ODYSSEY MARINE EXPLORATION INC
For the period ended Mar 31, 2025. Filed May 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 2025
OMEX$10.82-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0000950170-24-126269
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000950170-25-069126
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 125 previous paragraphs and 113 current paragraphs.
60 unchanged; 36 reworded; 16 added; 26 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
On December 12, 2024, Mexico commenced an application before the Ontario Superior Court of Justice seeking to set-aside the Arbitral Award.
Current report
Joint Venture with Capital Latinoamericano
Current report
On December 23, 2024, the Company and Capital Latinoamericano, S.A. de C.V. (“CapLat”) entered into a Joint Venture Agreement (the “JV Agreement”) pursuant to which Odyssey and CapLat formed a joint venture to develop a strategic fertilizer production project in Mexico (the “JV Project”) building on the work completed by the Company to validate a high-quality subsea phosphate resource within Mexico’s Exclusive Economic Zone (“EEZ”). Pursuant to the JV Agreement, the Company and CapLat will work together to develop the JV Project and, subject to satisfaction of certain conditions, including certain regulatory approvals from Mexican governmental authorities, subsidiaries of each party will invest as equal partners, subject to adjustment based on final contributions, in a newly formed joint venture entity that will own and continue to develop and operate the JV Project. The JV Agreement also provides that the Company and CapLat have exclusive rights to develop the JV Project, and that CapLat has the exclusive right to develop with the Company any projects in the EEZ owned or developed by the Company during the next five years.
Current report
Each of the parties has the right to terminate the JV Agreement if the investment into the joint venture entity does not occur on or prior to December 31, 2026, or if there is a change of control of either party. In the event of a termination based on a change of control, the non-terminating party would be entitled to a termination fee of $10.0 million. The JV Agreement also sets forth representations and warranties, covenants, conditions, termination provisions, and other provisions customary for comparable transactions.
Current report
Offshore survey and mapping operations commenced in December 2021 in the Papua New Guinea, Lihir license area and was completed in 2022. This work produced a high-resolution acoustic terrain model of the seafloor in the area, as well as acquiring acoustic images of subseafloor sediments and lithology. This allowed characterization of the geologic setting of the area and essentially created a "snapshot" of the environment. These activities will help us to further characterize the value of this project and allow informed decision making on how to proceed with environmentally sensitive direct geologic sampling. In the first half of 2023, a comprehensive project plan was designed identifying specific target areas for geological and environmental samples to be collected in future offshore operations. No timetable has been set for operations to commence, as operational plans are currently being developed. On November 13, 2023, Bismarck received a sixth term renewal for the Bismarck Exploration License.
Current report
The net cash used in operating activities for the three months ended March 31, 2024 reflected a net income before non-controlling interest of $0.9 million and was adjusted primarily by non-cash items of $4.2 million, which primarily includes (i) share-based compensation of $1.5 million, (ii) amortization of debt discount of $1.0 million, (iii) note payable accretion of $0.4 million, (iv) PIK interest of $0.4 million, (v) loss on equity investment of $0.2 million, (vi) $0.2 million of directors’ compensation settled with share-based instruments, and (vii) amortization of finance liability of $66,939, offset by a gain on changes in our fair valued instruments of $7.9 million and investments in our unconsolidated entities of $0.2 million. Other operating activities resulted in an decrease in working capital of $1.6 million. This $1.6 million decrease includes primarily decreases of $1.0 million in accounts payable, $0.6 million in accrued expenses and other, and $0.2 million in other assets.
Current report
There were no cash flows used in or provided by investing activities for the three months ended March 31, 2025. Cash flows used in investing activities for the three months ended March 31, 2024 consisted of $0.1 million of purchases of property and equipment.
Current report
Cash flows used in financing activities for the three months ended March 31, 2025 were $0.4 million, consisting primarily of $0.2 million of debt obligation payments, $0.1 million payments on sale-leaseback financing and $89,315 of offering costs paid on financings.
Current report
On December 20, 2024, the Company and the holders of the March 2023 Securities entered into an Amendment to Note and Warrant Purchase Agreement (the “March 2023 NWPA Amendment”) pursuant to which the March 2023 Purchase Agreement was amended to, among other things, (a) add certain covenants, including a requirement for the Company to maintain a minimum liquidity level, and modify certain existing covenants, (b) add related events of default, and (c) provide that the Company’s obligations under the March 2023 Purchase Agreement, the March 2023 Notes, and related documents are guaranteed by specified subsidiaries of the Company.
Current report
In connection with the March 2023 NWPA Amendment, the Company issued to each of the holders of the March 2023 Securities an Amended and Restated Convertible Promissory Note (the “March 2023 AR Notes”), and the Company and such holders entered into amendments (the “March 2023 Warrant Amendments”) to the March 2023 Warrants. The March 2023 Notes were modified by the March 2023 AR Notes to, among other things, (a) extend the maturity date to June 30, 2025, and, subject to an amendment of the Company’s December 2023 Notes (as defined below), to December 31, 2025, (b) add a conversion feature pursuant to which the holders have the right to convert the indebtedness under the March 2023 AR Notes into shares of the Company’s common stock at a conversion rate equal to 75% of the 30-day volume weighted average price of the Company’s common stock, provided that the conversion rate will not be less than $1.10 or greater than $2.20. The March 2023 AR Notes include limitations on the holders’ right to exercise the conversion feature, including customary limitations intended to ensure compliance with the rules of the Nasdaq Capital Market (“Nasdaq”) and a provision that provides the Company with the right to settle any exercise of the conversion feature in cash rather than by issuing shares of Common Stock. The condition relating to amendment of the December 2023 Notes was also satisfied on December 20, 2024, such that the maturity date of the March 2023 AR Notes is currently December 31, 2025.
Current report
The March 2023 Warrant Amendments modify the exercise price of the March 2023 Warrants from $3.78 to $1.10. In connection with the March 2023 NWPA Amendment, the Company also granted (a) registration rights to the holders of the March 2023 AR Notes and the March 2023 Warrants with respect to the shares of Common Stock issuable upon conversion or exercise thereof and (b) provided the holders with security interests in additional collateral to secure the Company’s obligations to the holders.
Current report
At March 31, 2025 and December 31, 2024, the debt instrument amounted to $13.5 million and $13.1 million, respectively, and was recorded on the condensed consolidated balance sheets in Loans payable – short term, and the embedded derivative amounted to $0.4 million and $2.7 million, respectively, and was recorded on the condensed consolidated balance sheets in debt derivative.
Current report
On January 31, 2025, the Company entered into amendments to the March 2023 Notes transaction documents and the December 2023 Notes transaction documents to implement the Company’s post-closing obligations under the December 2024 amendment to the March 2023 Note Purchase Agreement. The amendments included (a) an amendment to the security agreement securing the March 2023 Notes, pursuant to which, among other things, the Company granted a second-priority security interest in the collateral securing the December 2023 Notes; (b) a second amendment to the December 2023 Note Purchase Agreement pursuant to which, among other things, the holders of the December 2023 Notes agreed to the second-priority security interest in the collateral securing the December 2023 Notes; and (c) an intercreditor agreement with the collateral agents for the March 2023 Notes and the December 2023 Notes (the “Collateral Agents”) addressing the relative interests between them with respect to the shared collateral.
Current report
On February 25, 2025, the Company entered into amendments to the March 2023 Notes transaction documents and the December 2023 Notes transaction documents in furtherance of the Company’s post-closing obligations under the December 2024 amendment to the March 2023 Note Purchase Agreement and the January 2025 amendment to the December 2023 Note Purchase Agreement. The amendments included (a) a second amendment to the March 2023 Note Purchase Agreement pursuant to which, among other things, the holders of the March 2023 Notes agreed to a second-priority security interest in certain of the collateral securing the March 2023 Notes; (b) a third amendment to the December 2023 Note Purchase Agreement to address the grant of security interests in additional collateral; (c) an amendment to the security agreement securing the December 2023 Notes, pursuant to which, among other things, the Company granted a second-priority security interest in the collateral securing the March 2023 Notes; and (d) an amended and restated intercreditor agreement with the Collateral Agents addressing the relative interests between them with respect to the shared collateral.
Current report
At March 31, 2025 and December 31, 2024, the debt instrument amounted to $6.7 million and $6.6 million, respectively, and was recorded on the condensed consolidated balance sheets in Loans payable – short term, and the embedded derivative amounted to $0.2 million and $0.3 million, respectively, and was recorded on the condensed consolidated balance sheets in debt derivative.
Current report
As discussed above, on January 31, 2025 and February 25, 2025, the Company entered into amendments to the March 2023 Notes transaction documents and the December 2023 Notes transaction documents to implement and in furtherance of the Company’s post-closing obligations under the December 2024 amendment to the March 2023 Note Purchase Agreement.
Removed paragraphs (26)
Previous report
The revenue generated in each period was a result of performing marine research and project administration services for our customers and related parties. Total revenue for the three months ended September 30, 2024 was $0.21 million, an increase of $38,000 as compared to $0.18 million for the three months ended September 30, 2023. We do not consider the fluctuation period over period to be significant.
Previous report
Marketing, general and administrative expenses primarily include all costs within the following departments: Executive, Finance & Accounting, Legal, Information Technology, Human Resources, Marketing & Communications, Sales and Business Development. Marketing, general and administrative expenses for the three months ended September 30, 2024 were $1.7 million, an increase of $0.2 million as compared to the three months ended September 30, 2023. The increase was primarily due to $0.4 million of increased professional services fees for audit and consulting, offset by a decrease of $0.2 million in stock-based compensation.
Previous report
Operations and research expenses are primarily focused around deep-sea mineral exploration, which include minerals research, scientific services, marine operations and project management. Operations and research expenses increased by $0.3 million to $1.3 million for the three months ended September 30, 2024 from $1.1 million for the three months ended September 30, 2023. The increase was primarily due to $0.3 million of increased licenses and permits and $0.2 million of increased depreciation and other operating expenses, offset by a decrease of $0.2 million in compensation expenses.
Previous report
Total Other Income/Expense
Previous report
Total other income/expense was an income of $19.1 million and an expense of $3.6 million for the three months ended September 30, 2024 and 2023, respectively, resulting in a net income increase of $22.7 million. The increased income was attributable to: (i) $21.4 million increase in the change in fair value of derivative liabilities, relating primarily to the change in fair value of warrants; (ii) $0.4 million of other income from our residual economic interest from our legacy shipwreck business, (iii) $0.3 million increased foreign exchange income, and (iv) an increase of $0.4 million in the gain from our equity investment, which were offset by (x) a $0.2 million reduction of the gain on sale of wholly owned entity.
Previous report
Starting in 2013, we became the controlling stockholder of Oceanica. Our financial statements thus include the financial results of Oceanica and its subsidiary, ExO. Except for intercompany transactions that are fully eliminated upon consolidation, Oceanica’s revenues and expenses, in their entirety, are shown in our condensed consolidated financial statements. The share of Oceanica’s net losses corresponding to the equity of Oceanica not owned by us is subsequently shown as the “Non-Controlling Interest” in the condensed consolidated statements of operations.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Revenue
Previous report
Operating Expenses
Previous report
Income Taxes
Previous report
Non-Controlling Interest
Previous report
Cash flows used in investing activities for the nine months ended September 30, 2024 were minimal and related to purchases of property and equipment. Cash flows used in investing activities for the nine months ended September 30, 2023 primarily consisted of$1.0 million cash paid for the investment in a new unconsolidated entity and $0.6 million of purchases of property and equipment, offset by $1.0 million of proceeds from the note receivable repayment and $0.3 million of proceeds from the sale of equipment.
Previous report
Cash flows provided by financing activities for the nine months ended September 30, 2023 were $8.2 million, consisting primarily of $15.4 million received from the issuance of loans payable and $4.1 million of net proceeds from the sale leaseback financing, which were offset by $11.4 million of debt obligation payments.
Previous report
The Company noted that when debt is issued with liability-classified stock purchase warrants, the residual method should be used so that the warrants are recognized at fair value at issuance and the residual proceeds are allocated to the debt. We incurred $65,500 in related expenses, which are being amortized over the term of the December 2023 Note Purchase Agreement and charged to interest expense. The total proceeds of $6.0 million were allocated between debt and warrant liability by recognizing the warrants at their full fair value and allocating the residual proceeds to the December 2023 Notes. The initial fair value of the December 2023 Warrants was $2.4 million, resulting in a corresponding discount on the December 2023 Notes which is being amortized over the remaining term of the December 2023 Note Purchase Agreement using the effective interest method, which is charged to interest expense.
Previous report
For the three and nine months ended September 30, 2024, we recorded $0.4 million and $1.2 million, respectively, of interest expense from the amortization of the debt discount and $10,996 and $32,750, respectively, of interest from the fee amortization.
Previous report
37North
Previous report
On June 29, 2023, we entered into a Note Purchase Agreement (“Note Agreement”) with 37North SPV 11, LLC (“37N”) pursuant to which 37N agreed to loan us $1.0 million. The proceeds from this transaction were received in full on June 29, 2023. Pursuant to the Note Agreement, the indebtedness was non-interest bearing and matured on July 30, 2023. At any time from 31 days after the maturity date, 37N has the option to convert all or a portion of the outstanding amount of the indebtedness into conversion shares equal to the quotient obtained by dividing (A) 120% of the amount of the indebtedness, by (B) the lower of $3.66 or 70% of the 10-day volume-weighted average principal (“VWAP”) market trading price of Common Stock. The aggregate maximum number of shares of Common Stock to be issued in connection with conversion of the indebtedness is not to exceed (i) 19.9% of the outstanding shares of Common Stock prior to the date of the Agreement, (ii) 19.9% of the combined voting power of the outstanding voting securities, or (iii) such number of shares of Common Stock that would violate the applicable listing rules of the Principal Market if the stockholders did not approve the issuance of Common Stock upon conversion of the indebtedness.
Previous report
Any time prior to maturity, the Company had the option to prepay the indebtedness at an amount of 108% of the unpaid principal. From the maturity date to 29 days after the maturity date (August 27, 2023), we were permitted to repay all (but not less than) of an amount equal to 112.5% of the unpaid amount of the indebtedness. At any time after the 30th day after the maturity date (August 28, 2023), we are permitted to repay all (but not less than) of an amount equal to 115% of the unpaid amount of the indebtedness after 10 days’ notice. If 37N delivers an exercise notice during this 10-day period, the note issued pursuant to the Note Agreement (the “37N Note”) would be converted to shares of Common Stock, instead of being repaid. As of September 30, 2024, we have not repaid this Note Agreement.
Previous report
If 37N delivers an exercise notice and the number of shares issuable is limited by the 19.9% limitation outlined above, then we are permitted to repay all the remaining unpaid amount of the Loan in an amount equal to 130% of the remaining unpaid amount. On December 27, 2023, 37N delivered an exercise notice to us pursuant to which it exercised its right to convert $360,003 of the outstanding indebtedness under the Note Agreement into shares of our Common Stock. In accordance with the Note Agreement, based on the applicable conversation rate of $2.3226 under the agreement, we issued 155,000 shares of our Common Stock to 37N on December 29, 2023.
Previous report
In June 2024, 37N delivered an exercise notice to us pursuant to which it exercised its right to convert $200,701 of the outstanding indebtedness under the Note Agreement into shares of our Common Stock. In accordance with the Note Agreement, based on the applicable conversation rate of $3.6491, we issued 55,000 shares of our Common Stock to 37N on June 24, 2024.
Previous report
In July 2024, 37N delivered an exercise notice to us pursuant to which it exercised its right to convert $101,621 of the outstanding indebtedness under the Note Agreement into shares of our Common Stock. In accordance with the Note Agreement, based on the applicable conversation rate of $3.2781, we issued 31,000 shares of our Common Stock to 37N on July 18, 2024.
Previous report
In September 2024, 37N delivered an exercise notice to us pursuant to which it exercised its right to convert $250,633 of the outstanding indebtedness under the Note Agreement into shares of our Common Stock. In accordance with the Note Agreement, based on the applicable conversation rate of $2.8161, we issued 89,000 shares of our Common Stock to 37N on September 12, 2024.
Previous report
In October 2024, 37N delivered exercise notices to us pursuant to which it exercised its right to convert the remainder of the outstanding indebtedness under the Note Agreement, amounting to $467,043, into shares of our Common Stock. In accordance with the Note Agreement, based on the applicable conversation rates of ranging between $0.41055 and $0.6993, we issued 853,671 shares of our Common Stock to 37N during October 2024.
Previous report
We evaluated the indebtedness and, based on the criteria of ASC 480 Distinguishing Liabilities from Equity and 815 Derivatives and Hedging, the 37N convertible note is classified as a liability on the consolidated balance sheet with a share settled redemption feature that is recorded as an embedded derivative. As a result, the share settled redemption and conversion features were recorded at fair value at each reporting period outstanding with changes recognized through Interest expenses on the consolidated statement of operations. The Company analyzed the conversion feature of the note and determined that, because it includes a conditional obligation to issue a variable number of shares based on a fixed amount known at inception, the debt is properly classified as a liability in the balance sheet. The Company identified seven embedded features, all of which were of de minimis fair value other than the Share Settled Redemption Feature. As such, only that was bifurcated and accounted for separately from the debt host. Certain default put provisions were not considered to be clearly and closely related to the debt host, but management concluded that the value of these default put provisions was de minimis.
Previous report
At September 30, 2024, the debt instrument and embedded derivatives were recorded on the consolidated balance sheets at fair value of $0.4 million and $0.1 million, respectively, under Loans payable – short term and Litigation financing and other – long term.
Previous report
At December 31, 2023, the debt instrument and embedded derivatives were recorded on the consolidated balance sheets at fair value of $0.8 million and $0.7 million, respectively, under Loans payable – short term and Litigation financing and other – long term.
Reworded paragraphs (36)
Previous wording
The “Exploraciones Oceánicas” Phosphate Project is a rich deposit of phosphate sands located 70-90 meters deep within Mexico’s Exclusive Economic Zone (“EEZ”). This deposit contains a large amount of high-grade phosphate ore that can be extracted on a financially attractive basis (essentially a standard dredging operation). The product will be desirable to Mexican and other world producers of fertilizers and can provide important benefits to Mexico’s agricultural development.
Current wording
The “Exploraciones Oceánicas” Phosphate Project is a rich deposit of phosphate sands located 70-90 meters deep within Mexico’s Exclusive Economic Zone (“EEZ”). This deposit contains a large amount of high-grade phosphate ore that can be extracted on a financially attractive basis (essentially a standard dredging operation). The product will be attractive to Mexican and other world producers of fertilizers and can provide important benefits to Mexico’s agricultural development.
Previous wording
The deposit lies within an exclusive mining concession licensed to the Mexican company Exploraciones Oceánicas S. de R.L. de CV (“ExO”). Oceanica Resources, S. de R.L., a Panamanian company (“Oceanica”) owns 99.99% of ExO, and Odyssey owns 56.04% of Oceanica through Odyssey Marine Enterprises, Ltd., a wholly owned Bahamian company (“Enterprises”).
Current wording
The deposit lies within an exclusive mining concession licensed to the Mexican company Exploraciones Oceánicas S. de R.L. de CV (“ExO”). Oceanica Resources, S. de R.L., a Panamanian company (“Oceanica”) owns 99.99% of ExO, and Odyssey owns 56.14% of Oceanica through Odyssey Marine Enterprises, Ltd., a wholly owned Bahamian company (“Enterprises”).
Previous wording
Sound propagation studies concluded that noise levels generated during dredging would be similar to whale-watching vessels, merchant ships and commercial fishing ships that already regularly transit this area, proving the system is not a threat to marine mammals.
Current wording
Sound propagation studies concluded that noise levels generated during dredging would be similar to whale-watching vessels, merchant ships and fisherman’s ships that already regularly transit this area, proving the system is not a threat to marine mammals.
Previous wording
ExO challenged the decision in Mexican federal court and in March 2018, the Tribunal Federal de Justicia Administrativa (“TFJA”), an 11-judge panel, ruled unanimously that SEMARNAT denied the application in violation of Mexican law and ordered the agency to re-take its decision. Just prior to the change in administration later in 2018, SEMARNAT denied the permit a second time in defiance of the court. ExO once again challenged the unlawful SEMARNAT decision before the TFJA. On October 25, 2024, the TFJA announced its ruling in favor of SEMARNAT. ExO expects to appeal the TFJA’s ruling.
Current wording
ExO challenged the decision in Mexican federal court and in March 2018, the Tribunal Federal de Justicia Administrativa (“TFJA”), an 11-judge panel, ruled unanimously that SEMARNAT denied the application in violation of Mexican law and ordered the agency to re-take its decision. Just prior to the change in the Mexican administration later in 2018, SEMARNAT denied the permit a second time in defiance of the court. ExO challenged the decision again before the TFJA. On October 25, 2024, the TFJA announced its ruling in favor of SEMARNAT. ExO has appealed the TFJA’s ruling, and the appeal is pending.
Previous wording
In April 2019, we filed a claim under the North American Free Trade Agreement (“NAFTA”) against Mexico to protect our stockholders’ interests and significant investment in the project. Our claim sought compensation on the basis that SEMARNAT’s wrongful repeated denial of authorization has destroyed the value of our investment in violation of NAFTA.
Current wording
In addition, in April 2019, we filed a claim under the North American Free Trade Agreement (“NAFTA”) arbitration claim against Mexico on behalf of Odyssey and ExO to protect our stockholders’ interests and significant investment in the project. Our claim sought compensation on the basis that SEMARNAT’s wrongful repeated denial of authorization has destroyed the value of our investment in violation of NAFTA.
Previous wording
On June 14, 2019, Odyssey and ExO executed an agreement that provided up to $6.5 million in funding for prior, current and future costs of the NAFTA action. On January 31, 2020, this agreement was amended and restated, as a result of which the availability increased to $10.0 million. In December 2020, Odyssey announced it secured an additional $10.0 million from the funder to aid in our NAFTA case. On June 14, 2021, the funder agreed to fund up to an additional $5.0 million for arbitration costs. The funder will not have any right of recourse against us unless the environmental permit is awarded or if proceeds are received (See Note 9, Loans Payable).
Current wording
On June 14, 2019, Odyssey and ExO executed an agreement that provided up to $6.5 million in funding for prior, current and future costs of the NAFTA action. On January 31, 2020, this agreement was amended and restated, as a result of which the availability increased to $10.0 million. In December 2020, Odyssey announced it secured an additional $10.0 million from the funder to aid in our NAFTA case. On June 14, 2021, the funder agreed to fund up to an additional $5.0 million for arbitration costs. The funder will not have any right of recourse against us unless the environmental permit is awarded or if proceeds are received (See Note 11, Derivative Financial Instruments - Litigation Financing).
Previous wording
On September 17, 2024, the Company received notification from the International Centre for Settlement of Investment Disputes (“ICSID”) of the arbitral award on the claims brought by the Company on behalf of itself and ExO, against the United Mexican States under Chapter Eleven of the North American Free Trade Agreement (“NAFTA”). The arbitral tribunal issued an award in favor of the Company and ExO. The award orders Mexico to pay $37.1 million for breaching its obligations under NAFTA, plus interest at the one-year Mexico Treasury bond rate, compounded annually, from October 12, 2018, until the award is paid in full, plus the arbitrators’ fees and ICSID administrative costs. The amounts awarded are net of Mexican taxes and Mexico may not tax the award.
Current wording
On September 17, 2024, the Company received notification from the International Centre for Settlement of Investment Disputes (“ICSID”) of the arbitral award (the “Arbitral Award”) on the claims brought by the Company on behalf of itself and ExO, against the United Mexican States under NAFTA. The arbitral tribunal issued an award in favor of the Company and ExO. The award orders Mexico to pay $37.1 million for breaching its obligations under NAFTA, plus interest (the “Award Interest”) at the one-year Mexico Treasury bond rate, compounded annually, from October 12, 2018, until the award is paid in full, plus the arbitrators’ fees and ICSID administrative costs. The amounts awarded are net of Mexican taxes, and Mexico may not tax the award. The case filings and the award are available on the ICSID website.
Previous wording
Through a wholly-owned subsidiary, we have earned and now hold approximately 15.3% of the current outstanding equity units of CIC issued in exchange for provision of services by the Company.
Current wording
Through a wholly owned subsidiary, we have earned and now hold approximately 14.2% of the current outstanding equity units of CIC issued in exchange for provision of services by the Company.
Previous wording
We have the ability to earn up to an aggregate of 20.0 million equity units over the next calendar year, which represents an approximate 16.0% interest in CIC, based upon the currently outstanding equity units. This means we can earn approximately 1.1 million additional equity units in CIC under our current services agreement. We achieved our current equity position through the provision of services rendered to CIC (see Note 6, Investment In Unconsolidated Entity).
Current wording
We have the ability to earn up to an aggregate of 20.0 million equity units through July 2025. This means we can earn approximately 1.0 million additional equity units in CIC under our current services agreement. We achieved our current equity position through the provision of services rendered to CIC (see Note 5, Investment in Unconsolidated Entities).
Previous wording
On June 4, 2023, Odyssey entered into a purchase agreement to acquire an approximately 13% interest in OML in exchange for a contribution by Odyssey of its interest in its then wholly owned subsidiary, ORI, whose sole asset was a 6,000-meter remotely operated vehicle (“ROV”), cash contributions of up to $10.0 million in a series of transactions over the following year, a Contribution Agreement and an Equity Exchange Agreement. On July 3, 2023, the parties consummated the initial closing of the purchase agreement, pursuant to which Odyssey’s wholly owned subsidiary obtained approximately 6.28% of OML’s outstanding equity interests. On October 18, 2024, Odyssey and OML entered into a Termination Agreement pursuant to which the parties terminated the OML Purchase Agreement. The Termination Agreement terminated the parties’ rights and obligations relating to the Second OML Units, Third OML Units and Optional Units (see Note 6, Investment In Unconsolidated Entity), but did not affect Odyssey’s ownership of the Initial OML Units or its obligation to pay the lease payments for the Retriever asset (see Note 6, Investment In Unconsolidated Entity). The Termination Agreement also did not affect the Equity Exchange Agreement or Contribution Agreement (each as defined above), each of which remains in effect.
Current wording
On June 4, 2023, Odyssey entered into a purchase agreement to acquire an approximately 13% interest in OML in exchange for a contribution by Odyssey of its interest in its then wholly owned subsidiary, ORI, whose sole asset was a 6,000-meter remotely operated vehicle (“ROV”), cash contributions of up to $10.0 million in a series of transactions over the following year, a Contribution Agreement and an Equity Exchange Agreement. On July 3, 2023, the parties consummated the initial closing of the purchase agreement, pursuant to which Odyssey’s wholly owned subsidiary obtained approximately 6.28% of OML’s outstanding equity interests. On October 18, 2024, Odyssey and OML entered into a Termination Agreement pursuant to which the parties terminated the OML Purchase Agreement. The Termination Agreement terminated the parties’ rights and obligations relating to the Second OML Units, Third OML Units and Optional Units (see Note 5, Investment in Unconsolidated Entities), but did not affect Odyssey’s ownership of the Initial OML Units or its obligation to pay the lease payments for the ROV (see Note 5, Investment in Unconsolidated Entities). The Termination Agreement also did not affect the Equity Exchange Agreement or Contribution Agreement (each as defined above), each of which remains in effect.
Previous wording
In November 2023, Papua New Guinea issued a permit extension allowing Odyssey to continue with our exploration program. We have developed an exploration program for the Lihir Gold Project to validate and quantify the precious and base metal content of the prospective resource. The Company has met with local regulatory authorities, specialists in local mining, environmental legal experts, and logistics support service companies in Papua New Guinea to establish baseline business functions essential for a successful program to support upcoming marine exploration operations in the license area. This offshore work began in late 2021 and is ongoing. Bismarck and Odyssey value the environment and respect the interests and people of Papua New Guinea and Lihir and are committed to transparent sharing of all environmental data collected during the exploration program.
Current wording
In 2021 and again in 2023, Papua New Guinea issued permit extensions allowing Odyssey to continue with our exploration program. We have developed an exploration program for the Lihir Gold Project to validate and quantify the precious and base metal content of the prospective resource. The Company has met with local regulatory authorities, specialists in local mining, environmental legal experts, and logistics support service companies in Papua New Guinea to establish baseline business functions essential for a successful program to support upcoming marine exploration operations in the license area. This offshore work began in late 2021 and is ongoing. Bismarck and Odyssey value the environment and respect the interests and people of Papua New Guinea and Lihir and are committed to transparent sharing of all environmental data collected during the exploration program.
Previous wording
During the exploration phase, steps to validate and quantify the precious and base metal content of the prospective resource would also be carried out. Once completed, if the data shows extraction can be carried out responsibly, Odyssey will apply for a mining license.
Current wording
Odyssey's multi-year exploration program is planned to focus on robust environmental surveys and studies that will accrue to environmental permitting in compliance with PNG's requirements as well as the development of an Environmental Impact Assessment ("EIA"). During the exploration phase, steps to validate and quantify the precious and base metal content of the prospective resource would also be carried out. Once completed, if the data shows extraction can be carried out responsibly, Odyssey will apply for a mining license.
Previous wording
Further development of this project is dependent on the characterization resources during the exploration phase.
Current wording
Further development of this project is dependent on the characterization of any resources during exploration.
Previous wording
We have experienced several years of net losses and may continue to do so. Our ability to generate net income or positive cash flows for the following twelve months is dependent upon financings, our success in developing and monetizing our interests in mineral exploration entities, generating income from contracted services, and collecting amounts owed to us.
Current wording
We have experienced several years of net losses and may continue to do so. Our ability to generate net income or positive cash flows for the next twelve months is dependent upon financings, our success in developing and monetizing our interests in mineral exploration entities, and generating income from exploration charters.
Previous wording
Our 2024 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects. We continually plan to generate new cash inflows through the monetization of our receivables and equity stakes in seabed mineral companies, financings, syndications or other partnership opportunities. If cash inflow becomes insufficient to meet our desired projected business plan requirements, we would be required to follow a contingency business plan based on curtailed expenses and fewer cash requirements.
Current wording
Our 2025 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects. We continually plan to generate new cash inflows through the monetization of our equity stakes in seabed mineral companies, financings, syndications or other partnership opportunities. If cash inflow ever becomes insufficient to meet our projected business plan requirements, we would be required to follow a contingency business plan based on curtailed expenses and fewer cash requirements.
Previous wording
In 2024, we received a payment of approximately $9.8 million arising from a residual economic interest in a salvaged shipwreck. The balance of those proceeds, together with other anticipated cash inflows, is expected to provide sufficient operating funds through at least the fourth quarter of 2024.
Current wording
In December 2024, we amended the March 2023 Notes (as defined below) and the December 2023 Notes (as defined below) to, among other items, extend the maturity date of our obligations, and add a conversion feature, thereby deferring a material cash need. In addition, on December 23, 2024, we entered into a Securities Purchase Agreement (the “SPA”) pursuant to which the Company issued and sold an aggregate of 7,377,912 shares of Common Stock to certain accredited investors at a purchase price of $0.55 per share. The aggregate purchase price for the shares, before deduction of the Company’s expenses associated with the transaction, was approximately $4.1 million. The proceeds of that sale of Common Stock, together with other anticipated cash inflows, is expected to provide sufficient operating funds into the second quarter of 2025. The SPA further provides the investors with the right, but not the obligation, to purchase an additional 7,220,141 shares of Common Stock at a purchase price of $1.10 per share at a subsequent closing to be held on April 30, 2025, or such later date as may be agreed by the Company and the purchasers who purchased at least a majority of the initial shares under the SPA, provided that the subsequent closing date shall not be later than July 31, 2025. Subsequent to March 31, 2025, and through the date of this filing, 1,452,302 additional shares of Common Stock has been purchased under the SPA at $1.10 per share. Further, on April 28, 2025, the Company entered into an amendment to the SPA to modify the subsequent closing date to be held on May 16, 2025, or such later date as may be agreed by the Company and the purchasers who purchased at least a majority of the initial shares under the SPA, provided that the subsequent closing date shall not be later than July 31, 2025. That subsequent sale of Common Stock, if exercised by the investors under the SPA, is expected to provide sufficient operating funds through at least the fourth quarter of 2025.
Previous wording
Our consolidated non-restricted cash balance at September 30, 2024 was $2.9 million. We have a working capital deficit at September 30, 2024 of $27.7 million. The total consolidated book value of our assets was approximately $21.8 million at September 30, 2024, which includes cash of $2.9 million. The fair market value of these assets may differ from their net carrying book value. The factors noted above raise substantial doubt about our ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
Current wording
Our consolidated non-restricted cash balance at March 31, 2025 was $2.5 million. We have a working capital deficit at March 31, 2025 of $20.0 million. The total consolidated book value of our assets was approximately $15.8 million at March 31, 2025, which includes cash of $2.5 million. The fair market value of these assets may differ from their net carrying book value. The factors noted above raise substantial doubt about our ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
Previous wording
Total revenue for the nine months ended September 30, 2024 was $0.6 million, a decrease of $4,000 as compared to $0.6 million for the nine months ended September 30, 2023. We do not consider the fluctuation period over period to be significant.
Current wording
Total revenue for the three months ended March 31, 2025 was $0.1 million, a decrease of $68,000 as compared to $0.2 million for the three months ended March 31, 2024. We do not consider the fluctuation period over period to be significant.
Previous wording
One company to which we provided these services in both periods is a deep-sea mineral exploration company, CIC, which we consider to be a related party because our lead director has an interest in the company (see Note 5, Related Party Transactions). In addition, during the nine months ended 2024, we also provided services to OML, which is also a related party and that we account for under the equity method of accounting.
Current wording
One company to which we provided these services in both periods is a deep-sea mineral exploration company, CIC, which we consider to be a related party because our lead director has an interest in the company (see Note 5, Related Party Transactions). In addition, during the three months ended March 31, 2025 and 2024, we also provided services to OML, which is also a related party that we account for under the equity method of accounting.
Previous wording
Marketing, general and administrative expenses for the nine months ended September 30, 2024 were $8.0 million, an increase of $2.8 million as compared to the nine months ended September 30, 2023. The increase primarily resulted from an increase of $2.0 million in professional services primarily attributable to audit and consulting fees and an increase of $1.2 million in non-cash share-based compensation expense, offset by a $0.4 million reduction in employee compensation.
Current wording
Marketing, general and administrative expenses for the three months ended March 31, 2025 were $1.8 million, a decrease of $2.2 million as compared to the three months ended March 31, 2024. The decrease primarily resulted from a decrease of $0.8 million in professional services primarily attributable to audit and consulting fees and a decrease of $1.4 million in non-cash share-based compensation expense.
Previous wording
Operations and research expenses decreased by $0.3 million to $3.3 million for the nine months ended September 30, 2024 from $3.6 million the nine months ended September 30, 2023, primarily as a result of a $0.3 million decrease in professional legal fees services, $0.2 million decrease in compensation expenses, and $0.1 million decrease in depreciation expense, offset by an increase of $0.3 million in licenses and permits.
Current wording
Operations and research expenses for the three months ended March 31, 2025 were $0.6 million, a decrease of $0.3 million as compared to $0.9 million for the three months ended March 31, 2024. The decrease is primarily as a result of a $0.6 million decrease in licenses and permits, offset by a $0.3 million increase in other professional fees.
Previous wording
Total other income/expense was $24.0 million and $14.9 million in net income for both the nine months ended September 30, 2024 and 2023, respectively, resulting in a net increase of $9.1 million.
Current wording
Total other income/expense was a $1.8 million income and a $5.6 million income for the three months ended March 31, 2025 and 2024, respectively, resulting in a net decrease of $3.8 million.
Previous wording
The increased income was attributable to: (i) $20.0 million increased gain in the change in fair value of derivative liabilities, relating primarily to the change in fair value of warrants and Litigation financing liability, (ii) $9.8 million of other income from our residual economic interest from our legacy shipwreck business, and (iii) $2.5 million increased foreign exchange income, which were offset by (x) $21.2 million of gain on debt extinguishment in 2023 that did not reoccur in 2024, (y) $1.7 million increase in interest expense which includes debt discount amortization; and (z) $0.3 million in decreased interest income.
Current wording
The decreased income was attributable to: (i) $4.6 million decrease in the change in fair value of derivative liabilities, relating primarily to the change in fair value of warrants, litigation financing liability, and debt conversion embedded derivatives, which were offset by (x) $0.6 million decrease in interest expense, which includes debt discount amortization; (y) $0.1 million of a decrease in the loss on equity method investment, and (z) $61,081 in increased interest income.
Previous wording
Due to losses and our net operating loss carryforwards, we did not accrue any taxes in either period ending 2024 or 2023.
Current wording
Due to losses and our net operating loss carryforwards, we did not accrue any taxes in either period ending three months ended March 31, 2025 or 2024.
Previous wording
The non-controlling interest adjustment in the three months ended September 30, 2024 was $2.5 million as compared to $2.2 million for the three months ended September 30, 2023. The substance of these amounts is primarily due to the increase in costs relating to permits and other standard operating costs. We do not consider the fluctuation period over period to be significant.
Current wording
The non-controlling interest adjustment in the three months ended March 31, 2025 was $2.7 million as compared to $2.6 million for the three months ended March 31, 2024. The substance of these amounts is primarily due to the increase in permits and other standard operating costs. We do not consider the fluctuation period over period to be significant.
Previous wording
Net cash provided by operating activities for the nine months ended September 30, 2024 was $2.4 million, compared to cash used of $8.7 million for the nine months ended September 30, 2023.
Current wording
Net cash used in operating activities for the three months ended March 31, 2025 was $2.0 million, compared to cash used of $1.7 million for the three months ended March 31, 2024.
Previous wording
The net cash provided by operating activities reflected a net income before non-controlling interest of $13.4 million, which includes other income of $9.8 million from a residual economic interest in a salvaged shipwreck. Cash provided by operating activities is adjusted primarily by non-cash items of $10.9 million, including: (i) $18.4 million in changes in fair value of derivative liabilities, relating primarily to the change in fair value of warrants and Litigation financing liability, (ii) the amortization of deferred discount $2.9 million, (iii) note payable accretion of $1.8 million, (iv) share-based compensation of $1.7 million, and (v) $1.2 million of PIK interest. Other operating activities resulted in an increase in working capital of $0.2 million. This $0.2 million increase includes a $0.6 million increase to accrued expenses, predominantly related to our NAFTA arbitration, offset by a decrease of $0.5 million in other assets.
Current wording
The net cash used in operating activities for the three months ended March 31, 2025 reflected a net loss before non-controlling interest of $0.4 million. Cash provided by operating activities was adjusted primarily by non-cash items of $1.4 million, including: (i) $3.2 million in changes in fair value of derivative liabilities, relating primarily to the change in fair value of warrants, litigation financing liability and the debt conversion embedded derivatives, (ii) the amortization of deferred discount $0.4 million, (iii) note payable accretion of $0.5 million, (iv) share-based compensation of $45,742, and (v) $0.5 million of PIK interest. Other operating activities resulted in an increase in working capital of $0.1 million. This $0.1 million increase includes a $0.4 million increase to accrued expenses, predominantly related to our NAFTA arbitration, offset by decreases of $0.2 million in receivable and $0.1 million in other assets.
Previous wording
Cash flows used in financing activities for the nine months ended September 30, 2024 were $3.5 million, consisting primarily of debt obligation payments.
Current wording
Cash flows used in financing activities for the three months ended March 31, 2024 was $0.2 million, consisting primarily of $0.2 million of debt obligation payments.
Previous wording
At September 30, 2024, we had cash and cash equivalents of $2.9 million, a decrease of $1.1 million from the December 31, 2023 balance of $4.0 million. Financial debt of the company was $23.2 million at September 30, 2024 and $23.3 million at December 31, 2023.
Current wording
At March 31, 2025, we had cash and cash equivalents of $2.5 million, a decrease of $2.3 million from the December 31, 2024 balance of $4.8 million. Financial debt of the company was $23.8 million and $22.9 million at March 31, 2025 and December 31, 2024, respectively.
Previous wording
On January 30, 2024, the March 2023 Warrants were amended to add a cashless exercise provision. Due to that amendment, the Company determined that the March 2023 Warrants meet the definition of a derivative and are not considered indexed to the Company’s own stock due to the settlement adjustment that provides that the share price input upon cashless exercise is always based on the highest of three prices. As such, the March 2023 Warrants are now recognized as a derivative liability, which was initially measured at fair value and any subsequent changes in fair value will be recognized in earnings in the period incurred.
Current wording
On January 30, 2024, the March 2023 Warrants were amended to add a cashless exercise provision. Due to that amendment, the Company determined that the March 2023 Warrants meet the definition of a derivative and are not considered indexed to the Company’s own stock due to the settlement adjustment that provides that the share price input upon cashless exercise is always based on the highest of three prices. As such, starting on January 30, 2024, the March 2023 Warrants are recognized as a derivative liability, which was initially measured at fair value and any subsequent changes in fair value are recognized in earnings in the period incurred.
Previous wording
The amended March 2023 Warrants were measured using the Black-Scholes valuation method on January 30, 2024, and re-classified from equity to warrant liability. The difference between the warrant liability and the initial equity balance was recognized as an additional discount to additional paid-in capital (“APIC”). The change in fair value of the March 2023 Warrants for the three and nine months ended September 30, 2024 was a decrease of $5.9 million and a decrease of $6.2 million, respectively, which has been recorded in the change in derivative liabilities fair value in the condensed consolidated statement of operations. The fair value of the March 2023 Warrants at September 30, 2024 was $1.5 million.
Current wording
The change in fair value of the March 2023 Warrants for the three months ended March 31, 2025 and 2024 was a decrease of $1.0 million and a decrease of $2.5 million, respectively, which has been recorded in the change in derivative liabilities fair value in the condensed consolidated statement of operations. The fair value of the March 2023 Warrants at March 31, 2025 and December 31, 2024 was $0.9 million and $1.9, respectively.
Previous wording
For the three months ended September 30, 2024 and 2023, we incurred $0.5 million and $0.6 million, respectively, of interest expense from the amortization of the debt discount and $12,157 and $16,447, respectively, interest from the fee amortization which has been recorded in interest expense on the condensed consolidated Statement of Operations.
Current wording
For the three months ended March 31, 2025 and 2024, we incurred $0.4 million and $0.6 million, respectively, of interest expense from the amortization of the debt discount and $27,386 and $16,268, respectively, of interest from the fee amortization which has been recorded in interest expense on the condensed consolidated statements of operations.
Previous wording
The September 30, 2024 carrying value of the debt was $12.7 million, which includes interest Paid-In-Kind (“PIK”) of $1.7 million. The total face value of this obligation on September 30, 2024, and December 31, 2023, was $12.7 million and $14.9 million, respectively.
Current wording
The carrying value of the debt was $12.3 million and $11.6 million as of March 31, 2025 and December 31, 2024, respectively, which includes interest Paid In Kind (“PIK”) of $0.4 million and $1.2 million, respectively, and was net of unamortized debt fees of $82,760 and $0.1 million, net of unamortized debt discount of $1.1 million and $1.5 million, respectively, associated with the fair value of the warrant. The total face value of this obligation on March 31, 2025 and December 31, 2024, was $13.5 million and $13.1 million, respectively. The current interest rate of the March 2023 Notes was 11.0%.
Previous wording
At September 30, 2024, the carrying value of the debt was $5.3 million and was net of unamortized debt fees of $29,045, net of unamortized debt discount of $1.1 million associated with the fair value of the warrants. The change in fair value of the December 2023 Warrants for the three and nine months ended September 30, 2024 was a decrease of $2.7 million and a decrease of $1.7 million, respectively, which has been recorded in the change in derivative liabilities fair value in the condensed consolidated statement of operations. The total face value of this obligation at September 30, 2024 was $6.4 million. The current interest rate of the December 2023 Notes was 11.0%.
Current wording
The change in fair value of the December 2023 Warrants for the three months ended March 31, 2025 and 2024 was a decrease of $0.4 million and a decrease of $0.1 million, respectively, which has been recorded in the change in derivative liabilities fair value in the condensed consolidated statement of operations. The fair value of the December 2023 Warrants at March 31, 2025 and December 31, 2024 was $0.4 million and $0.8 million, respectively.
Previous wording
For the nine months ended September 30, 2024 and 2023, we incurred $1.7 million and $1.4 million, respectively, of interest expense from the amortization of the debt discount and $44,693 and $37,363, respectively, interest from the fee amortization which has been recorded in interest expense on the condensed consolidated Statement of Operations.
Current wording
For the three months ended March 31, 2025 and 2024, we recorded $0.1 million and $0.4 million, respectively, of interest expense from the amortization of the debt discount and $10,154 and $10,877, respectively, of interest from the fee amortization which has been recorded in interest expense on the condensed consolidated statements of operations.
Previous wording
Refer to Note 2, Summary of Significant Accounting Policies, to the Condensed Consolidated Financial Statements included elsewhere in this report.
Current wording
Refer to Note 2, Summary Of Significant Accounting Policies, to the condensed consolidated financial statements included elsewhere in this quarterly report.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The carrying value of the debt was $6.3 million and $6.0 million as of March 31, 2025 and December 31, 2024, and was net of unamortized debt fees of $41,294 and $29,710, respectively, net of unamortized debt discount of $0.4 million and $0.5 million, respectively, associated with the fair value of the warrants. The total face value of this obligation at March 31, 2025 and December 31, 2024, was $6.7 million and $6.6 million, respectively. The current interest rate of the December 2023 Notes was 11.0%.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
One company to which we provided these services in both years is a deep-sea mineral exploration company, CIC, which we consider to be a related party because our lead director has an indirect interest in the company (see Note 5, Related Party Transactions). In addition, during 2024, we also provided services to OML, which is also a related party and that we account for under the equity method of accounting.
Previous report — wording carried elsewhere
Due to losses and our net operating loss carryforwards, we did not accrue any taxes in either period ending 2024 or 2023.
Previous report — wording carried elsewhere
The non-controlling interest adjustment in the nine months ended September 30, 2024 was $7.2 million as compared to $6.8 million for the nine months ended September 30, 2023. The substance of these amounts is primarily due to the increase in permits and other standard operating costs. We do not consider the fluctuation period over period to be significant.