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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2023.

 

or

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from

 

to

 

 

Commission File Number 001-31895

 

ODYSSEY MARINE EXPLORATION, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Nevada

84-1018684

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

205 S. Hoover Blvd., Suite 210, Tampa, FL 33609

(Address of principal executive offices) (Zip code)

(813) 876-1776

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

OMEX

NASDAQ Capital Market

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer: ☐ Accelerated filer: ☐

Non-accelerated filer: ☐ Smaller reporting company:

Emerging growth company:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the exchange act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

 

Yes ☐ No

 

The number of outstanding shares of the registrant’s Common Stock, $0.0001 par value, as of August 08, 2023 was 19,981,901.

 

 

 


 

img260033438_0.jpg 

 

 

 

 

Page No.

Part I:

Financial Information

 

 

 

Item 1.

Financial Statements (Unaudited):

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

3

 

 

 

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022

4

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2023 and 2022

5

 

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

6

 

 

 

Notes to the Condensed Consolidated Financial Statements

8 – 21

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23 – 33

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

 

 

 

Item 4.

Controls and Procedures

33

 

 

 

Part II:

Other Information

 

 

 

Item 1.

Legal Proceedings

34

 

 

 

Item 1A.

Risk Factors

35

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

35

 

 

 

Item 4.

Mine Safety Disclosures

35

 

 

 

Item 5.

Other Information

35

 

 

 

Item 6.

Exhibits

36

 

 

Signatures

37

 

2


 

PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

Unaudited June 30, 2023

 

 

December 31,
2022

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,832,078

 

 

$

1,443,421

 

Accounts receivable and other, net

 

 

1,005,157

 

 

 

7,515

 

Short-term notes receivable related party, net

 

 

690,795

 

 

 

1,576,717

 

Deferred tax asset

 

 

10,327

 

 

 

 

Other current assets

 

 

981,207

 

 

 

947,428

 

Total current assets

 

 

4,519,564

 

 

 

3,975,081

 

PROPERTY AND EQUIPMENT

 

 

 

 

 

 

Equipment and office fixtures

 

 

6,823,557

 

 

 

8,137,026

 

Right of use - operating leases

 

 

213,108

 

 

 

300,025

 

Accumulated depreciation

 

 

(4,269,013

)

 

 

(5,390,559

)

Total property and equipment, net

 

 

2,767,652

 

 

 

3,046,492

 

NON-CURRENT ASSETS

 

 

 

 

 

 

Investment in unconsolidated entity

 

 

4,842,925

 

 

 

4,404,717

 

Exploration license

 

 

1,821,251

 

 

 

1,821,251

 

Other non-current assets

 

 

34,295

 

 

 

34,295

 

Total non-current assets

 

 

6,698,471

 

 

 

6,260,263

 

Total assets

 

$

13,985,687

 

 

$

13,281,836

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

$

932,902

 

 

$

2,285,892

 

Accrued expenses

 

 

36,919,178

 

 

 

40,481,204

 

Operating lease liability

 

 

199,365

 

 

 

186,656

 

Loans payable

 

 

2,216,963

 

 

 

21,732,654

 

Total current liabilities

 

 

40,268,408

 

 

 

64,686,406

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

Loans payable

 

 

38,708,182

 

 

 

25,011,049

 

Operating lease liability

 

 

26,578

 

 

 

129,139

 

Total long-term liabilities

 

 

38,734,760

 

 

 

25,140,188

 

Total liabilities

 

 

79,003,168

 

 

 

89,826,594

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

Preferred stock - $.0001 par value; 24,984,166 shares authorized; none outstanding

 

 

 

 

 

 

Common stock – $.0001 par value; 75,000,000 shares authorized; 19,981,901 and
   
19,540,310 issued and outstanding

 

 

1,998

 

 

 

1,954

 

Additional paid-in capital

 

 

271,083,470

 

 

 

265,882,279

 

Accumulated deficit

 

 

(287,354,763

)

 

 

(298,231,607

)

Total stockholders’ deficit before non-controlling interest

 

 

(16,269,295

)

 

 

(32,347,374

)

Non-controlling interest

 

 

(48,748,186

)

 

 

(44,197,384

)

Total stockholders’ deficit

 

 

(65,017,481

)

 

 

(76,544,758

)

Total liabilities and stockholders’ deficit

 

$

13,985,687

 

 

$

13,281,836

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


 

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,
2023

 

 

June 30,
2022

 

 

June 30,
2023

 

 

June 30,
2022

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

Marine services

 

$

166,832

 

 

$

300,000

 

 

$

438,208

 

 

$

594,975

 

Operating and other

 

 

5,743

 

 

 

90,278

 

 

 

23,106

 

 

 

94,909

 

Total revenue

 

 

172,575

 

 

 

390,278

 

 

 

461,314

 

 

 

689,884

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Marketing, general and administrative

 

 

1,820,858

 

 

 

2,292,082

 

 

 

3,698,702

 

 

 

4,210,578

 

Operations and research

 

 

1,498,701

 

 

 

1,229,634

 

 

 

3,286,560

 

 

 

6,286,169

 

Total operating expenses

 

 

3,319,559

 

 

 

3,521,716

 

 

 

6,985,262

 

 

 

10,496,747

 

LOSS FROM OPERATIONS

 

 

(3,146,984

)

 

 

(3,131,438

)

 

 

(6,523,948

)

 

 

(9,806,863

)

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

 

23,424

 

 

 

2,178

 

 

 

411,956

 

 

 

2,272

 

Interest expense

 

 

(4,333,224

)

 

 

(3,552,539

)

 

 

(8,141,810

)

 

 

(6,778,193

)

Gain (loss) on debt extinguishment

 

 

(301,414

)

 

 

 

 

 

21,177,200

 

 

 

 

Other

 

 

(283,897

)

 

 

140,361

 

 

 

(606,148

)

 

 

(49,896

)

Total other income (expense)

 

 

(4,895,111

)

 

 

(3,410,000

)

 

 

12,841,198

 

 

 

(6,825,817

)

INCOME/(LOSS) BEFORE INCOME TAXES

 

 

(8,042,095

)

 

 

(6,541,438

)

 

 

6,317,250

 

 

 

(16,632,680

)

Income tax benefit (provision)

 

 

3,046

 

 

 

 

 

 

8,792

 

 

 

 

NET INCOME(LOSS) BEFORE NON-CONTROLLING INTEREST

 

 

(8,039,049

)

 

 

(6,541,438

)

 

 

6,326,042

 

 

 

(16,632,680

)

Non-controlling interest

 

 

2,315,359

 

 

 

1,857,953

 

 

 

4,550,802

 

 

 

3,718,966

 

NET INCOME (LOSS)

 

$

(5,723,690

)

 

$

(4,683,485

)

 

$

10,876,844

 

 

$

(12,913,714

)

NET INCOME (LOSS) PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

Basic (See Note 2)

 

$

(0.29

)

 

$

(0.30

)

 

$

0.55

 

 

$

(0.86

)

Diluted (See Note 2)

 

$

(0.29

)

 

$

(0.30

)

 

$

0.54

 

 

$

(0.86

)

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,918,677

 

 

 

15,803,746

 

 

 

19,793,265

 

 

 

15,088,662

 

Diluted

 

 

19,918,677

 

 

 

15,803,746

 

 

 

20,019,461

 

 

 

15,088,662

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDER’S DEFICIT - Unaudited

 

 

Three Months Ended June 30, 2023

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated Deficit

 

 

Non-controlling Interest

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2023

 

$

1,989

 

 

$

270,608,427

 

 

$

(281,631,073

)

 

$

(46,432,827

)

 

$

(57,453,484

)

Share-based compensation

 

 

9

 

 

 

355,483

 

 

 

 

 

 

 

 

 

355,492

 

Fair value of warrants issued

 

 

 

 

 

119,560

 

 

 

 

 

 

 

 

 

119,560

 

Net (loss)

 

 

 

 

 

 

 

 

(5,723,690

)

 

 

(2,315,359

)

 

 

(8,039,049

)

Balance at June 30, 2023

 

$

1,998

 

 

$

271,083,470

 

 

$

(287,354,763

)

 

$

(48,748,186

)

 

$

(65,017,481

)

 

 

Three Months Ended June 30, 2022

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated Deficit

 

 

Non-controlling Interest

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2022

 

$

1,448

 

 

$

249,189,881

 

 

$

(283,321,086

)

 

$

(38,315,825

)

 

$

(72,445,582

)

Share-based compensation

 

 

4

 

 

 

412,194

 

 

 

 

 

 

 

 

 

412,198

 

Common stock issued for cash, net

 

 

494

 

 

 

9,274,068

 

 

 

 

 

 

 

 

 

9,274,562

 

Fair value of warrants issued

 

 

 

 

 

5,446,965

 

 

 

 

 

 

 

 

 

5,446,965

 

Net (loss)

 

 

 

 

 

 

 

 

(4,683,485

)

 

 

(1,857,953

)

 

 

(6,541,438

)

Balance at June 30, 2022

 

$

1,946

 

 

$

264,323,108

 

 

$

(288,004,571

)

 

$

(40,173,778

)

 

$

(63,853,295

)

 

 

Six Months Ended June 30, 2023

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated Deficit

 

 

Non-controlling Interest

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 

$

1,954

 

 

$

265,882,279

 

 

$

(298,231,607

)

 

$

(44,197,384

)

 

$

(76,544,758

)

Share-based compensation

 

 

14

 

 

 

665,067

 

 

 

 

 

 

 

 

 

665,081

 

Common stock issued for debt extinguishment

 

 

30

 

 

 

999,970

 

 

 

 

 

 

 

 

 

1,000,000

 

Fair value of warrants issued

 

 

 

 

 

3,536,154

 

 

 

 

 

 

 

 

 

3,536,154

 

Net income (loss)

 

 

 

 

 

 

 

 

10,876,844

 

 

 

(4,550,802

)

 

 

6,326,042

 

Balance at June 30, 2023

 

$

1,998

 

 

$

271,083,470

 

 

$

(287,354,763

)

 

$

(48,748,186

)

 

$

(65,017,481

)

 

 

Six Months Ended June 30, 2022

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated Deficit

 

 

Non-controlling Interest

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

$

1,431

 

 

$

249,055,600

 

 

$

(275,090,857

)

 

$

(36,454,812

)

 

$

(62,488,638

)

Share-based compensation

 

 

21

 

 

 

546,475

 

 

 

 

 

 

 

 

 

546,496

 

Common stock issued for cash, net

 

 

494

 

 

 

9,274,068

 

 

 

 

 

 

 

 

 

9,274,562

 

Fair value of warrants issued

 

 

 

 

 

5,446,965

 

 

 

 

 

 

 

 

 

5,446,965

 

Net (loss)

 

 

 

 

 

 

 

 

(12,913,714

)

 

 

(3,718,966

)

 

 

(16,632,680

)

Balance at June 30, 2022

 

$

1,946

 

 

$

264,323,108

 

 

$

(288,004,571

)

 

$

(40,173,778

)

 

$

(63,853,295

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5


 

ODYSSEY MARINE EXPLORATION, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Unaudited

 

 

Six Months Ended

 

 

June 30,
2023

 

 

June 30,
2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income (loss) before non-controlling interest

 

$

6,326,042

 

 

$

(16,632,680

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

Investment in unconsolidated entity

 

 

(438,208

)

 

 

(594,975

)

Depreciation

 

 

289,511

 

 

 

10,325

 

Financing fees amortization

 

 

268,673

 

 

 

73,448

 

Amortization of loan prepayment premium

 

 

 

 

 

300,000

 

Amortization of finance liability

 

 

116,826

 

 

 

 

Note payable interest accretion

 

 

857,549

 

 

 

140,153

 

Note receivable interest accretion

 

 

(288,991

)

 

 

 

Non-cash operating lease expense