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Loans Payable (Tables)
 12 Months Ended
Dec. 31, 2023
Schedule of Consolidated Notes Payable
The Company’s consolidated notes payable consisted of the following carrying values:
 
    
Loans Payable
  
    
December 31,
2023
     
December 31,

2022

(Restated)
  
MINOSA 1
    $ —       $ 14,750,001  
MINOSA 2
      —         5,050,000  
March 2023 Note
      14,858,816        —   
December 2023 Note
      6,000,000        —   
Emergency Injury Disaster Loan
      150,000        149,900  
Vendor note payable
      484,009        484,009  
Seller Note payable
      —         1,400,000  
AFCO Insurance note payable
      468,751        562,280  
Pignatelli note
      500,000        —   
37N Note
      804,997        —   
Finance liability (NOTE 13)
      4,112,332        —   
  
 
 
     
 
 
  
Total Loans payable
      27,378,905        22,396,190  
Less: Unamortized deferred lender fee
      (106,488 )       —   
Less: Unamortized deferred discount
      (3,955,449 )       —   
  
 
 
     
 
 
  
Total Loans payable, net
      23,316,968        22,396,190  
Less: Current portion of loans payable
      (15,413,894 )       (21,732,654 ) 
  
 
 
     
 
 
  
Loans payable - long term
    $ 7,903,074      $ 663,536  
  
 
 
     
 
 
  
MINOSA 1
On March 11, 2015, in connection with the Stock Purchase Agreement (refer to the discussion of the
Convertible Preferred Stock
in
Note 15 – Stockholders’ Equity/(Deficit)
below) we issued promissory notes to Minera del Norte, S.A. de C.V. (“MINOSA”) with a principal amount of $14.75 million (the “Minosa 1 Note”). The outstanding indebtedness bears interest at 8.0% percent per annum. The Minosa 1 Note was amended from time to time in 2015, 2016, and 2017 to extend the maturity date and each amendment was accounted for as a debt modification, as the change in cash flows was not substantial. The principal balance of the Minosa 1 Note was due and payable in full upon written demand by MINOSA and was classified as short-term debt. The carrying amount of the Minosa 1 Note is equal to the principal amount since the amount of debt issuance costs were immaterial as of issuance and as of each amendment date. In connection with the Minosa 1 Note, we granted MINOSA an option to purchase interest in Oceanica Resources, S.R.L. for $40.0 million (the “Oceanica Call Option”) which expired on March 11, 2016. During December 2017, MINOSA transferred this debt to its parent company.
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 Odyssey Marine Enterprises Ltd. up to $3.0 million. By January 2018, the Company borrowed the entire $3.0 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 2 Note” and, together with the Minosa 1 Note, the “Minosa Notes”) and bears interest at a rate equal to 10.0% per annum. The carrying amount of the Minosa 2 Note is equal to the principal amount, as the amount of debt issuance costs were immaterial. Unless otherwise converted as described below, the entire outstanding principal balance and all accrued interest and fees are due and payable upon written demand by MINOSA. The Minosa 2 Note is classified as short-term debt.
During December 2017, MINOSA transferred this indebtedness to its parent company. On July 15, 2021, $404,633 of this indebtedness with accumulated interest of $159,082 was transferred to James Pignatelli, 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.
 
The Minosa 2 Note is convertible into a maximum share count of approximately 2,177,849 shares of our common stock in the event of a default, subject to adjustment for certain dilutive events, and is settleable only in shares. MINOSA has the right to convert all amounts outstanding under the Minosa 2 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. Of the principal amount of the Minosa 2 Note, $2.7 million is convertible at a conversion price of $4.35 per share, $1 million is convertible at a conversion price of $4.19 per share, and $1 million is convertible at a conversion price of $4.13 per share. Upon the occurrence of an event of default, the Minosa 2 Note is convertible at MINOSA’s option at a conversion price equal to
one-half
of the applicable conversion price.
Upon the closing of the Minosa Purchase Agreement, along with MINOSA, and Penelope Mining LLC, an affiliate of MINOSA (“Penelope”), executed and delivered a Second Amended and Restated Waiver and Consent and Amendment No. 5 to Promissory Note and Amendment No. 2 to Stock Purchase Agreement (the “Second AR Waiver”). Pursuant to the Second AR Waiver, MINOSA and Penelope consented to the transactions contemplated by the Minosa Purchase Agreement and waived any breach of any representation or warranty and violation of any covenant in the Stock Purchase Agreement, dated as of March 11, 2015, as amended April 10, 2015 (the “SPA”), by and among us, MINOSA, and Penelope, arising out of the Company’s execution and delivery of the Minosa Purchase Agreement and the consummation of the transactions contemplated thereby. Pursuant to the Second AR Waiver, we also waived, and agreed not to exercise our right to terminate the SPA pursuant to Section 8.1(c)(ii) thereto, both (a) until after the earlier of (i) July 1, 2018, (ii) the date that MINOSA fails, refuses, or declines to fund (or otherwise does not fund) any subsequent loan under the Minosa Purchase Agreement and (iii) demand is made for repayment of all or any part of the indebtedness outstanding under the Minosa Notes, the Second AR Epsilon Note, or the Promissory Note, dated as of March 11, 2015, as amended (the “SPA Note”), in the principal amount of $14.75 million that was issued by us to MINOSA under the SPA, and (b) unless on or prior to such termination, the Minosa Notes are paid in full.
The Second AR Waiver (x) further provides that following any conversion of the indebtedness evidenced by the Minosa 2 Note, Penelope may elect to reduce its commitment to purchase our preferred stock under the SPA by the amount of indebtedness converted by MINOSA and (y) amends the SPA Note to provide that the outstanding principal balance under the SPA 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 2 Note) or (b) a date, which may be no earlier than December 31, 2017, that is at least 60 days subsequent to written notice that Minosa intends to demand payment. Refer to
Note 15 – Stockholders’ Equity/(Deficit)
below for information on the SPA.
In addition to being due and payable upon written demand by MINOSA, the obligations under the Minosa 2 Note may be accelerated upon the occurrence of specified events of default including (a) our failure to pay any amount payable under the Minosa 2 Note on the date due and payable; (b) our failure to perform or observe any term, covenant, or agreement in the Minosa 2 Note or the related documents, subject to a
five-day
cure period; (c) the occurrence and expiration of all applicable grace periods, if any, of an event of default or material breach by us under any of the other loan documents; (d) the termination of the SPA; € commencement of certain specified dissolution, liquidation, insolvency, bankruptcy, reorganization, or similar cases or actions by or against us, in specified circumstances unless dismissed or stayed within 60 days; (f) the entry of a judgment or award against us in excess of $100,000; and (g) occurrence of a change in control (as defined in the Minosa 2 Note).
Pursuant to second amended and restated pledge agreements (the “Second AR 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 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.
In connection with the execution and delivery of the Minosa Purchase Agreement, Odyssey and MINOSA entered into a second amended and restated registration rights agreement (the “Second AR Registration Rights Agreement”) pursuant to which Odyssey agreed to register the offer and sale of the shares (the “Conversion Shares”) of our common stock issuable upon the conversion of the indebtedness evidenced by the Minosa 2 Note. Subject to specified limitations set forth in the Second AR Registration Rights Agreement, including that we are eligible to use Form
S-3,
the holder of the Minosa 2 Note can require us to register the offer and sale of the Conversion Shares if the aggregate offering price thereof (before any underwriting discounts and commissions) is not less than $3.0 million. In addition, we agreed to file a registration statement relating to the offer and sale of the Conversion Shares on a continuous basis promptly (but in no event later than 60 days after) after the conversion of the Minosa 2 Note into the Conversion Shares and to thereafter use its reasonable best efforts to have such registration statement declared effective by the Securities and Exchange Commission.
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 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 would be deemed automatically converted into
304,879
shares of Odyssey’s common stock;
 
  •  
the Minosa Notes, the Stock Purchase Agreement, and the Pledge Agreements were terminated;
 
  •  
each of the AHMSA Parties, on the one hand, and Odyssey, on the other, 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, on the one hand, and Odyssey, on the other, 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. As a result of executing this Termination Agreement, the Company recognized a gain on extinguishment of debt in the amount of $21.2 million.
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.
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., a wholly owned subsidiary of the Company, 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.