UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 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 (IRS Employer Identification No.)
of 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 March 31, 2006 was 33,175,009 shares.
PART I - FINANCIAL INFORMATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements and Condensed Notes - Quarter Ended March 31, 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
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND CONDENSED NOTES (UNAUDITED) - QUARTER ENDED
MARCH 31, 2006
ODYSSEY OIL & GAS, INC , INC., AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2006
CONTENTS PAGE
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Balance Sheets F-1
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Statements of Operations F-2
------------------------
Statements of Changes in Shareholders' Equity F-3
---------------------------------------------
Statements of Cash Flows F-5
------------------------
Notes to Consolidated Financial Statements F-6
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ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2006
(UNAUDITED)
ASSETS
TOTAL ASSETS $ --
============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 108,300
Loans payable - related party 50,606
Accrued royalty expense 163,500
Due to shareholder 26,564
------------
Total Current Liabilities 348,970
LONG-TERM LIABILITIES
Royalties due 210,000
------------
TOTAL LIABILITIES 558,970
------------
STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.0001 par value, 20,000,000 shares authorized,
none issued and outstanding --
Common stock, $0.0001 par value, 100,000,000 shares
authorized, 33,175,009 shares issued and
outstanding 3,318
Additional paid-in capital 3,500,173
Accumulated deficit during development stage (4,062,461)
------------
Total Stockholders' Deficiency (558,970)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ --
============
See accompanying notes to condensed consolidated financial statements.
F-1
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Period
from
For the Three For the Three May 28, 2003
Months Ended Months Ended (Inception) To
March 31, 2006 March 31, 2005 March 31, 2006
-------------- -------------- --------------
OPERATING EXPENSES
General and administrative $ -- $ -- $ 3,259
Professional fees 4,995 -- 32,066
-------------- -------------- --------------
Total Operating Expenses 4,995 -- 35,325
-------------- -------------- --------------
LOSS FROM CONTINUING OPERATIONS (4,995) -- (35,325)
OTHER INCOME (EXPENSE)
Interest income -- -- 2,789
Interest expense (969) -- (3,164)
-------------- -------------- --------------
Total Other (Expense) (969) -- (375)
-------------- -------------- --------------
LOSS BEFORE DISCONTINUED OPERATIONS (5,964) -- (35,700)
LOSS FROM DISCONTINUED OPERATIONS (70,500) (124,043) (4,026,761)
-------------- -------------- --------------
NET LOSS $ (76,464) $ (124,043) $ (4,062,461)
============== ============== ==============
LOSS PER COMMON SHARE - BASIC AND DILUTED
Loss from continuing operations $ -- $ -- $ --
Loss from discontinued operations -- -- (.14)
-------------- -------------- --------------
Net loss per share - basic and diluted $ -- $ -- $ (.14)
============== ============== ==============
Weighted average number of shares outstanding during the period -
basic and diluted 33,175,009 33,577,509 28,571,176
============== ============== ==============
See accompanying notes to condensed consolidated financial statements.
F-2
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO MARCH 31, 2006
(UNAUDITED)
Additional
Preferred Stock Common Stock Paid-In
Shares Amount Shares Amount Capital
------------ ------------ ------------ ------------ ------------
Common stock issued to founders for cash
($0.10 per share) -- $ -- 2,500 $ 1 $ 249
Common stock issued for license ($0.10 per share) -- -- 16,500,000 1,650 1,648,350
Common stock issued to officer as compensation
($0.10 per share) -- -- 7,125,000 713 711,787
Common stock issued for cash ($0.10 per share) -- -- 800,000 80 79,920
Common stock issued for cash ($0.45 per share) -- -- 277,778 28 124,972
Common stock issued to consultant for services
($0.10 per share) -- -- 8,200,000 820 819,180
Net loss for the period from May 28, 2003
(inception) to December 31, 2003 -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2003 -- -- 32,905,278 3,292 3,384,458
Accumulated
Deficit During
Development
Stage Total
------------ ------------
Common stock issued to founders for cash
($0.10 per share) $ -- $ 250
Common stock issued for license ($0.10 per share) -- 1,650,000
Common stock issued to officer as compensation
($0.10 per share) -- 712,500
Common stock issued for cash ($0.10 per share) -- 80,000
Common stock issued for cash ($0.45 per share) -- 125,000
Common stock issued to consultant for services
($0.10 per share) -- 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 (1,737,805) 1,649,945
See accompanying notes to condensed consolidated financial statements.
F-3
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM MAY 28, 2003 (INCEPTION) TO MARCH 31, 2006
(UNAUDITED)
Additional
Preferred Stock Common Stock Paid-In
Shares Amount Shares Amount Capital
------------ ------------ ------------ ------------ ------------
Common stock issued for cash ($0.45 per share) -- -- 672,231 67 302,436
Net loss, 2004 -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance, December 31, 2004 -- -- 33,577,509 3,358 3,686,895
Common stock cancelled related to license rights
($0.03 per share) -- -- (16,500,000) (1,650) (493,350)
Common stock issued to officer for services
($0.03 per share) -- -- 5,000,000 500 149,500
Shares issued in reverse merger -- -- 11,097,500 1,110 (1,110)
In-kind contribution -- -- -- -- 12,000
Warrants issued for non- exclusive license -- -- -- -- 143,238
Net loss, 2005 -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance , December 31, 2005 -- -- 33,175,009 3,318 3,497,173
In-kind contribution -- -- -- -- 3,000
Net loss during the three months ended
March 31, 2006 -- -- -- -- --
------------ ------------ ------------ ------------ ------------
BALANCE, MARCH 31, 2006 -- $ -- $ 33,175,009 $ 3,318 $ 3,500,173
============ ============ ============ ============ ============
Accumulated
Deficit During
Development
Stage Total
------------ ------------
Common stock issued for cash ($0.45 per share) -- 302,503
Net loss, 2004 (551,203) (551,203)
------------ ------------
Balance, December 31, 2004 (2,289,008) 1,401,245
Common stock cancelled related to license rights
($0.03 per share) -- (495,000)
Common stock issued to officer for services
($0.03 per share) -- 150,000
Shares issued in reverse merger -- --
In-kind contribution -- 12,000
Warrants issued for non- exclusive license -- 143,238
Net loss, 2005 (1,696,989) (1,696,989)
------------ ------------
Balance , December 31, 2005 (3,985,997) (485,506)
In-kind contribution -- 3,000
Net loss during the three months ended
March 31, 2006 (76,464) (76,464)
------------ ------------
BALANCE, MARCH 31, 2006 $ (4,062,461) $ (558,970)
============ ============
See accompanying notes to condensed consolidated financial statements.
F-4
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Period
from
For the Three For the Three May 28, 2003
Months Ended Months Ended (Inception) To
March 31, 2006 March 31, 2005 March 31, 2006
--------------- --------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (76,464) $ -- $ (4,062,461)
Net loss from discontinued operations (70,500) (124,043) (4,026,761)
--------------- --------------- ---------------
Loss from continuing operations (5,964) (124,043) (35,700)
Adjustments to reconcile net loss to net cash used in operating
activities:
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable and accrued expenses (5,557) -- 108,300
Increase in accrued royalty expenses 63,500 50,000 373,500
Discontinued operations, net (65,777) 25,259 (896,211)
--------------- --------------- ---------------
Net Cash Used In Operating Activities (13,798) (48,784) (450,111)
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment -- -- (34,812)
Loss of license rights -- -- (100,000)
--------------- --------------- ---------------
Net Cash Used In Investing Activities -- -- (134,812)
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock -- -- 507,753
Due to shareholder 11,151 6,000 26,564
Loans payable - related party 949 -- 50,606
--------------- --------------- ---------------
Net Cash Provided By Financing Activities 12,100 6,000 584,923
--------------- --------------- ---------------
NET (DECREASE) IN CASH (1,698) (42,784) --
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,698 48,102 --
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -- $ 5,318 $ --
=============== =============== ===============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid for income taxes $ 456 $ 456 $ 1,368
=============== =============== ===============
Cash paid for interest $ -- $ -- $ --
=============== =============== ===============
See accompanying notes to condensed consolidated financial statements.
F-5
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 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.
(B) Principles of Consolidation
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). The
financial statements for 2005 include the accounts of
CardioBioMedical Corporation. All intercompany accounts have been
eliminated in the consolidation.
Odyssey Oil & Gas, Inc. (F/K/A Advanced Sports Technologies, Inc.)
and its wholly-owned subsidiary are hereafter referred to as the
"Company."
(C) 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.
(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
March 31, 2006 there were 6,500,000 warrants outstanding that were
not included in dilutive net loss per share as the effect was
anti-dilutive. As of March 31, 2005, there were no common share
equivalents outstanding.
F-6
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2006
(UNAUDITED)
NOTE 2 DUE TO SHAREHOLDER
During the three months ended March 31, 2006, a shareholder advanced
the Company an additional $11,151 for operating expenses. The
advance is non-interest bearing, unsecured and due on demand. As of
March 31, 2006, total advances and loans were $77,170.
NOTE 3 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.
(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.
F-7
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2006
(UNAUDITED)
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
$3,000 for the fair value of rent.
During 2005, the Company recorded additional paid-in capital of
$12,000 for the fair value of rent.
NOTE 4 RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2006, a stockholder advanced
the Company an additional $11,151 for operating expenses. The
advance is non-interest bearing, unsecured and due on demand.
From inception, the Company recorded additional paid-in capital of
$15,000 for the fair value of rent.
NOTE 5 COMMITMENTS AND CONTINGENCIES
(A) License Agreement
During 2003, the Company acquired the North America license rights
to the bio-cybernetic technology and frequency analysis technology
covered by U.S. Patent 6,145,228 and copyright TXU 856-320. The
license period is for the life of the patent or for 15 years from
the first sale of products developed using the license rights. The
agreement requires a royalty payment of 5% of all sales after
F-8
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2006
(UNAUDITED)
initial sales of $3,000,000 or 50 units, minimum royalties equal to
12.5% of all equity raised in the fist year and minimum annual
royalties of $250,000, thereafter. On September 16, 2005, a new
agreement superseding the previous license agreement and other
agreements was entered into. This new agreement provided for the
return for cancellation of 16,500,000 shares of Company common stock
owned by the inventor, the issuance to him of a nontransferable
warrant to purchase 6,500,000 shares of common stock at $ .01 per
share exercisable between January 1, 2007 and December 31, 2014,
agreement that $310,000 was due him payable in quarterly
installments of $ 50,000 beginning for the quarter starting July 1,
2006 and a non-exclusive license agreement. The non-exclusive
license agreement is for North America covering the same
technology/products as before with a royalty of 5% of the sale price
for each device sold to a customer within the defined territory. The
minimum royalty, beginning in 2006, is $250,000 per year, payable in
installments every two months beginning on the last day of February
2006. The license may be cancelled at any time for failure to pay.
The inventor also may license the product in the defined territory
to two other companies with certain exceptions that expire beginning
January 1, 2008. As of March 31, 2006, the Company has not sold any
products and has accrued $373,500 due to the license holder.
During the three months ended March 31, 2006, the Company did not
raise additional equity capital and consequently, was unable to make
the minimum royalty payment of $50,000 due on February 28, 2006 and
is in default under the agreement.
(B) Employment Agreement
During 2003, the Company entered into an employment agreement with
an individual to assume the position of Chief Executive Officer and
President for a term of five years at an annual salary of $250,000
upon the Company raising $500,000 in equity financing, with
additional annual increases of 10% every July 1 over the life of the
agreement. The agreement also calls for the officer to receive
fringe benefits and participate in all Company employment benefits
as approved by the Board of Directors. As of March 31, 2006, the
Company has not raised the minimum equity capital and no salary has
been accrued or paid.
NOTE 6 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 (See Note 8). Accordingly, all current and
prior period amounts relating to the operations of CardioBioMedical
Corporation have been reclassified to conform to this presentation.
The loss from discontinued operations was equal to operating
expenses.
F-9
ODYSSEY OIL & GAS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2006
(UNAUDITED)
NOTE 7 GOING CONCERN
As reflected in the accompanying financial statements, the Company
is in the development stage with a working capital deficiency of
$348,970, an accumulated deficit of $4,062,461 and a negative cash
flow from operations of $450,111 from inception. This raises
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 is approximately $59,000.
This capital requirement was funded by an affiliated party (Note 8).
Management anticipates that the well will produce cash flow in the
second quarter of 2006 sufficient to ensure that the Company will be
able to continue as a going concern.
NOTE 8 SUBSEQUENT EVENTS
On April 20, 2006, the Articles of Incorporation were amended to
change the name of the Company to Odyssey Oil & Gas, Inc. and to
increase the number of authorized common shares from 20 million to
250 million.
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.
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.
As a result of the CardioBioMedical Corporation and gas and oil
lease transactions referred to above, the Company incurred a change
in control.
Subsequent to March 31, 2006, an affiliated party advanced the
Company on additional $58,229 and a third party advanced an
additional $9,203 for operating and oil well development expenses.
The advances are non-interest bearing, unsecured and due on demand.
F-10
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
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 had not
generated any revenues through the sale of the Better Buns product or otherwise,
and had 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, 2008, 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. Our strategy consisted
in first obtaining insurance reimbursement for performance of the diagnostic
test then establishing the device with cardiologists and later gaining
acceptance and use by other physician specialties and hospitals. The Company was
unsuccessful in its attempts to pursue its goal of obtaining insurance
reimbursement and then marketing CSD. On April 21, 2006, our Board of Directors
authorized the purchase (the "Purchase") of a ten percent (10%) working interest
in the BBB Area, Wharton, Texas an oil exploration project. At the present time,
the business operations of BBB Area constitute all of the business operations of
the Company.
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 in the BBB Area, Wharton,
Texas which is an oil exploration project. At the present time, the business
operations of BBB Area constitute all of the business operations of the
Registrant.
The sellers of the working interest received in the aggregate 20,000,000
restricted shares of the common stock of the Company in exchange for the 10%
working interest leaving a total of 31,097,500 shares of common stock issued and
outstanding immediately following the acquisition and the subsequent disposition
of CardioBioMedical Corporation.
The preexisting member of the Company's board of directors resigned immediately
after the acquisition. The following person has been appointed to the board of
directors: Arthur Johnson.
Additionally, Arthur Johnson was appointed as President and Secretary executive
officer of the Company.
At the present time, the business operations of the Company consist of the
ownership in the 10% working interest in the BBB Area, Wharton, Texas an oil
exploration project. The Company intends to devote its energy to the exploration
and exploitation of the BBB Area. As a result of the acquisition described above
the Company has acquired a ten percent (10%) working interest in BBB Area,
Wharton, Texas. As a result of the acquisition the Company disposed of
CardioBioMedical Corporation and returned to treasury 22,077,509 shares of the
issued and outstanding common stock and cancel a warrant exercisable beginning
January 1, 2008 to purchase 6,500,000 shares of the Company's common stock at a
purchase price of $.01 per share.
On April 21, 2006 a change in control occurred as a result of the acquisition of
the 10% working interest in BBB Area, Wharton, Texas. The terms of the
acquisition are set forth in the Stock Purchase Agreement dated April 21, 2006
between Advanced Sports Technologies, Inc and the owners of the 10% working
interest in BBB Area. A copy of the Stock Purchase Agreement has been filed with
the 8-K/A dated May 1, 2006.
On April 20, 2006, in anticipation of the acquisition as described above, the
Company changed its name from Advanced Sports Technologies, Inc. to Odyssey Oil
& Gas, Inc. The Company also increased its Authorized Shares to two hundred and
seventy million (270,000,000) shares which includes two hundred fifty million
(250,000,000) shares of Common Stock and twenty million (20,000,000) shares of
preferred stock. The change of name and the increase in the authorized capital
was approved by consent of a majority of the outstanding shares. The necessary
documentation was submitted to the State of Florida on April 24, 2006.
PLAN OF OPERATIONS
Neither AST nor CBM has generated any revenues from operations or otherwise
since their inception. AST intended to generate revenue through the sale of a
licensed product, Better Buns(R) - a portable patented gym product, but the
license to such product was terminated due to AST 's failure to make minimum
royalty payments. Through September 23, 2005, 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.
In order to implement the new strategy of the Company, AST needed to raise
capital during 2006. Both entities have funded operations to date in part
through the sale of equity securities and loans, although such efforts have been
insufficient to effectively pursue their business strategies.
We intended to raise capital primarily through the public or private sale of
securities (equity and/or debt), although there can be no assurance that we will
be able to obtain capital or, if such capital is available, that the terms of
any financing will be acceptable. If the Company had succeeded in raising
capital, such funds would have been used to implement the new strategy of
developing clinical trial data to support the market introduction of the Cardio
Spectrum Diagnostic System in the United States, Canada and Mexico. Payment for
clinical trials includes retaining the services of a clinical research
organization, payment to the clinical research site(s) for patients enrolled in
the clinical trials, payment for the CSD unit(s) used in these clinical trials,
payment for costs associated with Institution Review Board Approval, and
preparation of marketing materials to support commercial introduction of the
CSD.
Pursuant to its new strategy, the Company continued to operate at a reduced
level as it attempted to raise capital. The Company believed such an approach
would help leverage results through better allocation of its capital by
retaining as needed the diverse expertise required to conduct clinical trials
and to prepare for market introduction.
Having been unsuccessful at raising sufficient capital to fund our operations in
order to implement the new strategy, we were forced to seek opportunities
outside of our new corporate focus or to seek a buyer for our business or
another entity with which we could partner.
EXPENSES
Expenses of CBM decreased 38% to $76,464 for the quarter ended March 31, 2006
compared to $124,043 for the quarter ended March 31, 2005. This decrease in
expenses was necessitated by the inability of the Company to raise additional
equity capital to fund its operations. During 2006, CBM was able to minimize
expenses while it sought additional equity capital. In this regard, the major
expense of a clinical trial at Cedars - Sinai Medical Center was placed on hold
pending resolution of the financial status of CBM and, therefore, no expense
were incurred for research and development during the quarter ending March 31,
2006.
At the present time, the business operations of the Company consist of the
ownership in the 10% working interest in the BBB Area, Wharton, Texas an oil
exploration project. The Company intends to devote its energy to the exploration
and exploitation of the BBB Area. Given this new focus, our capital requirements
was $67,432 for our share of the working interest, in order to bring the well
into production. Odyssey was able to raise the funds from an affiliated party
and the payments were made in the second quarter of 2006. Future activities will
be subject to our ability to raise funds.
OFF-BALANCE SHEET ARRANGEMENTS
Neither the Company nor its subsidiary is a party to any off- balance sheet
arrangements.
DESCRIPTION OF PROPERTY
The Company does not own any real property other than its 10% working interest.
The principal business address of the Company was 9700 Via Emilie in Boca Raton,
Florida 33428, which was space owned by the former sole director and officer of
the Company. At the time of the Merger, the Company moved its principal place of
business to that of CBM, located at 2 Briar Lane, Natick, Massachusetts 01760,
which is space owned by the former director and officer of the Company. In both
cases rent has not been charged for the office space, and it is not expected
that rent will be charged in the near-term. Currently the new 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 first quarter ended March 31, 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.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In connection with the merger of the Company and CBM discussed above, the Board
of Directors of the Company authorized the issuance of up to 22,077,509 shares
of its common stock, $0.0001 par value (representing 66.5% of the company's
issued and outstanding shares following the merger), to the stockholders of CBM.
Such shares were to be exchanged, on a one-for-one basis, for up to 22,077,509
issued and outstanding shares of common stock, $.01 par value, held by CBM's
consenting shareholders. The issuance of stock to U.S. stockholders was made in
reliance on the exemption from the registration requirements of the Securities
Act of 1933, as amended, pursuant to Section 4(2) thereof.
Preceding the merger, 16,500,000 shares of CBM common stock were cancelled
pursuant to an agreement dated September 16, 2005. Pursuant to the terms of such
agreement and the Merger Agreement, the Company also issued a warrant to
purchase 6,500,000 shares of its common stock to a warrant holder of CBM in
exchange for a CBM warrant representing such holder's right to purchase
6,500,000 shares of CBM common stock. The warrant was also canceled. As a result
of the acquisition of the 10% interest in the BBB Area, on April 21, 2006, the
Company issued an aggregate of 20,000,000 shares of common stock to Centurion
Gold Holdings, Inc.
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:
31.1 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.
32.1 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 first
quarter of 2006
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