XML 31 R7.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Organization And Summary Of Significant Accounting Policies | 12 Months Ended
--- | ---
Dec. 31, 2011
Organization And Summary Of Significant Accounting Policies [Abstract] |
Organization And Summary Of Significant Accounting Policies | NOTE A – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Odyssey Marine Exploration, Inc. and subsidiaries (the "Company," "Odyssey," "us," "we" or "our") is engaged in the archaeologically sensitive exploration and recovery of deep-ocean shipwrecks throughout the world. Our corporate headquarters are located in Tampa, Florida. Summary of Significant Accounting Policies This summary of significant accounting policies of the Company is presented to assist in understanding our financial statements. The financial statements and notes are representations of the Company's management who are responsible for their integrity and objectivity and have prepared them in accordance with our customary accounting practices. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Odyssey Marine, Inc., Odyssey Marine Services, Inc., OVH, Inc., Odyssey Retriever, Inc. and Odyssey Marine Entertainment, Inc. Equity investments in which we exercise significant influence but do not control and are not the primary beneficiary are accounted for using the equity method. All significant inter-company and intra-company transactions and balances have been eliminated. Shipwreck Heritage Press, LLC was created during 2005 to publish and distribute print media. The entity does not have activity and has not been capitalized, and therefore, it is not consolidated. Use of Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. Revenue Recognition and Accounts Receivable Revenue from product sales is recognized at the point of sale when legal title transfers. Legal title transfers when product is shipped or is available for shipment to customers. In accordance with Topic A.1. in SAB 13: Revenue Recognition, exhibit and expedition charter revenue is recognized ratably when realized and earned as time passes throughout the contract period as defined by the terms of the agreement. Bad debts are recorded as identified and, from time to time, a specific reserve allowance will be established when required. A return allowance is established for sales which have a right of return. Accounts receivable is stated net of any recorded allowances. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and cash in banks. We also consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Inventory Our inventory consists of artifacts recovered from the SS Republic shipwreck, general branded merchandise and related packaging material. Inventoried costs of recovered artifacts include the costs of recovery, conservation and administrative costs to obtain legal title to the artifacts. Administrative costs are generally legal fees or insurance settlements required in order to obtain clean title. The capitalized recovery costs include direct costs such as vessel and related equipment operations and maintenance, crew and technical labor, fuel, provisions, supplies, port fees and depreciation. Conservation costs include fees paid to conservators for cleaning and preserving the artifacts. We continually monitor the recorded aggregate costs of the artifacts in inventory to ensure these costs do not exceed the net realizable value. Historical sales, publications or available public market data are used to assess market value. The packaging materials and merchandise are recorded at average cost. We record our inventory at the lower of cost or market. Long-Lived Assets Our policy is to recognize impairment losses relating to long-lived assets in accordance with the Accounting Standards Codification ("ASC") topic for Property, Plant and Equipment. Decisions are based on several factors, including, but not limited to, management's plans for future operations, recent operating results and projected cash flows. Due to a planned sale of our vessel, the Ocean Alert, at salvage value subsequent to September 30, 2011, management decided to charge the difference of $593,966 to Operations and research in the period ended September 30, 2011. Comprehensive Income Securities with a maturity greater than three months from purchase date are deemed available-for-sale and carried at fair value. Unrealized gains and losses on these securities are excluded from earnings and reported as a separate component of stockholders' equity. At December 31, 2011, we did not own securities with a maturity greater than three months. Property and Equipment and Depreciation Property and equipment is stated at historical cost. Depreciation is provided using the straight-line method at rates based on the assets' estimated useful lives which are normally between three and ten years. Leasehold improvements are amortized over their estimated useful lives or lease term, if shorter. Major overhaul items (such as engines or generators) that enhance or extend the useful life of vessel related assets qualify to be capitalized and depreciated over the useful life or remaining life of that asset, whichever is shorter. Certain major repair items required by industry standards to ensure a vessel's seaworthiness also qualify to be capitalized and depreciated over the period of time until the next scheduled planned major maintenance for that item. All other repairs and maintenance are accounted for under the direct-expensing method and are expensed when incurred. Earnings Per Share Basic earnings per share (EPS) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. In periods when the Company generates income, the Company calculates basic earnings per share ("EPS") using the two-class method pursuant to ASC 260 Earnings Per Share. The two-class method is required effective with the issuance of the Senior Convertible Note disclosed in Note L because the note qualifies as participating security, giving the holder the right to receive dividends should dividends be declared on common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common stockholders and to the holders of Convertible Notes based on the weighted average number of common shares outstanding and number of shares that could be converted. The Company does not use the two-class method in periods when it generates a loss as the holders of the Convertible Notes do not participate in losses. Diluted EPS reflects the potential dilution that would occur if dilutive securities and other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in our earnings. We use the treasury stock method to compute potential common shares from stock options and warrants and the if-converted method to compute potential common shares from Preferred Stock, Convertible Notes or other convertible securities. As it relates solely to the Senior Convertible Note, for diluted earnings per share, the Company uses the more dilutive of the if-converted method or two-class method. When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the Diluted EPS calculation. At December 31, 2011, 2010 and 2009 weighted average common shares outstanding were 70,179,935, 65,633,382 and 56,211,952, respectively. For the periods ending December 31, 2011, 2010 and 2009 in which net losses occurred, all potential common shares were excluded from Diluted EPS because the effect of including such shares would be anti-dilutive. The potential common shares, in the table following, represent potential common shares calculated using the treasury stock method from outstanding options and warrants that were excluded from the calculation of Diluted EPS:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Average market price during the period |  | $ | 2.98 |  |  | $ | 1.56 |  |  | $ | 2.48 |
In the money potential common shares from options excluded |  |  | 129,793 |  |  |  | — |  |  |  | — |
In the money potential common shares from warrants excluded |  |  | 959,521 |  |  |  | — |  |  |  | — |
Potential common shares from out-of-the-money options and warrants were also excluded from the computation of diluted earnings per share because calculation of the associated potential common shares has an anti-dilutive effect. The following table lists options and warrants that were excluded from diluted EPS.
|  | 2011 |  |  | 2010 |  |  | 2009 |
Out of the money options and warrants excluded: |  |  |  |  |  |  |  |  |  |  |  |
Stock Options with an exercise price of $1.74 per share |  |  | — |  |  |  | 71,500 |  |  |  | — |
Stock Options with an exercise price of $2.25 per share |  |  | — |  |  |  | 200,000 |  |  |  | — |
Stock Options with an exercise price of $2.50 per share |  |  | — |  |  |  | — |  |  |  | 33,000 |
Stock Options with an exercise price of $3.50 per share |  |  | 495,000 |  |  |  | 1,266,666 |  |  |  | 1,417,916 |
Stock Options with an exercise price of $3.51 per share |  |  | 984,670 |  |  |  | 984,670 |  |  |  | 1,003,170 |
Stock Options with an exercise price of $3.53 per share |  |  | 211,900 |  |  |  | 211,900 |  |  |  | 212,500 |
Stock Options with an exercise price of $4.00 per share |  |  | 52,500 |  |  |  | 52,500 |  |  |  | 315,250 |
Stock Options with an exercise price of $5.00 per share |  |  | 650,000 |  |  |  | 650,000 |  |  |  | 650,000 |
Stock Options with an exercise price of $7.00 per share |  |  | 100,000 |  |  |  | 100,000 |  |  |  | 100,000 |
Warrants with an exercise price of $2.25 per share |  |  | — |  |  |  | 2,670,000 |  |  |  | — |
Warrants with an exercise price of $2.50 per share |  |  | — |  |  |  | 1,800,000 |  |  |  | — |
Warrants with an exercise price of $4.32 per share |  |  | 1,302,083 |  |  |  | — |  |  |  | — |
Warrants with an exercise price of $5.25 per share |  |  | 100,000 |  |  |  | 100,000 |  |  |  | 100,000 |
Total anti-dilutive warrants and options excluded from EPS |  |  | 3,896,153 |  |  |  | 8,107,236 |  |  |  | 3,831,836 |
Potential common shares from outstanding Convertible Preferred Stock calculated per the if-converted basis having an anti-dilutive effect on diluted earnings per share were excluded from potential common shares as follows:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Potential common shares from Preferred Stock excluded from computation of diluted earnings per share |  |  | 346,400 |  |  |  | 3,566,400 |  |  |  | 3,206,400 |
The weighted average equivalent common shares relating to our unvested restricted stock awards that were excluded from potential common shares used in the earning per share calculation due to having an anti-dilutive effect are:
|  | 2011 |  |  | 2010 |  |  | 2009 |
Excluded unvested restricted stock awards |  |  | 90,033 |  |  |  | 256,315 |  |  |  | 81,662 |
The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income per share:
|  | 12 Month Period Ended December 31, 2011 |  |  | 12 Month Period Ended December 31, 2010 |  |  | 12 Month Period Ended December 31, 2009 |
Net loss |  | $ | (16,225,308 | ) |  | $ | (23,343,066 | ) |  | $ | (18,628,198 | )
Accretion of Series G Preferred Stock |  |  | (1,987,977 | ) |  |  | (383,050 | ) |  |  | — |
Cumulative dividends on Series G Preferred Stock |  |  | (409,035 | ) |  |  | — |  |  |  | — |
Fair market value of warrants issued to Series G Preferred Stock stockholders |  |  | (906,150 | ) |  |  | — |  |  |  | — |
Undecleared cumulative dividends on Series G Preferred Stock in arrears |  |  | (5,000 | ) |  |  | (106,521 | ) |  |  | — |
Numerator, basic and diluted net loss available to stockholders |  | $ | (19,533,470 | ) |  | $ | (23,832,637 | ) |  | $ | (18,628,198 | )
Denominator: |  |  |  |  |  |  |  |  |  |  |  |
Shares used in computation – basic: |  |  |  |  |  |  |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 70,179,935 |  |  |  | 65,633,382 |  |  |  | 56,211,952 |
Shares used in computation – diluted: |  |  |  |  |  |  |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 70,179,935 |  |  |  | 65,633,382 |  |  |  | 56,211,952 |
Dilutive effect of options, warrants and convertible instruments outstanding |  |  | — |  |  |  | — |  |  |  | — |
Shares used in computing diluted net loss per share |  |  | 70,179,935 |  |  |  | 65,633,382 |  |  |  | 56,211,952 |
Net loss per share – basic and diluted |  | $ | (0.28 | ) |  | $ | (0.36 | ) |  | $ | (0.33 | )
Income Taxes Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or the entire deferred tax asset will not be realized. Stock-based compensation Our stock-based compensation is recorded in accordance with the guidance in the ASC topic for Stock-Based Compensation (See NOTE R). Fair Value of Financial Instruments Financial instruments consist of cash, evidence of ownership in an entity, and contracts that both (i) impose on one entity a contractual obligation to deliver cash or another financial instrument to a second entity, or to exchange other financial instruments on potentially unfavorable terms with the second entity, and (ii) conveys to that second entity a contractual right (a) to receive cash or another financial instrument from the first entity, or (b) to exchange other financial instruments on potentially favorable terms with the first entity. Accordingly, our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative financial instruments, mortgage and loans payable, and redeemable preferred stock. We carry cash and cash equivalents, accounts payable and accrued liabilities, and mortgage and loans payable at the approximate fair market value, and, accordingly, these estimates are not necessarily indicative of the amounts that we could realize in a current market exchange. We carry derivative financial instruments at fair value as is required under current accounting standards. We carry redeemable preferred stock at historical cost and accrete carrying values to estimated redemption values over the term of the financial instrument. Derivative financial instruments consist of financial instruments or other contracts that contain a notional amount and one or more underlying variables (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. See NOTE K for additional information. We generally do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, we have entered into certain other financial instruments and contracts, such as our sale and issuance of redeemable preferred stock and freestanding warrants during October 2010 with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815 – Derivatives and Hedging, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements with changes in fair value reflected in our income. Fair Value Hierarchy Fair Value Hierarchy The three levels of inputs that may be used to measure fair value are as follows: Level 1. Quoted prices in active markets for identical assets or liabilities. Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions. Level 3. Unobservable inputs to the valuation methodology that is significant to the measurement of the fair value of assets or liabilities. Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data. Redeemable Preferred Stock Redeemable preferred stock (and, if ever, any other redeemable financial instrument we may enter into) is initially evaluated for possible classification as liabilities in instances where redemption is certain to occur pursuant to ASC 480 – Distinguishing Liabilities from Equity. Redeemable preferred stock classified as liabilities is recorded and carried at fair value. Redeemable preferred stock that does not, in its entirety, require liability classification is evaluated for embedded features that may require bifurcation and separate classification as derivative liabilities. In all instances, the classification of the redeemable preferred stock host contract that does not require liability classification is evaluated for equity classification or mezzanine classification based upon the nature of the redemption features. Generally, mandatory redemption requirements or any feature that could require cash redemption for matters not within our control, irrespective of probability of the event occurring, requires classification outside of stockholders' equity. Redeemable preferred stock that is recorded in the mezzanine section is accreted to its redemption value through charges to stockholders' equity when redemption is probable using the effective interest method. See Note Q for further disclosures about our redeemable preferred stock. Subsequent Events We have evaluated subsequent events for recognition or disclosure through the date this Form 10-K is filed with the Securities and Exchange Commission.

X
- Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 720 -SubTopic 15 -URI http://asc.fasb.org/subtopic&trid=2122524 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6921930&loc=d3e5614-111684 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=6970148&loc=SL6228881-111685 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Name Statement of Position (SOP) -Publisher AICPA -Number 94-6 -Paragraph 10 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 272 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS140-4/FIN46(R)-8 -Paragraph 8, C1, C7 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Name FASB Interpretation (FIN) -Publisher FASB -Number 46R -Paragraph 4, 14, 15 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2209116 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2134480 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Research Bulletin (ARB) -Number 51 -Paragraph 2-6 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 915 -SubTopic 235 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6472506&loc=d3e38932-110933 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2122150 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6359553&loc=d3e288-107754 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2197480 + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration