Odyssey Marine Exploration(US:OMEX)2023-08-14 20:05Project Developments - The ExO Phosphate Project in Mexico contains a significant deposit of high-grade phosphate rock, with extraction being financially attractive due to its location 70-90 meters deep [124]. - Odyssey is seeking over $2 billion in compensation from Mexico due to repeated unlawful permit denials for the ExO project, which has significantly impacted the company's investment value [129]. - The CIC Project received a five-year exploration license from the Cook Islands Seabed Minerals Authority, with offshore explorations yielding positive early results [134]. - Odyssey holds approximately 14.67% of CIC's outstanding equity units and can earn up to 20 million equity units over the next several years, representing a potential 16% interest [136]. - The Ocean Minerals LLC Project involves a purchase agreement for a 13% interest in OML, with cash contributions of up to $10 million planned over the next year [139]. - The Lihir Gold Project in Papua New Guinea has identified at least five prospective gold exploration targets, with ongoing exploration programs to validate and quantify resource content [142]. - Offshore survey operations in the Lihir license area produced a high-resolution acoustic terrain model, aiding in the characterization of the geological setting [145]. - Odyssey's exploration program in Papua New Guinea will focus on environmental surveys and studies to support future mining license applications [146]. - The company has developed an environmentally sustainable plan for the ExO project, ensuring no chemicals are used in the dredging process and that the seabed will be restored post-dredging [126]. Financial Performance - Total revenues for the three months ended June 30, 2023, decreased by $217,000 (55.6%) to $173,000 compared to $390,000 for the same period in 2022 [151]. - Marketing, general and administrative expenses decreased by $471,000 (20.5%) to $1.8 million for the three months ended June 30, 2023, compared to $2.3 million in 2022 [153]. - Operations and research expenses increased by $269,000 (21.9%) to $1.5 million for the three months ended June 30, 2023, driven by a $530,000 increase in marine equipment expenses [154]. - Total other expenses increased by $1.5 million (43.5%) to $4.9 million for the three months ended June 30, 2023, primarily due to a $771,000 increase in interest expense [155]. - Net income (loss) for the three months ended June 30, 2023, was $(5.7) million, a decrease of $1.0 million (22.2%) compared to $(4.7) million in 2022 [150]. - Total revenues for the six months ended June 30, 2023, decreased by $229,000 (33.0%) to $461,000 compared to $690,000 for the same period in 2022 [160]. - Operations and research expenses decreased by $3.0 million (47.7%) to $3.3 million for the six months ended June 30, 2023, primarily due to a $4.6 million decrease in litigation finance costs [162]. - Total other income increased by $19.7 million, resulting in net income of $12.8 million for the six months ended June 30, 2023, compared to a net expense of $6.8 million in 2022 [163]. Cash and Debt Management - Cash and cash equivalents at June 30, 2023, were $1.8 million, an increase of $0.4 million from $1.4 million at December 31, 2022 [169]. - Financial debt decreased to $36.8 million at June 30, 2023, from $46.7 million at December 31, 2022 [169]. - The total carrying value of the Company's consolidated notes payable as of June 30, 2023, was $40,925,145, compared to $46,743,700 as of December 31, 2022 [172]. - For the three months ended June 30, 2023, the Company recorded $86,130 in interest expense from the amortization of the debt discount, compared to $72,013 for the same period in 2022 [175]. - The Company entered into a Note and Warrant Purchase Agreement in March 2023, issuing a promissory note with a principal amount of up to $14.0 million, of which $13.1 million was advanced in March 2023 [176]. - The principal amount outstanding under the DP SPV Note bears interest at 11.0% per annum, with the first quarterly interest payment being satisfied with PIK Interest [177]. - The total face value of the obligation under the DP SPV Note as of June 30, 2023, was $13,652,646, net of unamortized debt fees and discounts [183]. - The Company entered into a Note Purchase Agreement with 37North SPV 11, LLC for $1.0 million, with the proceeds received in full on June 29, 2023 [184]. - The Company recorded $750,871 of interest expense from the amortization of the debt discount for the six months ended June 30, 2023 [183]. - The total proceeds from the Note and Warrant Purchase Agreement were allocated between debt and equity, resulting in a debt discount of $3,536,154 [182]. Going Concern and Financial Risks - As of June 30, 2023, the consolidated non-restricted cash balance was $1.8 million, with a working capital deficit of $35.7 million [191]. - The total consolidated book value of assets was approximately $14.0 million, which includes the cash balance [191]. - The company has raised substantial doubt about its ability to continue as a going concern due to financial conditions [191]. - The company does not engage in off-balance sheet financing arrangements and has no interest in limited purpose entities [196]. - There is no material market risk exposure, and the company has not entered into market risk sensitive instruments [197]. - The company currently has no debt obligations with variable interest rates [198].