XML 21 R11.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Related Party Transactions
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Related Party Transactions
NOTE 5 – RELATED PARTY TRANSACTIONS
CIC Limited
We currently provide services to and own approximately 15.08% of the equity interests in
CIC Limited (“CIC”), 
a
deep-sea
mineral exploration company. Odyssey’s lead director, Mark B. Justh, made an investment into CIC’s parent company and indirectly owns approximately 11.5% of CIC. We believe Mr. Justh’s indirect ownership in CIC does not impair his independence under applicable rules and Odyssey’s board of directors has formed a special committee to address any matters relating to CIC. We are providing services to CIC in accordance with the terms of a Services Agreement pursuant to which Odyssey provides certain back-office services to CIC in exchange for a recurring monthly fee, as well as other
deep-sea
mineral related services on a cost-plus profit basis and is compensated for these services with a combination of cash and equity in CIC. During the three months ended March 31, 2024 and 2023, we invoiced CIC a total of $133,166 and $271,375, respectively, recorded in Marine services in our consolidated statements of operations, which was for technical services. We have the option to accept equity in payment of the amounts due from CIC
 in lieu of cash.
 
Ocean Minerals, LLC
We also provide services to
Ocean Minerals, LLC (“OML”), 
a
deep-sea
mineral exploration company in which we hold approximately 6.6%
of the equity interests (see Note 6 Investment in Unconsolidated Entities). We are providing these services to OML pursuant to the Contribution Agreement that provides for deep-sea mineral related services on a cost-plus profit basis and will be compensated for these services with equity in OML. See Note 6 Investment in Unconsolidated Entities for amounts we invoiced OML during the three months ended March 31, 2024 and 2023. 
Salvage Agreement
We hold a 40% interest in
 
proceeds under a salvage agreement from our legacy shipwreck business. A company controlled by Mr. Justh obtained the right to the remaining 60% of those proceeds from an unrelated third party in exchange for the obligation to
finance
legal expenses relating to the recovery of the proceeds, pursuant to a funding arrangement to which we are also a party. Odyssey and Mr. Justh’s controlled entity will be responsible for any remaining legal costs on a pro rata basis.
Oceanica and ExO
Odyssey and its subsidiary, Oceanica Marine Operations S.R.L. (“OMO”), hold three notes (the
“Oceanica-ExO
Notes”) issued and/or guaranteed by our majority-owned subsidiaries, ExO and Oceanica
,
in the aggregate principal amount of approximately $23 million, which was advanced to ExO and Oceanica to fund working capital, exploration and legal expenses. In addition, Odyssey provides management and administrative services to ExO and funds ExO’s ongoing administrative expenses pursuant to a services agreement in exchange for a recurring monthly fee and reimbursement of funded amounts. Certain of Odyssey’s former and current directors and officers are also directors or officers of ExO and Oceanica. The Oceanica-ExO Notes and outstanding receivables under the management and services agreement accrue interest at 18% per annum. As of March 31, 2024, the aggregate outstanding amount of the
Oceanica-ExO
Notes with accrued interest was approximately $109 million, and the aggregate receivable pursuant to the management and services agreement was approximately $856,000. As of December 31, 2023, the aggregate outstanding amount of the
Oceanica-ExO
Notes with accrued interest was approximately $105 million, and the aggregate receivable pursuant to the management and services agreement was approximately $675,000.
Stockholders
We have entered into financing transactions with certain
stockholders
that beneficially own more than five percent of our Common Stock. FourWorld Capital Management LLC (“FourWorld”) beneficially owns approximately 20% of our Common Stock. Part of that holding includes two of FourWorld’s funds, each of which individually beneficially owns more than five percent of our Common Stock and has participated in our financial transactions: each of FW Deep Value Opportunities Fund LLC and FourWorld Global Opportunities Fund, Ltd beneficially owns approximately 6% of our Common Stock. Funds managed by Two Seas Capital LP (“Two Seas”) own approximately 9.99% of our Common Stock after giving effect to the 9.99% beneficial ownership limitation applicable to warrants held by its funds. Greywolf Opportunities Master Fund II LP and its affiliates (“Greywolf”) beneficially own approximately 9% of our Common Stock.
On June 10, 2022, we completed the 2022 Equity Transaction, in which FourWorld participated. FourWorld funds purchased 292,628 shares of our Common Stock and 2022 Warrants to purchase 292,628 shares of our Common Stock in the 2022 Equity Transaction for a purchase price of $980,304. FourWorld exercised some of the 2022 Warrants on August 31, 2023, to purchase 1,000 shares of Common Stock at $3.35 per share. As of December 31, 2023, FourWorld held 2022 Warrants to purchase 291,628 shares of our Common Stock at an exercise price of $3.35 per share.
On March 6, 2023, we entered into the March 2023 Note Purchase Agreement, pursuant to which we issued the March 2023 Note and the March 2023 Warrants. FourWorld, Two Seas and Greywolf each purchased portions of the March 2023 Note and March 2023 Warrants. No principal amount was repaid during fiscal year 2023.
 
  •  
FourWorld purchased a portion of the March 2023 Note in the principal amount of $
1.08
 million and March 200Warrants to purchase
285,715
shares of our Common Stock on March 6, 2023, for an aggregate purchase price of $
1.08
 million. Interest at the rate of
11
% had accrued and was capitalized with respect to the March 2023 Note as of December 31, 2023, in the amount of $
31,866
for the note held by FourWorld. As of December 31, 2023, FourWorld held March 2023 Warrants to purchase
285,715
shares of our Common Stock.
 
  •  
Two Seas purchased a portion of the March 2023 Note in the principal amount of $
2,300,641
and March 2023 Warrants to purchase
608,635
shares of our Common Stock on March 6, 2023, for an aggregate purchase price of $
2,300,641
; and a portion of the March 2023 Note in the principal amount of $
449,359
and Warrants to purchase
118,878
shares of our Common Stock on September 22, 2023, for an aggregate purchase price of $
449,359
. Interest at the rate of
11
% had accrued and was capitalized with respect to the March 2023 Note as of December 31, 2023, in the amount of $
80,374
for the note held by Two Seas. As of December 31, 2023, Two Seas held March 2023 Warrants to purchase
608,635
shares of our Common Stock.
 
  •  
Greywolf purchased a portion of the March 2023 Note in the principal amount of $
7.0
 million and March 2023 Warrants to purchase
1,851,852
shares of our Common Stock for an aggregate purchase price of $
7.0
 million.
No
principal amount was repaid during fiscal year 2023. Interest at the rate of
11
% had accrued and was capitalized with respect to the March 2023 Note as of December 31, 2023, in the amount of $
206,539
for the note held by Greywolf. As of December 31, 2023, Greywolf held March 2023 Warrants to purchase
1,851,852
shares of our Common Stock, each at an exercise price of $
3.78
per share.
On December 1, 2023, we entered into the December 2023 Note Purchase Agreement, in which FourWorld, Two Seas and Greywolf participated. No principal amount was repaid during fiscal year 2023.
 
  •  
FourWorld purchased a December 2023 Note in the principal amount of $
500,000
and December 2023 Warrants to purchase
135,278
shares of our Common Stock for an aggregate purchase price of $
500,000
. Interest at the rate of
11
% had accrued and was capitalized with respect to the December 2023 Notes as of December 31, 2023, in the amount of $
4,671
for the note held by FourWorld. As of December 31, 2023, FourWorld held December 2023 Warrants to purchase
117,648
shares of our Common Stock at an exercise price of $
4.25
per share and December 2023 Warrants to purchase
17,630
shares of our Common Stock at an exercise price of $
7.09
per share.
 
  •  
Two Seas funds purchased a December 2023 Note in the principal amount of $
2.0
 million and December 2023 Warrants to purchase
541,109
shares of our Common Stock for an aggregate purchase price of $
2.0
 million. Interest at the rate of
11
% had accrued and was capitalized with respect to the December 2023 Notes as of December 31, 2023, in the amount of $
18,871
for the note held by Two Seas. As of December 31, 2023, Two Seas held December 2023 Warrants to purchase
470,589
shares of our Common Stock at an exercise price of $
4.25
per share and December 2023 Warrants to purchase
70,523
shares of our Common Stock at an exercise price of $
7.09
per share.
Greywolf purchased a December 2023 Note in the principal amount of $1.0 million and December 2023 Warrants to purchase 270,556 shares of our Common Stock for an aggregate purchase price of $1.0 million. Interest at the rate of 11% had accrued and was capitalized with respect to the December 2023 Notes as of December 31, 2023, in the amount Greywolf held December 2023 Warrants to purchase 235,295 shares of our Common Stock at an exercise price of $4.25 per share and December 2023 Warrants to purchase 35,261 shares of our Common Stock at an exercise price of $7.09 per share.