C2E ENERGY, INC. - Quarter Report: 2008 June (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
|X|
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the
quarterly period ended June 30, 2008
|_|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For
the
transition period from __________ to _________
Commission
file Number 333-106299
ODYSSEY
OIL AND GAS, INC
(Exact
name of small business issuer as specified in its charter)
ADVANCED
SPORTS TECHNOLOGIES, INC.
(Former
Name of Registrant)
FLORIDA
|
65-1139235
|
|
(State
or other jurisdiction of
incorporation
|
(IRS
Employer Identification
No.)
|
|
or
organization)
|
|
18
George
Avenue
Rivonia,
2128 South Africa
Address
of Principal Executive Offices
+27
(11) 807-1446
(Issuer's
telephone number)
Check
whether the issuer: (1) filed all documents reports required to be
filed
by
Section 13 or 15(d) of the Securities Exchange Act during the preceding 12
months (or for
such
shorter period that the registrant was required to file such reports),
and
(2)
has
been subject to such filing requirements for the past 90 days.
Yes
|X|
No |_|
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer |_| Accelerated
filer
|_|
Non-accelerated
filer (Do not check if a smaller reporting company) |_|
Smaller
reporting company |X|
Indicate
by check mark whether the registrant is a shell company (as defined
in
Rule
12b-2 of the Exchange Act). Yes |X| No |_|
The
number of shares of the registrant's common stock, par value $0.0001 per share,
outstanding as of August 18,
2008
was
143,742,500 shares.
PART
I. FINANCIAL INFORMATION
|
|
Item
1. Consolidated Condensed Financial Statements and Notes - Quarter
Ended
June 30, 2008
|
2
|
Item
2. Management's Discussion and Analysis or Plan of Operation
|
2
|
Item
3. Controls and Procedures
|
5
|
PART
II. OTHER INFORMATION
|
|
Item
1. Legal Proceedings
|
5
|
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
|
5
|
Item
3. Default Upon Senior Securities
|
5
|
Item
4. Submission of Matters to a Vote of Security Holders
|
5
|
Item
5. Other Information
|
5
|
Item
6. Exhibits and Reports on Form 8-K
|
6
|
Signatures
|
6
|
1
FORWARD
LOOKING STATEMENT
Certain
statements contained in this discussion and analysis or incorporated herein
by
reference that are not related to historical results are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act
of 1995. Statements that are predictive, that depend upon or refer to future
events or conditions, and/or that include words such as "expects,"
"anticipates," "intends," "plans," "believes," "estimates," "hopes," and similar
expressions constitute forward-looking statements. In addition, any statements
concerning future financial performance (including future revenues, earnings
or
growth rates), business strategies or prospects, or possible future actions
by
us are also forward-looking statements.
These
forward-looking statements are based on beliefs of our management as well as
current expectations, projections, assumptions and information currently
available to the Company and are subject to certain risks and uncertainties
that
could cause actual results to differ materially from historical results or
those
anticipated or implied by such forward-looking statements. Should one or more
of
those risks or uncertainties materialize or should underlying expectations,
projections and assumptions prove incorrect, actual results may vary materially
from those described. Those events and uncertainties are difficult to predict
accurately and many are beyond our control. We assume no obligation to update
these forward-looking statements to reflect events or circumstances that occur
after the date of these statements except as specifically required by law.
Accordingly, past results and trends should not be used to anticipate future
results or trends.
Item
1. Financial Statements
Unaudited
financial statements as of the quarter ended June 30, 2008 are submitted in
compliance with Rule 210.8-03 of Regulation S-X.
Item
2. Management Discussion and
Analysis or Plan of Operations
Overview
The
Company was formed in Florida in August 2001 with the plan of becoming a direct
marketing company that developed and marketed premium-quality, premium-priced,
branded fitness and exercise equipment to the home fitness equipment market.
Our
original business plan included marketing products directly to consumers through
a variety of direct marketing channels.
As
an
initial step, the Company licensed the rights to a portable gym subject to
patent protection in the United States, which was eligible to be marketed under
the trademark Better Buns. It was the Company's intention for this product
to be
its first direct-marketed product. The Company was unsuccessful in its attempts
to raise funding to pursue this goal and in May 2005, received notice that
it
was in breach of its license agreement for the Better Buns product and that
the
license was being terminated. Since inception to date, the Company has not
generated any revenues through the sale of the Better
Buns
product or otherwise, and has not engaged in any marketing activities due to
limited funds and resources.
In
September 2005, the Company changed focus in connection with the Merger of
a
wholly-owned subsidiary of the Company and CardioBioMedical Corporation (“CBM”),
a Delaware corporation. The subsidiary merged with and into CBM, with CBM as
the
surviving corporation which became a subsidiary of the Company. The
consideration for the merger consisted of 66,232,527 shares of the Company
common stock, $.0001 par value, payable on a one-for-one basis to the consenting
shareholders of CBM and a warrant, exercisable beginning January 1, 2008, to
purchase 19,500,000 shares of the Company common stock at a purchase price
of
$.003 per share payable to the sole warrant holder of CBM in exchange for an
equivalent CBM warrant.
The
new
objective of the Company was to establish a medical device, the Cardio Spectrum
Diagnostic System as the standard of care for the detection of early-stage
ischemic heart disease. The Company’s strategy consisted of (i) attempting to
obtain insurance reimbursement for performance of the diagnostic test (ii)
establish the device with cardiologists and (iii) finally gain acceptance and
use by other physician specialties and hospitals. The Company was unsuccessful
in its attempts to obtain insurance reimbursement and marketing
CSD.
2
The
Company was not having much success with CardioBioMedical Corporation and on
April 21, 2006, the ownership of CardioBioMedical Corporation was exchanged
for
66,232,527 shares of Odyssey common stock with the original stockholders. In
addition, we changed the name of the Company to Odyssey Oil & Gas, Inc to
reflect our new strategy.
On
April
21, 2006, we began the realization of our new strategy by purchasing a 10%
working interest in oil and gas leases in Texas from Centurion Gold Holdings,
Inc., a related public company. We expect to purchase other working interests
in
oil and gas wells in the future.
The
Company intends to expand by acquiring additional working interests in other
oil
and gas wells. The Company will also explore investments in other energy related
enterprises.
On
November 21, 2007 we entered into a new phase of our strategy by acquiring
a
Uranium Prospect known as Springbok Flats in the Bela Bela District of South
Africa.
The
company intends to expand by acquiring additional Uranium Deposits in the
Southern Africa Region.
On
January 15, 2008, the Company’s well operator determined that the Leslie 1 Well
of BBB Area, Wharton Texas, was no longer commercially viable and the well
was
plugged and abandoned.
On
June
16, 2008, the Company acquired ALG Bio Oils Limited, which in turn owns 100%
of
ALG Western Oils (Pty) Ltd. ALG Western Oils has the technology to make bio
fuel
from algae and has entered into a Letter of Intent with Xstrata Alloys to begin
a bio fuel project at the Boshoek smelter in South Africa. This acquisition
continues the Company’s strategy of investing in energy related
enterprises.
Critical
Accounting Policies and Changes to Accounting Policies
The
Company historically has utilized the following critical accounting policies
in
making its more significant judgments and estimates used in the preparation
of
its financial statements:
Investment
in Mining Company. Through
its acquisition of Uranium Acquisition Corp., Inc., the Company owns a 49%
interest in MCA Uranium One (Pty) Limited (“MCA”), a South African company which
owns a non operating Uranium mine in the Bela Bela district in South Africa.
The Company
has recently been providing all financial support of MCA, and in accordance
with
FIN 46R, “Consolidation
of variable Interest Entities,”
MCA has
been consolidated with the Company.
Use
of Estimates.
In
preparing financial statements in conformity with accounting principles
generally accepted in the United States, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the
date
of the financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those
estimates.
Income
Taxes.
The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes ("Statement 109"). Under
Statement 109, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
Under
Statement 109, the effect on deferred tax assets and liabilities of a change
in
tax rates is recognized in income in the period that includes the enactment
date.
3
Impairment
The
Company accounts for any impairment in accordance with Statement of Financial
Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“Statement
142”). Under Statement 142, intangible assets are reviewed for evidence or
changes in circumstances that indicate that their carrying value may not
be recoverable.
The Company
periodically reviews the carrying value to determine whether or not an
impairment to such value has occurred.
Foreign
Currency Translation
The
functional currency of the Company is the United States Dollar. The
financial statements of the Company are translated to United States dollars
using period-end exchange rates as to assets and liabilities and average
exchange rates as to revenues and expenses. Capital accounts are
translated at their historical exchange rates when the capital transaction
occurred. Net gains and losses resulting from foreign exchange
translations are included in the statements of operations and stockholders’
equity as other comprehensive income (loss).
Management’s
Discussion and Analysis and Plan of Operations
On
June
16, 2008, the Company acquired ALG Bio Oils Limited, which in turn owns 100%
of
ALG Western Oils (Pty) Ltd. ALG Western Oils has the technology to make bio
fuel
from algae and has entered into a Letter of Intent with Xstrata Alloys to begin
a bio fuel project at the Boshoek smelter in South Africa. The
Company issued 35 million restricted common shares with a fair value of
$21,700,000. An additional 75 million restricted common shares are contingent
upon the occurrence of future specific events. The excess of the purchase price
over the fair value of net assets acquired of $21,717,235 was assigned to the
bio-fuels plant development contract. Because
of the uncertainty of completion and success of the project and the uncertainty
of the Company to successfully raise funds for this project, the intangible
asset was impaired during the six months ended June 30, 2008 and
expensed.
During
the quarter ended June 30, 2008, Global Investment Group, Inc., a third party,
loaned the Company an additional $28,000 for partial payment of accounts payable
due as of March 31, 2008 and other operating expenses. The loan bears interest
at 10% per annum, is unsecured and is due on demand.
Unlike
the quarter and six months ended June 30, 2007, no revenue was earned from
the
oil and gas lease during the quarter and six months ended June 30, 2008 as
the
well was permanently plugged and abandoned in January 2008.
Excluding
the impairment of the bio-fuels development contract relating to the acquisition
of ALG Bio Oils Limited and the impairment of investment in oil and gas leases,
total operating expenses increased to $225,711 from $52,249 for the six months
ended June 30, 2007. The increase was primarily due to consulting fees expensed
of $183,750 relating to the transferring of prospecting rights to MCA Uranium
One (Pty) Limited.
Total
assets consist of cash of $3,022. Total liabilities consist of accounts payable
of $84,422 and amounts due to related parties totaling $277,329. Global
Investment Group, Inc. and various related parties of ALG Bio Oils Limited
funded all operating costs during the quarter and will continue to do so.
Management has received verbal assurances from these related parties that such
funding will continue as needed.
The
Company intends to commence prospecting and proving up the reserves of Uranium
during 2008. Funding is expected to be provided by Global Investment Group,
Inc.
The
Company intends on building a pilot plant for the bio fuel project at Boshoek
in
accordance with the terms of the Letter of Intent with Xstrata Alloys during
2008. Based
on
verbal discussions we intend to obtain funding from Xstrata Alloys to build
the
pilot plant.
The
company intends to expand by acquiring additional working interests in other
oil
and gas wells and to explore investments in other energy related enterprises.
These
future
activities will be dependent upon the Company’s ability to raise additional
funds. Currently, the Company does not have sufficient cash to continue
operations for the next twelve months. Our auditors have raised substantial
doubt about the Company’s ability to continue as a going concern. Although no
assurances can be given, management has received verbal assurances from the
related parties referred to above that such funding will continue as needed.
Based on these assurances, management expects that the Company will be able
to
develop its interests in MCA and ALG Bio Oils Ltd. and execute its plan of
operations and continue as a going concern.
4
Off-Balance
Sheet Arrangements
The
Company is not a party to any off- balance sheet arrangements.
Description
of Property
The
Company does not own any real property or any interest in real property and
does
not invest in real property or have any policies with respect thereto as a
part
of their operations or otherwise.
Our
principal office facility is presently located in space owned by our sole
officer. Rent has not been charged for the office space, and it is not expected
that rent will be charged in the near-term.
The
current mailing address of the Company is 6248 NW 32nd
Terrace,
Boca Raton, FL 33496.
Item
3. Controls and Procedures.
The
Company maintains disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) promulgated under the Exchange Act) that are designed
to
ensure that information required to be disclosed in the company's Exchange
Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.
Our
Chief
Executive Officer and Chief Financial Officer performed an evaluation of the
effectiveness of the design and operation of the company's disclosure controls
and procedures as of the end of the period covered by this quarterly report.
Based upon that evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that the company's disclosure controls and procedures were
effective.
Such
evaluation did not identify any change in the company's internal control over
financial reporting during the quarter ended June 30, 2008 that has materially
affected, or is reasonably likely to materially affect, the company's internal
control over financial reporting.
PART
II-OTHER INFORMATION
Item
1. Legal Proceedings
We
are
not party to any legal proceedings as of the date of this Form
10QSB.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
Not
applicable.
Item
3. Defaults Upon Senior Securities
Not
applicable.
Item
4. Submission of Matters to a Vote of Security Holders
Not.
Applicable
Item
5. Other Information
Not.
Applicable
5
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits:
31
Certification of Chief Executive Officer and Chief Financial Officer pursuant
to
Rule 13a-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32
Certification of Chief Executive Officer and Chief Financial Officer pursuant
to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
b)
Reports on Form 8-K
The
Company filed a Current Reports on Form 8-K on June 23, 2008 in connection
with
an agreement to acquire 100% of the outstanding stock in Alg Bio Oils
Limited.
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused
this
report to be signed on its behalf of the undersigned, thereunto duly
authorized.
ODYSSEY
OIL & GAS, INC
By:
/s/ Arthur Johnson
Arthur
Johnson
Principal
Executive Officer,
President
and Director
6
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE
|
1
|
CONDENSED
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2008 (UNAUDITED) AND
DECEMBER
31, 2007 (AUDITED)
|
PAGE
|
2
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR
THE THREE
AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007 AND FOR THE PERIOD
FROM MAY
28, 2003 (INCEPTION) TO JUNE 30, 2008 (UNAUDITED)
|
PAGES
|
3 –
4
|
CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE PERIOD
FROM MAY 28, 2003 (INCEPTION) TO JUNE 30, 2008
(UNAUDITED)
|
PAGES
|
5
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED
JUNE 30,
2008 AND 2007 AND FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION)
TO JUNE 30,
2008 (UNAUDITED)
|
PAGES
|
6 -
14
|
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
ODYSSEY
OIL & GAS, INC. & SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED BALANCE SHEETS
As of
|
As of
|
||||||
June 30
|
December 31,
|
||||||
2008
|
2007
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
|
$
|
3,022
|
$
|
450
|
|||
Total
Assets
|
$
|
3,022
|
$
|
450
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
payable and accrued expenses
|
$
|
84,422
|
$
|
87,085
|
|||
Loans
payable and accrued interest - related parties
|
277,329
|
208,898
|
|||||
Total
Current Liabilities
|
361,751
|
295,983
|
|||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
|||||||
Preferred
stock, $.0001 par value, 20,000,000 shares authorized, none issued
and
outstanding
|
-
|
-
|
|||||
Common
stock, $.0001 par value, 250,000,000 shares authorized, 143,742,500
and
108,292,500 shares issued and outstanding, respectively
|
14,375
|
10,830
|
|||||
Additional
paid-in capital
|
26,780,251
|
4,710,296
|
|||||
Deferred
stock compensation
|
(183,750
|
)
|
-
|
||||
Accumulated
deficit during development stage
|
(26,969,654
|
)
|
(5,016,659
|
)
|
|||
Accumulated
other comprehensive income
|
49
|
-
|
|||||
Total
Stockholders' Equity (Deficit)
|
(358,729
|
)
|
(295,533
|
)
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
|
$
|
3,022
|
$
|
450
|
See
accompanying notes to unaudited condensed consolidated financial
statements.
1
ODYSSEY
OIL & GAS, INC. & SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE
LOSS
(UNAUDITED)
For the
|
||||||||||||||||
Period From
|
||||||||||||||||
For the Three
|
For the Three
|
For the Six
|
For the Six
|
May 28,2003
|
||||||||||||
Months Ended
|
Months Ended
|
Months Ended
|
Months Ended
|
(Inception)
|
||||||||||||
June 30, 2008
|
June 30, 2007
|
June 30, 2008
|
June 30, 2007
|
to June 30, 2008
|
||||||||||||
REVENUE
|
$
|
-
|
$
|
2,660
|
$
|
-
|
$
|
7,450
|
$
|
26,695
|
||||||
OPERATING
EXPENSES
|
||||||||||||||||
Drilling
costs and expenses
|
-
|
-
|
-
|
-
|
51,886
|
|||||||||||
General
and administrative
|
106,837
|
5,359
|
206,512
|
12,672
|
260,084
|
|||||||||||
Professional
fees
|
6,043
|
2,943
|
19,199
|
20,909
|
124,187
|
|||||||||||
Amortization
|
-
|
15,324
|
-
|
18,668
|
33,400
|
|||||||||||
Impairment
of investment in oil and gas leases
|
-
|
159,716
|
-
|
159,716
|
247,931
|
|||||||||||
Impairment
of bio-fuels plant development contract
|
21,717,235
|
-
|
21,717,235
|
-
|
21,717,235
|
|||||||||||
Acquisition
costs
|
-
|
-
|
-
|
-
|
4,250,000
|
|||||||||||
Total
Operating Expenses
|
21,830,115
|
183,342
|
21,942,946
|
211,965
|
26,684,723
|
|||||||||||
LOSS
FROM CONTINUING OPERATIONS
|
(21,830,115
|
)
|
(180,682
|
)
|
(21,942,946
|
)
|
(204,515
|
)
|
(26,658,028
|
)
|
||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||
Interest
income
|
-
|
-
|
-
|
-
|
2,789
|
|||||||||||
Interest
expense
|
(5,211
|
)
|
(3,555
|
)
|
(10,049
|
)
|
(6,321
|
)
|
(33,246
|
)
|
||||||
Total
Other Expense
|
(5,211
|
)
|
(3,555
|
)
|
(10,049
|
)
|
(6,321
|
)
|
(30,457
|
)
|
||||||
LOSS
BEFORE DISCONTINUED OPERATIONS
|
(21,835,326
|
)
|
(184,237
|
)
|
(21,952,995
|
)
|
(210,836
|
)
|
(26,688,485
|
)
|
||||||
LOSS
FROM DISCONTINUED OPERATIONS
|
-
|
-
|
-
|
-
|
(4,026,761
|
)
|
||||||||||
LOSS
BEFORE PROVISION FOR INCOME TAXES
|
(21,835,326
|
)
|
(184,237
|
)
|
(21,952,995
|
)
|
(210,836
|
)
|
(30,715,246
|
)
|
||||||
Provision
for income taxes
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
NET
LOSS
|
(21,835,326
|
)
|
(184,237
|
)
|
(21,952,995
|
)
|
(210,836
|
)
|
(30,715,246
|
)
|
||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||||||||||
Foreign
currency translation gain (loss)
|
(89
|
)
|
-
|
49
|
-
|
49
|
||||||||||
COMPREHENSIVE
LOSS
|
$
|
(21,835,415
|
)
|
$
|
(184,237
|
)
|
$
|
(21,952,946
|
)
|
$
|
(210,836
|
)
|
$
|
(30,715,197
|
)
|
|
LOSS
PER COMMON SHARE - BASIC AND DILUTED
|
||||||||||||||||
Continuing
operations
|
$
|
(0.19
|
)
|
$
|
-
|
$
|
(0.22
|
)
|
$
|
-
|
||||||
Discontinued
operations
|
-
|
-
|
-
|
-
|
||||||||||||
Net
loss per share - basic and diluted
|
$
|
(0.19
|
)
|
$
|
-
|
$
|
(0.22
|
)
|
$
|
-
|
||||||
Weighted
average number of shares outstanding during the period - basic
and
diluted
|
114,127,115
|
93,292,500
|
100,204,615
|
93,292,500
|
See
accompanying notes to the unaudited condensed consolidated financial
statements.
2
ODYSSEY
OIL & GAS, INC. & SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the
|
||||||||||
Period From
|
||||||||||
For the Six
|
For the Six
|
May 28,2003
|
||||||||
Months Ended
|
Months Ended
|
(Inception)
|
||||||||
June 30, 2008
|
June 30, 2007
|
to June 30, 2008
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||
Net
loss
|
$
|
(21,952,995
|
)
|
$
|
(210,836
|
)
|
$
|
(30,715,246
|
)
|
|
Net
loss from discontinued operations
|
-
|
-
|
(4,026,761
|
)
|
||||||
Loss
from continuing operations
|
(21,952,995
|
)
|
(210,836
|
)
|
(26,688,485
|
)
|
||||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||
In-kind
contributions
|
189,750
|
6,000
|
210,750
|
|||||||
Amortization
|
-
|
18,668
|
33,400
|
|||||||
Impairment
of investment in oil and gas leases
|
-
|
159,716
|
247,931
|
|||||||
Impairment
of bio-fuels plant development contract
|
21,717,235
|
-
|
21,717,235
|
|||||||
Acquisition
costs
|
-
|
-
|
4,250,000
|
|||||||
Changes
in operating assets and liabilities:
|
||||||||||
(Increase)
decrease in accounts receivable
|
-
|
7,843
|
-
|
|||||||
Increase
(decrease) in accounts payable and accrued expenses
|
7,386
|
(31,852
|
)
|
109,366
|
||||||
Cash
flows from operating activities in continuing operations
|
(38,624
|
)
|
(50,461
|
)
|
(119,803
|
)
|
||||
Cash
flows from operating activities in discontinued operations
|
-
|
-
|
(1,034,023
|
)
|
||||||
Net
Cash (Used In) Operating Activities
|
(38,624
|
)
|
(50,461
|
)
|
(1,153,826
|
)
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||
Purchase
of property and equipment
|
-
|
-
|
(116,331
|
)
|
||||||
Acquisition
of ALG Bio Oils Ltd. net of cash purchased
|
180
|
-
|
180
|
|||||||
Cash
flows from investing activities in continuing operations
|
180
|
-
|
(116,151
|
)
|
||||||
Cash
flows from investing activities in discontinued operations
|
-
|
-
|
-
|
|||||||
Net
Cash Provided By (Used In) Investing Activities
|
180
|
-
|
(116,151
|
)
|
||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||
Repayment
of stockholder's loans
|
-
|
-
|
(609
|
)
|
||||||
Loan
payable - related parties
|
40,967
|
57,911
|
230,441
|
|||||||
Cash
flows from financing activities in continuing operations
|
40,967
|
57,911
|
229,832
|
|||||||
Cash
flows from financing activities in discontinued operations
|
-
|
-
|
1,043,118
|
|||||||
Net
Cash Provided By Financing Activities
|
40,967
|
57,911
|
1,272,950
|
|||||||
EFFECT
ON EXCHANGE RATE ON CASH
|
49
|
-
|
49
|
|||||||
NET
INCREASE IN CASH
|
2,572
|
7,450
|
3,022
|
|||||||
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
450
|
-
|
-
|
|||||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
3,022
|
$
|
7,450
|
$
|
3,022
|
See
accompanying notes to the unaudited condensed consolidated financial
statements.
3
ODYSSEY
OIL & GAS, INC. & SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
For the
|
||||||||||
Period From
|
||||||||||
For the Six
|
For the Six
|
May 28,2003
|
||||||||
Months Ended
|
Months Ended
|
(Inception)
|
||||||||
June 30, 2008
|
June 30, 2007
|
to June 30, 2008
|
||||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||
Cash
paid for income taxes
|
$
|
-
|
$
|
-
|
$
|
1,824
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
On
June
16, 2008, the Company issued 35 million shares of common stock to acquire
100%
of the outstanding common shares of ALG Bio Oils Ltd.
During
March 2008, the Company issued 450,000 shares of common stock with a fair
value
of $367,500 to a consultant for services.
On
November 20, 2007, the Company issued 15 million shares of common stock to
acquire 100% of the outstanding common shares of Uranium Acquisition Corp.,
Inc.
On
April
21, 2006, the Company issued 60 million shares of common stock to purchase
a 10%
working interest in oil and gas leases in Texas for $165,000 from a related
public company.
On
April
21, 2006, the Company exchanged all of its ownership in CardioBioMedical
Corporation to the original stockholders for 66,232,527 common shares of
Odyssey
and the warrants to purchase 19,500,000 shares of the Company's common stock
was
cancelled.
During
2003, the Company issued 49,500,000 shares of common stock with a fair value
of
$1,650,000 for the license rights to the bio-cybernetic technology and frequency
analysis technology.
During
2005, the Company cancelled 49,500,000 shares of common stock with a fair
value
of $495,000 for the termination of the exclusive rights to the bio-cybernetic
technology and frequency analysis technology.
During
2005, the Company issued warrants to purchase 19,500,000 shares of common
stock
at $.003 for the non-exclusive rights to the bio-cybernetic technology and
frequency analysis technology valued at $143,238.
See
accompanying notes to the unaudited condensed consolidated financial
statements.
4
ODYSSEY
OIL & GAS, INC. & SUBSIDIARY
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR
THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO JUNE 30, 2008
(UNAUDITED)
Accumulated
|
||||||||||||||||||||||||||||
Deficit
|
Accumulated
|
|||||||||||||||||||||||||||
Additional
|
During
|
Other
|
Deferred
|
|||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Development
|
Comprehensive
|
Stock
|
|||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Income
|
Compensation
|
Total
|
||||||||||||||||||||
Common
stock issued to founders for cash ($.03 per share)
|
-
|
$
|
-
|
7,500
|
$
|
1
|
$
|
249
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
250
|
||||||||||||
Common
stock issued for license ($.03 per share
|
-
|
-
|
49,500,000
|
4,950
|
1,645,050
|
-
|
-
|
-
|
1,650,000
|
|||||||||||||||||||
Common
stock issued to officer as compensation ($.03 per share)
|
-
|
-
|
21,375,000
|
2,138
|
710,362
|
-
|
-
|
-
|
712,500
|
|||||||||||||||||||
Common
stock issued for cash ($.03 per share)
|
-
|
-
|
2,400,000
|
240
|
79,760
|
-
|
-
|
-
|
80,000
|
|||||||||||||||||||
Common
stock issued for cash ($.15 per share)
|
-
|
-
|
833,334
|
83
|
124,917
|
-
|
-
|
-
|
125,000
|
|||||||||||||||||||
-
|
-
|
|||||||||||||||||||||||||||
Common
stock issued to consultant for services ($.03 per share)
|
-
|
-
|
24,600,000
|
2,460
|
817,540
|
-
|
-
|
-
|
820,000
|
|||||||||||||||||||
Net
loss for the period from May 28, 2003 (inception) to December 31,
2003
|
-
|
-
|
-
|
-
|
-
|
(1,737,805
|
)
|
-
|
-
|
(1,737,805
|
)
|
|||||||||||||||||
Balance,
December 31, 2003
|
-
|
-
|
98,715,834
|
9,872
|
3,377,878
|
(1,737,805
|
)
|
-
|
-
|
1,649,945
|
||||||||||||||||||
Common
stock issued for cash ($.15 per share)
|
-
|
-
|
2,016,693
|
202
|
302,301
|
-
|
-
|
-
|
302,503
|
|||||||||||||||||||
Net
loss, 2004
|
-
|
-
|
-
|
-
|
-
|
(551,203
|
)
|
-
|
-
|
(551,203
|
)
|
|||||||||||||||||
Balance,
December 31, 2004
|
-
|
-
|
100,732,527
|
10,074
|
3,680,179
|
(2,289,008
|
)
|
-
|
-
|
1,401,245
|
||||||||||||||||||
Common
stock issued in reverse merger
|
-
|
-
|
33,292,500
|
3,329
|
(3,329
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Common
stock issued to consultant for services ($.01 per share)
|
-
|
-
|
15,000,000
|
1,500
|
148,500
|
-
|
-
|
-
|
150,000
|
|||||||||||||||||||
Common
stock cancelled related to license rights ($.01 per share)
|
-
|
-
|
(49,500,000
|
)
|
(4,950
|
)
|
(490,050
|
)
|
-
|
-
|
-
|
(495,000
|
)
|
|||||||||||||||
In-kind
contribution
|
-
|
-
|
-
|
-
|
12,000
|
-
|
-
|
-
|
12,000
|
|||||||||||||||||||
Warrants
issued for non-exclusive license
|
-
|
-
|
-
|
-
|
143,238
|
-
|
-
|
-
|
143,238
|
|||||||||||||||||||
Net
loss, 2005
|
-
|
-
|
-
|
-
|
-
|
(1,696,989
|
)
|
-
|
-
|
(1,696,989
|
)
|
|||||||||||||||||
Balance,
December 31, 2005
|
-
|
-
|
99,525,027
|
9,953
|
3,490,538
|
(3,985,997
|
)
|
-
|
-
|
(485,506
|
)
|
|||||||||||||||||
In-kind
contribution
|
-
|
-
|
-
|
-
|
12,000
|
-
|
-
|
-
|
12,000
|
|||||||||||||||||||
Common
stock cancelled in connection with exchange of ownership in
CardioBioMedical
|
||||||||||||||||||||||||||||
Corporation
to its original stockholders
|
-
|
-
|
(66,232,527
|
)
|
(6,623
|
)
|
(3,211,742
|
)
|
3,745,592
|
-
|
-
|
527,227
|
||||||||||||||||
Common
stock issued to purchase investment in oil and gas leases ($.003
per
share)
|
-
|
-
|
60,000,000
|
6,000
|
159,000
|
-
|
-
|
-
|
165,000
|
|||||||||||||||||||
Net
loss, 2006
|
-
|
-
|
-
|
-
|
-
|
(140,836
|
)
|
-
|
-
|
(140,836
|
)
|
|||||||||||||||||
Balance,
December 31, 2006
|
-
|
-
|
93,292,500
|
9,330
|
449,796
|
(381,241
|
)
|
-
|
-
|
77,885
|
||||||||||||||||||
In-kind
contribution
|
-
|
-
|
-
|
-
|
12,000
|
-
|
-
|
-
|
12,000
|
|||||||||||||||||||
Common
shares issued to acquire 100% of outstanding common shares of
Uranium
|
||||||||||||||||||||||||||||
Acquisition
Corp., Inc.
|
-
|
-
|
15,000,000
|
1,500
|
4,248,500
|
-
|
-
|
-
|
4,250,000
|
|||||||||||||||||||
Net
loss, 2007
|
-
|
-
|
-
|
-
|
-
|
(4,635,418
|
)
|
-
|
-
|
(4,635,418
|
)
|
|||||||||||||||||
Balance,
December 31, 2007
|
-
|
-
|
108,292,500
|
10,830
|
4,710,296
|
(5,016,659
|
)
|
-
|
-
|
(295,533
|
)
|
|||||||||||||||||
In-kind
contribution
|
-
|
-
|
-
|
-
|
6,000
|
-
|
-
|
-
|
6,000
|
|||||||||||||||||||
Common
stock issued to consultant for services ($.82 per share)
|
-
|
-
|
450,000
|
45
|
367,455
|
-
|
-
|
(183,750
|
)
|
183,750
|
||||||||||||||||||
Common
shares issued to acquire 100% of outstanding common shares of ALG
Bio Oils
Ltd.
|
-
|
-
|
35,000,000
|
3,500
|
21,696,500
|
-
|
-
|
-
|
21,700,000
|
|||||||||||||||||||
Other
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
-
|
49
|
-
|
49
|
|||||||||||||||||||
Net
loss for the six months ended June 30, 2008
|
-
|
-
|
-
|
-
|
-
|
(21,952,995
|
)
|
-
|
-
|
(21,952,995
|
)
|
|||||||||||||||||
Balance,
June 30, 2008
|
-
|
$
|
-
|
143,742,500
|
$
|
14,375
|
$
|
26,780,251
|
$
|
(26,969,654
|
)
|
$
|
49
|
$
|
(183,750
|
)
|
$
|
(358,729
|
)
|
See
accompanying notes to the unaudited condensed consolidated financial
statements.
5
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
NOTE 1 |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES AND
ORGANIZATION
|
(A)
Basis of Presentation
The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules and regulations of the Securities
and
Exchange Commission for interim financial information. Accordingly, they
do not
include all the information necessary for a comprehensive presentation of
financial position and results of operations.
It
is
management’s opinion however, that all material adjustments (consisting of
normal recurring adjustments) have been made which are necessary for a fair
financial statements presentation. The results for the interim period are
not
necessarily indicative of the results to be expected for the year.
For
further information, refer to the financial statements and footnotes included
in
the Company’s Form 10-KSB for the year ended December 31, 2007.
On
April
21, 2006, the Company exchanged all of its ownership in CardioBioMedical
Corporation to the original stockholders. All amounts relating to the operations
of CardioBioMedical Corporation have been reflected as discontinued operations.
CardioBioMedical Corporation originally merged with Odyssey Oil & Gas, Inc.
(F/K/A Advanced Sports Technologies, Inc.) on September 23, 2005.
Odyssey
Oil & Gas, Inc. (F/K/A Advanced Sports Technologies, Inc.) is hereafter
referred to as the “Company.”
As
a
result of the transaction referred to above, Centurion Gold Holdings, Inc.,
a
related public company, owns approximately 42% of the Company.
(B)
Principles of Consolidation
The
financial statements for 2008 include the accounts of Odyssey Oil & Gas,
Inc. (F/K/A Advanced Sports Technologies, Inc.),
Uranium
Acquisition Corp., Inc. (a development stage company), whose sole asset is
a 49%
interest in MCA Uranium One (Pty) Limited, and ALG Bio Oils Ltd. (a development
stage company) from the dates of acquisition. All inter-company accounts
during
the period of consolidation have been eliminated.
The
financial statements for 2007 include the accounts of Odyssey Oil & Gas,
Inc. (F/K/A Advanced Sports Technologies, Inc.)
6
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
(C)
Investment in Mining Company
Through
its acquisition of Uranium Acquisition Corp., Inc., the Company owns a 49%
interest in MCA Uranium One (Pty) Limited (“MCA”), a South African company which
owns a non-operating uranium mine in the Bela Bela district in South Africa.
The
Company has agreed to provide financial support to MCA to fund all exploration
costs up to proving the existence of ore. Under FIN 46R, MCA is dependent
on the
Company for its funding and should therefore be consolidated, and in accordance
with FIN 46R, “Consolidation
of variable Interest Entities,”
MCA has
been consolidated with the Company.
(D)
Use of Estimates
In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that
affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues
and
expenses during the reported period. Actual results could differ from those
estimates.
(E)
Loss Per Share
Basic
and
diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by Financial Accounting Standards No.
128,
“Earnings Per Share.” As of June 30, 2008 and 2007, there were no common stock
equivalents.
(F)
Cash and Cash Equivalents
The
Company considers all highly liquid temporary cash investments with an original
maturity of three months or less to be cash equivalents. The Company did
not
have any cash equivalents as of the balance sheet dates presented in the
financial statements.
(G)
Comprehensive Income
SFAS
No.
130, "Reporting Comprehensive Income" establishes standards for reporting
and
presentation of changes in stockholders' equity resulting from non-owner
sources. Comprehensive income is the total of net income (loss) and other
comprehensive income. For the Company, other comprehensive income is comprised
entirely of foreign currency translation adjustments.
7
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
(H)
Stock Split
Effective
May 1, 2008, the Board of Directors approved a 3 for 1 stock split. As a
result
of the stock split, all share and per share data have been retroactively
adjusted to give effect to the stock split.
(I)
Income Taxes
The
Company accounts for income taxes under the Statement of Financial Accounting
Standards No. 109, “Accounting for Income Taxes” (“Statement 109”). Under
Statement 109, deferred tax assets and liabilities are recognized for the
future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under Statement 109,
the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.
(J)
Impairment
The
Company accounts for any impairment in accordance with Statement of Financial
Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“Statement
142”). Under Statement 142, intangible assets are reviewed for evidence or
changes in circumstances that indicate that their carrying value may not
be recoverable.
The Company
periodically reviews the carrying value to determine whether or not an
impairment to such value has occurred.
(K)
Foreign Currency Translation
The
functional currency of the Company is the United States Dollar. The
financial statements of the Company are translated to United States dollars
using period-end exchange rates as to assets and liabilities and average
exchange rates as to revenues and expenses. Capital accounts are
translated at their historical exchange rates when the capital transaction
occurred. Net gains and losses resulting from foreign exchange
translations are included in the statements of operations and stockholders’
equity as other comprehensive income (loss).
8
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
(L)
Recent Pronouncements
In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS
No.
160, “Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB No.
51”.
This
statement improves the relevance, comparability, and transparency of the
financial information that a reporting entity provides in its consolidated
financial statements by establishing accounting and reporting standards that
require; the ownership interests in subsidiaries held by parties other than
the
parent and the amount of consolidated net income attributable to the parent
and
to the noncontrolling interest be clearly identified and presented on the
face
of the consolidated statement of income, changes in a parent’s ownership
interest while the parent retains its controlling financial interest in its
subsidiary be accounted for consistently, when a subsidiary is deconsolidated,
any retained noncontrolling equity investment in the former subsidiary be
initially measured at fair value, entities provide sufficient disclosures
that
clearly identify and distinguish between the interests of the parent and
the
interests of the noncontrolling owners. SFAS No. 160 affects those entities
that
have an outstanding noncontrolling interest in one or more subsidiaries or
that
deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December
15,
2008. Early adoption is prohibited. The adoption of this statement is not
expected to have a material effect on the Company's financial
statements.
In
March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS
161).
This statement is intended to improve transparency in financial reporting
by
requiring enhanced disclosures of an entity’s derivative instruments and hedging
activities and their effects on the entity’s financial position, financial
performance, and cash flows. SFAS
161
applies to all derivative instruments within the scope of SFAS 133, “Accounting
for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related
hedged items, bifurcated derivatives, and nonderivative instruments that
are
designated and qualify as hedging instruments. Entities with instruments
subject
to SFAS
161
must
provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS
161
is
effective prospectively for financial statements issued for fiscal years
and
interim periods beginning after November 15, 2008, with early application
permitted. The adoption of this statement is not expected to have a material
effect on the Company's financial statements.
In
May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and provides entities with a framework for selecting the principles
used in preparation of financial statements that are presented in conformity
with GAAP. The current GAAP hierarchy has been criticized because it is directed
to the auditor rather than the entity, it is complex, and it ranks FASB
Statements of Financial Accounting Concepts, which are subject to the same
level
of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that
are
not subject to due process. The Board believes the GAAP hierarchy should
be
directed to entities because it is the entity (not its auditors) that is
responsible for selecting accounting principles for financial statements
that
are presented in conformity with GAAP. The
adoption of FASB 162 is not expected to have a material impact on the Company’s
financial position.
9
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
In
May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts
by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting
by
Insurance Enterprises. This results in inconsistencies in the recognition
and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures
about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. The adoption of FASB 163 is not expected
to
have a material impact on the Company’s financial position.
NOTE 2 |
ACQUISITION
|
On
June
16, 2008, the Company acquired 100% of the outstanding common shares of ALG
Bio
Oils Ltd., a Cyprus development stage company through a share purchase
agreement. ALG Bio Oils Ltd. owns 100% of the outstanding shares of ALG Western
Oil (Pty) Ltd., a South African company that has a preferred contract with
a
company to develop a commercial bio-fuels plant. The Company issued 35 million
restricted common shares with a fair value of $21,700,000. An additional
75
million restricted common shares are contingent upon the occurrence of future
specific events (Note 7). The following summarizes the fair values of the
assets
acquired and liabilities assumed at the date of acquisition:
$
|
180
|
|||
Intangible
asset
|
21,717,235
|
|||
Total
Assets Acquired
|
21,717,415
|
|||
(17,415
|
)
|
|||
Net
Assets Acquired
|
$
|
21,700,000
|
The
intangible asset was assigned to bio-fuels plant development contract. Because
of the uncertainty of completion and success of the project and the uncertainty
of the Company to successfully raise funds for this project, the intangible
asset was impaired during the six months ended June 30, 2008.
10
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
NOTE 3 |
LOANS
PAYABLE – RELATED
PARTY
|
During
the six months ended June 30, 2008, a related party advanced an additional
$38,550 in partial payment of accounts payable due and other operating expenses.
The advances, totaling $172,212 as of June 30, 2008, are unsecured, bear
interest at 10% per annum and are due on demand. Accrued interest for loans
payable - related party was $30,082 as of June 30, 2008.
During
the six months ended June 30, 2008, a related party advanced to ALG Bio Oils
Ltd, the Company’s wholly owned subsidiary, $17,415 in payment of operating
expenses. The
loans
are non-interest bearing and are due at the discretion of the
director.
Subsequent
to June 30, 2008, an additional $3,236 was advanced to ALG Bio Oils Ltd,
the
Company’s wholly owned subsidiary, by a related party. The loans are
non-interest bearing and are due at the discretion of the director.
NOTE 4 |
STOCKHOLDERS’
EQUITY
|
(A)
Common Stock Issued for Cash
During
2003, the Company issued 7,500 shares of common stock to its founder for
cash of
$250 ($0.033 per share).
During
2003, the Company issued 2,400,000 shares of common stock for cash of $80,000
($0.33 per share).
During
2003, the Company issued 833,334 shares of common stock for cash of $125,000
($0.15 per share).
During
2004, the Company issued 2,016,693 shares of common stock for cash of $302,503
($0.15 per share).
During
2005, the Company issued 33,292,500 shares of common stock to the stockholders
of Advanced Sports upon completion of the merger.
(B)
Common Stock Issued for Services
During
2003, the Company issued 21,375,000 shares of common stock for officer
compensation valued for financial accounting purposes at $712,500 ($0.033
per
share) based upon recent cash offering prices. The initial 7,500 shares issued
upon formation of the corporation were purchased for $.033 per
share.
11
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
During
2003, the Company issued 49,500,000 shares of common stock for licensing
rights
valued for financial accounting purposes at $1,650,000 ($0.033 per share,
the
price paid for the initial 7,500 shares issued upon formation of the
corporation) based upon recent cash offering prices. During 2005, these
49,500,000 shares of common stock were cancelled pursuant to a settlement
agreement dated September 16, 2005. Under the terms of this agreement, a
nontransferable warrant for 19,500,000 common shares at $ .003 per share
was
issued for the nonexclusive right to the technology. This warrant is exercisable
between January 1, 2007 and December 31, 2014. The fair value of the warrants
was estimated on the grant date using the Black-Scholes option pricing model
as
required by SFAS 123 with the following assumptions: expected dividend yield
0%,
volatility 1%, risk-free interest rate of return of 3.28% and expected life
of
7 years. The value of $143,238 was recorded as intangible license rights
and will be amortized over the patent life of approximately 14
years.
During
2003, the Company issued 24,600,000 shares of common stock for consulting
services valued for financial accounting purposes at $820,000 ($0.033 per
share)
based upon recent cash offering prices.
During
2005, the Company issued 15,000,000 shares of common stock to its Chief
Executive Officer and President in recognition and consideration of his service
as an officer and director of the Company since June 2003 and his contributions
to the progress and development of the Company. For financial accounting
purposes, these shares were valued at $150,000 ($0.01 per share) based upon
recent market prices of the Company.
Effective
January 1 2008, the Company entered into three one year contracts for consulting
services. As consideration, the Company issued 450,000 shares of common stock
valued for financial accounting purposes at $367,500 ($.82 per share) based
upon
recent market prices of the Company. The value of the services is being
recognized over the contract term. As of June 30, 2008, the Company has recorded
$183,750 as consulting expense.
(C)
In-kind Contribution
During
the six months ended June 30, 2008, the Company recorded additional paid-in
capital of $6,000 for the fair value of rent contributed to the Company by
its
president.
During
2007, 2006 and 2005, the Company recorded additional paid-in capital of $12,000
for the fair value of rent contributed to the Company by its
president.
(D)
Common Stock Issued in Exchange of Assets
On
April
21, 2006, the Company exchanged all of its ownership in CardioBioMedical
Corporation to the original stockholders for 66,232,527 common shares of
Odyssey
and the warrant issued to purchase 19,500,000 shares of the Company’s common
stock was cancelled based on the book value of assets and liabilities on
the
date of exchange.
12
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
On
April
21, 2006, the Company issued 60 million shares of common stock to purchase
a 10%
working interest in certain gas and oil leases in Texas for $165,000 ($.003
per
share) from Centurion Gold Holdings, Inc., a related public
company.
NOTE 5 |
RELATED
PARTY TRANSACTIONS
|
See
Notes
3 and 4.
NOTE 6 |
DISCONTINUED
OPERATIONS
|
On
April
21, 2006, the ownership of CardioBioMedical Corporation was exchanged for
66,232,527 shares of Odyssey common stock to the original stockholders.
Accordingly, all amounts relating to the operations of CardioBioMedical
Corporation have been reflected as discontinued operations. The net book
value
of assets and liabilities of CardioBioMedical Corporation was recorded as
a
distribution on the date of exchange. The loss from discontinued operations
was
equal to operating expenses of CardioBioMedical Corporation.
NOTE 7 |
COMMITMENTS
AND CONTINGENCIES
|
(A)
Purchase Agreements
Uranium
Acquisition Corp.
During
November 2007, the Company signed an agreement under which it acquired 49%
of
the outstanding shares of Uranium Acquisition Corp., Inc. (“Uranium”), a Florida
corporation. The agreement called for the Company to issue 15 million shares
of
Company stock upon signing of the agreement. The agreement also calls for
the
Company to issue 30 million shares upon approval of a mining license. In
addition, the agreement calls for the Company to deliver 75 million shares
of
common stock ,within 18 months of the signature of the agreement, upon the
proving
up
of
uranium reserves being substantially the same
as
per the “Summary of Geological Area and Write up” presented by Mineral Capital
Assets.
The
agreement requires each shareholder to provide funding based on the
shareholders’ percentage of the pro rata amount of shares held based on the
future funding requirements of Uranium. If a shareholder does not provide
the
required loans, the agreement gives the remaining shareholders the right
to
force the sale of shares held by the non-compliant shareholder. The agreement
gives the controlling interest shareholders the right of first refusal on
any
shares held by the Company at a price to be determined by the shareholders.
As
of June 30, 2008, no uranium reserves have been proven and no additional
shares
or loans are due under the agreement.
13
ODYSSEY
OIL & GAS, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS
OF JUNE 30, 2008
(UNAUDITED)
ALG
Bio Oils Ltd.
During
June 2008, the Company signed an agreement under which it acquired 100% of
the
outstanding shares of ALG Bio Oils Ltd. (Note 2). The agreement called for
the
Company to issue 35 million shares of Company stock upon signing of the
agreement. The agreement also calls for the Company to issue an additional
25
million shares upon each of the following events:
1.
The
successful commissioning of a bio-fuels pilot plant,
2.
The
ordering of a commercial bio-fuels plant, and
3.
The
commissioning of a commercial bio-fuels plant.
As
of
June 30, 2008, none of the required events have been completed and no additional
shares are due under the agreement.
NOTE 8 |
GOING
CONCERN
|
As
reflected in the accompanying financial statements, the Company is in the
development stage with an accumulated deficit of $26,969,654, a working capital
deficiency of $358,729 and net cash used in operations of $1,153,826 from
inception. These factors raise substantial doubt about its ability to continue
as a going concern. The ability of the Company to continue as a going concern
is
dependent on the Company’s ability to raise additional capital and implement its
business plan. The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going
concern.
To
date,
related parties have funded our operating cash requirements. Management has
received verbal assurances from these related parties that such funding will
continue as needed. Based on these assurances, management expects that the
Company will be able to develop
its interests in MCA and ALG Bio Oils Ltd. and execute its plan of operations
and continue as a going concern.
NOTE 9 |
SUBSEQUENT
EVENTS
|
Subsequent
to June 30, 2008, an additional $3,236 was advanced to ALG Bio Oils Ltd,
the
Company’s wholly owned subsidiary, by a related party. The loans are
non-interest bearing and are due at the discretion of the director (See Note
3).
14