Corporate Update
Dear Omagine Shareholders,
In our continuing pro-active efforts to keep investors apprised of the most relevant and timely information on Omagine, below is an overview of a number of relevant points contained in FORM 10-QSB (Q3 2007) as filed by Omagine with the SEC.
To review the complete filing please use the link below, or to review all corporate filings please click on the view filings section of the main page of the Omagine hub here at Agoracom.
Link:
http://www.sec.gov/Archives/edgar
During the period from June through October 2007, JOL Management had further meetings, discussions and negotiations with officials of the Government of Oman regarding the terms and conditions of a development agreement (“Development Agreement”) between the Government and Omagine SAOC and JOL has now delivered to the Government what it believes to be the final draft of the Development Agreement. Final discussions remain to be had with the MOT regarding only the identity and percentage ownership of the three required Founder Shareholders of Omagine SAOC.
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Agoracom comments:
The common stock shares outstanding increased from approx 41 to 45 million as a direct result of the redemption of all Series B Preferred shares on September 28, 2007. Currently Omagine has only one class of stock issued and outstanding – which clarifies and makes Omagine’s capital structure easier to understand. There was no actual dilution since Preferred shareholders had a pre-existing right to convert Preferred shares.
The Omagine project will be financed locally through Omagine SAOC, the project company under formation (“SAOC”), so no further dilution is anticipated.
ALL financing of the Omagine project will be made through equity of the founder shareholders, plus debt (and any further equity in the SAOC project company if required) – ALL exclusively with the SAOC project company in Oman, and not with OMAG.OB. Such project financing will have no effect whatsoever on the parent of the Project company - JOL - or on JOL's parent Omagine. Omagine reports financials on a consolidated basis -- so that equity percentage of JOL subsidiary’s ownership in the SAOC project company -- will be consolidated in future OMAG.OB financial reporting.
To clarify our previous comment, Omagine Inc. (OMAG) never planned to, nor does it have any present intention to, finance the Omagine Project through the further issuance of shares of OMAG. OMAG's wholly owned subsidiary, Journey of Light, Inc. (JOL) is presently in the process of forming a subsidiary of its own - Omagine SAOC (the "Project Company") in Oman. JOL will then cause the Project Company to sell minority equity stakes of the Project Company to a limited number of already identified investors. JOL will cause the Project Company to contract with a large local financial institution as its (the Project Company's) financial advisor and placement agent for (i) any further equity that may be required subsequent to the signing of the Development Agreement (and JOL management believes at this time that further equity is unlikely to be required, but chose to make provision for the eventuality as a cautionary measure), and (ii) the placement of all required debt (bank loans, etc.) to cover the construction and other financing requirements of the Project Company during the period of construction - and beyond.
So, although like any other responsible corporate entity OMAG may, at its option and depending on future circumstances, decide in the future to issue further shares of its common stock for business requirements that it may have from time to time, it does not intend to do so for the purpose of any Omagine Project financing - all of which Omagine Project financing is intended to be handled as indicated above. We hope this clarifies the Company's plans and objectives.
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During October and continuing to date JOL has held discussions the largest commercial bank in Oman, with a view toward signing an agreement (the Financial Advisory MOU) with the Bank memorializing the agreement between JOL and the Bank regarding, among other things:
(i) JOL appointing the Bank as its financial advisor immediately subsequent to signing the Development Agreement,
(ii) the Bank undertaking the task of structuring the optimal capital structure for Omagine SAOC,
(iii) the Bank arranging for and placing equity, debt and mezzanine capital requirements for Omagine SAOC,
(iv) the Bank, or its nominee investing up to twenty-five percent (25%) of the capital of Omagine SAOC.
As of the date hereof, JOL and the Bank have finalized their agreement and the Financial Advisory MOU is expected to be signed by JOL and the Bank within the next several days.
In order to move into the actual development stage of the Omagine Project, JOL and the Government must sign the Development Agreement, an event which the Company previously expected to occur during the second or third Quarter of 2007 but presently expects to occur during the fourth quarter of 2007.
Regards,
Agoracom Investor Relations
