Odyssey Marine Exploration(OMEX) - 2024 Q4 - Annual Report

Legal and Regulatory Matters - The Company received an arbitral award of $37.1 million from Mexico for breaching obligations under NAFTA, plus interest from October 12, 2018[161] - The Company is challenging the unlawful cancellation of ExO's mining concessions by the Mexican mining authority[162] - The Funder has provided a total of $24.8 million in Claims Payments as of December 31, 2024, under the Third Amended and Restated International Claims Enforcement Agreement[262] - The Funder agreed to provide up to $2.2 million in Arbitration Support Funds for litigation support costs related to the Subject Claim[259] - The Company incurred $0.2 million in related fees for the Arbitration Support Funds, treated as an additional advance[257] Financial Performance - Total revenue for the year ended December 31, 2024 was $0.769 million, a decrease of 4% compared to $0.804 million in 2023[189] - Net income for the year ended December 31, 2024 was $6.247 million, a significant improvement from a net loss of $3.885 million in 2023[189] - Total other income increased by 182.8% to $18.252 million in 2024 from $6.453 million in 2023[189] - The consolidated cash balance at December 31, 2024 was $4.8 million, up from $4.0 million at the end of 2023[207] - Cash flows provided by operating activities for 2024 were $0.642 million, a turnaround from cash used of $10.170 million in 2023[198] Expenses and Liabilities - Marketing, general and administrative expenses increased by 41.3% to $9.669 million in 2024 from $6.843 million in 2023[189] - The company had a working capital deficit of $16.7 million as of December 31, 2024[187] - Total loans payable decreased from $27.4 million in 2023 to $22.9 million in 2024, with long-term loans payable increasing from $7.9 million to $9.9 million[211] - Interest expense recorded for the years ended December 31, 2024 and 2023 was $1.8 million and $2.0 million, respectively[220] Equity and Financing - The Company issued 7,377,912 shares of common stock at $0.55 per share, raising approximately $4.1 million in December 2024[186] - The right to purchase an additional 7,220,141 shares at $1.10 per share is classified as an equity instrument, valued at approximately $1.5 million[210] - The December 2023 Note Purchase Agreement raised a total of $6.0 million, with $2.4 million allocated to warrants[228] - The company entered into a Note Purchase Agreement with 37North SPV 11, LLC for a loan of $1.0 million, which was non-interest bearing and matured on July 30, 2023[241] Project Developments - The ExO Phosphate Project is located 70-90 meters deep within Mexico's Exclusive Economic Zone and is expected to provide significant benefits to Mexico's agricultural development[154] - The Company and Capital Latinoamericano formed a joint venture to develop a strategic fertilizer production project in Mexico, with equal investment from both parties[163] - The Lihir Gold Project exploration license covers a subsea area believed to have commercially viable gold content, with an 85.6% interest held by the Company[177] - The offshore survey and mapping operations for the Lihir Gold Project were completed in 2022, producing a high-resolution acoustic terrain model of the seafloor[180] Debt and Interest Management - The March 2023 Note has a principal amount of up to $14.0 million, with a debt discount of $3.7 million amortized over its term[214] - The total face value of the March 2023 Note obligation was $13.1 million as of December 31, 2024[220] - The carrying value of the debt was $5.8 million and $3.7 million as of December 31, 2024 and 2023, respectively, net of unamortized debt fees and discounts[236] - The company evaluated the December 2023 NWPA Amendment and concluded it should be recorded as a debt extinguishment due to the addition of a substantive conversion option[240] Asset Management - The total consolidated book value of assets was approximately $18.5 million at December 31, 2024[187] - The fair value of the obligation increased to $57.0 million as of December 31, 2024, up from $52.1 million in 2023, reflecting a change of $4.8 million[263] - The company has a cost investment with a related party, requiring careful analysis to determine the proper accounting treatment[280] Risk Management and Valuation - The company does not believe it has material market risk exposure and has not engaged in market risk-sensitive instruments for trading or speculative purposes[283] - The fair value of derivative liabilities, including warrants, is estimated using a Black-Scholes model, which is sensitive to inputs like stock volatility and risk-free interest rates[276] - The company has identified critical accounting estimates that could result in materially different financial outcomes under varying assumptions[272]