UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2006
|_| 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 (IRS Employer Identification No.)
incorporation or organization)
5005 Riverway, Suite 440
Houston, TX 77056
Address of Principal Executive Offices
(713) 623-2219
--------------
(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 Exchange Act during the past 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 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 September 30, 2006 was 31,097,500 shares.
INTRODUCTORY NOTE
We are filing this Amendment to our Quarterly Report on Form 10-QSB for the
Quarter ended September 30, 2006, which was originally filed on November 14,
2006 pursuant to comments received from the Securities and Exchange Commission
relating to the valuation and classification of stock received in the disposal
transaction with CARDIO BIO MEDICAL CORP. We have reclassified the gain
recognized on the disposal of the discontinued operations to stockholders
equity.
TABLE OF CONTENT
PART I - FINANCIAL INFORMATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements and Condensed Notes - Quarter Ended
September 30, 2006
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Default Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
2
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 2006 (UNAUDITED)
PAGE 2 CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2006 (RESTATED) AND 2005 AND FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO
SEPTEMBER 30, 2006 (RESTATED) (UNAUDITED)
PAGES 3 - 4 CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM MAY 28, 2003
(INCEPTION) TO SEPTEMBER 30, 2006 (RESTATED) (UNAUDITED)
PAGES 5 - 6 CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
(RESTATED) AND 2005 AND FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO SEPTEMBER 30,
2006 (RESTATED) (UNAUDITED)
PAGES 7 - 12 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 2006
(UNAUDITED)
ASSETS
Investment in Oil and Gas Leases $ 223,229
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 40,657
Loans payable and accrued interest - related parties 80,044
---------
Total Current Liabilities 120,701
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, none issued and
outstanding --
Common stock, $0.0001 par value, 250,000,000 shares authorized, 31,097,500 shares
issued and outstanding 3,110
Additional paid-in capital 453,016
Accumulated deficit during development stage (353,598)
---------
Total Stockholders' Equity 102,528
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 223,229
=========
See accompanying notes to condensed financial statements.
1
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three For the Three For the Nine For the Nine For The Period From
Months Ended Months Ended May 28, 2003
September 30, Months Ended September 30, Months Ended (Inception) To
2006 September 30, 2006 September 30, September 30, 2006
(Restated) 2005 (Restated) 2005 (Restated)
------------ ----------------- ------------ ----------------- ------------
OPERATING EXPENSES
General and administrative $ 6,880 $ -- $ 17,007 -- $ 20,266
Professional fees 6,500 -- 25,234 -- 52,305
------------ ----------------- ------------ ----------------- ------------
Total Operating Expenses 13,380 -- 42,241 -- 72,571
------------ ----------------- ------------ ----------------- ------------
LOSS FROM CONTINUING OPERATIONS (13,380) -- (42,241) -- (72,571)
OTHER INCOME (EXPENSE)
Interest income -- -- -- -- 2,789
Interest expense (3,343) -- (4,312) -- (6,507)
------------ ----------------- ------------ ----------------- ------------
Total Other Expense (3,343) -- (4,312) -- (3,718)
------------ ----------------- ------------ ----------------- ------------
LOSS BEFORE DISCONTINUED OPERATIONS
AND INCOME TAXES (16,723) -- (46,553) -- (76,289)
Provision for Income Taxes -- -- -- -- --
------------ ----------------- ------------ ----------------- ------------
LOSS BEFORE DISCONTINUED OPERATIONS (16,723) -- (46,553) -- (76,289)
DISCONTINUED OPERATIONS
Loss from discontinued operations,
net of taxes -- (1,214,006) (70,500) (1,497,467) (4,026,761)
------------ ----------------- ------------ ----------------- ------------
NET LOSS $ (16,723) $ (1,214,006) $ (117,053) $ (1,497,467) $ (4,103,050)
============ ================= ============ ================= ============
LOSS PER COMMON SHARE - BASIC AND DILUTED
Loss from continuing operations $ -- $ -- $ -- $ -- $ --
Loss from discontinued operations -- (.05) -- (0.07) (0.14)
------------ ----------------- ------------ ----------------- ------------
Net loss per share - basic and diluted $ -- $ (.05) $ -- $ (0.07) $ (0.14)
============ ================= ============ ================= ============
Weighted average number of shares outstanding
during the period - basic and diluted 31,097,500 22,921,884 31,942,201 22,362,060 29,002,500
============ ================= ============ ================= ============
See accompanying notes to condensed financial statements.
2
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO SEPTEMBER 30, 2006
(UNAUDITED)
Preferred Stock Common Stock
Shares Amount Shares Amount
------------ ----------- ---------------- ------------
Common stock issued to founders for cash ($0.10 per
share) - $ - 2,500 $ 1
Common stock issued for license ($0.10 per share) - - 16,500,000 1,650
Common stock issued to officer as compensation ($0.10
per share) - - 7,125,000 713
Common stock issued for cash ($0.10 per share) - - 800,000 80
Common stock issued for cash ($0.45 per share) - - 277,778 28
Common stock issued to consultant for services ($0.10
per share) - - 8,200,000 820
Net loss for the period from May 28, 2003 (inception) to
December 31, 2003 - - - -
------------ ----------- ---------------- ------------
Balance, December 31, 2003 - - 32,905,278 3,292
Common stock issued for cash ($0.45 per share) - - 672,231 66
Net loss, 2004 - - - -
------------ ----------- ---------------- ------------
Balance, December 31, 2004 - - 33,577,509 3,358
Common stock cancelled related to license rights
($0.03 per share) - - (16,500,000) (1,650)
Additional Accumulated
Deficit During
Paid-In Development
Capital Stage Total
--------------- ------------------ --------------
Common stock issued to founders for cash ($0.10 per $ 249 $ - $ 250
share)
1,648,350 - 1,650,000
Common stock issued for license ($0.10 per share)
Common stock issued to officer as compensation ($0.10 711,787 - 712,500
per share)
79,920 - 80,000
Common stock issued for cash ($0.10 per share)
124,972 - 125,000
Common stock issued for cash ($0.45 per share)
Common stock issued to consultant for services ($0.10 819,180 - 820,000
per share)
Net loss for the period from May 28, 2003 (inception) to - (1,737,805) (1,737,805)
December 31, 2003 --------------- ------------------ --------------
3,384,458 (1,737,805) 1,649,945
Balance, December 31, 2003
302,437 - 302,503
Common stock issued for cash ($0.45 per share)
- (551,203) (551,203)
Net loss, 2004 --------------- ------------------ --------------
3,686,895 (2,289,008) 1,401,245
Balance, December 31, 2004
Common stock cancelled related to license rights (493,350) - (495,000)
($0.03 per share)
See accompanying notes to condensed financial statements.
3
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO SEPTEMBER 30, 2006
(UNAUDITED)
Preferred Stock Common Stock
Shares Amount Shares Amount
------------ ----------- ---------------- ------------
Common stock issued to officer for services
($0.03 per share) - - 5,000,000 500
Shares issued in reverse merger - - 11,097,500 1,110
In-kind contribution - - - -
Warrants issued for non- exclusive license - - - -
Net loss, 2005 - - - -
------------ ----------- ---------------- ------------
Balance , December 31, 2005 - - 33,175,009 3,318
In-kind contribution - - - -
Common stock cancelled in connection with exchange of
ownership in CardioBioMedical Corporation to its
original stockholders - - (22,077,509) (2,208)
Common stock issued to purchase investment in oil and
gas leases ($.008 per share) - - 20,000,000 2,000
Net loss during the nine months ended September 30, 2006 - - - -
------------ ----------- ---------------- ------------
BALANCE, SEPTEMBER 30, 2006 (RESTATED) - $ - 31,097,500 $ 3,110
--------------------------------------
============ =========== ================ ============
Accumulated
Additional Deficit During
Paid-In Development
Capital Stage Total
--------------- ------------------ --------------
Common stock issued to officer for services 149,500 - 150,000
($0.03 per share)
(1,110) - -
Shares issued in reverse merger
12,000 - 12,000
In-kind contribution
143,238 - 143,238
Warrants issued for non- exclusive license
- (1,696,989) (1,696,989)
Net loss, 2005 --------------- ------------------ --------------
3,497,173 (3,985,997) (485,506)
Balance , December 31, 2005
9,000 - 9,000
In-kind contribution
Common stock cancelled in connection with exchange of
ownership in CardioBioMedical Corporation to its (3,216,157) 3,749,452 531,087
original stockholders
Common stock issued to purchase investment in oil and 163,000 - 165,000
gas leases ($.008 per share)
- (117,053) (117,053)
Net loss during the nine months ended September 30, 2006 --------------- ------------------ --------------
$ 453,016 $ (353,598) $ 102,528
BALANCE, SEPTEMBER 30, 2006 (RESTATED)
-------------------------------------- =============== ================== ==============
See accompanying notes to condensed financial statements.
4
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For The Period
From
For the Nine For the Nine May 28, 2003
Months Ended Months Ended (Inception) To
September 30, September 30, September 30, 2006
2006 (Restated) 2005 (Restated)
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (117,053) $ -- $(4,103,050)
Net loss from discontinued operations (70,500) (1,497,467) (4,026,761)
----------- ----------- -----------
Loss from continuing operations (46,553) (1,497,467) (76,289)
Adjustments to reconcile net loss to net cash used in operating
activities:
Changes in operating assets and liabilities:
In-kind contribution 6,000 -- 6,000
Increase in accounts payable and accrued expenses 40,658 -- 40,658
Increase in accrued interest on loans payable - related parties 3,343 -- 3,343
----------- ----------- -----------
Cash flow from operating activities in continuing operations 3,448 -- (26,288)
Cash flow from operating activities in discontinued operations (81,847) 1,450,453 (50,413)
----------- ----------- -----------
Net Cash Used In Operating Activities (78,399) (47,014) (76,701)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans payable - related parties 76,701 -- 76,701
----------- ----------- -----------
Net Cash Provided By Financing Activities 76,701 -- 76,701
----------- ----------- -----------
NET DECREASE IN CASH (1,698) (47,014) --
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,698 48,102 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -- $ 1,088 $ --
=========== =========== ===========
See accompanying notes to condensed financial statements.
5
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine For the Nine For The Period
From
May 28, 2003
Months Ended Months Ended (Inception) To
September 30, September 30, September 30, 2006
2006 (Restated) 2005 (Restated)
------------------ ------------------ ----------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 456 $ 456 $1,368
=================== =================== ======
Cash paid for interest $ -- $ -- $ --
=================== =================== ======
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
On April 21, 2006, the Company issued 20 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 22,077,509 common
shares of Odyssey and the warrant issued to purchase 6,500,000 shares of the
Company's common stock was cancelled.
6
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2006
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) Basis of Presentation
The accompanying unaudited condensed 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,
2005.
On April 21, 2006, the ownership of CardioBioMedical Corporation was
exchanged for 22,077,509 shares of Odyssey common stock to the original
stockholders. Accordingly, all current and prior period amounts relating
to the operations of CardioBioMedical Corporation have been reflected as
discontinued operations.
The financial statements for 2006 include the accounts of Odyssey Oil &
Gas, Inc. (F/K/A Advanced Sports Technologies, Inc.) and CardioBioMedical
Corporation (a development stage company) through the date of the sale of
the assets on April 21, 2006. The financial statements for 2005 include
the accounts of CardioBioMedical Corporation. All intercompany accounts
during periods of consolidation have been eliminated.
Odyssey Oil & Gas, Inc. (F/K/A Advanced Sports Technologies, Inc.) is
hereafter referred to as the "Company."
As a result of the transactions referred to in Note 5(D), Centurion Gold
Holdings, Inc., a related public company, owns approximately 64% of the
Company.
(B) 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.
7
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2006
(UNAUDITED)
(C) Investment in Oil and Gas Leases
The Company follows the successful efforts method of accounting for its
oil and gas operations. Under this method, all property acquisition costs
and costs of exploratory and development wells are capitalized when
incurred, pending determination of whether an individual well has found
proved reserves. If it is determined that a well has not found proved
reserves, the costs of drilling the well are expensed. The costs of
development wells are capitalized whether productive or nonproductive.
Geological and geophysical costs on exploratory prospects and the costs
of carrying and retaining unproved properties are expensed as incurred.
An impairment allowance is provided to the extent that capitalized costs
of unproved properties, on a property-by property basis, are not
considered to be realizable. Depletion, depreciation and amortization
("DD&A") of capitalized costs of proved oil and gas properties is
provided on a property- by property basis using the units of production
method. The computation of DD&A takes into consideration dismantlement,
restoration and abandonment costs and the anticipated proceeds from
equipment salvage. The estimated dismantlement, restoration and
abandonment costs are expected to be substantially offset by the
estimated residual value of the lease and well equipment. An impairment
loss is recorded if the net capitalized costs of proved oil and gas
properties exceed the aggregate undiscounted future net revenues
determined on a property-by-property basis. The impairment loss
recognized equals the excess of net capitalized costs over the related
fair value determined on a property-by-property basis.
(D) 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 September 30,
2006, there were no common stock equivalents outstanding. As of September
30, 2005, the assumed exercise of 6,500,000 warrants was anti-dilutive
and not included in the computation of dilutive loss per share.
NOTE 2 RESTATEMENT
The financial statements have been restated to correct an error related
to the gain recognized on the disposal of the CardioBioMedical
Corporation subsidiary.
The following table presents the effect of changes in the statements of
operations and cash flows caused by the restatement:
8
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2006
(UNAUDITED)
Statement of Operations: For the Three Months For the Nine Months
Ended September 30, 2006 Ended September 30, 2006
As
Restated As Restated
As for As for
Originally Correction As Originally Correction As
Reported of Errors Restated Reported of Errors Restated
----------- ---------- ----------- ----------- ------------- -----------
Loss from continuing operations $ (16,723) $ -- $ (16,723) $ (46,553) $ -- $ (46,553)
Income (loss) from discontinued
operations, net of taxes -- -- -- 3,678,952 (3,749,452) (70,500)
Net loss (16,723) -- (16,723) 3,632,399 (3,749,452) (117,053)
Basic and diluted net earnings (loss)
per common share:
Continuing operations -- -- -- -- -- --
Discontinued operations -- -- -- 0.12 (0.12) --
----------- ---------- ----------- ----------- ------------- -----------
Total -- -- -- 0.12 (0.12) --
=========== ========== =========== =========== ============= ===========
Statement of Cash Flows: For the Nine Months
------------------------
Ended September 30, 2006
As Restated
As for
Originally Correction
Reported of Errors As Restated
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,632,399 $(3,749,452) $ (117,053)
Net income (loss) from discontinued operations 3,678,952 (3,749,452) (70,500)
----------- ----------- -----------
Loss from continuing operations (46,553) -- (46,553)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
In-kind contribution 6,000 -- 6,000
Increase in accounts payable and accrued expenses 40,658 -- 40,658
Increase in accrued interest on loans payable - related parties 3,343 -- 3,343
----------- ----------- -----------
Cash flow from operating activities in continuing operations 3,448 -- 3,448
Cash flow from operating activities in discontinued operations (81,847) -- (81,847)
----------- ----------- -----------
Net Cash Used In Operating Activities (78,399) -- (78,399)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans payable - related parties 76,701 -- 76,701
----------- ----------- -----------
Net Cash Provided By Financing Activities 76,701 -- 76,701
----------- ----------- -----------
NET DECREASE IN CASH (1,698) -- (1,698)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,698 -- 1,698
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -- $ -- $ --
=========== =========== ===========
9
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2006
(UNAUDITED)
NOTE 3 INVESTMENT IN OIL AND GAS LEASES
On April 21, 2006, the Company issued 20 million shares of common stock
to purchase a 10% working interest in oil and gas leases in Texas for
$165,000 ($.008 per share) from Centurion Gold Holdings, Inc., a related
public company. The investment was recorded at historical cost equal to
the amount recorded by Centurion Gold Holdings, Inc. The investment is
being accounted for under the cost method of accounting. During the nine
months ended September 30, 2006, an additional $58,229 was paid for the
Company's share of oil well development costs (See Note 4).
NOTE 4 LOANS PAYABLE - RELATED PARTIES
During the nine months ended September 30, 2006, an affiliated party
advanced the Company an additional $58,229 and a third party advanced an
additional $18,472 for operating and oil well development expenses. The
advances are unsecured, bear interest at 10% per annum and are due on
demand. Loans payable - related parties include accrued interest of
$3,343.
NOTE 5 STOCKHOLDERS' EQUITY
(A) Common Stock Issued for Cash
During 2003, the Company issued 2,500 shares of common stock to its
founder for cash of $250 ($0.10 per share).
During 2003, the Company issued 800,000 shares of common stock for cash
of $80,000 ($0.10 per share).
During 2003, the Company issued 277,778 shares of common stock for cash
of $125,000 ($0.45 per share).
During 2004, the Company issued 672,231 shares of common stock for cash
of $302,503 ($0.45 per share).
During 2005, the Company issued 11,097,500 shares of common stock to the
stockholders of Advanced Sports upon completion of the merger with
CardioBioMedical Corporation.
10
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2006
(UNAUDITED)
(B) Common Stock Issued for Services
During 2003, the Company issued 7,125,000 shares of common stock for
officer compensation valued for financial accounting purposes at $712,500
($0.10 per share) based upon recent cash offering prices. During 2003,
the Company issued 16,500,000 shares of common stock for licensing rights
valued for financial accounting purposes at $1,650,000 ($0.10 per share)
based upon recent cash offering prices. During 2005, these 16,500,000
shares of common stock were cancelled pursuant to an agreement dated
September 16, 2005. Under the terms of this agreement, a nontransferable
warrant for 6,500,000 common shares at $ .01 per share was issued. 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 tights and will
be amortized over the patent life of approximately 14 years.
During 2003, the Company issued 8,200,000 shares of common stock for
consulting services valued for financial accounting purposes at $820,000
($0.10 per share) based upon recent cash offering prices.
During 2005, the Company issued 5,000,000 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
which service and contributions he has not been compensated prior to the
date of issuance of these shares. For financial accounting purposes,
these shares were valued at $150,000 ($0.03 per share) based upon recent
market prices of the Company.
(C) In-Kind Contribution
During 2006, the Company recorded additional paid-in capital of $9,000
for the fair value of rent contributed to the Company by its president.
During 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) Other
On April 21, 2006, the Company exchanged all of its ownership in
CardioBioMedical Corporation to the original stockholders for 22,077,509
common shares of Odyssey and the warrant issued to purchase 6,500,000
shares of the Company's common stock was cancelled based on the net book
value of assets and liabilities on the date of exchange.
On April 21, 2006, the Company issued 20 million shares of common stock
to purchase a 10% working interest in certain gas and oil leases in Texas
for $165,000 ($.008 per share) from Centurion Gold Holdings, Inc., a
related public company (See Note 3).
11
ODYSSEY OIL & GAS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2006
(UNAUDITED)
NOTE 6 RELATED PARTY TRANSACTIONS
See Notes 3, 4 and 5.
NOTE 7 DISCONTINUED OPERATIONS
On April 21, 2006, the ownership of CardioBioMedical Corporation was
exchanged for 22,077,509 shares of Odyssey common stock to the original
stockholders. Accordingly, all current and prior period amounts relating
to the operations of CardioBioMedical Corporation have been reclassified
to conform to this presentation. 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 for the period January 1, 2006 to April 21, 2006, the date of
exchange.
NOTE 8 GOING CONCERN
As reflected in the accompanying financial statements, the Company is in
the development stage with a working capital deficiency of $120,701 and
an accumulated deficit of $353,598 as of September 30, 2006 and a
negative cash flow from operations of $78,399 for the nine months ended
September 30, 2006. 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.
On April 21, 2006, the Company acquired a 10% working interest in certain
gas and oil leases in Texas. The Company's portion of the capital
requirement to finish the well was $58,229. This capital requirement was
paid by an affiliated party (See Note 4). Management anticipates the well
will produce cash flow in the fourth quarter of 2006 sufficient to ensure
the Company will continue as a going concern.
12
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 2. Management Discussion and Analysis / Plan of Operation
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 22,077,509 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, 2007 and
ending December 31, 2014 to purchase 6,500,000 shares of the Company common
stock at a purchase price of $.01 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 attempting to (i) obtain insurance
reimbursement for performance of the diagnostic test, (ii) establish the device
with cardiologists and finally (iii) gain acceptance and use by other physician
specialties and hospitals. The Company was unsuccessful in its attempts to
obtain insurance reimbursement and marketing CSD.
On April 21, 2006, our Board of Directors authorized the purchase (the
"Purchase") of a ten percent (10%) working interest in an oil exploration
project in the BBB Area, Wharton, Texas from Centurion Gold Holdings, Inc., a
related public company. Presently, the business operations of BBB Area
constitute all of the business operations of the Company. As a result of the
Purchase, the Company disposed of CBM and returned to treasury 22,077,509 shares
of the issued and outstanding common stock and canceled the warrant to purchase
6,500,000 shares of the Company's common stock at a purchase price of $.01 per
share.
15
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:
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.
Recent Developments
On April 21, 2006, our Board of Directors authorized the purchase (the
"Purchase") of a ten percent (10%) working interest an oil exploration project
in the BBB Area, Wharton, Texas (the "Working Interest") from Centurion Gold
Holdings, Inc., a related public company ("Centurion"). As a result of the
Purchase, the Company disposed of CBM and returned to treasury 22,077,509 shares
of the issued and outstanding common stock and canceled a warrant to purchase
6,500,000 shares of the Company's common stock at a purchase price of $.01 per
share.
The sellers of the Working Interest received an aggregate of 20,000,000
restricted shares of the common stock of the Company, leaving a total of
31,097,500 shares of common stock issued and outstanding immediately following
the Purchase and the subsequent disposition of CBM.
Immediately prior to the Purchase, the former member of the Company's Board of
Directors resigned and Arthur V. Johnson was appointed to the Board and to serve
as President and Secretary.
On April 20, 2006, in connection with the Purchase, the Company changed its name
from Advanced Sports Technologies, Inc. ("AST") to Odyssey Oil & Gas, Inc. The
Company also increased its authorized shares to two hundred and seventy million
(270,000,000) shares of stock, consisting of 250,000,000 shares of common stock
and 20,000,000 shares of preferred stock.
On April 21, 2006, a change in control occurred as a result of the Purchase, as
set forth in the Stock Purchase Agreement dated April 21, 2006 between the
Company and the owners of the Working Interest, a copy which has been filed with
the Form 8-K/A dated May 1, 2006. Centurion now owns approximately 64% of the
Company.
On June 8, 2006, an affiliated party advanced the Company an additional $58,229
and a third party advanced an additional $11,151 for operating and oil well
development expenses. Such loans are non-interest bearing, unsecured and due on
demand.
On August 8, 2006, Global Investment Group, Inc., an unrelated third party,
loaned the Company an additional $15,522.68, of which $12,522.68 was received
and used to pay current payables. Such loan is non-interest bearing.
During October 2006 Global Investment Group, Inc. an unrelated third party,
loaned the Company an additional $1,506,207 to pay current payables. Such loan
is non-interest bearing unsecured and due on demand.
16
Plan of Operations
The Company has not generated any revenues from operations since its inception.
The Company initially intended to generate revenue through the licensing and
sale of a portable patented gym product, but the license to such product was
terminated due to the Company's failure to make minimum royalty payments.
Through April 7, 2006, the Company had not been successful in raising capital
for the development, marketing or sale of any other products. The Company then
adopted a new strategy through the merger with CBM, however, the Company was
unsuccessful in obtaining insurance reimbursement for, and marketing CBM's
medical device, so CBM was disposed of.
Having been unsuccessful at raising sufficient capital to implement the new
strategy, the Company was forced to seek opportunities outside of its new
corporate focus by purchasing the Working Interest. Presently, all of the
business operations of the Company consist solely of its ownership of the
Working Interest and the Company intends to devote its energy to the exploration
and exploitation of the well in the BBB Area. In order to complete the well for
production, the Company paid approximately $59,000 for its share of the costs of
the Working Interest. It was able to raise this amount from a related party and
the payments were made in the second quarter of 2006. The Leslie #1 well has
been linked up to the pipelines and gas started flowing on October 1, 2006. The
first full month of production was October 2006. Management expects the first
revenues to be paid to the Company during November 2006. Going forward the
Company's business will be focused on the exploration and exploitation of the
BBB Area. A third party also advanced the Company's $16,972 for operating and
oil well development expenses. Future activities will be dependent upon the
Company's ability to raise additional funds. Our auditors have raised
substantial doubt about the Company's ability to continue as a going concern.
Although no assurances can be given, management anticipates that the well in the
BBB Area will produce cash flow in the third quarter of 2006 sufficient to
ensure that the Company will be able to continue as a going concern. The Company
does not have enough cash to continue for the next 12 months.
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 other than its 10% interest in the
BBB Area.
The current location of the Company is 5005 Riverway, Suite 440 Houston, TX
77056.
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 September 30, 2006 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.
17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
N/A
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
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 has not filed any Current Reports on Form 8-K during the quarter
ended September 2006
18
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
19