Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer: |
☐ |
Accelerated filer: |
☐ | |||||
☐ (Do not check if a smaller Reporting company) |
Smaller reporting company: |
|||||||
Emerging growth company: |
Page No. |
||||||
Part I: |
||||||
Item 1. |
||||||
3 |
||||||
4 |
||||||
5 |
||||||
6 |
||||||
7 |
||||||
Item 2. |
15 |
|||||
Item 3. |
23 |
|||||
Item 4. |
23 |
|||||
Part II: |
||||||
Item 1. |
23 |
|||||
Item 1A. |
23 |
|||||
Item 2. |
23 |
|||||
Item 4. |
23 |
|||||
Item 5. |
23 |
|||||
Item 6. |
24 |
|||||
25 |
Unaudited March 31, 2022 |
December 31, 2021 |
|||||||
ASSETS |
||||||||
CURRENT ASSETS |
|
|
| |||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable and other, net |
||||||||
Other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
|
|
|
|
|||||
PROPERTY AND EQUIPMENT |
||||||||
Equipment and office fixtures |
||||||||
Right to use – operating lease, net |
||||||||
Accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total property and equipment |
||||||||
|
|
|
|
|||||
NON-CURRENT ASSETS |
||||||||
Investment in unconsolidated entity |
||||||||
Exploration license |
||||||||
Other non-current assets |
||||||||
|
|
|
|
|||||
Total non-current assets |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT) |
||||||||
CURRENT LIABILITIES |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued expenses |
||||||||
Operating lease obligation |
||||||||
Loans payable |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
|
|
|
|
|||||
LONG-TERM LIABILITIES |
||||||||
Loans payable |
||||||||
Operating lease obligation |
||||||||
|
|
|
|
|||||
Total long-term liabilities |
||||||||
|
|
|
|
|||||
Total liabilities |
||||||||
|
|
|
|
|||||
Commitments and contingencies (NOTE G) |
||||||||
STOCKHOLDERS’ EQUITY/(DEFICIT) |
||||||||
Preferred stock – $ |
||||||||
Common stock – $outstanding |
||||||||
Additional paid-in capital |
||||||||
Accumulated (deficit) |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity/(deficit) before non-controlling interest |
( |
) | ( |
) | ||||
Non-controlling interest |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity/(deficit) |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity/(deficit) |
$ | $ | ||||||
|
|
|
|
Three Months Ended |
||||||||
March 31, 2022 |
March 31, 2021 |
|||||||
REVENUE |
||||||||
Marine services |
$ | $ | ||||||
Operating and other |
||||||||
|
|
|
|
|||||
Total revenue |
||||||||
|
|
|
|
|||||
OPERATING EXPENSES |
||||||||
Marketing, general and administrative |
||||||||
Operations and research |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
INCOME (LOSS) FROM OPERATIONS |
( |
) | ( |
) | ||||
OTHER INCOME (EXPENSE) |
||||||||
Interest expense |
( |
) | ( |
) | ||||
Other |
( |
) | ||||||
|
|
|
|
|||||
Total other income (expense) |
( |
) | ( |
) | ||||
|
|
|
|
|||||
(LOSS) BEFORE INCOME TAXES |
( |
) | ( |
) | ||||
Income tax benefit (provision) |
— | |||||||
|
|
|
|
|||||
NET (LOSS) BEFORE NON-CONTROLLING INTEREST |
( |
) | ( |
) | ||||
Non-controlling interest |
||||||||
|
|
|
|
|||||
NET (LOSS) |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
NET (LOSS) PER SHARE |
||||||||
Basic and diluted (See NOTE B) |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Weighted average number of common shares outstanding |
||||||||
Basic |
||||||||
|
|
|
|
|||||
Diluted |
||||||||
|
|
|
|
Three Months Ended March 31, 2022 |
||||||||||||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Non-controlling Interest |
Total |
||||||||||||||||
December 31, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
||||||||||||||||||||
Net (loss) |
( |
) |
( |
) |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
March 31, 2022 |
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021 |
||||||||||||||||||||
Common Stock |
Paid-in Capital |
Accumulated Deficit |
Non-controlling Interest |
Total |
||||||||||||||||
December 31, 2020 |
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ | ( |
) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
||||||||||||||||||||
Common stock issued for converted convertible debt |
||||||||||||||||||||
Common stock issued for services |
||||||||||||||||||||
Sale of subsidiary equity |
||||||||||||||||||||
Net (loss) |
( |
) |
( |
) |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
March 31, 2021 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
||||||||
March 31 2022 |
March 31 2021 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net loss before non-controlling interest |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash (used) in operating activities: |
||||||||
Investment in unconsolidated entity |
( |
) | ( |
) | ||||
Depreciation and amortization |
||||||||
Financing fees amortization |
||||||||
Loan payable prepayment premium |
||||||||
Note payable interest accretion |
( |
) | ||||||
Right of use asset amortization |
||||||||
Share-based compensation |
||||||||
(Increase) decrease in: |
||||||||
Accounts receivable |
( |
) | ||||||
Other assets |
||||||||
Increase (decrease) in: |
||||||||
Accounts payable |
||||||||
Accrued expenses and other |
||||||||
NET CASH USED IN OPERATING ACTIVITIES |
( |
) | ( |
) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Purchase of property and equipment |
( |
) | ||||||
NET CASH USED IN INVESTING ACTIVITIES |
( |
) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Proceeds from issuance of loans payable |
||||||||
Payment of operating lease liability |
( |
) | ( |
) | ||||
Proceeds from sale of equity of subsidiary |
||||||||
Payment of debt obligation |
( |
) | ( |
) | ||||
Repurchase of stock-based awards withheld for payment of withholding tax requirements |
( |
) | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES |
||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
( |
) | ( |
) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | $ | ||||||
SUPPLEMENTARY INFORMATION: |
||||||||
Interest paid |
$ | $ | ||||||
Income taxes paid |
$ | $ | ||||||
NON-CASH INVESTING AND FINANCING TRANSACTIONS: |
||||||||
Director compensation settled with equity |
$ | $ | ||||||
Accrued interest settled with common stock |
$ | $ |
Three Months Ended |
||||||||
March 31, 2022 |
March 31, 2021 |
|||||||
Average market price during the period |
$ | $ | ||||||
In the money potential common shares from options excluded |
||||||||
In the money potential common shares from warrants excluded |
Three Months Ended |
||||||||
Per share exercise price |
March 31, 2022 |
March 31, 2021 |
||||||
Out of the money options excluded: |
||||||||
$ |
||||||||
$ |
||||||||
$ |
||||||||
Out-of-the-money |
||||||||
$ |
||||||||
Total excluded | ||||||||
Three Months Ended |
||||||||
March 31, 2022 |
March 31, 2021 |
|||||||
Excluded unvested restricted stock awards |
Three Months Ended |
||||||||
March 31, 2022 |
March 31, 2021 |
|||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Numerator, basic and diluted net loss available to stockholders |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Shares used in computation – basic: |
||||||||
Weighted average common shares outstanding |
||||||||
Shares used in computation – diluted: |
||||||||
Weighted average common shares outstanding |
||||||||
Net loss per share – basic and diluted |
$ | ( |
) | $ | ( |
) | ||
March 31, 2022 |
December 31, 2021 |
|||||||
Related party (see Note D) |
$ | $ | ||||||
Other |
||||||||
|
|
|
|
|||||
Total accounts receivable and other |
$ | $ | ||||||
|
|
|
|
Year ending December 31, |
Annual payment obligation |
|||
2022 |
$ | |
||
2023 |
||||
2024 |
||||
|
|
|||
$ | ||||
|
|
Year ending December 31, |
Annual payment obligation |
|||
2022 |
$ | |
||
2023 |
||||
2024 |
||||
|
|
|||
$ | ||||
|
|
Note payable |
Interest expense |
|||||||||||||||
March 31, 2022 |
December 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|||||||||||||
MINOSA 1 |
$ |
|
$ |
|
$ |
$ |
||||||||||
MINOSA 2 |
||||||||||||||||
Litigation financing |
||||||||||||||||
Emergency Injury Disaster Loan |
||||||||||||||||
Vendor note payable |
||||||||||||||||
Monaco |
||||||||||||||||
37North |
||||||||||||||||
$ |
$ |
• | No chemicals would be used in the dredging process or released into the sea. |
• | A specialized return down pipe that exceeds international best practices to manage the return of dredged sands close to the seabed, limiting plume or impact to the water column and marine ecosystem (including primary production). |
• | The seabed would be restored after dredging in such a way as to promote rapid regeneration of seabed organisms in dredged areas. |
• | Ecotoxicology tests demonstrated that the dredging and return of sediment to the seabed would not have toxic effects on organisms. |
• | Sound propagation studies concluded that noise levels generated during dredging would be similar to whale-watching vessels, merchant ships and fisherman’s ships that already regularly transit this area, proving the system is not a threat to marine mammals. |
• | Dredging limited to less than one square kilometre each year, which means the project would operate in only a tiny proportion of the concession area each year. |
• | Proven turtle protection measures were incorporated, even though the deposit and the dredging activity are much deeper and colder than where turtles feed and live, making material harm to the species highly remote. |
• | There will be no material impact on local fisheries as fishermen have historically avoided the water column directly above the deposit due to the naturally low occurrence of fish there. |
• | The project would not be visible from the shoreline and would not impact tourism or coastal activities. |
• | Precautionary mitigation measures were incorporated into the development plan in line with best-practice global operational standards. |
• | The technology proposed to recover the phosphate sands has been safely used in Mexican waters for over 20 years on more than 200 projects. |
• | Article 1102. National Treatment. |
• | Article 1105. Minimum Standard of Treatment; and |
• | Article 1110. Expropriation and compensation. |
• | MERITS: Testimony from independent environmental experts that the environmental impact of ExO’s phosphate project is minimal and readily mitigated by the mitigation measures proposed by ExO. Witnesses also testified that Mexico’s denial of environmental approval by the prior administration was politically motivated and not justified on environmental grounds, and that Mexico granted environmental permits to similar dredging projects in areas that are considered more environmentally sensitive than ExO’s project location. |
• | RESOURCE: An independent certified marine geologist testified as to the size and character of the resource. |
• | OPERATIONAL VIABILITY: Engineering experts testified that the project uses established dredging and processing technology, and the project’s anticipated CAPEX and OPEX was reasonable. |
• | VALUE: A phosphate market analyst testified that the project’s projected CAPEX and OPEX would make the project one of the lowest cost phosphate rock resources in the world, and damages experts testified the project would be commercially viable and profitable. |
2022 vs. 2021 |
||||||||||||||||
Increase/(Decrease) (Dollars in millions) |
2022 |
2021 |
$ |
% |
||||||||||||
Total revenues |
$ | 0.3 | $ | 0.3 | $ | 0.0 | 0 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Marketing, general and administrative |
1.9 | 1.3 | 0.6 | 48.5 | % | |||||||||||
Operations and research |
5.1 | 1.8 | 3.3 | 181.3 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 7.0 | $ | 3.1 | $ | 3.9 | 125.8 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (expense) |
$ | (3.4 | ) | $ | (2.3 | ) | $ | (1.1 | ) | 46.8 | % | |||||
|
|
|
|
|
|
|
|
|||||||||
Income tax benefit (provision) |
$ | 0.0 | $ | 0.0 | $ | 0.0 | 0 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-controlling interest |
$ | 1.9 | $ | 1.4 | $ | 0.5 | 32.6 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | (8.2 | ) | $ | (3.7 | ) | $ | (4.5 | ) | 121.2 | % | |||||
|
|
|
|
|
|
|
|
Three Months Ended |
||||||||
(In thousands) |
March 31, 2022 |
March 31, 2021 |
||||||
Summary of Cash Flows: |
||||||||
Net cash used in operating activities |
$ | (2,140 | ) | $ | (1,431 | ) | ||
Net cash used in investing activities |
(3 | ) | — | |||||
Net cash provided by financing activities |
1,974 | 503 | ||||||
|
|
|
|
|||||
Net decrease in cash and cash equivalents |
$ | (168 | ) | $ | (928 | ) | ||
Beginning cash and cash equivalents |
2,274 | 6,163 | ||||||
|
|
|
|
|||||
Ending cash and cash equivalents |
$ | 2,106 | $ | 5,235 | ||||
|
|
|
|
Note payable |
Interest expense |
|||||||||||||||
March 31, 2022 |
December 31, 2021 |
March 31, 2022 |
March 31, 2021 |
|||||||||||||
MINOSA 1 |
$ | 14,750,001 | $ | 14,750,001 | $ | 290,959 | $ | 290,959 | ||||||||
MINOSA 2 |
5,050,000 | 5,050,000 | 124,520 | 124,520 | ||||||||||||
Litigation financing |
19,334,009 | 18,323,097 | 2,412,348 | 1,505,032 | ||||||||||||
Emergency Injury Disaster Loan |
149,900 | 149,900 | 1,461 | — | ||||||||||||
Vendor note payable |
484,009 | 484,009 | 14,322 | 14,321 | ||||||||||||
Monaco |
2,500,000 | 2,500,000 | 111,000 | — | ||||||||||||
37North |
2,200,000 | — | 200,000 | — | ||||||||||||
|
|
|
|
|||||||||||||
$ | 44,467,919 | $ | 41,257,007 | |||||||||||||
|
|
|
|
ITEM 6. |
Exhibits |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith electronically) | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith electronically) | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (Filed herewith electronically) | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (Filed herewith electronically) | |
101.1 | Interactive Data File | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
ODYSSEY MARINE EXPLORATION, INC. | ||||
Date: May 16, 2022 | By: | /s/ Christopher E. Jones | ||
Christopher E. Jones, as Chief Financial Officer and Authorized Officer |