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Stockholders' Equity/(Deficit)
 6 Months Ended
Jun. 30, 2025
Stockholders' Equity Note [Abstract]  
Stockholders' Equity/(Deficit)

NOTE 14 – STOCKHOLDERS’ EQUITY/(DEFICIT)

 

Oceanica Equity Exchange Agreements

The Company and the Oceanica D&Os entered into the Oceanica Equity Exchange Agreements, whereby they exchanged equity interests in Oceanica for our Common Stock.

Refer to Note 5 – Related Party Transactions, for additional information.

Pursuant to the Oceanica Equity Exchange Agreements, the Compensation Quotas were exchanged for Odyssey common stock with a value as of the date of the Oceanica Equity Exchange Agreements of $1.12. Based upon a third-party valuation report of the underlying assets of Oceanica as of the exchange date, the fair value of Oceanica’s member interests was determined to be $0.017 per Compensation Quota, resulting in additional fair value to the Oceanica D&Os in the aggregate amount of additional fair value of $2,029,575 for the aggregate 1,911,666 Compensation Quotas exchanged by the Oceanica D&Os. The Company determined that the exchange of the Oceanica Compensation Quotas (as defined above) being exchanged for Odyssey common stock should be accounted for as stock-based compensation, because all Oceanica D&Os provided services to Odyssey’s subsidiaries in the past, and the additional value provided is considered compensation related to prior services provided by the individuals. The Company further determined that the Oceanica Equity Exchange Agreements should be accounted for as a modification on June 27, 2025, and the modification represents a compensatory transaction within the scope of ASC 718. The Company evaluated the modification and concluded it was a Type I modification (probable-to-probable) because the Oceanica Compensation Quota awards were probable to vest prior to the modification, as they were fully vested when issued. Post-modification, the vesting of Odyssey common stock is also probable because it is subject only to the passage of time. As a result, the Company will recognize the incremental value of $2,029,575 on June 27, 2025, the modification date.

 

Stock Purchase Agreement

On December 23, 2024, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued and sold an aggregate of 7,377,912 shares of Common Stock to certain accredited investors at a purchase price of $0.55 per share. The aggregate purchase price for the shares, before deduction of the Company’s expenses associated with the transaction, was approximately $4.1 million. The SPA further provides the investors with the right, but not the obligation, to purchase an additional 7,220,141 shares of Common Stock at a purchase price of $1.10 per share (the “Additional SPA Shares”) at a subsequent closing to be held on April 30, 2025, or such later date as may be agreed by the Company and the purchasers who purchased at least a majority of the initial shares under the SPA, provided that the subsequent closing date shall not be later than July 31, 2025.

On December 23, 2024, the Company recorded the written call option as well as a capital contribution from the investors under the SPA within APIC at a fair value of approximately $1.5 million. The written call option does not require subsequent remeasurement each reporting period. The capital contribution was recorded for the excess of proceeds received compared to the fair value of Common Stock and written call option.

During the second quarter of 2025, the Company entered into a series of amendments to the SPA, three of which extended the subsequent closing date and had no effect on any other terms of the SPA. The fourth amendment extended the subsequent closing date to July 31, 2025 for purchasers that exercised on or prior to June 30, 2025 at least twenty percent of the options to which they

were entitled under the SPA as of June 1, 2025. As a result, the written call option was considered modified and the Company determined the fair value of the remaining outstanding Additional SPA Shares as of June 30, 2025. Holders of the SPA options exercised their options to purchase an aggregate of 2,601,595 Additional SPA Shares in the second quarter of 2025 for a total purchase price of $2.9 million, and options to purchase 4,618,546 Additional SPA Shares remained outstanding. The written call option was valued at $1.0 million as of June 30, 2025 and recorded within additional paid-in capital. Subsequent to June 30, 2025, purchasers under the SPA exercised their right to purchase 4,373,893 Additional SPA Shares at an exercise price of $1.10 per share, for an aggregate purchase price of $4.8 million, and no options to purchase Additional SPA Shares remain outstanding as of the date of this report.

 

Share-Based Compensation

The Company recorded share-based compensation expense related to our options and restricted stock units of $45,742 and $0.1 million, for the three months ended June 30, 2025 and 2024, respectively, and $91,484 and $1.6 million for the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025 and 2024, the Company issued 225,500 shares to one consultant for services provided to the Company.

 

Restricted Stock Units (“RSU”)

On April 14, 2025, we granted an aggregate 36,404 RSUs to two directors, which RSUs vested immediately upon being granted. The estimated fair value of each RSU was calculated using the share price at the date of the grant. The following is a summary of the restricted stock awards activity during the six months ended June 30, 2025:

 

Number of
Shares

 

 

Weighted-Average
Grant Date
Fair Value

 

Unvested at December 31, 2024

 

—

 

 

$

—

 

Granted

 

36,404

 

 

$

0.40

 

Vested

 

(36,404

)

 

$

0.40

 

Cancelled

 

—

 

 

$

—

 

Unvested at June 30, 2025

 

—

 

 

$

—

 

 

Options

On March 27, 2025, we granted options to purchase an aggregate of 7,500 shares of Common Stock to one director, which options vested immediately upon being granted. The value of the stock options granted was determined using the Black-Scholes-Merton option-pricing model (“BSM”), which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the life of the option. Expected volatilities are based on the historical volatility of the Company’s stock as well as other companies operating similar businesses. The expected term (in years) is determined using historical data to estimate option exercise patterns. Forfeitures are recognized in compensation expense when they occur. The expected dividend yield is based on the annualized dividend rate over the vesting period. The risk-free interest rate is based on the rate for US Treasury bonds commensurate with the expected term of the granted option.

The Company used the following assumptions for the BSM to determine the fair value of the stock options granted during the six months ended June 30, 2025.

 



March 27, 2025

 

Risk free interest rate

 

4.09

%

Expected life (in years)

5

 

Expected volatility

 

119

%

Expected dividend yield

 

0

%

Grant-date fair value

0.36

 

 

Warrants

 

The following table sets forth a summary of changes in warrants outstanding from December 31, 2024 to June 30, 2025:

 

 

 

 

 

 

Number of

 

 

Weighted-Average

 

 

Warrants

 

 

Exercise Price

 

Balance at December 31, 2024

 

10,727,387

 

 

$

2.30

 

Issued

 

—

 

 

$

—

 

Exercised

 

(460,000

)

 

$

1.10

 

Cancellation/Expiration

 

—

 

 

$

—

 

Balance at June 30, 2025

 

10,267,387

 

 

$

2.36

 

 

Refer to Note 11 – Fair Value Measurements, for changes in fair value during the three and six months ended June 30, 2025 and 2024.

 

December 2023 Warrants

 

In conjunction with the Purchase Agreement on December 1, 2023, as described above, the Company issued December 2023 Notes in the aggregate amount of $3.75 million and related warrants on December 1, 2023, and December 2023 Notes in the aggregate amount of $2.25 million and related warrants on December 28, 2023. Under the terms of the first tranche of December 2023 Warrants, as amended, the holders had the right to purchase an aggregate of up to 1,411,765 shares of our Common Stock at an exercise price of $1.23 per share. Under the terms of the second tranche of December 2023 Warrants, as amended, the holders had the right to purchase an aggregate of up to 211,565 shares of our Common Stock at an exercise price of $2.05 per share. The December 2023 Warrants are exercisable at any time during the three years after issuance, ending on the close of business on December 1, 2026.

 

March 2023 Warrants

 

In conjunction with the Purchase Agreement on March 6, 2023, as described above, the Company issued the March 2023 Warrants to purchase up to 3,703,704 shares of our Common Stock. The March 2023 Warrants have an exercise price of $1.10 per share and are exercisable at any time during the three years after issuance, ending on the close of business on March 6, 2026.

 

2022 Warrants

 

On June 10, 2022, we sold an aggregate of 4,939,515 shares of our Common Stock and the 2022 Warrants to holders to purchase up to 4,939,515 shares of our Common Stock (“2022 Warrants”). The net proceeds received from this sale, after offering expenses of $1.8 million, were $14.7 million. The shares of Common Stock and warrants were sold in units, with each unit consisting of one share of Common Stock and one warrant to purchase one share of Common Stock at an exercise price of $3.35 (the “2022 Warrant Price”) per share of Common Stock. Each unit was sold at a negotiated price of $3.35 per unit. The 2022 Warrants are exercisable at any time beginning on December 10, 2022, and ending on the close of business on June 10, 2027.