Odyssey Marine Exploration(OMEX) - 2022 Q4 - Annual Report

Financial Performance - Total revenue for 2022 was $1.3 million, an increase of $0.4 million or 45.0% compared to $0.9 million in 2021[128] - Net income loss for 2022 was $23.1 million, a decrease of $13.2 million or 132.4% compared to a loss of $10.0 million in 2021[128] - Total other expenses increased to $13.8 million in 2022, up $12.6 million or 1075.8% from $1.2 million in 2021, primarily due to increased interest expenses[132] - Total operating expenses for 2022 were $18.4 million, an increase of $2.5 million or 15.8% from $15.9 million in 2021[128] - The company has experienced several years of net losses, raising doubt about its ability to continue as a going concern[191] Cash Flow and Liquidity - Cash used in operating activities for 2022 was $9.3 million, an increase of $3.8 million compared to $5.4 million in 2021[138] - Cash flows provided by financing activities in 2022 were $10.8 million, significantly higher than $1.2 million in 2021[142] - Ending cash and cash equivalents decreased to $1.4 million in 2022 from $2.3 million in 2021[144] - The consolidated non-restricted cash balance at December 31, 2022, was $1.4 million, with a working capital deficit of $60.7 million[193] Debt and Financial Obligations - Financial debt increased to $46.7 million at the end of 2022 from $41.9 million at the end of 2021[145] - The total face value of the obligation as of December 31, 2022, was $24,848,406, an increase from $19,266,818 in 2021[190] - As of December 31, 2022, the carrying value of the obligation was $24,347,513, net of unamortized debt fees of $146,897 and a debt discount of $353,996[190] - The company incurred $295,932 in debt discount expense and $146,896 in fee amortization for the year ended December 31, 2022[190] Expenses - Marketing, general and administrative expenses rose to $8.5 million in 2022, up $2.2 million or 34.2% from $6.3 million in 2021[130] - Marketing, general and administrative expenses increased by $2.6 million to $6.3 million for the year ended December 31, 2021, compared to $3.8 million for the year ended December 31, 2020[150] - Operations and research expenses decreased by $1.4 million to $9.6 million for the year ended December 31, 2021, compared to $10.9 million for the year ended December 31, 2020[151] Equity and Investments - The company sold 4,939,515 shares of common stock and warrants in June 2022, generating net proceeds of $14.7 million after offering expenses of $1.8 million[192] - Non-controlling interest increased to $7.7 million in 2022 from $6.2 million in 2021, reflecting compounding interest on intercompany debt[136] Litigation and Funding - Odyssey paid AHMSA $9.0 million as a Termination Payment on March 6, 2023[169] - A portion of the MINOSA Notes was converted into 304,879 shares of Odyssey's common stock[169] - The Maximum Investment Amount for litigation financing is capped at $6.5 million, with $1.5 million allocated for Phase I and $5 million for Phase II[174] - The Funder is entitled to a closing fee of $80,000 for both Phase I and Phase II Investment Amounts[174] - If the Claimholder ceases the Subject Claim, all Claims Payments will convert to a senior secured liability with an annualized IRR of 50%[179] - The Funder has the right to receive 100% of the Proceeds until the cumulative amount equals the total Claims Payments made under Phase I[182] - The Claimholder must exercise options for Tranche A and Tranche B in writing within specified timeframes to receive additional funding[174] - The Funder's rights to the Recovery Percentage will survive any decision by the Claimholder to utilize Self-Funding[181] - The Claimholder acknowledged the Funder's priority right to any Proceeds, including collateral to secure obligations under the Agreement[183] - The Agreement includes customary provisions such as representations, warranties, and indemnification[183] - The Funder provided $2.0 million in Arbitration Support Funds during 2020, with related fees of $200,000 treated as an additional advance[184] Tax and Valuation - The company recorded a valuation allowance of $85.3 million for deferred tax assets as of December 31, 2022, indicating they are unlikely to be realized[198] - As of December 31, 2022, the total consolidated book value of assets was approximately $13.3 million[193]