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Related Party Transactions | 6 Months Ended
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Jun. 30, 2024
Related Party Transactions [Abstract] |
Related Party Transactions | NOTE 5 – RELATED PARTY TRANSACTIONS CIC Limited The Company provides services to and owns approximately 15.2% of the equity interests in CIC Limited (“CIC”), a deep-sea mineral exploration company. The Company’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. The Company is 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. We invoiced CIC for technical services a total of $0.1 million and $0.2 million for the three months ended June 30, 2024 and 2023, respectively, and $0.3 million and $0.4 million for the six months ended June 30, 2024 and 2023, respectively, which amounts are recorded in Marine services in our condensed consolidated statements of operations. The Company is paid in equity for its services. In addition, the Company has the option to accept equity for payment of cash expenditures due from CIC in lieu of cash. The Company has not opted to accept equity from CIC in lieu of cash for its cash expenditures. Ocean Minerals, LLC The Company provides services to Ocean Minerals, LLC (“OML”), a deep-sea mineral exploration company in which we hold approximately 7.0% of the equity interests (see Note 6, Investment in Unconsolidated Entities). The Company is providing these services to OML pursuant to the Contribution Agreement (defined below) 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 the Company invoiced OML during the three and six months ended June 30, 2024 and 2023. Salvage Agreement The Company holds 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 the Company is also a party. Odyssey and Mr. Justh’s controlled entity will be responsible for any remaining legal costs on a pro rata basis. On May 3, 2024, the Company received a payment of approximately $9.4 million arising from its residual economic interest in one of the shipwrecks, which is recorded in Residual economic interest in shipwreck in our condensed consolidated statements of operations. The entity controlled by Mr. Justh also received a payment arising from the shipwreck. 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 $23.0 million, which was advanced to ExO and Oceanica to fund working capital, exploration and legal expenses. Approximately $11.4 million was advanced to ExO and Oceanica between 2012 and 2014, and approximately $7.6 million between 2015 and 2017; the balance has been advanced since 2017. 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. The Oceanica-ExO Notes and outstanding receivables under the management and services agreement accrue interest at 18% per annum. Certain of Odyssey’s former and current directors and officers are also directors or officers of ExO and Oceanica. As of June 30, 2024 and December 31, 2023, the aggregate outstanding amount, including accrued interest, of the Oceanica-ExO Notes was approximately $114.1 million and $105.0 million, respectively, and the aggregate receivable pursuant to the management and services agreement was approximately $1.1 million and $0.7 million as of June 30, 2024 and December 31, 2023, respectively. Certain 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 20.0% 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 as of July 31, 2024, and has participated in our financial transactions: each of FW Deep Value Opportunities Fund LLC and FourWorld Global Opportunities Fund, Ltd beneficially owns approximately 6.0% 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 as of July 31, 2024. Greywolf Distressed Opportunities Master Fund, L.P. and its affiliates (“Greywolf”) beneficially own approximately 9.2% of our Common Stock as of July 31, 2024. On June 10, 2022, we completed the 2022 Equity Transaction, in which FourWorld funds purchased 292,628 shares of our Common Stock and 2022 Warrants (as defined below) to purchase 292,628 shares of our Common Stock, Two Seas purchased 447,761 shares of our Common Stock and 2022 Warrants to purchase 447,761 shares of our Common Stock, and Greywolf purchased 940,298 shares of our Common Stock and 2022 Warrants to purchase 940,298 shares of our Common Stock. On August 31, 2023, FourWorld exercised 2022 Warrants to purchase 1,000 shares of Common Stock at $3.35 per share. As of June 30, 2024, FourWorld, Two Seas and Greywolf held 2022 Warrants to purchase 291,628 shares of our Common Stock, 447,761 shares of our Common Stock and 940,298 shares of our Common Stock, respectively, 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 was repaid during the six months ended June 30, 2024 and 2023. Interest payments during the six months ended June 30, 2024 are detailed below and there was no interest paid during the six months ended June 30, 2023. • FourWorld: Interest expense for the March 2023 Note held by FourWorld amounted to $33,282 and $65,676 for the three and six months ended June 30, 2024, of which $32,394 was capitalized to the principal on April 1, 2024 as paid-in-kind and $33,282 was paid in cash on June 29, 2024. As of June 30, 2024, FourWorld held March 2023 Warrants to purchase 285,715 shares of our Common Stock at an exercise price of $3.78 per share. • Two Seas: Interest expense for the March 2023 Note held by Two Seas amounted to $83,946 and $165,651 for the three and six months ended June 30, 2024, of which $81,705 was capitalized to the principal on April 1, 2024 as paid-in-kind and $83,946 was paid in cash on June 29, 2024. As of June 30, 2024, Two Seas held March 2023 Warrants to purchase 727,514 shares of our Common Stock at an exercise price of $3.78 per share. • Greywolf: Interest expense for the March 2023 Note held by Greywolf amounted to $215,717 and $425,675 for the three and six months ended June 30, 2024, of which $209,959 was capitalized to the principal on April 1, 2024 as paid-in-kind and $215,717 was paid in cash on June 29, 2024. As of June 30, 2024, Greywolf held March 2023 Warrants to purchase 1,851,852 shares of our Common Stock 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 was repaid and no cash interest was paid during the three and six months ended June 30, 2024 and 2023. Any accrued and unpaid interest is capitalized to the principal as paid-in-kind on a quarterly basis on the first day immediately following the close of the quarter. • FourWorld: Interest expense for the December 2023 Notes held by FourWorld amounted to $14,220 and $28,060 for the three and six months ended June 30, 2024, which was accrued as of June 30, 2024. As of June 30, 2024, FourWorld held December 2023 Warrants to purchase 117,648 shares and 17,631 shares of our Common Stock at an exercise price of $4.25 per share and $7.09 per share, respectively. • Two Seas: Interest expense for the December 2023 Notes held by Two Seas amounted to $56,880 and $112,242 for the three and six months ended June 30, 2024, which was accrued as of June 30, 2024. As of June 30, 2024, Two Seas held December 2023 Warrants to purchase 470,588 shares and 70,521 shares of our Common Stock at an exercise price of $4.25 per share and $7.09 per share, respectively. • Greywolf: Interest expense for the December 2023 Notes held by Greywolf amounted of $28,440 and $56,121 for the three and six months ended June 30, 2024, which was accrued as of June 30, 2024. As of June 30, 2024, Greywolf held December 2023 Warrants to purchase 235,295 and 35,261 shares of our Common Stock at an exercise price of $4.25 per share and $7.09 per share, respectively.

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