Odyssey Marine Exploration(US:OMEX)2026-03-31 20:13Joint Ventures and Projects - The Company entered into a Joint Venture Agreement for the Phosagmex Project in Mexico, focusing on developing a strategic fertilizer production project based on high-quality subsea phosphate resources [150]. - The Phosagmex Project includes a rich deposit of phosphate sands located 70-90 meters deep, which is commercially viable for extraction and beneficial for agricultural development in Mexico and North America [151]. - The Phosagmex joint venture was formalized on June 4, 2025, with the Company and CapLat as equal partners [152]. - The exploration license for the Lihir Gold Project covers a subsea area with prospective gold targets, with an 85.6% interest held by the Company in the Bismarck Mining Corporation [171]. - Offshore survey and mapping operations for the Lihir Gold Project were completed in 2022, producing a high-resolution acoustic terrain model of the seafloor [175]. - The Company has developed a comprehensive project plan for the Lihir Gold Project, identifying specific target areas for future geological and environmental sampling [175]. - The Company is advancing work to develop recovery systems for harvesting high-quality seafloor polymetallic nodules in the Ocean Minerals, LLC Project [168]. - The CIC project has commenced offshore explorations with positive early results, informing ongoing operational functions for a longer-term operation [165]. Financial Performance - Total revenue for the year ended December 31, 2025 was $0.4 million, a decrease of 54% compared to $0.8 million in 2024 [194]. - Net loss for the year ended December 31, 2025 was $48.5 million, compared to a net income of $6.2 million in 2024, representing a change of 375.2% [193]. - Total other expenses for 2025 were $35.0 million, a significant increase of $53.3 million compared to $18.3 million in 2024 [198]. - Cash at the end of the period was $3.5 million, down from $4.8 million at the beginning of the year, reflecting a net decrease of $1.3 million [203]. - Net cash used in operating activities for 2025 was $8.8 million, an increase of approximately $9.5 million compared to cash provided of $0.6 million in 2024 [204]. - The total consolidated book value of assets was approximately $15.8 million at December 31, 2025, which included the cash balance of $3.5 million [190]. Debt and Financing Activities - The Company recorded interest expenses of $1.4 million and $1.8 million for the years ended December 31, 2025 and 2024, respectively, from the amortization of the debt discount [228]. - The March 2023 Note had a principal amount of up to $14.0 million, with a debt discount of $3.7 million amortized over its term [212][213]. - The December 2023 Notes had a principal amount of up to $6.0 million, with $3.75 million issued on December 1, 2023, and $2.25 million on December 28, 2023 [229]. - The Company entered into amendments to the March 2023 and December 2023 Notes, including a second-priority security interest in collateral securing the March 2023 Notes [225]. - The Company settled a Vendor Note Payable of $0.5 million for a cash payment of $250,000 and an assignment of equipment, resulting in a gain on debt extinguishment of $0.6 million [247]. - The principal balance of the EIDL Loan was $0.2 million as of December 31, 2025, with interest accruing at 3.75% per annum [245]. - The Company incurred $65,500 in related expenses for the December 2023 Note Purchase Agreement, amortized over the term and charged to interest expense [236]. - The Company issued a convertible promissory note to Mr. Pignatelli for $0.5 million, which was converted into 152,461 shares of Common Stock, with the balance of the note being zero as of December 31, 2024 [255]. Legal and Regulatory Matters - The Company was awarded $37.1 million in an arbitral award under NAFTA for breaches by Mexico, with interest accruing from October 2018 until payment is made [160]. - The company received an arbitral award of $37.1 million from Mexico for breaching obligations under NAFTA, with additional interest to be compounded annually [272]. - Odyssey submitted an Unsolicited Request for Lease Sale of Marine Mineral Exploration and Development Rights to BOEM on November 6, 2025 [182]. - The proposed lease area is highly prospective for heavy mineral sands rich in titanium, zirconium, and rare earth elements, critical for U.S. national defense and manufacturing [183]. Stock and Equity Transactions - The company issued 7,377,912 shares of common stock at a price of $0.55 per share, raising approximately $4.1 million on December 23, 2024 [256]. - As of December 31, 2024, the company issued 1,028,671 shares of Common Stock to 37North as a result of converting $1.2 million of outstanding indebtedness [253]. - During the year ended December 31, 2025, holders of the SPA options exercised their options to purchase 6,975,488 Additional SPA Shares for a total of $7.7 million [261]. - As of December 31, 2025, holders of the March 2023 AR Notes converted $14.5 million of indebtedness into 12,051,669 shares of Common Stock, resulting in no outstanding March 2023 AR Notes [227]. Fair Value and Derivative Instruments - The fair value of the litigation financing obligation was recorded at $63.3 million, reflecting a change of $6.2 million from the previous year [274][276]. - The fair value of the derivative financial instruments is subject to significant judgment and estimates, with changes in fair value reported in the statements of operations [280]. - The estimated fair value of the 2022 and December 2023 Warrants was calculated using a Black-Scholes model, incorporating expected stock volatility and risk-free interest rates [281]. - The fair value of the embedded derivative liability related to the share settled redemption feature of the 37N Note was determined using a risk-adjusted discount rate [282]. - The Company estimated the fair value of the concession rights contributed to Phosagmex to be $1.9 million as of August 29, 2025 [283]. Market Risk and Sensitivity - The Company has not entered into any market risk sensitive instruments and does not believe it has material market risk exposure [287].