XML 37 R26.htm IDEA: XBRL DOCUMENT v3.23.1
Loans Payable (Tables)
 1 Months Ended
Mar. 31, 2023
Schedule of Consolidated Notes Payable

The Company’s consolidated notes payable consisted of the following carrying values and related interest expense at:

 

 

Note payable

 

 

Interest expense

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,
2023

 

 

December 31,
2022

 

 

March 31,
2023

 

 

March 31,
2022

 

MINOSA 1

 

$

—

 

 

$

14,750,001

 

 

$

210,137

 

 

$

290,959

 

MINOSA 2

 

 

—

 

 

 

5,050,000

 

 

 

89,932

 

 

 

124,520

 

Litigation financing

 

 

23,493,442

 

 

 

24,347,513

 

 

 

3,102,064

 

 

 

2,412,348

 

DP SPV I LLC note

 

 

9,798,236

 

 

 

—

 

 

 

315,980

 

 

 

-

 

Emergency Injury Disaster Loan

 

 

150,000

 

 

 

149,900

 

 

 

1,387

 

 

 

1,461

 

Vendor note payable

 

 

484,009

 

 

 

484,009

 

 

 

14,321

 

 

 

14,322

 

Seller note payable

 

 

1,193,778

 

 

 

1,400,000

 

 

 

62,733

 

 

 

-

 

AFCO Insurance note payable

 

 

376,187

 

 

 

562,280

 

 

 

7,747

 

 

 

2,903

 

Pignatelli note

 

 

500,000

 

 

 

—

 

 

 

3,562

 

 

 

-

 

Galileo note

 

 

—

 

 

 

—

 

 

 

723

 

 

 

 

Bridge loan

 

 

115,000

 

 

 

—

 

 

 

—

 

 

 

-

 

 

$

36,110,652

 

 

$

46,743,703

 

 

 

 

 

 

 

 

MINOSA 1

 

On March 11, 2015, in connection with a Stock Purchase Agreement ("SPA"), Minera del Norte, S.A. de C.V. ("MINOSA") agreed to lend us up to $14.75 million. The entire $14.75 million was loaned in five advances from March 11 through June 30, 2015. The outstanding indebtedness bore interest at 8.0% percent per annum. As described in Note 9 Loans Payable - MINOSA 2 below, the Minosa Purchase Agreement amended the due date of this note to a due date that was at least 60 days subsequent to written notice of demand from MINOSA. See Note 9 Loans Payable - MINOSA 2 for further qualifications. During December 2017, MINOSA transferred this debt to its parent company, AHMSA.

 

MINOSA 2

 

On August 10, 2017, we entered into a Note Purchase Agreement (the "Minosa Purchase Agreement") with MINOSA. Pursuant to the Minosa Purchase Agreement, MINOSA agreed to loan our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd., up to $3.0 million. During 2017, we borrowed $2.7 million against this facility, and Epsilon Acquisitions LLC ("Epsilon") assigned $2.0 million of its previously held debt to MINOSA. The indebtedness is evidenced by a secured convertible promissory note (the "Minosa Note") and bore interest at a rate equal to 10.0% per annum. Unless otherwise converted as described below, the entire outstanding principal balance under this Minosa Note and all accrued interest and fees are due and payable upon written

demand by MINOSA; provided, that MINOSA agreed not make a demand for payment prior to the earlier of (a) an event of default (as defined in the Minosa Note) or (b) a date, which may be no earlier than December 31, 2017, that is at least 60 days subsequent to written notice from MINOSA that it intended to demand payment. We unconditionally and irrevocably guaranteed all of the obligations under the Minosa Purchase Agreement and the Minosa Note. MINOSA had the right to convert all amounts outstanding under the Minosa Note into shares of our common stock upon 75 days’ notice to us or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the conversion price of $4.35 per share. During December 2017, MINOSA transferred this indebtedness to its parent company. On July 15, 2021, MINOSA transferred $404,633 of this indebtedness with accumulated interest of $159,082 to a director of the Company under the same terms as the original agreement, and that indebtedness continues to be convertible at a conversion price of $4.35 per share. This transaction was reviewed and approved by the independent members of the Company’s board of directors.

Pursuant to second amended and restated pledge agreements (the "Pledge Agreements") entered into by us in favor of MINOSA on August 10, 2017, we pledged and granted security interests to MINOSA in (a) the 54 million cuotas (a unit of ownership under Panamanian law) of Oceanica Resources S. de R.L. (“Oceanica”) held by us, (b) all notes and other receivables from Oceanica and its subsidiary owed to us, and (c) all of the outstanding equity in our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd.

Settlement, Release and Termination Agreement of the MINOSA 1 and MINOSA 2

On March 3, 2023, Odyssey, Altos Hornos de México, S.A.B. de C.V. (“AHMSA”), MINOSA and Phosphate One LLC (f/k/a Penelope Mining LLC, “Phosphate One” and together with AHMSA and MINOSA, the “AHMSA Parties”) entered into a Settlement, Release and Termination Agreement (the “Termination Agreement”).

Pursuant to the Termination Agreement:

•
Odyssey paid AHMSA $9.0 million (the “Termination Payment”) in cash on March 6, 2023;
•
the parties agreed that, concurrently with the payment of the Termination Payment, a portion of the MINOSA Notes were deemed automatically converted into 304,879 shares of Odyssey’s common stock;
•
the MINOSA Notes, the Purchase Agreement, and the Pledge Agreements were terminated;
•
each of the AHMSA Parties and Odyssey agreed to release the other parties and their respective affiliates, equity holders, beneficiaries, successors and assigns (the “Released Parties”) from any and all claims, demands, damages, actions, causes of action or liabilities of any kind or nature whatsoever under the SPA, the MINOSA Notes, the Minosa Purchase Agreement, or the Pledge Agreements (the “Released Matters”); and
•
each of the AHMSA Parties and Odyssey agreed not to make any claims against any of the Released Parties related to the Released Matters.

The transactions contemplated by the Termination Agreement were completed on March 6, 2023.

On March 6, 2023, Odyssey entered into a Release and Termination Agreement with a director of the Company, James S. Pignatelli, to terminate and release a portion of the MINOSA 2 Note assigned to Mr. Pignatelli in 2021, the related Note Purchase Agreement (“NPA”) and the Pledge Agreement.

As a result of these transactions, Odyssey has recorded a Gain on debt extinguishment of $21,478,614 in our Statement of Operations.

Pignatelli

 

On March 6, 2023, Odyssey issued a new Unsecured Convertible Promissory Note in the principal amount of $500,000 to Mr. Pignatelli that bears interest at the rate of 10.0% per annum convertible into common stock of Odyssey at a conversion price of $3.78 per share. Pursuant to the Release and Termination Agreement with Mr. Pignatelli noted above, he agreed, in exchange for the issuance of this Unsecured Convertible Promissory Note by Odyssey, to release the assigned portion of the MINOSA 2 note issued by Odyssey Marine Exploration, Inc., to Mr. Pignatelli in the principal amount of $404,634 and convertible at a conversion price of $4.35 per share, pursuant to which the outstanding aggregate obligation with accrued interest was $630,231.