ 1.31		$ 1.40																						$ 1.58
Sale of share price														2.00
Number of warrants exercisable					2,375
Exercise of Tempest Warrants, Shares					2,375													250,000		240,000																						158,228
Stock Options exercised by former Director																																																		$ (1,020)
Purchase of Omagine's common stock	700,000
Conversion of converted note amount																																																$ 15,000
Independent Director [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares																																							38,462
Value of restricted stock shares issued																																							$ 150,000
Number of shares issued																																					2,000
Stock options exercise price per share																																					$ 0.85
Officers and Directors [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Proceeds from sale of Common Stock									$ 120,000
Number of shares issued									100,000
Consultant [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares											5,000																				30,340
Value of restricted stock shares issued											$ 9,450																				$ 25,000
Accredited Investor [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares										6,281				150,000																		34,247	11,312	13,245	10,684
Proceeds from sale of Common Stock										$ 10,000																						$ 25,000	$ 10,000	$ 10,000	$ 10,000
Number of shares issued						10,000
Proceeds from issuance of common shares						$ 14,700
Accredited Investor One [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares				200,000										250,000
Accredited Investor Two [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares				500,000
Non-U.S. person [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares	700,000									200,000																																158,228
Value of restricted stock shares issued																																										$ 12,500
Number of restricted shares issued																																										7,911
Proceeds from sale of Common Stock	$ 504,000									$ 210,000
Number of shares issued																																											1,195,300
Proceeds from issuance of common shares																																										$ 250,000
Class of warrant or right, outstanding																																											441,120
Warrants exercise price																																										$ 1.58
Common shares, ownership percentage																																											7.40%								7.10%
Exercise of Tempest Warrants, Shares																																										158,228
Former Director [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Stock Options exercised by former Director																																									$ 1,020
Stock Options exercised by former Director, Shares																																									2,000
Director [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares								25,000
Value of restricted stock shares issued								$ 50,000
President [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Accrued salary																																																		$ 125,000
Holders [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Conversion of converted note amount																																						$ 30,984
Conversion of converted note shares																																						24,207
Non-U.S. Affiliate [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Proceeds from sale of Common Stock					$ 3,040
Warrants exercise price					$ 1.28
Exercise of Tempest Warrants, Shares					2,375
Non-U.S. Finder [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares																																								33,334
Value of restricted stock shares issued																																								$ 60,000
YA [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares																														161,290
Commitment fee amount																														$ 150,000
Omagine, Inc. [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Value of the shares committed to issue to eligible employees												$ 76,250																											$ 76,250
Restricted shares of common shares												36,483																34,374											61,001
Value of restricted stock shares issued																												$ 26,248
Value of stock issued for law firm satisfaction																												15,812
Excess value issued to firm																												$ 10,436
Omagine, Inc. [Member] | Independent Director [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Purchase of Omagine's common stock			83,334
Standby Equity Distribution Agreement [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of common shares issued to YA																					32,270		13,597		68,493																					85,822
Proceeds from sale of Common Stock																					$ 50,000		$ 25,000		$ 150,000	$ 25,000	$ 20,000		$ 25,000																	$ 150,000
Number of shares issued							17,696																			31,705	24,912		29,687							31,289
Proceeds from issuance of common shares							$ 25,000																													$ 25,000
Commitment fee amount																																														$ 150,000
Restricted Stock [Member] | Accredited Investor [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares				1,200,000																		150,000		70,000																20,886					362,308
Value of restricted stock shares issued				$ 1,200,000																		$ 150,000		$ 70,000																$ 25,000					$ 422,100
Proceeds from sale of Common Stock															$ 15,000	$ 30,000
Number of warrants exercisable																																													1,000,000
Restricted Stock [Member] | Non-U.S. person [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of restricted shares issued															7,440	14,881
Restricted Stock [Member] | Non-U.S. Finder [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares																																								1,200,000
Restricted Stock [Member] | Omagine, Inc. [Member] | Independent Director [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares		27,778
Value of restricted stock shares issued		$ 75,000
Share Price		$ 0.90
Accrued directors fees		$ 25,000
Restricted Stock [Member] | Omagine, Inc. [Member] | President [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares			56,000
Value of restricted stock shares issued			$ 50,400
Share Price			$ 0.90
Accrued salary			$ 50,400
Restricted Stock [Member] | Standby Equity Distribution Agreement [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Restricted shares of common shares																																																			85,822

XML

Stock Options, Stock Appreciation Rights and Warrants (Details) - USD ($)		9 Months Ended		12 Months Ended
	Dec. 13, 2014	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of Shares, Outstanding		3,273,000
Number of Shares, Granted	950,000
Number of Shares, Outstanding		4,724,000		3,273,000
Number of Shares, Exercisable		4,724,000
Weighted Average Exercise Price, Granted	$ 2.55
Stock Options [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of Shares, Outstanding		4,728,000	3,275,000	3,275,000	2,285,000
Number of Shares, Exercised		(2,000)	(2,000)	(2,000)
Number of Shares, Granted			1,455,000	1,455,000	40,000
Number of Shares, Expired		(2,000)
Number of Shares, Outstanding		4,724,000	4,728,000	4,728,000	3,275,000
Number of Shares, Exercisable		4,724,000	4,728,000	4,728,000	3,265,000
Number of Shares, Granted One					950,000
Weighted Average Exercise Price, Outstanding		$ 1.98	$ 1.97	$ 1.97	$ 1.72
Weighted average exercise price, Exercised		0.85	0.51	0.51
Weighted Average Exercise Price, Granted			2.00	2.00	1.80
Weighted Average Exercise Price, Expired		0.85
Weighted Average Exercise Price, Outstanding		1.98	1.98	1.98	1.97
Weighted Average Exercise Price, Exercisable		$ 1.98	$ 1.98	$ 1.98	1.97
Weighted Average Exercise Price, Granted One					$ 2.55
Weighted Average Remaining Contractual Term, Outstanding (in years)		1 year 4 months 28 days	1 year 2 months 27 days	1 year 2 months 27 days	1 year 5 months 5 days
Weighted Average Remaining Contractual Term, Granted (in years)			2 years 3 months 15 days	2 years 11 days	5 years 22 days
Weighted Average Remaining Contractual Term, Outstanding (in years)		7 months 24 days	1 year 8 months 1 day	1 year 4 months 28 days	1 year 2 months 27 days
Weighted Average Remaining Contractual Term, Exercisable (in years)		7 months 24 days	1 year 8 months 1 day	1 year 4 months 28 days	1 year 2 months 27 days
Weighted Average Remaining Contractual Term, Granted One (in years)					1 year 4 days
Aggregate Intrinsic Value, Outstanding		$ 26,240	$ 1,923,170	$ 1,923,170	$ 1,100
Aggregate Intrinsic Value, Exercised
Aggregate Intrinsic Value, Granted
Aggregate Intrinsic Value, Outstanding			59,440	26,240	1,923,170
Aggregate Intrinsic Value, Exercisable			$ 59,440	26,240	1,915,670
Aggregate Intrinsic Value, Granted One

XML

Stock Options, Stock Appreciation Rights and Warrants (Details 1) - Nonvested shares [Member] - 2003 Plan and 2014 Plan [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Number of Nonvested shares	10,000	10,000
Granted in Q1 2014			40,000
Number of shares vested	(10,000)	(10,000)	(30,000)
Number of Nonvested shares			10,000
Weighted Average Exercise Price, Nonvested shares	$ 1.80	$ 1.80
Weighted Average Exercise Price, Granted shares			$ 1.80
Weighted Average Exercise Price, Vested	$ 1.80	$ 1.80	1.80
Weighted Average Exercise Price, Nonvested shares			$ 1.80
Weighted Average Remaining Contractual Term, Nonvested shares (in years)	4 years 3 months 18 days	4 years 3 months 18 days
Weighted Average Remaining Contractual Term, Granted (in years)			5 years
Weighted Average Remaining Contractual Term, Vested (in years)	4 years 3 months 18 days	4 years 3 months 18 days	4 years 9 months 22 days
Weighted Average Remaining Contractual Term, Nonvested shares (in years)			4 years 3 months 18 days

XML

Stock Options, Stock Appreciation Rights and Warrants (Details 2) - $ / shares			9 Months Ended	12 Months Ended
	Jan. 05, 2015	Dec. 13, 2014	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			4,724,000	3,273,000
Number Exercisable			4,724,000
Expiration Date	Dec. 31, 2016	Dec. 31, 2015		Dec. 31, 2016
Stock Options [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			4,724,000	4,728,000	4,728,000	3,275,000	2,325,000	2,285,000
Number Exercisable			4,724,000	4,728,000	4,728,000	3,265,000
Stock Options Outstanding, Exercise Price			$ 1.98	$ 1.98	$ 1.98	$ 1.97	$ 1.73	$ 1.72
Stock Options [Member] | Year Granted 2007 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			160,000	160,000
Number Exercisable			160,000	160,000
Stock Options Outstanding, Exercise Price			$ 1.25	$ 1.25
Expiration Date			Mar. 31, 2017	Mar. 31, 2017
Stock Options [Member] | Year Granted 2008 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			150,000	150,000
Number Exercisable			150,000	150,000
Stock Options Outstanding, Exercise Price			$ 2.60	$ 2.60
Expiration Date			Sep. 23, 2018	Sep. 23, 2018
Stock Options [Member] | Year Granted 2011 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding				4,000
Number Exercisable				4,000
Stock Options Outstanding, Exercise Price				$ 0.85
Expiration Date				May 16, 2016
Stock Options [Member] | Year Granted 2012 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			1,965,000	1,965,000
Number Exercisable			1,965,000	1,965,000
Stock Options Outstanding, Exercise Price			$ 1.70	$ 1.70
Expiration Date			Dec. 31, 2016	Dec. 31, 2016
Stock Options [Member] | Year Granted 2012 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			2,000	2,000
Number Exercisable			2,000	2,000
Stock Options Outstanding, Exercise Price			$ 1.70	$ 1.70
Expiration Date			Apr. 12, 2017	Apr. 12, 2017
Stock Options [Member] | Year Granted 2013 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			2,000	2,000
Number Exercisable			2,000	2,000
Stock Options Outstanding, Exercise Price			$ 1.38	$ 1.38
Expiration Date			Jan. 14, 2018	Jan. 14, 2018
Stock Options [Member] | Year Granted 2014 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			40,000	950,000
Number Exercisable			40,000	40,000
Stock Options Outstanding, Exercise Price			$ 1.80	$ 2.55
Expiration Date			Mar. 27, 2019	Dec. 31, 2016
Stock Options [Member] | Year Granted 2014 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			40,000	950,000		950,000
Number Exercisable			40,000	950,000
Stock Options Outstanding, Exercise Price			$ 1.80	$ 2.55		$ 2.55
Expiration Date			Mar. 27, 2019	Dec. 31, 2016
Stock Options [Member] | Year Granted 2015 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number Outstanding			1,455,000	1,455,000
Number Exercisable			1,455,000	1,455,000
Stock Options Outstanding, Exercise Price			$ 2.00	$ 2.00
Expiration Date			Dec. 31, 2017	Dec. 31, 2017

XML

Stock Options, Stock Appreciation Rights and Warrants (Details 3) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Outstanding	4,724,000	3,273,000
Number of Shares, Exercisable	4,724,000
Stock Options [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Outstanding	4,724,000	4,728,000	4,728,000	3,275,000	2,325,000	2,285,000
Weighted Average Exercise Price	$ 1.98	$ 1.98	$ 1.98	$ 1.97	$ 1.73	$ 1.72
Weighted Average Remaining Contractual Term (in years)	7 months 24 days	1 year 4 months 28 days
Number of Shares, Exercisable	4,724,000	4,728,000	4,728,000	3,265,000
Weighted Average Exercise Price, Exercisable	$ 1.98	$ 1.98	$ 1.98	$ 1.97
Stock Options [Member] | Dollar 0.50 To Dollar 1.00 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower Range of Exercise Prices		0.50
Upper Range of Exercise Prices		$ 1.00
Number of Shares, Outstanding		4,000
Weighted Average Exercise Price		$ 0.85
Weighted Average Remaining Contractual Term (in years)		4 months 17 days
Number of Shares, Exercisable		4,000
Weighted Average Exercise Price, Exercisable		$ 0.85
Stock Options [Member] | Dollar 1.01 To Dollar 2.00 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower Range of Exercise Prices	1.01	1.01
Upper Range of Exercise Prices	$ 2.00	$ 2.00
Number of Shares, Outstanding	3,624,000	3,624,000
Weighted Average Exercise Price	$ 1.80	$ 1.80
Weighted Average Remaining Contractual Term (in years)	8 months 12 days	1 year 5 months 16 days
Number of Shares, Exercisable	3,624,000	3,624,000
Weighted Average Exercise Price, Exercisable	$ 1.80	$ 1.80
Stock Options [Member] | Dollar 2.01 To Dollar 3.00 [Member] | 2003 Plan and 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Lower Range of Exercise Prices	2.01	2.01
Upper Range of Exercise Prices	$ 3.00	$ 3.00
Number of Shares, Outstanding	1,100,000	1,100,000
Weighted Average Exercise Price	$ 2.56	$ 2.56
Weighted Average Remaining Contractual Term (in years)	5 months 27 days	1 year 3 months 4 days
Number of Shares, Exercisable	1,100,000	1,100,000
Weighted Average Exercise Price, Exercisable	$ 2.56	$ 2.56

XML

Stock Options, Stock Appreciation Rights and Warrants (Details Textual) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized to issue		3,000,000
Options outstanding	4,724,000	3,273,000
2003 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized to issue		2,500,000
Options outstanding	2,279,000	2,283,000
Additional number of shares authorized to issue	2,500,000
2014 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized to issue	3,000,000	3,000,000
Options outstanding	990,000	990,000
Additional number of shares authorized to issue	5,000,000	5,000,000
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding	1,455,000	1,455,000	1,455,000

XML

Stock Options, Stock Appreciation Rights and Warrants (Details Textual 1)			1 Months Ended	3 Months Ended		9 Months Ended	12 Months Ended
	Jan. 05, 2015	Dec. 13, 2014 decimal $ / shares shares	Aug. 31, 2015 $ / shares shares	Sep. 30, 2015 USD ($) $ / shares shares	Dec. 31, 2014 USD ($) $ / shares	Sep. 30, 2015 USD ($) decimal $ / shares shares	Dec. 31, 2015 USD ($) decimal $ / shares shares	Dec. 31, 2014 shares	Sep. 30, 2016 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted		950,000
Exercise price | $ / shares		$ 2.55
Expiration Date	Dec. 31, 2016	Dec. 31, 2015					Dec. 31, 2016
Estimated fair value | $					$ 1,277,370
Share price | $ / shares					$ 2.52
Expected term					368 days
Expected volatility rate					147.00%
Risk free interest rate					0.25%
Pricing model					Black Scholes option pricing model
Stock Options outstanding							3,273,000		4,724,000
Independent Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted		25,000
Number of individuals | decimal		1
Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted		625,000
Number of individuals | decimal		3
Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted		300,000
Number of individuals | decimal		2
January 2012 Options [Member] | Independent Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted						125,000	125,000
Number of individuals | decimal						3	3
January 2012 Options [Member] | Extension One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value | $				$ 541,215			$ 1,373,326
Requisite service period				507 days			370 days
Share price | $ / shares				$ 1.91			$ 1.77
Expected term				507 days			370 days
Expected volatility rate				147.00%			125.00%
Risk free interest rate				0.32%			0.16%
Pricing model				Black Scholes option pricing model			Black Scholes option pricing model
Estimated fair value of the issuance of the Strategic Options | $							$ 1,685,629
January 2012 Options [Member] | Extension Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value | $						$ 671,440	$ 671,440
Requisite service period						378 days	378 days
Share price | $ / shares						$ 0.89	$ 0.89
Expected term						378 days	378 days
Expected volatility rate						144.00%	144.00%
Risk free interest rate						0.13%	0.13%
Pricing model						Black Scholes option pricing model	Black Scholes option pricing model
January 2012 Options [Member] | Deputy Managing Director of Omagine LLC [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted						1,000,000	1,000,000
Exercise price | $ / shares						$ 1.25	$ 1.25
Deputy Managing Director of Omagine LLC (Consultant to Omagine), shares hold						160,000	160,000
Expiration Date						Mar. 17, 2017	Mar. 31, 2017
January 2012 Options [Member] | Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted						1,685,000	1,685,000
Number of individuals | decimal						3	3
January 2012 Options [Member] | Officers, Directors and Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted								2,915,000
January 2012 Options [Member] | Extension Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value | $					$ 1,504,404
Share price | $ / shares					$ 2.52
Expected term					368 days
Expected volatility rate					147.00%
Risk free interest rate					0.25%
Pricing model					Black Scholes option pricing model
January 2012 Options [Member] | Extension Four [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value | $							$ 915,493
Share price | $ / shares							$ 1.91
Expected term							507 days
Expected volatility rate							147.00%
Risk free interest rate							0.32%
Pricing model							Black Scholes option pricing model
Strategic Options Exercisable Price One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted						1,965,000	1,965,000
Exercise price | $ / shares						$ 1.70	$ 1.70
Strategic Options Exercisable Price Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted						950,000	950,000
Exercise price | $ / shares						$ 2.55	$ 2.55
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted			1,455,000
Expiration Date			Dec. 31, 2017
Estimated fair value | $				$ 1,654,481
Share price | $ / shares			$ 2.00	$ 1.60
Expected term				854 days
Expected volatility rate				147.00%
Risk free interest rate				0.28%
Pricing model				Black Scholes option pricing model
Stock Options outstanding				1,455,000		1,455,000	1,455,000		1,455,000
Stock Appreciation Rights (SARs) [Member] | Independent Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted			15,000			15,000	15,000
Number of individuals | decimal						1	1
Stock Appreciation Rights (SARs) [Member] | Deputy Managing Director of Omagine LLC [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted			675,000			675,000	675,000
Stock Appreciation Rights (SARs) [Member] | Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted						750,000	750,000
Number of individuals | decimal						3	3

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Stock Options, Stock Appreciation Rights and Warrants (Details Textual 2) - USD ($)				1 Months Ended			3 Months Ended		12 Months Ended
	Jan. 05, 2015	Dec. 13, 2014	Jan. 15, 2013	Aug. 31, 2015	Jun. 30, 2015	Mar. 28, 2014	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2015	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration Date	Dec. 31, 2016	Dec. 31, 2015							Dec. 31, 2016
Unrecognized compensation cost									$ 1,080	$ 675
Stock option granted		950,000
Share price								$ 2.52
Estimated fair value								$ 1,277,370
Pricing model								Black Scholes option pricing model
Expected term								368 days
Expected volatility rate								147.00%
Risk free interest rate								0.25%
2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options cost, expensed								$ 51,914
2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options cost, expensed									3,462
2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost									540	135
2017 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost									$ 540	$ 540
Stock Options [Member] | 2013 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration Date			Jan. 14, 2018
Stock option granted			2,000
Stock options exercisable price			$ 1.38
Stock Options [Member] | 2014 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration Date						Mar. 27, 2019
Stock option granted						40,000
Stock options exercisable price						$ 1.80
Stock option granted, value						$ 55,376
Share price						$ 1.80
Stock option expiration period						5 years
Stock Options term, assumptions						5 years
Stock Options volatility, assumptions						106.00%
Stock Options risk free interest rate, assumptions						1.75%
Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration Date				Dec. 31, 2017
Stock option granted				1,455,000
Stock options exercisable price				$ 2.00
Share price				$ 2.00			$ 1.60
Estimated fair value							$ 1,654,481
Pricing model							Black Scholes option pricing model
Expected term							854 days
Expected volatility rate							147.00%
Risk free interest rate							0.28%
Estate Of Salvatore J Bucchere [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock options exercised					2,000
Exercise price of stock options (in dollars per share)					$ 0.51

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Stock Options, Stock Appreciation Rights and Warrants (Details Textual 3) - USD ($)										1 Months Ended			9 Months Ended		12 Months Ended
	Oct. 08, 2015	Jan. 05, 2015	Dec. 13, 2014	Nov. 21, 2014	Nov. 20, 2014	Oct. 02, 2014	Aug. 15, 2014	Apr. 11, 2014	Mar. 14, 2014	Jun. 30, 2015	Jun. 24, 2014	Feb. 13, 2014	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued related to restricted stock				20,000				150,000	70,000			73,315
Exercise of Tempest Warrants, Shares	2,375					250,000	240,000			158,228
Tempest Warrants issued and outstanding	349,397
Number of warrants exercisable	2,375
Expiration Date		Dec. 31, 2016	Dec. 31, 2015												Dec. 31, 2016
Warrants exercise price	$ 1.28					$ 1.31	$ 1.40			$ 1.58
Proceeds from sale of common stock	$ 3,040				$ 800,000	$ 327,500	$ 336,000			$ 250,000			$ 584,000	$ 259,700	$ 1,484,700	$ 1,797,100
Proceeds from sale of warrants														$ 250,000	$ 253,040	$ 663,500
Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock shares to be purchased under rights													6,422,124		6,771,521
Class of warrant or right, outstanding													6,422,124		6,422,124
Tempest Warrants issued and outstanding							351,772
Date of warrants expiry													Dec. 31, 2016
Expiration Date															Dec. 31, 2016
Warrants [Member] | Exercise Price 5.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants exercisable													3,211,062		3,211,062
Exercise price of warrants													$ 5.00		$ 5.00
Warrants [Member] | Exercise Price 10.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of warrants exercisable													3,211,062		3,211,062
Exercise price of warrants													$ 10		$ 10.00
Warrants [Member] | Investor [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued related to restricted stock											362,308
Number of warrants exercisable											1,000,000
Expiration Date											Jun. 23, 2016
Percentage of exercise price on closing price											80.00%

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U.S. Income Taxes (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
U.S. Income Taxes [Abstract]
U.S. federal net operating loss carry forwards	$ 6,807,000	$ 6,375,000	$ 5,293,000
U.S. state and city net operating loss carry forwards, net of U.S. federal tax benefit	1,945,000	1,822,000	1,512,000
Deferred U.S. tax assets, Gross	8,752,000	8,197,000	6,805,000
Less: Valuation allowance	(8,752,000)	(8,197,000)	(6,805,000)
Total

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U.S. Income Taxes (Details Textual) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
U.S. Income Taxes (Textual)
U.S. federal net operating loss carry forwards	$ 19,448,000	$ 18,215,000
Operating loss carryforwards expiration	Expiring in various amounts from fiscal year 2017 to fiscal year 2036.	Expiring in various amounts from fiscal year 2017 to fiscal year 2036.

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Commitments (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Other Commitments [Line Items]
Rent expense	$ 45,657	$ 124,419	$ 159,382
Lease description	Omagine leases its executive office in New York under a month to month lease from an unaffiliated third party.	Omagine leases its executive office in New York under a month to month lease from an unaffiliated third party.
Office space [Member]
Other Commitments [Line Items]
Rent expense	$ 35,880	$ 35,880
Lease description	LLC leases office space in Muscat, Oman from an unaffiliated third party under a one year lease which commenced in January 2016.	LLC leases office space in Muscat, Oman from an unaffiliated third party under a one year prepaid lease which commenced in January 2015

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Commitments (Details 1) - USD ($)													9 Months Ended	12 Months Ended
	Jul. 28, 2016	Jun. 23, 2016	Jun. 14, 2016	Apr. 05, 2016	Dec. 07, 2015	Oct. 03, 2015	Oct. 03, 2015	Sep. 10, 2015	May 16, 2015	May 01, 2015	Mar. 26, 2015	Jan. 14, 2015	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
President and Chief Executive Officer [Member]
Other Commitments [Line Items]
Annual base salary													$ 125,000
President [Member]
Other Commitments [Line Items]
Accrued officer's compensation			$ 55,601	$ 50,400					$ 120,000	$ 87,781			57,155	$ 115,131
Annual base salary														125,000
Share-based Compensation, Gross				56,000					100,000
Purchase price per share				$ 0.90					$ 1.20
Vice-President and Secretary [Member]
Other Commitments [Line Items]
Annual base salary													100,000	100,000
Vice President [Member]
Other Commitments [Line Items]
Accrued officer's compensation	$ 2,700	$ 32,000			$ 2,500		$ 3,200	$ 2,000			$ 33,000		141,122	137,905
Controller [Member]
Other Commitments [Line Items]
Accrued officer's compensation												$ 25,000	$ 169,000	136,798
Purchase price per share															$ 80,000
Employment Agreements [Member] | President and Chief Executive Officer [Member]
Other Commitments [Line Items]
Annual base salary														125,000
Employment Agreements [Member] | President [Member]
Other Commitments [Line Items]
Accrued officer's compensation									$ 120,000	$ 87,781				115,131	$ 310,464
Annual base salary														125,000
Share-based Compensation, Gross									100,000
Purchase price per share									$ 1.20
Employment Agreements [Member] | Vice-President and Secretary [Member]
Other Commitments [Line Items]
Annual base salary														100,000	100,000
Employment Agreements [Member] | Vice President [Member]
Other Commitments [Line Items]
Accrued officer's compensation					$ 2,500	$ 3,200		$ 2,000						137,905	171,575
Employment Agreements [Member] | Controller [Member]
Other Commitments [Line Items]
Accrued officer's compensation												$ 25,000		$ 136,798	155,883
Annual base salary															$ 80,000

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Commitments (Details 2) - USD ($)						1 Months Ended			9 Months Ended	12 Months Ended
	Nov. 21, 2014	Nov. 20, 2014	Oct. 02, 2014	Apr. 11, 2014	Mar. 14, 2014	Sep. 21, 2016	Jun. 24, 2014	Apr. 22, 2014	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014	Sep. 20, 2016
Other Commitments [Line Items]
Payment of contingent fee									$ 72,000	$ 72,000
Restricted shares of common shares	400,000	400,000	250,000	7,500	3,500		15,000
Standby Equity Distribution Agreement [Member]
Other Commitments [Line Items]
Commitment fee amount								$ 150,000
Maximum allowable distributions under Equity Distribution Agreement									$ 5,000,000	$ 5,000,000
Standby Equity Distribution Agreement [Member] | Restricted Stock [Member]
Other Commitments [Line Items]
Restricted shares of common shares											85,822
Second SEDA Amendment [Member]
Other Commitments [Line Items]
Commitment fee amount						$ 150,000
Maximum allowable distributions under Equity Distribution Agreement												$ 5,000,000
Second SEDA Amendment [Member] | Restricted Stock [Member]
Other Commitments [Line Items]
Restricted shares of common shares						161,290		85,822

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Commitments (Details 3) - Standby Equity Distribution Agreement [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Other Commitments [Line Items]
Percentage of the lowest daily volume weighted average price	95.00%	95.00%
Number of trading days	5 days	5 days
Purchase price	$ 5,000,000	$ 5,000,000
Maximum limit for individual periodic sale of shares	$ 200,000	$ 200,000

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Commitments (Details 4)	9 Months Ended	12 Months Ended
	Sep. 30, 2016 a decimal	Dec. 31, 2015 m² decimal	Jul. 02, 2015 m²
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Project planned in area of land (Approximately 245 acres) | m²			1,000,000
Number of residences for project	2,100
Omagine Project [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Project planned in area of land (Approximately 245 acres)	1,000,000	1,000,000
Number of residences for project		2,100

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Commitments (Details 5)		9 Months Ended		12 Months Ended
	Jul. 01, 2015	Sep. 30, 2016 USD ($) Installment	Sep. 30, 2016 OMR	Dec. 31, 2015 USD ($)	Dec. 31, 2015 OMR	Sep. 30, 2016 OMR Installment	Dec. 31, 2015 OMR	Oct. 02, 2014
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Rent description		The five year period commencing on the Operative Date is a rent free period and thereafter LLC will pay annual rent to the Government based on only the built but unsold commercial area of the Omagine Project (approximately 150,000 square meters) or approximately 45,000 Omani Rials ($117,000) per year based on the current annual per square meter fee of 0.300 Omani Rials ($0.78).	The five year period commencing on the Operative Date is a rent free period and thereafter LLC will pay annual rent to the Government based on only the built but unsold commercial area of the Omagine Project (approximately 150,000 square meters) or approximately 45,000 Omani Rials ($117,000) per year based on the current annual per square meter fee of 0.300 Omani Rials ($0.78).	The five year period commencing on the Operative Date is a rent free period and thereafter LLC will pay annual rent to the Government based on only the built but unsold commercial area of the Omagine Project (approximately 150,000 square meters) or approximately 45,000 Omani Rials ($117,000) per year based on the current annual per square meter fee of 0.300 Omani Rials ($0.78).	The five year period commencing on the Operative Date is a rent free period and thereafter LLC will pay annual rent to the Government based on only the built but unsold commercial area of the Omagine Project (approximately 150,000 square meters) or approximately 45,000 Omani Rials ($117,000) per year based on the current annual per square meter fee of 0.300 Omani Rials ($0.78).
Land rights registration fee		$ 718,614,000	OMR 276,666,667
Omagine LLC Shareholder Agreement
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Success fee		10,000,000
Pre development expense		$ 17,920,114
Number of installments | Installment		5				5
Omagine LLC Shareholder Agreement | OMAG Final Equity Investment [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Capital contributions		$ 234,000	90,000	$ 234,000	OMR 90,000
Cash advances to Omagine LLC		546,000		546,000		OMR 210,000	OMR 210,000
Omagine LLC Shareholder Agreement | New Investors [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Capital contributions		156,000	60,000	156,000	60,000
Additional cash capital contributions		69,233,125	26,628,125	69,233,125	26,628,125
Omagine LLC Shareholder Agreement | Omagine LLC [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Capital contributions		52,000	20,000	52,000	20,000
Additional cash capital contributions		182,000	70,000	182,000	70,000
Cash advances to Omagine LLC		58,500				OMR 22,500
Omagine LLC Shareholder Agreement | Omagine LLC [Member] | OMAG Final Equity Investment [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Additional cash capital contributions		$ 546,000	OMR 210,000	$ 546,000	OMR 210,000
Omagine Llc Development Agreement [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Term of agreement	5 years	20 years	20 years	20 years	20 years
Description of development agreement	(1) LLC's delivery to the Government within twelve months from the Operative Date of a term sheet with lenders for the financing of the first phase, any other phase or all of the Project, (2) LLC's submission to the Ministry of Tourism of a social impact assessment within 8 months of the Operative Date and the Government's approval thereof within 12 months of the Operative Date, (3) the Government's approval within 12 months of the Operative Date of the development control plan for the Omagine Project and (4) the transformation of LLC into a joint stock company within 12 months of the Operative Date.
Land rights registration fee				$ 52,650	OMR 20,250
Percentage of owned subsidiary for project								60.00%
Usufruct Agreement [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Term of agreement		50 years	50 years	50 years	50 years
Description of development agreement		The failure to execute the CCC-Contract by July 1, 2016 does not relieve RCA of its continuing obligation under the Shareholder Agreement (irrespective of such CCC-Contract failure) to make RCA's approximately $20 million Deferred Investment into LLC; but it may (under certain conditions) relieve CCC of its obligation under the Shareholder Agreement to make its approximately $49 million Deferred Investment into LLC.	The failure to execute the CCC-Contract by July 1, 2016 does not relieve RCA of its continuing obligation under the Shareholder Agreement (irrespective of such CCC-Contract failure) to make RCA's approximately $20 million Deferred Investment into LLC; but it may (under certain conditions) relieve CCC of its obligation under the Shareholder Agreement to make its approximately $49 million Deferred Investment into LLC.

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Related Party Transactions (Details) - USD ($)	1 Months Ended	9 Months Ended
	Apr. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Officers and Directors [Member]
Related Party Transactions (Textual)
Due to officers and directors		$ 52,585		$ 32,148
Deputy Managing Director [Member]
Related Party Transactions (Textual)
Consulting fees		$ 68,000	$ 47,000
Sponsorship fee	$ 300,000

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Subsequent Events (Details)																		1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Feb. 02, 2017 USD ($) Independent_Director $ / shares shares	Feb. 01, 2017 USD ($) $ / shares shares	Jan. 13, 2017 USD ($) shares	Jan. 04, 2017 USD ($) Independent_Director $ / shares shares	Dec. 09, 2016 shares	Dec. 07, 2016 USD ($)	Dec. 05, 2016 USD ($) shares	Nov. 14, 2016 USD ($) shares	Nov. 08, 2016 USD ($) Accreditedinvestors shares	Nov. 04, 2016 USD ($) shares	Nov. 01, 2016 USD ($) shares	Oct. 14, 2016 USD ($) $ / shares	Apr. 12, 2016 USD ($) shares	Apr. 06, 2016 $ / shares shares	Apr. 05, 2016 USD ($) $ / shares shares	Mar. 15, 2016 USD ($)	Jan. 15, 2016 USD ($) Independent_Director $ / shares shares	Jan. 25, 2017 USD ($) shares	Jan. 20, 2017 USD ($) shares	Oct. 17, 2016 USD ($) shares	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Subsequent Events (Textual)
Due maturity date																	Mar. 15, 2016
Restricted common shares sold | shares													700,000
Proceeds for accredited investor													$ 504,000
Restricted shares of common shares | shares																	61,001
Restricted shares of common stock issued, Value																	$ 76,250
Proceeds of issuance of convertible note payable																							$ 100,000
Commitment fees																					$ 150,000		$ 150,000			$ 150,000
OMAG Final Equity Investment [Member]
Subsequent Events (Textual)
Restricted shares of common shares | shares																	38,462
Restricted shares of common stock issued, Value																	$ 50,000
Common stock, par value (in dollars per share) | $ / shares																	$ 1.30
Number of independent directors | Independent_Director																	3
2016 Loan Agreement [Member]
Subsequent Events (Textual)
Annual interest rate percentage																10.00%
Commitment fees																$ 60,000
Loan borrowed																600,000
Remaining principal balance																150,000
Proceeds of Loan																389,425
2015 Loan Agreement [Member]
Subsequent Events (Textual)
Accrued interest																$ 575
Independent Director [Member]
Subsequent Events (Textual)
Common stock, par value (in dollars per share) | $ / shares														$ 0.90
Purchase of restricted common stock share | shares														27,778	83,334
The total purchase price paid															$ 75,000
Reduction in accrued salary and expenses															$ 25,000
President [Member]
Subsequent Events (Textual)
Common stock, par value (in dollars per share) | $ / shares															$ 0.90
Purchase of restricted common stock share | shares															56,000
The total purchase price paid															$ 50,400
Reduction in accrued salary and expenses															$ 50,400
Subsequent Event [Member]
Subsequent Events (Textual)
Accredited investor for principal amount								$ 185,000				$ 50,000								$ 75,000
Annual interest rate percentage												5.00%
Due maturity date								May 15, 2017				Apr. 14, 2017
Conversion price per common share | $ / shares												$ 0.65
Issuance shares of common stock purchase warrants | shares																				150,000
Description of purchase warrants exercisable																				(a) $0.50, or (b) 80% of the Market Price on the Trading Day immediately preceding the relevant Exercise Date.
Restricted common shares sold | shares			18,051	123,782			300,000	10,000	20,000	10,000	20,000							20,000	25,000
Proceeds for accredited investor			$ 10,000				$ 150,000	$ 5,000	$ 10,000	$ 5,000	$ 10,000							$ 10,000	$ 12,500
Restricted shares of common stock issued, Value				$ 76,250
Cancellation and payment of Promissory Note							$ 75,000
Number of accredited investors | Accreditedinvestors									2
Debt conversion, Description								Convertible into the Company's Common Stock only in the case of non-payment or in the Event of Default at a Conversion Price equal to 60% of the three lowest daily Volume Weighted Average Prices for the Company's Common Stock during the twenty trading days immediately preceding the Conversion.
Original issue discount								$ 30,000
Legal fees								5,000
Proceeds of issuance of convertible note payable								$ 150,000
Issued and outstanding Strategic Options | shares					2,915,000
Warrants issued and outstanding description					The Board of Directors extended the expiration date of all 6,422,124 presently issued and outstanding Strategic Warrants (3,211,062 exercisable at $5 per Common Share and 3,211,062 exercisable at $10 per Common Share) from December 31, 2016 to December 31, 2017.
Subsequent Event [Member] | December 2016 Loan Agreement [Member]
Subsequent Events (Textual)
Accredited investor for principal amount						$ 750,000
Annual interest rate percentage						10.00%
Aggregate of loan amount balance						$ 432,710
Proceeds from Sale of Notes Receivable						$ 242,290
Subsequent Event [Member] | Independent Director [Member]
Subsequent Events (Textual)
Restricted common shares sold | shares				81,169							10,000
Proceeds for accredited investor											$ 5,000
Restricted shares of common stock issued, Value				$ 50,000
Closing price of common stock | $ / shares				$ 0.616
Number of independent directors | Independent_Director				3
Subsequent Event [Member] | President [Member] | OMAG Final Equity Investment [Member]
Subsequent Events (Textual)
Annual interest rate percentage		18.00%
Closing price of common stock | $ / shares	$ 0.6414	$ 0.62
Purchase of restricted common stock share | shares	94,340	100,000
Number of independent directors | Independent_Director	3
Payments For Proceeds From Restricted Common Stock		$ 51,000
Subsequent Event [Member] | Vice President [Member] | OMAG Final Equity Investment [Member]
Subsequent Events (Textual)
Purchase of restricted common stock share | shares	47,170
Payments For Proceeds From Restricted Common Stock	$ 175,000