Related Party Transactions

9 Months Ended

Sep. 30, 2019

NOTE D – RELATED PARTY TRANSACTIONS

Based on the economic substance of our

prior

business transactions with Monaco Financial, LLC, we

continue to

consider Monaco to be an affiliated company, thus a related party. We do not own any financial interest in Monaco. We had accounts receivable from Monaco and affiliates at

September

30, 2019 of $141,738 and at December 31, 2018 of $612,498. We had general operating payables owed to Monaco at

September

30, 2019 of $232,542 and at December 31, 2018 of $233,855. See NOTE

for further debt arrangements between the entities. We are currently performing marine shipwreck search and recovery services for this related party and recognized 2019 year to date revenue of approximately $1.5 million.

During 2018 we entered into a services agreement with and continue to provide services to a

deep-sea

mineral exploration company, CIC, which was organized and is majority owned and controlled by Greg Stemm, the past Chairman of the Board for Odyssey. Mr. Stemm’s involvement with this company was disclosed to, and approved by, the Odyssey Board of Directors and legal counsel pursuant to the terms of his consulting agreement. We are providing these services pursuant to a Master Services Agreement that provides for back office services in exchange for a recurring monthly fee as well as other mineral related services on a cost-plus profit basis and will be compensated for these services with a combination of cash and equity in

CIC

. For the 2019 year to date, we invoiced

CIC

a total of $681,456, which was for back office technical and support services. Included in this amount is $662,007 which shall be deemed as consideration for equity units in

CIC

. Billings related to cash amounted to $19,449 for the same period. We have the option to accept equity in lieu of the amount expected to be paid in cash. See NOTE C for related accounts receivable at

September

30, 2019 and NOTE

for our investment in an unconsolidated entity.

During

September

2019, we entered into an arrangement with a company controlled by one of our directors relating to its possible participation in a pending financing arrangement. Upon entering the arrangement, we received an earnest deposit of $150,000. If the company’s participation was not required, the arrangement called for the return of the $150,000 deposit

plus

a 10%

break-up-fee.

The deposit and

break-up

fee

will

most likely

be paid subsequent the end of the

third

quarter of 2019. The deposit and

break-up

fee

are included in accrued expenses and other in our statement of consolidated balance sheets.

During the quarter ended September 30, 2019, we received an earnest money deposit of $450,000 from a company controlled by Greg Stemm, our past Chairman of the Board. The earnest money deposit relates to a draft agreement related to potential sell of a stake of our equity in CIC. As of this report date, this transaction has not yet been consummated. The deposit is included in accrued expenses and other in our statement of consolidated balance sheets.