Excerpt from S1 filling 6/2811


In order to obtain needed capital, we entered into the New SEDA with YA Master.
The sale of shares of our Common Stock pursuant to the New SEDA will have a dilutive impact on our stockholders. We believe YA Master intends to promptly re-sell the shares that we sell to it under the New SEDA and that such re-sales could cause the market price of our Common Stock to decline significantly. Any subsequent sales by us to YA Master under the New SEDA may, to the extent of any such decline, require us to issue a greater number of shares of Common Stock to YA Master in exchange for each dollar of such subsequent sale. Under these circumstances our existing stockholders would experience greater dilution. The sale of our Common Stock under the New SEDA could encourage short sales by third parties, which could contribute to the further decline of the price of our Common Stock.

With the above said- Omagine has the final say in the amount of shares it will sell to YA Master - but its still its a difficult pill to swallow when our stock price keeps declining.

The good that can come of this FOR THE SHAREHOLDER if the DA is signed shortly as stated in the shareholders agreement - BUT WHO CAN DEFINE SHORTLY. Maybe then we can see the rise in the stock price