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Related Party Transactions
 3 Months Ended
Mar. 31, 2025
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 5 – RELATED PARTY TRANSACTIONS

 

CIC Limited

 

The Company provides services to and owns approximately 14.2% 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 11.9% 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 of disinterested directors 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 $0.1 million for the three months ended March 31, 2025 and 2024, respectively, which 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 in lieu of cash for payment of cash expenditures due from CIC. 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 provides 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.

 

During the three months ended March 31, 2025 and 2024, we invoiced OML for technical services a total of $22,500 and $69,898, respectively, recorded in Marine services in our condensed consolidated statements of operations.

 

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. 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 March 31, 2025 and December 31, 2024, the aggregate outstanding amount, including accrued interest, of the Oceanica-ExO Notes was approximately $130.5 million and $124.9 million, respectively, and the aggregate receivable pursuant to the management and services agreement was approximately $1.8 million and $1.5 million as of March 31, 2025 and December 31, 2024, respectively.

 

Certain Stockholders

 

We have entered into financing transactions with certain stockholders that beneficially own more than five percent of our outstanding Common Stock as of March 31, 2025:

•
FourWorld Capital Management LLC (“FourWorld”) beneficially owns approximately 5.1% 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.

 

2022 Equity Transaction

 

On June 10, 2022, we completed the 2022 Equity Transaction, pursuant to which we issued the 2022 Warrants. As of March 31, 2025, FourWorld and Two Seas held 2022 Warrants to purchase 205,628 shares of our Common Stock and 447,761 shares of our Common Stock, respectively, at an exercise price of $3.35 per share.

 

March 2023 Note Purchase Agreement

 

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 and Two Seas each purchased portions of the March 2023 Note and March 2023 Warrants. Principal and interest payments during the three months ended March 31, 2025 and 2024 as detailed below.

•
FourWorld:
o
Interest expense for the March 2023 Note held by FourWorld amounted to $28,250 and $32,394 for the three months ended March 31, 2025 and 2024. During the three months ended March 31, 2025, $28,098 of interest expense was capitalized to principal as paid-in-kind and none was paid in cash. During the three months ended March 31, 2024, $31,866 of interest expense was capitalized to principal as paid-in-kind and none was paid in cash. There were no cash principal payments made during the three months ended March 31, 2025 and 2024.
o
As of March 31, 2025, FourWorld held March 2023 Warrants to purchase 285,715 shares of our Common Stock at an exercise price of $1.10 per share.
•
Two Seas:
o
Interest expense for the March 2023 Note held by Two Seas amounted to $71,253 and $81,705 for the three months ended March 31, 2025 and 2024. During the three months ended March 31, 2025, $70,872 was capitalized to principal as paid-in-kind and none was paid in cash. During the three months ended March 31, 2024, $80,375 was capitalized to principal as paid-in-kind and none was paid in cash. There were no cash principal payments made during the three months ended March 31, 2025 and 2024.
o
As of March 31, 2025, Two Seas held March 2023 Warrants to purchase 727,514 shares of our Common Stock at an exercise price of $1.10 per share.

 

December 2023 Note Purchase Agreement

 

On December 1, 2023, we entered into the December 2023 Note Purchase Agreement, in which FourWorld and Two Seas participated. No principal was repaid and no cash interest was paid during the three months ended March 31, 2025 and 2024. 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:
o
Interest expense for the December 2023 Notes held by FourWorld amounted to $15,262 and $13,840 for the three months ended March 31, 2025 and 2024, which was accrued as of March 31, 2025. During the three months ended March 31, 2025 and 2024, $15,180 and $4,671, respectively, of interest expense was capitalized to principal as paid-in-kind and $0 and $0, respectively, was paid in cash.
o
As of March 31, 2025, FourWorld held December 2023 Warrants to purchase 117,648 shares and 17,631 shares of our Common Stock at an exercise price of $1.23 per share and $2.05 per share, respectively.
•
Two Seas:
o
Interest expense for the December 2023 Notes held by Two Seas amounted to $40,291 and $36,539 for the three months ended March 31, 2025 and 2024.
o
As of March 31, 2025, Two Seas held December 2023 Warrants to purchase 470,588 shares and 70,521 shares of our Common Stock at an exercise price of $1.23 per share and $2.05 per share, respectively.