Odyssey Marine Exploration(OMEX) - 2025 Q1 - Quarterly 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 [148]. - The company is appealing the cancellation of ExO's mining concessions by the Mexican mining authority [149]. - The company has invested up to $10 million in funding for NAFTA arbitration costs related to the ExO project [147]. Mining and Exploration Projects - The company holds an 85.6% interest in Bismarck Mining Corporation, which has an exploration license for the Lihir Gold Project in Papua New Guinea [161]. - The ExO Phosphate Project is located 70-90 meters deep in Mexico's Exclusive Economic Zone and contains high-grade phosphate ore [141]. - The company has a joint venture with Capital Latinoamericano to develop a strategic fertilizer production project in Mexico [150]. - The company plans to conduct further exploration activities in the Lihir Gold Project area, having collected 127 geological samples and conducted seven ROV dives in 2023 [165]. - The company has secured a five-year exploration license for the Ocean Minerals project, with ongoing efforts to validate polymetallic nodule resources [157]. - The company has developed an environmentally sustainable plan for the ExO Phosphate Project, ensuring minimal impact on marine ecosystems [143]. Financial Performance - Total revenue for Q1 2025 was $0.135 million, a decrease of 33.5% compared to $0.203 million in Q1 2024 [174]. - Net loss for Q1 2025 was $0.416 million, a decline of 145.2% compared to a net income of $0.921 million in Q1 2024 [174]. - The consolidated cash balance at March 31, 2025 was $2.5 million, down from $4.8 million at December 31, 2024 [189]. - The company reported a working capital deficit of $20.0 million as of March 31, 2025 [171]. - Total loans payable as of March 31, 2025 amounted to $25.4 million, an increase from $24.9 million at December 31, 2024 [190]. - Cash used in operating activities for Q1 2025 was $1.955 million, compared to $1.669 million in Q1 2024 [183]. Financing and Capital Management - The company plans to generate new cash inflows through monetization of equity stakes in seabed mineral companies and other financing opportunities [169]. - The company amended its March 2023 Notes to extend the maturity date and added a conversion feature, deferring a material cash need [170]. - The company expects sufficient operating funds through at least Q4 2025 from the proceeds of a recent stock sale and anticipated cash inflows [170]. - The Company amended the March 2023 Note and Warrant Purchase Agreement to include a minimum liquidity requirement and modify existing covenants [194]. - The maturity date of the March 2023 AR Notes was extended to December 31, 2025, with a conversion feature allowing holders to convert at a rate of 75% of the 30-day volume weighted average price, capped between $1.10 and $2.20 [195]. - The exercise price of the March 2023 Warrants was reduced from $3.78 to $1.10, and registration rights were granted to holders of the March 2023 AR Notes and Warrants [196]. - The fair value of the March 2023 Warrants decreased by $1.0 million for the three months ended March 31, 2025, compared to a decrease of $2.5 million for the same period in 2024 [197]. - The carrying value of the debt was $12.3 million as of March 31, 2025, which includes $0.4 million of Paid In Kind interest and is net of unamortized debt fees and discounts [199]. - The total face value of the March 2023 debt obligation was $13.5 million as of March 31, 2025, with a current interest rate of 11.0% [199]. - The Company issued December 2023 Notes totaling up to $6.0 million and associated warrants to institutional investors [203]. - The carrying value of the December 2023 debt was $6.3 million as of March 31, 2025, net of unamortized debt fees and discounts [207]. - The fair value of the December 2023 Warrants decreased by $0.4 million for the three months ended March 31, 2025 [205]. - The Company does not believe it has material market risk exposure and has not entered into market risk sensitive instruments [212].