What changed in this filing

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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-31 · 720 added, 1015 removed, 625 unchanged (74% of the section changed)

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Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information we are required to disclose in reports that we file with or furnish to the SEC is recorded, processed, summarized and reported within the time periods specified by the SEC.

An evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.

Based on that evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective to ensure that we are able to collect process and disclose the information we are required to disclose in the reports we file with the SEC within required time periods.

Internal Controls over Financial Reporting

Management’s report on our internal controls over financial reporting can be found in the financial statement section of this report.

There have been no significant changes in the Company’s internal controls over financial reporting as of December 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Disclosure controls are procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this report, are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

Disclosure controls are also designated to ensure that such information is accumulated and communicated to management including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgement in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and with the participation of our management, including our CEO and CFO, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Securities Exchange Act of 1934 Rule 13a-15(b) as of the end of the period covered by this report.

Based on that evaluation our CEO and CFO have concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes during the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information concerning Directors and Executive Officers is hereby incorporated by reference to the information under the headings “Election of Directors” and “Executive Officers and Directors of the Company” in the Company’s Proxy Statement (the “Proxy Statement”) for the Annual Meeting of Stockholders to be held on June 13, 2022.

Information concerning Directors and Executive Officers is hereby incorporated by reference to the information under the headings "Election of Directors" and "Executive Officers and Directors of the Company" in the Company’s Proxy Statement (the "Proxy Statement") for the Annual Meeting of Stockholders to be held on June 5, 2023.

The Company has adopted a Code of Ethics that applies to all of its employees, including the principal executive officer, the principal financial officer and the principal accounting officer.

The Code of Ethics and all committee charters are posted on the Company’s website (www.odysseymarine.com).

We will provide a copy of any of these documents to stockholders free of charge upon request to the Company.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

A portion of the information required by this Item pursuant to Item 403 of Regulation S-K

is hereby incorporated by reference to the information under the heading “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.

The information required pursuant to Item 201(d) of Regulation S-K

is hereby incorporated by reference to the information under the heading “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.

A portion of the information required by this Item pursuant to Item 403 of Regulation S-K is hereby incorporated by reference to the information under the heading "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement.

The information required pursuant to Item 201(d) of Regulation S-K is hereby incorporated by reference to the information under the heading "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is hereby incorporated by reference to the information under the heading “Independent Public Accounting Firm’s Fees” in the Proxy Statement.

The information required by this Item is hereby incorporated by reference to the information under the heading "Independent Public Accounting Firm’s Fees" in the Proxy Statement.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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ODYSSEY MARINE EXPLORATION, INC.

Management’s Annual Report on Internal Control over Financial Reporting

Report of Independent Registered Public Accounting Firm

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Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Changes in Stockholders’ Equity/(Deficit)

Consolidated Statements of Operations

Consolidated Statements of Changes in Stockholders’

Equity/(Deficit)

Consolidated Statements of Cash Flows

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Consolidated Financial Statement Schedules:

Schedule II – Valuation and Qualifying Accounts

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)

and 15d-15(f)

under the Exchange Act.

Schedule II –

Valuation and Qualifying Accounts

MA NAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)and 15d-15(f) under the Exchange Act.

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

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Also, projections of any evaluation of the internal control over financial reporting to future periods are subject to risk that the internal control may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

R EPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Odyssey Marine Exploration, Inc and Subsidiaries

Stockholders of Odyssey Marine Exploration, Inc.

and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Odyssey Marine Exploration, Inc and Subsidiaries (the Company) as of December 31, 2021, and 2020, and the related consolidated statements of income, changes stockholders’ equity, and cash flows for each of the years in the three-year periods ended December 31, 2021, 2020 and 2019 and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year periods ended December 31, 2021, 2020 and 2019, in conformity with accounting principles generally accepted in the United States of America.

Consideration of the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note O to the consolidated financial statements, the Company has incurred significant losses and they may be unsuccessful in raising the necessary capital to fund operations and capital expenditures.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s evaluation of the events and conditions and management’s plans regarding those matters are also described in Note O.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have audited the accompanying consolidated balance sheets of Odyssey Marine Exploration, Inc.

and Subsidiaries (the "Company") as of December 31, 2022 and 2021 and the related consolidated statements of operations, changes in stockholders’

equity, and cash flows for each of the years in the three-year periods ended December 31, 2022, 2021, and 2020, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021 and the results of its operations and its cash flows for each of the years in the three-year periods ended December 31, 2022, 2021, and 2020 in conformity with accounting principles generally accepted in the United States of America.

Consideration of the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 16 to the financial statements, the Company has incurred significant losses and may be unsuccessful in raising the necessary capital to fund operations and capital expenditures.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s evaluation of the events and conditions and its plans regarding those matters are also described in Note 16.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our opinion is not modified with respect to that matter.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of Exploration License

As discussed in Notes A, and F to the consolidated financial statements, the Company recorded an indefinite life intangible exploration license for approximately $1.8 million on the consolidated balance sheets at December 31, 2021 and 2020.

As discussed in Note 2 to the financial statements, the Company recorded an indefinite life intangible exploration license for approximately $1.8 million on the consolidated balance sheets at December 31, 2022 and 2021.

The Company has determined that the exploration license has an indefinite useful life.

This determination is reviewed annually by

management, as well as an annual review for impairment.

This determination is reviewed annually by management, as well as an annual review

for impairment.

We identified the assessment of the useful life and potential impairment of the exploration license as a critical audit matter due to the assessment involving judgment in determining whether the rights to the license have an indefinite life, and judgment in determining if any triggering events have occurred that would cause the exploration license to be impaired.

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The economic factors considered included whether there were any legal, regulatory, or contractual provisions that would limit the useful life of the license.

We made inquiries with certain management of the Company to gain this understanding and reviewed the Company’s ability to renew the license.

We made inquiries with certain management of the Company to gain this understanding, and reviewed the Company’s ability to renew the license.

We determined that the most recent license renewal had been filed and approved.

Performed procedures to determine if any events occurred that could impede the Company’s ability to renew the license and trigger an impairment consideration.

We performed procedures to determine if any events occurred that could impede the Company’s ability to renew the license, and trigger an impairment consideration.

Evaluation of Litigation Financing with Detachable Warrants

As discussed in Note H to the consolidated financial statements, the Company has certain litigation financing with detachable warrants that is included in “loans payable” on the consolidated balance sheets at December 31, 2021 and 2020, respectively.

As discussed in Note 10 to the financial statements, the Company has certain litigation financing with detachable warrants that is included in "loans payable" on the consolidated balance sheets at December 31, 2022 and 2021.

We identified the litigation financing as a critical audit matter.

The terms of the financing agreement were complicated and involved numerous amendments, significant non-cash

financing, issuance of warrants, and debt issuance costs.

The terms of the financing agreement required significant audit effort in order to fully understand the terms of all the agreements as disclosed in Note H.

The terms of the financing agreement were complicated and involved numerous amendments, significant non-cash financing, issuance of warrants, and debt issuance costs.

The terms of the financing agreement required significant audit effort in order to fully understand the terms of all the agreements as disclosed in Note 10.

The primary procedures we performed to address this critical audit matter included the following:

We reviewed all the amended agreements.

We confirmed the face amount and the terms of the debt based on the various phases as disclosed in Note H to the consolidated financial statements.

We confirmed the face amount and the terms of the debt based on the various phases as disclosed in Note 10 to the financial statements.

We recalculated the fair value of the warrants issued in 2020.

Termination and Settlement Agreement

As discussed in Note H to the consolidated financial statements, the Company entered into a Termination and Settlement Agreement (the “Agreement”) with a lender, whereby the Company issued common stock and paid cash to the lender, and the lender agreed to forgive all outstanding notes payable and related accrued interest for this consideration.

The Company paid $500,000 in cash and agreed to pay an additional $2.5 million.

The agreement gave the lender the option to receive additional shares of common stock in-lieu

of the $2.5 million cash payment.

The Company recorded in the consolidated statements of income, under the caption “Gain (loss) on debt settlement, net”, a gain of approximately $5.2 million.

We identified the accounting of the conversion option and the gain on debt settlement as described in Note H to the consolidated financial statements, as a critical audit matter.

The interpretation of the accounting as it relates to the conversion option is complex.

Investment in Unconsolidated Entity

As discussed in Notes 6 and 9 to the financial statements, the Company has a cost investment in an entity that is a related party.

We identified the cost investment as a critical audit matter.

The Company entered into multiple agreements with the related party that required review of the underlying agreements to determine if the Company should consolidate the operations of the entity.

Additionally, the cost investment was reviewed for impairment based on a number of qualitative factors.

The audit procedures required significant judgement, as well as an understanding of the facts and circumstances to address the proper accounting for the investment.

The primary procedures we performed to address this critical audit matter included the following:

We obtained and reviewed the terms of the Agreement and agreed the terms to the calculation of the gain on the debt settlement.

We confirmed the principal amount of the debt forgiven, and recalculated the accrued interest forgiven.

We reviewed the accounting of the conversion option based on the terms in the agreement and determined the conversion option should be classified as equity as a beneficial conversion feature.

We have served as the Company’s auditor since 2020

We obtained and reviewed the terms of the Agreements.

We confirmed certain balances owed by the related party to the Company, as well as certain equity units earned by the Company.

We reviewed the status of the renewal process and the current status of the license that supports the cost investment, that included verification of the license renewal from an independent website.

We discussed with management and the board, the status of the entity’s operations to determine potential triggering events could potentially indicate impairment of the cost investment.

We have served as the Company’s auditors since 2020.

/s/ Warren Averett, LLC

PCAOB ID # 2226

Tampa, Florida

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AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

C ONSOLIDATED BALANCE SHEETS

December 31, 2022

December 31, 2021

CURRENT ASSETS

Cash and cash equivalents

Accounts receivable and other, net

Accounts receivable and other related party, net

Short-term notes receivable related party, net

Other current assets

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Equipment and office fixtures

Right to use – operating lease, net

Right to use –

operating lease, net

Accumulated depreciation

Total property and equipment

NON-CURRENT ASSETS

Investment in unconsolidated entity

Exploration license

Other non-current

Total non-current

LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)

Other non-current assets

Total non-current assets

LIABILITIES AND STOCKHOLDERS’

CURRENT LIABILITIES

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Operating lease obligation

Deferred income and revenue participation rights

Total long-term liabilities

Total liabilities

Commitments and contingencies (NOTE O)

STOCKHOLDERS’ EQUITY/(DEFICIT)

Commitments and contingencies (NOTE 15)

STOCKHOLDERS’

Preferred stock - $ .0001 par value;

24,984,166 shares authorized;

no ne outstanding

Common stock – $ .0001 par value;

none outstanding

Common stock –

$ .0001 par value;

75,000,000 shares authorized;

14,309,315 and 12,591,084 issued and outstanding

Additional paid-in

19,540,310 and

14,309,315 issued and outstanding

Additional paid-in capital

Accumulated (deficit)

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( 275,090,857

Total stockholders’ equity/(deficit) before non-controlling

Non-controlling

Total stockholders’ equity/(deficit)

Total liabilities and stockholders’ equity/(deficit)

Total stockholders’

(deficit) before non-controlling interest

Non-controlling interest

Total stockholders’

Total liabilities and stockholders’

The accompanying notes are an integral part of these consolidated financial statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

C ONSOLIDATED STATEMENTS OF OPERATIONS

Marine services

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OPERATING EXPENSES

Operations and research

Marketing, general and administrative

Operations and research

Total operating expenses

LOSS FROM OPERATIONS

OTHER INCOME OR (EXPENSE)

INCOME (LOSS) FROM OPERATIONS

OTHER INCOME (EXPENSE)

Interest income

Interest expense

Gain (loss) on Cuota Appreciation Rights extinguishment

Gain (loss) on debt extinguishment

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Change in derivative liabilities fair value

Total other income or (expense)

Total other income (expense)

(LOSS) BEFORE INCOME TAXES

Income tax benefit (provision)

NET (LOSS) BEFORE NON-CONTROLLING

Non-controlling

LOSS PER SHARE

Basic and diluted

NET (LOSS) BEFORE NON-CONTROLLING INTEREST

Non-controlling interest

NET (LOSS) PER SHARE

Basic and diluted (See NOTE 2)

Weighted average number of common shares outstanding

Basic and diluted

The accompanying notes are an integral part of these consolidated financial statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY / (DEFICIT)

Preferred Stock – Shares

At beginning of year

Preferred stock converted to common

At end of year

Common Stock – Shares

At beginning of year

Common stock issued for cash

Common stock issued for conversion and settlement of convertible debt and accounts payable

Common stock issued to settle outstanding indebtedness

Common stock issued for asset acquisition

Common stock issued for exercise of warrant

Common stock issued for services

At end of year

C ONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

EQUITY / (DEFICIT)

Preferred Stock –

Common Stock –

Preferred Stock

At beginning of year

Preferred stock converted to common

At end of year

At beginning of year

Additional Paid-in Capital

Accumulated Deficit

Non-controlling Interest

$ 221,027,057

$( 250,322,306 )

$( 24,003,114 )

$( 53,297,415 )

Common stock issued for cash

Common stock issued for conversion and settlement of convertible debt and accounts payable

Common stock issued to settle outstanding indebtedness

Common stock issued for asset acquisition

Common stock issued for exercise of warrant

Common stock issued for services

At end of year

Additional Paid-in

At beginning of year

Share-based compensation

Fair value of warrants attached convertible debt

Debt modification

Subsidiary equity issued for cash

( 14,812,156 )

( 6,280,313 )

( 21,092,469 )

$ 237,505,357

$( 265,134,462 )

$( 30,283,427 )

$( 57,911,273 )

Common stock issued for conversion and settlement of convertible debt and accounts payable

Common stock issued to settle outstanding indebtedness

Common stock issued for services

Beneficial conversion feature on convertible obligation

Share-based compensation

Fair value of warrants attached convertible debt

Asset acquisition

Debt modification

Common stock issued for cash, net

Subsidiary equity issued for cash

At end of year

Accumulated Deficit

At beginning of year

( 9,956,395 )

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( 16,127,780 )

At end of year

$ 249,055,600

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$( 36,454,812 )

Non-controlling

At beginning of year

Asset acquisition

At end of year

Total stockholders’ equity/(deficit)

$( 62,488,638 )

Common stock issued for cash

Share-based compensation

Fair value of warrants attached convertible debt

( 23,140,750 )

( 7,742,572 )

( 30,883,322 )

$ 265,882,279

$( 298,231,607 )

$( 44,197,384 )

$( 76,544,758 )

The accompanying notes are an integral part of these consolidated financial statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

C ONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31, 2022

Year ended December 31, 2021

Year ended December 31, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) before non-controlling

Net loss before non-controlling interest

$( 30,883,322 )

$( 16,127,780 )

$( 21,092,469 )

Adjustments to reconcile net loss to net cash used in operating activities:

Investment in unconsolidated entity

( 1,150,767 )

Depreciation and amortization

Financing fees amortization

Amortization of loan prepayment premium

Note payable interest accretion

Accrued non-cash

interest related to convertible debt

Note receivable interest accretion

Right of use asset amortization

Share-based compensation

Depreciation and amortization

Gain on debt settlement, net

( 5,212,902 )

Deferred revenue

( 3,818,750 )

Accrued non-cash interest related to convertible debt

(Gain) loss on debt extinguishment

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Beneficial conversion feature on convertible debt, interest expense

Director fees settled with equity instruments

Change in derivatives liabilities fair value

Debt modification inducement

Right of use asset amortization

fees amortization

Investment in unconsolidated entity

(Gain) on debt settlement, net

Deferred revenue

Payment of operating lease liability

(Increase) decrease in:

Accounts receivable

Increase (decrease) in:

Accrued interest receivable

Accounts payable

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NET CASH USED IN OPERATING ACTIVITIES

( 9,253,809 )

( 5,425,056 )

( 9,182,205 )

CASH FLOWS FROM INVESTING ACTIVITIES:

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Purchase of property and equipment

NET CASH PROVIDED BY INVESTING ACTIVITIES

( 1,346,424 )

Payment for loan disbursement

( 1,000,000 )

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

( 2,346,424 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of loans payable

Debt termination fee

Proceeds from sale of common stock

Offering costs paid on sale of common stock

Proceeds from sale of equity of subsidiary

Payment of operating lease liability

Repayment of loan and debt obligations

Payment of debt obligation

( 5,546,736 )

Repurchase of stock-based awards withheld for payment of withholding tax requirements

Offering cost paid on sale of common stock

( 1,810,800 )

Proceeds from sale of common stock

Debt termination fee

NET CASH PROVIDED BY FINANCING ACTIVITIES

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS AT END OF YEAR

NET DECREASE IN CASH

( 3,888,454 )

CASH AT BEGINNING OF YEAR

CASH AT END OF YEAR

ODYSSEY MARINE EXPLORATION, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued

Year ended December 31, 2022

Year ended December 31, 2021

Year ended December 31, 2020

SUPPLEMENTARY INFORMATION:

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Income taxes paid

Director fees paid with equity

NON-CASH INVESTING AND FINANCING TRANSACTIONS:

Director compensation settled with equity

Accrued expenses converted to equity

Accounts payable settled with equity

Gain on debt forgiveness

INVESTING AND FINANCING TRANSACTIONS:

During the quarter ended September 30, 2019, we entered into a new five-year operating lease for our headquarters which resulted in a right-of-use asset and corresponding operating lease liability of

$ 793,036 , see NOTE O.

During the quarter ended September 30, 2019, we acquired a 79.9 % equity interest in Bismarck Mining Corporation (PNG) LTD (Bismarck) in exchange for 249,584 shares ($ 1,407,653 ) of our common stock.

During the quarter ended December 31, 2019, we received $ 224,916 in non-cash

financing pertaining to our litigation financing as described in Note H:

Note 9 – Litigation financing.

The funder settled a portion of the Company’s litigation payables directly with the vendor.

During the year ended December 31,

2020, we received $ 6,079,702 in non-cash financing

pertaining to our litigation financing as described in Note H:

Note 9 – Litigation financing.

The funder settled a portion of the Company’s litigation payables directly with the vendor.

Related to this financing, we recorded a debt discount of $ 1,063,811 and a corresponding increase to additional paid in capital for the fair value of certain warrants that were issued to the funder.

We also incurred $ 400,000 of funder financed debt fees with this financing.

Capital expenditures financed

Capital expenditures included in accounts payable

Conversion of accounts receivable to note receivable

Non-Cash Disclosure:

During the years ended December 31, 2022, 2021 and 2020, we received 5,381,588 , $ 5,603,831 and $ 6,079,702 , respectively, in non-cash financing associated with our litigation financing as described in Note 10 Loans Payable - Litigation Financing.

The funder paid this amount directly to vendors used in our North American Free Trade Agreement ("NAFTA") litigation support.

During the year ended December 31, 2020 , we also recorded a debt discount of $ 1,063,811 and a corresponding increase to additional paid in capital for the fair value of certain warrants that were issued to the funder.

We also incurred $ 400,000 of funder financed debt fees with that financing.

On March 30, 2021, Epsilon Acquisitions LLC converted indebtedness of $ 1,448,697 at an exercise price of $ 3.52 per share into 411,562 shares of our common stock.

On July 12, 2021, certain creditors converted $ 1,325,582 of our convertible indebtedness held by them into 283,850 shares of our common stock at a conversion price of $ 4.67 per share.

On October 14, 2021, we entered into a Termination and Settlement Agreement with a lender, whereby we issued $ 6,500,000 of our common stock, paid $ 500,000 in cash and agreed to pay $ 2,500,000 , which is included in loans payable short-term.

In return, the lender forgave $ 8,574,366 in principal debt, $ 5,905,993 in accrued interest and $ 232,543 in accounts payable, see Note 10 Loans Payable - Monaco for further detail.

During the year ended December 31, 2020, a lender converted $ 2,205,804 of convertible debt into 329,498 shares of our common stock.

The same lender converted $ 243,480 of accounts payable into 50,725 shares of common stock.

During the year ended December 31, 2021, we received $ 5,603,831 in non-cash

financing associated with our litigation financing as described in Note H

Note 9 – Litigation financing.

The funder paid this amount directly to vendors used in our NAFTA litigation support.

On March 30, 2021, Epsilon Acquisitions LLC converted $ 1,000,000 of its convertible note payable and

$ 448,697 of accrued interest at a conversion price of

per share into

411,562 shares of our common stock.

On July 12, 2021, certain creditors converted $ 1,050,000 of their convertible note payable and $ 275,582 of accrued interest at a conversion price of

$ 4.67 per share

into 283,850 shares of our common stock .

In return, the lender forgave $ 8,574,366 in principal debt, $ 5,905,993 in accrued interest and $ 232,543 in accounts payable, see NOTE H (Note 13) for further detail.

The accompanying notes are an integral part of these financial statements.

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AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE A – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

N OTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 –

BASIS OF PRESENTATION

Odyssey Marine Exploration, Inc.

and subsidiaries (the "Company," "Odyssey," "us," "we" or "our") is engaged in deep-ocean exploration.

Our innovative techniques are currently applied to mineral exploration, shipwreck cargo recovery, and other marine survey and exploration charter services.

Our innovative techniques are currently applied to mineral exploration and other marine survey and exploration charter services.

Our corporate headquarters are located in Tampa, Florida.

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This summary of significant accounting policies of the Company is presented to assist in understanding our financial statements.

The financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity and have prepared them in accordance with our customary accounting practices.

Recent Accounting Pronouncements

Accounting standards not yet adopted

In August 2020, the FASB issued Accounting Standards Update (ASU) No.

Debt-Debt with Conversion and Other Options (Subtopic 470-20)

and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40).

Accounting standards adopted

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40).

The amendments in this Update are effective for public business entities that meet the definition of a Securities and Exchange Commission ("SEC") filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

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The Board specified that an entity should adopt the guidance as of the beginning of its annual fiscal year.

The amendments in the above Update affect entities that issue convertible instruments and/or contracts in an entity’s own equity.

For convertible instruments, the instruments primarily affected are those issued with beneficial conversion features or cash conversion features because the accounting models for those specific features are removed.

However, all entities that issue convertible instruments are affected by the amendments to the disclosure requirements in this Update.

For contracts in an entity’s own equity, the contracts primarily affected are freestanding instruments and embedded features that are accounted for as derivatives under the current guidance because of failure to meet the settlement conditions of the derivatives scope exception related to certain requirements of the settlement assessment.

The Board simplified the settlement assessment by removing the requirements (1) to consider whether the contract would be settled in registered shares, (2) to consider whether collateral is required to be posted, and (3) to assess shareholder rights.

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We have adopted this ASU as of January 1, 2022.

Accounting standards adopted

On October 31, 2018, the SEC adopted a final rule (“New Final Rule”) that will replace SEC Industry Guide 7 with new disclosure requirements that are more closely aligned with current industry and global regulatory practices and standards, including NI 43-101.

Companies must comply with the New Final Rule for the company’s first fiscal year beginning on or after January 1, 2021.

On October 31, 2018, the SEC adopted a final rule ("New Final Rule") that will replace SEC Industry Guide 7 with new disclosure requirements that are more closely aligned with current industry and global regulatory practices and standards.

Companies must comply with the New Final Rule for the company’s first fiscal year beginning on or after January 1, 2021.

We adopted this New Final Rule on January 1, 2021.

Other recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect, if any, on the Company’s financial statements.

NOTE 2 –

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, both domestic and international.

Equity investments in which we exercise significant influence but do not control

and of which we are not the primary beneficiary are accounted for using the equity method.

Equity investments in which we exercise significant influence but do not control and of which we are not the primary beneficiary are accounted for using the equity method.

All significant inter-company and intra-company transactions and balances have been eliminated.

The results of operations attributable to the non-controlling

interest are presented within equity and net income and are shown separately from the Company’s equity and net income attributable to the Company.

Some of the existing inter-company balances, which are eliminated upon consolidation, include features allowing the liability to be converted into equity of a subsidiary, which if exercised, could increase the direct or indirect interest of the Company in the non-wholly

owned subsidiaries.

The results of operations attributable to the non-controlling interest are presented within

equity and net income and are shown separately from the Company’s equity and net income attributable to the Company.

Use of Estimates

Management use d

estimates and assumptions in preparing these consolidated financial statements in accordance with U.S.

Management used estimates and assumptions in preparing these consolidated financial statements in accordance with U.S.

Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.

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Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, the Company performs the following five steps:

To determine revenue recognition for arrangements that the Company determines are within the scope of Accounting Standards Codification ("ASC") Topic 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

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Exploration License

The Company follows the guidance pursuant to ASU 350, “ Intangibles-Goodwill and Other

” in accounting for its Exploration License (see NOTE F).

The Company follows the guidance pursuant to ASU 350, " Intangibles-Goodwill and Other " in accounting for its Exploration License.

Management determined the rights to use the license to have an indefinite life.

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The exploration license is not dependent on another asset or group of assets that could potentially limit the useful life of the exploration license.

In the future, the recoverability of the license will be tested whenever circumstances indicate that its carrying amount may not be recoverable per the guidance of the Accounting Standards Codification (“ASC”) for topic 360 for Property, Plant and Equipment .

In the future, the recoverability of the license will be tested whenever

circumstances indicate that its carrying amount may not be recoverable per the guidance of ASC 360 Property, Plant and Equipment.

We did no t have any impairments for the years ended December 31, 2022, 2021 or 2020 .

Long-Lived Assets

Our policy is to recognize impairment losses relating to long-lived assets in accordance with the ASC 360 Property, Plant and Equipment.

Decisions are based on several factors, including, but not limited to, management’s plans for future operations, recent operating results and projected cash flows.

Impairment losses are included in depreciation at the time of impairment.

We did not have any impairments in 2021, 2020 or 2019.

We did not have any impairments in for the years ended December 31, 2022, 2021 or 2020 .

Property and Equipment and Depreciation

Property and equipment is stated at historical cost.

Depreciation is calculated using the straight-line method at rates based on the assets’ estimated useful lives which are normally between three and thirty years .

Depreciation is calculated using the straight-line method at rates based on the assets’

estimated useful lives which are normally between three and thirty years .

Leasehold improvements are amortized over their estimated useful lives or lease term, if shorter.

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Basic earnings per share ("EPS") is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period.

In periods when the Company has income, the Company would calculate basic earnings per share using the two-class

method, if required, pursuant to ASC 260 Earnings Per Share.

The two-class

method was required effective with the issuance of certain senior convertible notes in the past because these notes qualified as a participating security, giving the holder the right to receive dividends should dividends be declared on common stock.

Under the two-class

method, earnings for a period are allocated on a pro rata basis to the common stockholders and to the holders of convertible notes based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion.

The Company does not use the two-class

method in periods when it generates a loss because the holder of the convertible notes does not participate in losses.

Currently, we do not have any outstanding convertible notes that qualify as a participating security.

Diluted EPS reflects the potential dilution that would occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings.

We use the treasury stock method to compute potential common shares from stock options and warrants and the if-converted

method to compute potential common shares from preferred stock, convertible notes or other convertible securities.

For diluted earnings per share, the Company uses the more dilutive of the if-converted

method or two-class

We use the if-converted method to compute potential common shares from stock options, restricted stock units, warrants, preferred stock, convertible notes or other convertible securities.

When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted EPS calculation.

At December 31, 2022, 2021 and 2020 the weighted average common shares outstanding were 17,310,915 , 13,296,687 and 10,538,114 , respectively.

For the periods ending December 31, 2021, 2020 and 2019 in which net losses occurred, all potential common shares were excluded from Diluted EPS because the effect of including such shares would be anti-dilutive.

The potential common shares, in the table following, represent potential common shares calculated using the treasury stock method from outstanding options and warrants that were excluded from the calculation of Diluted EPS:

For the years ended December 31, 2022, 2021 and 2020 in which net losses occurred, all potential common shares were excluded from Diluted EPS because the effect of including such shares would be anti-dilutive.

The potential common shares in the following table represents potential common shares calculated using the as if-converted method from outstanding options, stock awards and warrants that were excluded from the calculation of diluted EPS:

Average market price during the period

In the money potential common shares from options excluded

In the money potential common shares from options

In the money potential common shares from warrants excluded

Potential common shares from out-of-the-money

options and warrants were also excluded from the computation of diluted earnings per share because calculation of the associated potential common shares has an anti-dilutive effect.

The following table lists options and warrants that were excluded from diluted EPS.

exercise price

Potential common shares from out of the money options and warrants were also excluded from the computation of diluted EPS because calculation of the associated potential common shares has an anti-dilutive effect on EPS.

The following table lists options and warrants that were excluded from diluted EPS.

Per share exercise price

Out of the money options excluded:

Out-of-the-money

warrants excluded:

Out-of-the-money warrants excluded:

Total excluded

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Numerator, basic and diluted net loss available to stockholders

Shares used in computation – basic:

Shares used in computation –

Weighted average common shares outstanding

Shares used in computation – diluted:

Shares used in computation –

Weighted average common shares outstanding

Net loss per share – basic and diluted

Net loss per share –

basic and diluted

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

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Stock-based Compensation

Our stock-based compensation is recorded in accordance with the guidance in the ASC topic for Stock-Based Compensation

(See NOTE L).

Our stock-based compensation is recorded in accordance with the guidance in the ASC topic for Stock-Based Compensation (see Note 13 Stockholders' Equity/(Deficit) ).

Fair Value of Financial Instruments

instruments on potentially unfavorable terms with the second entity, and (ii) conveys to that second entity a contractual right (a) to receive cash or another financial instrument from the first entity, or (b) to exchange other financial instruments on potentially favorable terms with the first entity.

Accordingly, our financial instruments consist of cash and cash equivalents,

accounts receivable, accounts payable, accrued liabilities, derivative financial instruments and mortgage and loans payable.

We carry cash and cash equivalents, accounts payable and accrued liabilities, and mortgage and loans payable at the approximate fair market value, and, accordingly, these estimates are not necessarily indicative of the amounts that we could realize in a current market exchange.

Financial instruments consist of cash, evidence of ownership in an entity, and contracts that both (i) impose on one entity a contractual obligation to deliver cash or another financial instrument to a second entity, or to exchange other financial instruments on potentially unfavorable terms with the second entity, and (ii) conveys to that second entity a contractual right (a) to receive cash or another financial instrument from the first entity, or (b) to exchange other financial instruments on potentially favorable terms with the first entity.

Accordingly, our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative financial instruments and mortgage and loans payable.

We carry cash and cash equivalents, accounts payable and accrued liabilities, and mortgage and loans payable at the approximate fair market value, and, accordingly, these estimates are not

necessarily indicative of the amounts that we could realize in a current market exchange.

We carry derivative financial instruments at fair value as is required under current accounting standards.

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We generally do not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks.

However, we have entered into certain other financial instruments and contracts with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash

settled by the counterparty.

As required by ASC 815 – Derivatives and Hedging

, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements with changes in fair value reflected in our income.

As required by ASC 815 –

Derivatives and Hedging , these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements with changes in fair value reflected in our income.

We adopted ASC Topic 820 for certain financial instruments measured as fair value on a recurring basis.

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Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities.

Level 2 inputs also include non-binding

market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.

Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions.

Unobservable inputs to the valuation methodology are significant to the measurement of the fair value of assets or liabilities.

Level 3 inputs also include non-binding

market consensus prices or non-binding

broker quotes that we were unable to corroborate with observable market data.

Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that we were unable to corroborate with observable market data.

At December 31, 2022 and 2021 , the Company did no t have any financial instruments measured on a recurring basis.

Subsequent Events

We have evaluated subsequent events for recognition or disclosure through the date this Form 10-K

is filed with the Securities and Exchange Commission.

NOTE B – CONCENTRATION OF CREDIT RISK

have any outstanding loans that bear variable interest rates thus we do not have any corresponding interest rate risk.

NOTE C – ACCOUNTS RECEIVABLE AND OTHER, NET

NOTE 3 –

CONCENTRATION OF CREDIT RISK

We do no t have any outstanding loans that bear variable interest rates thus we do not have any corresponding interest rate risk.

At times, the Company's cash balance may exceed federally insured limits.

The Company has not and does not expect to incur any losses with respect to these balances.

NOTE 4 –

ACCOUNTS RECEIVABLE AND OTHER RELATED PARTY, NET

Our accounts receivable consisted of the following:

Related party

Related party (see NOTE 6)

Accounts receivable, net

During the quarter ended September 30, 2018, we began providing services for a deep-sea mineral exploration company, CIC Limited (“CIC”), in which our past Chairman of the Board, Greg Stemm, has a controlling and ownership interest.

See NOTE J for further information.

At December 31, 2021 and 2020, respectively, the company owed us

$ 268,867 and $ 134,452 , respectively.

NOTE D – OTHER CURRENT ASSETS

NOTE 5 –

SHORT-TERM NOTES RECEIVABLE RELATED PARTY, NET

Our short-term notes receivable consisted of the following:

Related party (see NOTE 6)

Short-term notes receivable, net

NOTE 6 –

RELATED PARTY TRANSACTIONS

We currently provide services to a deep-sea mineral exploration company, CIC Limited ("CIC"), which was organized and is majority owned and controlled by Greg Stemm, Odyssey’s past Chairman of the Board.

Stemm’s involvement with this company was disclosed to, and approved by, the Odyssey Board of Directors and legal counsel pursuant to the terms of Mr.

Stemm’s consulting agreement in effect at that time.

A current Odyssey director, Mark B.

Justh, made an investment into CIC's parent company and indirectly owns approximately 11.5 % of CIC.

Another current Odyssey director, Laura L.

Barton, is also a director of CIC.

We believe Mr.

Justh's indirect ownership in CIC and Ms.

Barton's role as director of both entities do not impair their independence under applicable rules.

We are providing these services to CIC pursuant to a Master Services Agreement that provides for back-office services in exchange for a recurring monthly fee as well as other deep-sea mineral related services on a cost-plus profit basis and will be compensated for these services with a combination of cash and equity in CIC.

For the years ended December 31, 2022, 2021 and 2020, we invoiced CIC a total of $ 1,334,702 , $ 921,238 and $ 2,038,332 , respectively, which was for technical and support services.

We have the option to accept equity in payment of the amounts due from CIC.

See Note 4 Accounts Receivable and Other Related Party, Net for related accounts receivable and Note 5 Short-term Notes Receivable Related Party, Net for related short-term notes receivable at December 31, 2022 and 2021 and Note 9 Investment in Unconsolidated Entity for our investment in an unconsolidated entity.

In furtherance of the Master Services Agreement, we are financing the acquisition of certain equipment required for implementation of CIC's Marine Operations Plan, which is the comprehensive workplan for offshore operations, including exploration, survey and sampling of potential mineral deposits.

As of December 31, 2022 we have pai d $ 207,330 toward the purchase of this equipment and CIC has reimbursed $ 136,860 of that amount.

On December 13, 2022, we entered into a Loan Agreement with CIC.

Pursuant to the Loan Agreement, CIC issued to Odyssey a convertible promissory note in the amount of $ 1,350,000 that bears interest at a rate of 18 % per annum.

On the closing date of the Loan Agreement, Odyssey advanced CIC $ 1,000,000 (the "Advanced Amount") and recorded an original issue discount ("OID") of $ 350,000 , which will be accreted as interest income in our consolidated statements of operations.

Upon an event of default, the unpaid principal amount and, to the extent permitted by law, any accrued and unpaid interest and all other obligations, shall accrue interest at the rate of 18 % per annum plus default interest at the rate of 3 % per annum until paid in full.

Unless otherwise converted or repaid as described below, the entire outstanding principal balance under the Loan agreement and all accrued interest is due and payable on March 31, 2023 (the "Maturity Date").

The Loan Agreement provides that CIC may repay the Advanced Amount plus accrued interest on or prior to the fifth business day after the Maturity Date (the “Maturity Cure Date”) in full satisfaction of the Loan Agreement.

Odyssey expects CIC to repay the Advanced Amount on or prior to the Maturity Cure Date in accordance with the terms of the Loan Agreement.

Odyssey has the option to convert all or any portion of the Advanced Amount and accrued and unpaid interest thereon, at any time prior to the Maturity Cure Date, into Class B Shares of CIC's common stock at the Conversion Rate of $ 1.00 per share.

In the event of default, Odyssey has the option to convert all or any portion of the Advanced Amount and accrued and unpaid interest thereon into Class A Shares of CIC's common stock at the Conversion Rate of $ 1.00 per share.

For the year ended December 31, 2022, we recorded $ 61,009 of interest income from the accretion of the OID.

The December 31, 2022 carrying value of the note receivable was $ 1,061,009 and the unamortized OID was approximately $ 288,991 .

At December 31, 2022 we recorded $ 12,649 in accrued interest receivable, which is included in the note receivable balance.

On December 13, 2022, CIC issued a Services Agreement Note to us.

Pursuant to the Services Agreement Note, Odyssey agreed to extend the terms of its outstanding accounts receivables balance for past and future services performed under the Master Services Agreement for an amount not to exceed $ 600,000 .

The note bears interest at a rate of 1.5 % per month and matures on April 30, 2023 .

Interest is due and payable on the first day of each month for the previous month.

The December 31, 2022 carrying value of the note receivable was $ 503,059 .

The terms of the Services Agreement Note are not necessarily indicative of the terms that would have been provided had a comparable transaction been entered into with independent parties.

On July 15, 2021, MINOSA assigned $ 404,633 of its indebtedness with accumulated accrued interest of $ 159,082 to a director of the Company under the same terms as the original agreement, and that indebtedness continues to be convertible at a

conversion price of $ 4.35 .

This transaction was reviewed and approved by the independent members of the Company’s board of directors.

On March 6, 2023 this note was terminated and Odyssey issued a new note, see Note 10 Loans Payable –

MINOSA 2 for detail.

NOTE 7 –

OTHER CURRENT ASSETS

Our other current assets consist of the following:

December 31, 2021

Prepaid expenses

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Deposits may be held by various entities for equipment, services, and in accordance with agreements in the normal course of business.

NOTE E – PROPERTY AND EQUIPMENT

NOTE 8 –

PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

December 31, 2021

December 31, 2020

Computers and peripherals

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Property and equipment, net

See Lease commitment in NOTE O – Commitments and Contingencies for further information on right to use asset, net.

NOTE F – EXPLORATION LICENSE

On July 9, 2019, we acquired a 79.9 % interest in Bismarck Mining Corporation (PNG) Limited (“Bismarck”), a Papua New Guinea company that was organized for the purpose of exploring the deep waters off the coast for precious metals.

We evaluated the transaction under ASU 2017-01

Business Combinations (Topic 805) and determined that Bismarck did not meet the definition of a business so the transaction represented an acquisition of assets rather than a business combination.

Asset acquisitions do not give rise to goodwill.

Rather, the sum of the fair value of the consideration given, together with transaction costs is allocated to the individual assets acquired and liabilities assumed based on their relative fair values which were more clearly evident and, thus, more reliably measurable at the date of acquisition under ASC 805-50-30-2

Initial Measurement

In the future, the recoverability will be tested whenever events or changes in circumstances indicate that i

ts carrying amount may not be recoverable per the guidance of ASC 360-10-35-21

Subsequent Measurement.

Management has considered whether any triggering events occurred that would cause impairment.

Management did not identify any triggering events thus there is no

impairment for the year ended December 31, 2021 and 2020.

The consideration paid for the asset acquisition consisted of the following:

Fair value of 249,584 common shares issued

Direct transaction costs

Total consideration paid

The consideration was allocated as follows:

Intangible asset-exploration license rights

Current assets

Current liabilities

Non-controlling

Total net assets acquired

Included in this acquisition we

re the rights to Bismarck’s exploration license, which is renewable every two years.

Per ASC 350-30-35-3,

management has deemed the rights to this license to have an indefinite life.

Determining if the rights to the license has an indefinite or finite life required us to consider the nature of the renewal process and any additional economic factors, if any, required when renewing this license.

We currently expect to use and renew the related license indefinitely, and we do not believe there are currently any legal, regulatory, or contractual provisions that are expected to limit the useful life of the related exploration license or indicate that the useful life is other than indefinite.

The exploration license is also not dependent on, or specifically associated with, another asset or group of assets that would limit the useful life of the intangible asset or indicate that the useful life is other than indefinite.

Management’s assumptions regarding our ability to successfully renew or extend the exploration license are based on Bismarck’s historical experience.

Bismarck was established in 2006, and they have historically renewed and extended the exploration license without a lapse in their ability to use the license.

The license has also never been revoked.

We will not incur significant maintenance costs related to the license.

There is an annual fee due of approximately $ 14,000 to maintain the license.

This amount is much less than the carrying amount of the license and the cost is not expected to prohibit continued renewals of the license in the future.

Based on all the factors considered above, management believes it is appropriate to assign indefinite useful life to the acquisition of the rights for the exploration license.

NOTE G – INVESTMENT IN UNCONSOLIDATED ENTITY

See Lease commitment in Note 16 Commitments and Contingencies –

Commitments and Contingencies for further information on right to use asset, net.

NOTE 9 –

INVESTMENT IN UNCONSOLIDATED ENTITY

Neptune Minerals, Inc.

Our current investment in NMI consists of 3,092,488 Class B Common non-voting

shares and 2,612 Series A Preferred non-voting

The preferred shares are convertible into an aggregate of 261,200 shares of Class B non-voting

common stock.

Our current investment in NMI consists of 3,092,488 Class B Common non-voting shares and 2,612 Series A Preferred non-voting shares.

The preferred shares are convertible into an aggregate of 261,200 shares of Class B non-voting common stock.

Our holdings now constitute an approximate 14 % ownership in NMI.

At December 31, 202 1

, our estimated share of unrecognized NMI equity-method losses is approximately $ 21.3 million.

At December 31, 2022 , our estimated share of unrecognized NMI equity-method losses is approximately $ 21.3 million.

We have not recognized the accumulated $ 21.3 million in our income statement because these losses exceeded our investment in NMI.

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We believe it is appropriate to allocate this loss carryforward of $21.3 million to any incremental NMI investment that may be recognized on our balance sheet in excess of zero since the losses occurred when they were an equity-method investment.

The aforementioned loss carryforward is based on NMI’s last unaudited financial statements as of December 31, 2016.

We do not believe losses NMI may have incurred subsequent to the December 31, 2016 audit to be material.

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Chatham Rock Phosphate, Limited.

During 2012, we performed deep-sea

mining exploratory services for Chatham Rock Phosphate, Ltd.

During 2012, we performed deep-sea mining exploratory services for Chatham Rock Phosphate, Ltd.

("CRP") valued at $ 1,680,000 .

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The surviving entity is now named Chatham Rock Phosphate Limited ("CRPL").

In exchange for our 9,320,348 shares of CRP ,

we received 141,884 shares of CPRL, which represents equity

ownership of, at most, approximately 1 % of the surviving entity.

In exchange for our 9,320,348 shares of CRP, we received 141,884 shares of CPRL, which represents equity ownership of, at most, approximately 1 % of the surviving entity.

Since CRP was a thinly traded stock and pursuant to guidance per ASC 320:

Debt and Equity Securities

regarding readily determinable fair value, we believe it was appropriate to not recognize this amount as an asset nor as revenue during that period.

Debt and Equity Securities regarding readily determinable fair value, we believe it was appropriate to not recognize this amount as an asset nor as revenue during that period.

We continue to carry the value of our investment in CPRL at zero in our consolidated financial statements.

In 2018, we began providing services to CIC (see NOTE C).

In 2018, we began providing services to CIC (see Note 6 Related Party Transactions).

This company is pursuing deep water exploration permits in foreign waters.

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We will assess our investment for impairment annually and, if a loss in value is deemed other than temporary, an impairment charge will be recorded.

At December 31, 2021 and December 31, 2020, the accumulated investment in the entity was $ 3,253,950 and $ 2,370,794 , respectively, which is classified as an investment in unconsolidated entity in our consolidated balance sheets.

We reviewed the following items to assist in determining CIC’s composition.

We account for the investments we make in certain legal entities in which equity investors do not have (1) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support, or (2) as a group, the holders of the equity investment at risk do not have either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance, or (3) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity.

At December 31, 2022 and 2021, the accumulated investment in the entity was $ 4,404,717 and $ 3,253,950 , respectively, which is classified as an investment in unconsolidated entity in our consolidated balance sheets.

We reviewed the following items to assist in determining CIC’s composition:

This type of legal entity is referred to as a VIE.

We would consolidate the results of any such entity in which we determined we had a controlling financial interest.

We would have a “controlling financial interest” in such an entity if we had both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially significant to the VIE.

We would have a "controlling financial interest" in such an entity if we had both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially significant to the VIE.

On a quarterly basis, we reassess whether we have a controlling financial interest in our investments we have in these legal entities.

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At such times, we also consider whether we must consolidate a VIE and/or disclose information about our involvement in a VIE.

A reporting entity must consolidate a VIE if that reporting entity has a variable interest (or combination of variable interests) that will absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both.

A reporting entity must consider the rights and obligations conveyed by its variable interests and the relationship of its variable interests with variable interests held by other parties to determine whether its variable interests will absorb a majority of a VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both.

The reporting entity that consolidates a VIE is called the primary beneficiary of that VIE.

NOTE H –LOANS PAYABLE

The Company’s consolidated notes payable consisted of the following:

Note 1 – Monaco 2014

Note 2 – Monaco 2016

Note 3 – MINOSA 1

Note 4 – Epsilon

Note 5 – SMOM

Note 6 – MINOSA 2

Note 7 – Monaco 2018

Note 8 – Promissory note

Note 9 – Litigation financing

Note 10 – Payroll Protection Program

Note 11 – EIDL

Note 12 – Vendor note payable

Note 13 – Monaco

Note 1 – Monaco 2014

On August 14, 2014, we entered into a Loan Agreement with Monaco Financial, LLC (“Monaco”) pursuant to which Monaco agreed to lend us up to $ 10.0 million.

The loan was issued in three tranches:

(i) $ 5.0 million (the “First Tranche”) was advanced upon execution of the Loan Agreement;

(ii) $ 2.5 million (the “Second Tranche”) was advanced on October 1, 2014;

and (iii) $ 2.5 million (the “Third Tranche”) was advanced on December 1, 2014.

The Notes bear interest at a rate equal to 11 % per annum.

The Notes contained an option whereby Monaco could purchase shares of Oceanica held by Odyssey (the “Share Purchase Option”) at a purchase price that is the lower of (a) $ 3.15 per share or (b) the price per share of a contemplated equity offering of Oceanica which totals $ 1.0 million or more in the aggregate.

The share purchase option was not clearly and closely related to the host debt agreement and required bifurcation.

On December 10, 2015, these promissory notes were amended as part of the asset acquisition agreement with Monaco (See NOTE R in our Form 10-K

filed with the Securities and Exchange Commission for the period ended December 31, 2017 for further information).

The amendment included the following material changes:

(i) $ 2.2 million of the indebtedness represented by the Notes was extinguished, (ii) $ 5.0 million of the indebtedness represented by the Notes ceased to bear interest and is only repayable under certain circumstances from certain sources of cash, and (iii) the maturity date on the Notes was extended to December 31, 2017 .

During March 2016, the maturity date was further extended to April 1, 2018 and the exercise price of the Share Purchase Option was re-priced

to $ 1.00 per share.

In October 2018, the parties executed a Forbearance Agreement that extended the period of this Share Purchase Option to a period of one year after this indebtedness is repaid in full.

This indebtedness has matured, but Monaco has not demanded payment because we were in negotiations with Monaco.

As of the maturity date, the interest rate was adjusted to the default rate of 18 % per annum.

See “Loan Modification (March 2016)” below.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 434,934 and $ 574,680 , respectively, was recorded.

The outstanding interest-bearing balance of these Notes was zero at December 31, 2021 and $ 2.8 million at December 31, 2020, respectively.

On October 4, 2021 we entered into a Termination and Settlement agreement with Monaco that cancelled the entire indebtedness of approximately $ 5.2

million of principal and accrued interest related to this arrangement.

This agreement also terminated all conversion options.

See Note 13 below.

Note 2 – Monaco 2016

In March 2016, Monaco agreed to lend us an additional $ 1,825,000 .

These loan proceeds were received in full during the first quarter of 2016.

The indebtedness bears interest at 10.0 % percent per year.

All principal and any unpaid interest were due on April 15, 2018 .

This indebtedness has matured, but Monaco has not demanded payment because we were in negotiations with Monaco.

As of the maturity date, the interest rate was adjusted to the default rate of 18 % per annum.

The current outstanding balance was zero at December 31, 2021 and $ 1,175,000 at December 31, 2020.

The indebtedness was convertible at any time until the maturity date into shares of Oceanica held by us at a conversion price of $ 1.00 per share.

Pursuant to this loan and as security for the indebtedness, Monaco was granted a second priority security interest in (a) one-half

of the indebtedness evidenced by the Amended and Restated Consolidated Note and Guaranty, dated September 25, 2015 (the “ExO Note”), in the original principal amount of $ 18.0 million, issued by Exploraciones Oceanicas S.

to Oceanica Marine Operations, S.R.L.

(“OMO”), and all rights associated therewith (the “OMO Collateral”);

and (b) all technology and assets in our possession or control used for offshore exploration, including an ROV system, deep-tow

search systems, winches, multi-beam sonar, and other equipment.

The carrying net book value of this equipment was less than $ 0.1 million.

We unconditionally and irrevocably guaranteed all obligations of ours and our subsidiaries to Monaco under this loan agreement.

As further consideration for the loan, Monaco was granted an option (the “Option”) to purchase the OMO Collateral.

The Option was exercisable at any time before the earlier of (a) the date that is 30 after the loan is paid in full or (b) the maturity date of the ExO Note, for aggregate consideration of $ 9.3 million, $ 1.8 million of which would be paid at the closing of the exercise of the Option, with the balance paid in ten monthly installments of $ 750,000 .

In October 2018, both parties executed a Forbearance Agreement that extended the Option’s 30-day

period following a loan payoff to seven (7) months.

During 2017, we sold a marine vessel to a related party of Monaco for $ 650,000 .

The consideration for this vessel was applied against our loan balance to Monaco in the amount of $ 650,000 .

Accounting considerations

ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract.

The option to purchase the OMO Collateral is an embedded feature that is not clearly and closely related to the host debt agreement and thus requires bifurcation.

Because the option is out of the money, it has no material fair value as of the inception date or currently.

The debt agreement did not contain any additional embedded terms or features that have characteristics of derivatives.

However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”).

The calculation of the effective conversion amount did result in a BCF because the effective conversion price was less than the market price on the date of issuance, therefore a BCF of $ 456,250 was recorded.

This BCF has been fully amortized as of March 31, 2018.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 203,096 and $ 268,350 , respectively, was recorded.

Loan modification (December 2015)

In connection with the Acquisition Agreement entered into with Monaco on December 10, 2015, Monaco agreed to modify certain terms of the 2014 loans as partial consideration for the purchase of assets.

For the First Tranche ($ 5,000,000 advanced on August 14, 2014), Monaco agreed to cease interest as of December 10, 2015 and reduce the loan balance by (i) the cash or other value received from the SS Central America

shipwreck project (“SSCA”) or (ii) if the proceeds received from the SSCA project were insufficient to pay off the loan balance by December 31, 2017 , then Monaco could seek repayment of the remaining outstanding balance on the loan by withholding Odyssey’s 21.25 % “additional consideration” in new shipwreck projects performed for Monaco in the future.

For the Second Tranche ($ 2,500,000 advanced on October 1, 2014), Monaco agreed to reduce the principal amount by $ 2,200,000 leaving a new principal balance of $ 300,000 and extension of maturity to December 31, 2017 .

For the Third Tranche ($ 2,500,000 advanced on December 1, 2014), Monaco agreed to the extension of maturity to December 31, 2017 .

On December 10, 2015, the Monaco call option related to the Oceanica shares held by us was extended until December 31, 2017.

Loan modification (March 2016)

In connection with the $ 1.825 million loan agreement with Monaco in March 2016, the existing $ 2.8 million 2014 notes were modified.

Of the combined total indebtedness of Monaco’s Note 1 and Note 2, Monaco can convert this debt into 3,174,603 shares of Oceanica at a fixed conversion price of $ 1.00 per share, or $ 3,174,603 .

Any remaining debt in excess of $ 3,174,603 is not convertible.

Additionally, the modification eliminated Monaco’s option (“share purchase option”) to purchase 3,174,603 shares of Oceanica stock at a price of $ 3.15 per share.

The modification was analyzed under ASC 480 Distinguishing Liabilities from Equity

(“ASC 480”) to determine if extinguishment accounting was applicable.

Under ASC 470-50-40-10

a modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date is always considered substantial and requires extinguishment accounting.

Since this modification added a substantive conversion option, extinguishment accounting is applicable.

In accordance with the extinguishment accounting guidance (a) the share purchase option was first marked to its pre-modification

fair value, (b) the new debt was recorded at fair value and (c) the old debt and share purchased option was removed.

The difference between the fair value of the new debt and the sum of the pre-modification

carrying amount of the old debt and the share purchase option’s fair value represented a gain on extinguishment.

ASC 470-50-40-2

indicates that debt restructuring with a related party may be in essence a capital transaction and as a result the gain of $ 1.2 million was recognized in additional paid in capital upon extinguishment.

On October 4, 2021 we entered into a Termination and Settlement agreement with Monaco that cancelled the entire indebtedness of approximately $ 2.4 million of principal and accrued interest related to this arrangement.

This agreement also terminated all conversion options

See Note 13 below.

Note 3 – MINOSA

On March 11, 2015, in connection with a Stock Purchase Agreement, Minera del Norte, S.A.

NOTE 10 –

LOANS PAYABLE

The Company’s consolidated notes payable consisted of the following carrying values and related interest expense at:

Interest Expense

Year Ended December 31,

Litigation financing

Vendor note payable

Seller note payable

D&O Insurance note payable

On March 11, 2015, in connection with a Stock Purchase Agreement ("SPA"), Minera del Norte, S.A.

("MINOSA") agreed to lend us up to $ 14.75 million.

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The outstanding indebtedness bears interest at 8.0 % percent per annum.

The Promissory Note was amended on April 10, 2015 and on October 1, 2015 so that, unless otherwise converted as provided in the Note, the adjusted principal balance

shall be due and payable in full upon written demand by MINOSA;

The Promissory Note was amended on April 10, 2015 and on October 1, 2015 so that, unless otherwise converted as provided in the Note, the adjusted principal balance shall be due and payable in full upon written demand by MINOSA;

provided that MINOSA agreed that it shall not demand payment of the adjusted principal balance earlier than the first to occur of:

(i) 30 days after the date on which (x) SEMARNAT

makes a determination with respect to the current application for the Manifestacion de Impacto Ambiental relating to phosphate deposit project, which determination is other than an approval or (y) Odyssey Marine Enterprises or any of its affiliates withdraws such application without MINOSA’s prior written consent;

(i) 30 days after the date on which (x) SEMARNAT makes a determination with respect to the current application for the Manifestacion de Impacto Ambiental relating to phosphate deposit project, which determination is other than an approval or (y) Odyssey Marine Enterprises or any of its affiliates withdraws such application without MINOSA’s prior written consent;

(ii) termination by Odyssey of the Stock Purchase Agreement, dated March 11, 2015 (the "Purchase Agreement"), among Odyssey, MINOSA, and Penelope Mining, LLC (the "Investor");

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On March 11, 2016 , the Oceanica Call has expired.

on February 19, 2016, and (c) establishing a classified board of directors (collectively, the “Amendments”).

The Amendments have been or will be set forth in certificates of amendment to the Company’s articles of incorporation filed or to be filed with the Nevada Secretary of State.

As collateral for the loan, we granted MINOSA a security interest in the Company’s 54 % interest in Oceanica.

The outstanding principal balance of this debt was $ 14.75 million at December 31, 2021 and 2020, respectively.

Completion of the transaction requires amending the Company’s articles of incorporation to (a) effect a reverse stock split, which was implemented on February 19, 2016, (b) adjusting the Company’s authorized capitalization, which was also implemented on February 19, 2016, and (c) establishing a classified board of directors (collectively, the "Amendments").

The Amendments have been or will be set forth in certificates of amendment to the Company’s articles of incorporation filed or to be filed with the Nevada Secretary of State.

As collateral for the loan, we granted MINOSA a security interest in the Company’s 54 % interest in Oceanica.

The maturity date of this indebtedness has been amended and matured on March 18, 2017 .

Per Note 6 MINOSA 2 below, the Minosa Purchase Agreement amended the due date of this note to a due date which may be no earlier than

December 31, 2017, that is at least 60 days subsequent to written notice that Minosa intends to demand payment.

See Note 6 – MINOSA 2 for further

qualifications.

Per Note 10 Loans Payable - MINOSA 2 below, the Minosa Purchase Agreement amended the due date of this note to a due date which may be no earlier than December 31, 2017, that is at least 60 days subsequent to written notice that Minosa intends to demand payment.

See Note 10 Loans Payable - MINOSA 2 for further qualifications.

During December 2017, MINOSA transferred this debt to its parent company.

For the twelve months ended December 31, 2021 and

2020, interest expense in the amount of $ 1,179,998 and $ 1,183,230 , respectively, was recorded.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued.

Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity

(“ASC 480”), ASC 815 Derivatives and Hedging

(“ASC 815”) and ASC 320 Property, Plant and Equipment

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives.

The Oceanica Call Option is considered a freestanding financial instrument because it is both (i) legally detachable and (ii) separately exercisable.

The Oceanica Call Option did not fall under the guidance of ASC 480.

Additionally, it did not meet the definition of a derivative under ASC 815 because the option has a fixed value of $ 40.0 million and does not contain an underlying variable which is indicative of a derivative.

This instrument is considered an option contract for a sale of an asset.

The guidance applied in this case is ASC 360-20,

which provides that in situations when a party lends funds to a seller and is given an option to buy the property at a certain date in the future, the loan shall be recorded at its present value using market interest rates and any excess of the proceeds over that amount credited to an option deposit account.

If the option is exercised, the deposit shall be included as part of the sales proceeds;

if not exercised, it shall be credited to income in the period in which the option lapses.

Based on the previous conclusions, we allocated the cash proceeds first to the debt at its present value using a market rate of 15 %, which is management’s estimate of a market rate loan for the Company, with the residual allocated to the Oceanica Call Option, as follows:

Promissory Note

Deferred Income (Oceanica Call Option)

The call option amount of $ 383,148 represented a debt discount.

This discount has been fully accreted up to face value using the effective interest method.

Note 4 – Epsilon

On March 18, 2016 we entered into a Note Purchase Agreement (“Purchase Agreement”) with Epsilon Acquisitions LLC (“Epsilon”).

Pursuant to the Purchase Agreement, Epsilon loaned us $ 3.0 million in two installments of $ 1.5 million on March 31, 2016 and April 30, 2016.

The indebtedness bears interest at a rate of 10 % per annum and was due on March 18 ,

We were also responsible for $ 50,000 of the lender’s out of pocket costs.

This amount is included in the loan balance.

In pledge agreements related to the loans, we granted security interests to Epsilon in (a) the 54 million cuotas (a unit of ownership under Panamanian law) of Oceanica Resources S.

(“Oceanica”) held by our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd.

(“OME”), (b) all notes and other receivables from Oceanica and its subsidiary owed to the Odyssey Pledgors, and (c) all of the outstanding equity in OME.

Epsilon has the right to convert the outstanding indebtedness into shares of our common stock upon

75 days’ notice to us or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the conversion price of $ 5.00 per share, which represents the five-day

volume-weighted average price of Odyssey’s common stock for the five trading day period ending on March 17, 2016.

On January 25, 2017, Epsilon provided notice to us that it would convert the initial $ 3.0 million plus accrued interest per the Restated Note Purchase Agreement at $ 5.00 per share in accordance with the terms of the agreement.

The conversion and issuance of new shares was effective April 10, 2017 and included accrued interest of $ 302,274 for a total 670,455 shares.

Upon the occurrence and during the continuance of an event of default, the conversion price was to be reduced to $ 2.50 per share.

Following any conversion of the indebtedness, Penelope Mining LLC (an affiliate of Epsilon) (“Penelope”), may elect to reduce its commitment to purchase preferred stock of Odyssey under the Stock Purchase Agreement, dated as of March 11, 2015 (as amended, the “Stock Purchase Agreement”), among Odyssey, Penelope, and Minera del Norte, S.A.

(“MINOSA”) by the amount of indebtedness converted.

Pursuant to the Purchase Agreement (a) we agreed to waive our rights to terminate the Stock Purchase Agreement in accordance with the terms thereof until December 31, 2016, and (b) MINOSA agreed to extend, until March 18, 2017, the maturity date of the $ 14.75 million loan extended by MINOSA to OME pursuant to the Stock Purchase Agreement.

The indebtedness may be accelerated upon the occurrence of specified events of default including (a) OME’s failure to pay any amount payable on the date due and payable;

(b) OME or we fail to perform or observe any term, covenant, or agreement in the Purchase Agreement or the related documents, subject to a five-day

(c) an event of default or material breach by OME, us or any of our affiliates under any of the other loan documents shall have occurred and all grace periods, if any, applicable thereto shall have expired;

(d) the Stock Purchase Agreement shall have been terminated;

(e) specified dissolution, liquidation, insolvency, bankruptcy, reorganization, or similar cases or actions are commenced by or against OME or any of its subsidiaries, in specified circumstances unless dismissed or stayed within 60 days;

(f) the entry of judgment or award against OME or any of its subsidiaries in excess or $ 100,000 ;

and (g) a change in control (as defined in the Purchase Agreement) occurs.

In connection with the execution and delivery of the Purchase Agreement, we and Epsilon entered into a registration rights agreement pursuant to which we agreed to register new shares of our common stock with a formal registration statement with the Securities and Exchange Commission upon the conversion of the indebtedness.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued.

Prior to making the accounting allocation, we evaluated the transaction for proper classification under ASC 480 Distinguishing Liabilities from Equity

(“ASC 480”), ASC 815 Derivatives and Hedging

(“ASC 815”) and ASC 320 Property, Plant and Equipment

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives.

However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”).

The calculation of the effective conversion amount did result in a BCF because the effective conversion price was less than the Company’s stock price on the date of issuance, therefore a BCF of $ 96,000 was recorded.

The BCF represents a debt discount which was amortized over the life of the loan.

Loan modification (October 1, 2016)

On October 1, 2016 Odyssey Marine Enterprises, Ltd.

(“OME”), entered into an Amended and Restated Note Purchase Agreement (the “Restated Note Purchase Agreement”) with Epsilon Acquisitions LLC (“Epsilon”).

In connection with the existing $ 3.0 million loan agreement, Epsilon agreed to lend an additional $ 3.0 million evidenced by secured convertible promissory notes.

The convertible promissory notes bear an interest rate of 10.0 % per annum and are due and payable on March 18, 2017 .

Epsilon has the right to convert all amounts outstanding under the Restated Note into shares of our common stock upon 75 days’ notice to OME or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the applicable conversion price, which is (a) $ 5.00 per share with respect to the $ 3.0 million already advanced under the Restated Note and (b) with respect to additional advances under the Restated Note, the five-day

volume-weighted average price of our common stock for the five trading day period ending on the trading day immediately prior to the date on which OME

submits a borrowing notice for such advance.

Notwithstanding anything herein to the contrary, we shall not issue any of our common stock upon conversion of any outstanding tranche (other than the first $ 3.0

million already advanced) under this

Restated Note in excess of 1,388,769 shares of common stock.

The additional tranches were issued as follows:

(a) $ 1,000,000 (“Tranche 3”) was issued on October 16, 2016 with a conversion price of $ 3.52 per share;

(b) $ 1,000,000 (“Tranche 4”) was issued on November 15, 2016 with a conversion price of $ 4.19 per share;

and (c) $ 1,000,000 (“Tranche 5”) was issued on December 15, 2016 with a conversion price of $ 4.13 per share.

During 2017, Epsilon assigned Tranche 4 and 5 totaling $ 2,000,000 of this debt to MINOSA under the same terms as the original debt.

See Note – MINOSA 2 below for further detail.

On March 30, 2021, Epsilon converted the aggregate indebtedness related to Tranche 3 totaling $ 1,448,697 into 411,562 shares of our common stock at a conversion price of $ 3.52 per share.

As an inducement for the issuance of the additional $ 3.0 million of promissory notes, we also delivered to Epsilon a common stock purchase warrant (the “Warrant”) pursuant to which Epsilon has the right to purchase up to 120,000 shares of our common stock at an exercise price of $ 3.52 per share, which exercise price represents the five-day

volume-weighted average price of our common stock for the five trading day period ending on the trading day immediately prior to the day on which the Warrant was issued.

Epsilon may exercise the Warrant in whole or in part at any time during the period ending October 1, 2021 .

The Warrant includes a cashless exercise feature and provides that, if Epsilon is in default of its obligations to fund any advance pursuant to and in accordance with the Restated Note Purchase Agreement, then, thereafter, the maximum aggregate number of shares of common stock that may be purchased under the Warrant shall be the number determined by multiplying 120,000 by a fraction, (a) the numerator of which is the aggregate principal amount of advances that have been extended to the OME by Epsilon pursuant to the Restated Note Purchase Agreement on or after the date of the Warrant and prior to the date of such failure and (b) the denominator of which is $ 3.0 million.

During November 2020, Epsilon exercised this warrant using the cashless exercise feature.

This exercise resulted in the issuance of 56,228 of our common shares and the forfeiture of the right to acquire the remaining 63,772 common shares.

Accounting considerations for additional tranches

We evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity

(“ASC 480”), ASC 815 Derivatives and Hedging

(“ASC 815”) and ASC 320 Property, Plant and Equipment

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives.

Additionally, the warrant agreement did not contain any terms or features that would preclude equity classification.

We were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”).

The allocations of the three additional tranches were as follows.

Promissory Note

Beneficial Conversion Feature (“BCF”)*

A beneficial conversion feature arises when the calculation of the effective conversion price is less than the Company’s stock price on the date of issuance.

Tranche 5 did not result in a BCF because the effective conversion price was greater than the company’s stock price on the date of issuance.

The Warrant’s fair value was calculated using the Black-Scholes-Merton (“BSM”) pricing model.

The aggregate fair value of the Warrant totaled $ 303,712 .

Because the Warrant was issued as an inducement to Epsilon to issue additional debt, we recorded an inducement expense of $ 303,712 .

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 34,520 and $ 90,136 , respectively, was recorded.

Term Extension (March 21, 2017)

On March 21, 2017 we entered into an amendment to the Restated Note Purchase Agreement with Epsilon.

In connection with the existing $ 6.0 million of indebtedness, the adjusted principal balance is due and payable in full upon the earlier of (i) written demand by Epsilon or (ii) such time as Odyssey or the guarantor pays any other indebtedness for borrowed money prior to its stated maturity date.

As such the Company amortized the notes up to their face value of $ 6,050,000 and they were

classified as short-term.

he principal indebtedness at December 31, 2021 was zero and at December 31, 2020 was $ 1.0 million.

Note 5 – SMOM

On May 3, 2017, we entered into a Loan and Security Agreement (“Loan Agreement”) with SMOM.

Pursuant to the Loan Agreement, SMOM agreed to loan us up to $ 3.0 million as evidenced by a convertible promissory note.

As a commitment fee, we assigned the remaining 50 % of our Neptune Minerals, LLC receivable to SMOM.

This receivable had zero carrying

value on our balance sheet and due to the age and collectability was deemed to have no fair value.

The indebtedness bears interest at a rate of 10 % per annum and matures on the second anniversary of this Loan Agreement which is May 3, 2019.

During January 2021, this Loan Agreement was amended by increasing the interest rate to 18 %, effective January 1, 2021.

On April 20, 2018, the loan was amended, and the principal amount of the Loan was increased to $ 3.5 million.

The loan balance was zero at December 31, 2021 and $ 3.5

million at December 31, 2020.

The holder had the option to convert up to $ 2.0 million of any unpaid principal and interest into up to 50 % of the equity interest held by Odyssey in Aldama Mining Company, S.de R.L.

which is a wholly owned subsidiary of ours.

The conversion value of $ 1.0 million equates to 10 % of the equity interest in Aldama.

If the holder elected to acquire the entire 50 % of the equity interest, the Holder had to pay the deficiency in cash.

As additional consideration for the loan, the holder has the right to purchase from Odyssey all or a portion of the equity collateral (up to the 50% of the equity interest of Aldama) for the option consideration ($ 1.0 million for each 10 % of equity interests) during the period that is the later of (i) one year after the maturity date and (ii) one year after the loan is repaid in full, the expiration date.

The lender was also able to extend the expiration date annually by paying $ 500,000 for each year extended.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 478,111 and $ 350,958 , respectively, was recorded.

Accounting considerations

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued.

Prior to making the accounting allocation, we evaluated for proper classification under ASC 480 Distinguishing Liabilities from Equity

(“ASC 480”), ASC 815 Derivatives and Hedging

(“ASC 815”) and ASC 320 Property, Plant and Equipment

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives.

However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”).

The calculation of the effective conversion amount did not result in a BCF because the effective conversion price was equal to the Company’s stock price on the date of issuance.

On October 4, 2021 we entered into a Termination and Settlement agreement with Monaco that cancelled the entire indebtedness of approximately $5.2 million of principal and accrued interest related to this arrangement.

This agreement also terminated all conversion options.

See Note 13 below.

Note 6 – MINOSA 2

On August 10, 2017, we entered into a Note Purchase Agreement (the "Minosa Purchase Agreement") with MINOSA.

Pursuant to the Minosa Purchase Agreement, MINOSA agreed to loan Enterprises up to $ 3.0 million.

During 2017, we borrowed $ 2.7 million against this facility, and Epsilon assigned $ 2.0 million of its debt to MINOSA.

At December 31, 2021 and December 31, 2020, the outstanding principal balance, including the Epsilon assignment, was $ 5.05 million.

During 2017, we borrowed $ 2.7 million against this facility, and Epsilon Acquisitions LLC ("Epsilon") assigned $ 2.0 million of its previously held debt to MINOSA.

The indebtedness is evidenced by a secured convertible promissory note (the "Minosa Note") and bears interest at a rate equal to 10.0 % per annum.

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We unconditionally and irrevocably guaranteed all of the obligations under the Minosa Purchase Agreement and the Minosa Note.

MINOSA has the right to convert all amounts outstanding under the Minosa Note into shares of our common stock upon 75 days’ notice to us or upon a merger, consolidation, third party tender offer, or similar transaction relating to us at the conversion price of $ 4.35 per share.

MINOSA has the right to convert all amounts outstanding under the Minosa Note into shares of our common stock upon 75 days’

notice to us or upon a merger, consolidation, third party tender offer, or

similar transaction relating to us at the conversion price of $ 4.35 per share.

During December 2017, MINOSA transferred this indebtedness to its parent company.

On July 15, 2021, $ 404,633 of this indebtedness with accumulated interest of $ 159,082 was transferred to a director of the Company under the same terms as the original agreement, and that indebtedness continues to be convertible at a conversion price of $ 4.35

This transaction was reviewed and approved by the independent members of the Company’s board of directors.

This debt agreement did not contain any embedded terms or features that have characteristics of derivatives.

However, we were required to consider whether the hybrid contract embodied a beneficial conversion feature (“BCF”).

As of December 31, 2017, all of the BCF has been accreted to the income statement.

The BCF represented a debt discount that was amortized over the life of the loan.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 504,998 and $ 506,381 , respectively, was recorded.

As previously reported, Epsilon loaned us an aggregate of $ 6.0 million pursuant to an amended and restated convertible promissory Minosa Note, dated as of March 18, 2016, as further amended and restated on October 1, 2016 (the “Epsilon Note”).

Since then, Epsilon has assigned $ 2.0 million of the indebtedness under the Epsilon Note to MINOSA.

Along with Epsilon, we entered into a second amended and restated convertible promissory note (the “Second AR Epsilon Note”), which further amends and restates the Epsilon Note.

The stated principal amount of the Second AR Epsilon Note is $ 1.0 million (which reflects the outstanding principal balance remaining after giving effect to Epsilon’s (x) previous assignment of $ 2.0 million of the indebtedness under the Epsilon Note to MINOSA and (y) conversion of $ 3.0 million of the indebtedness under the Epsilon Note into shares of our common stock).

The Second AR Epsilon Note further provides that the outstanding principal balance under the Second AR Epsilon Note and all accrued interest and fees are due and payable upon written demand by Epsilon;

provided, that Epsilon agreed not make a demand for payment prior to the earlier of (a) an event of default (as defined in the Second AR Epsilon Note) or (b) a date, which may be no earlier than December 31, 2017, that is at least 60 days subsequent to written notice that MINOSA intends to demand payment.

This transaction was reviewed and approved by the independent members of the Company’s board of directors.

Upon the closing of the Minosa Purchase Agreement, along with MINOSA, and Penelope Mining LLC, an affiliate of Minosa ("Penelope"), executed and delivered a Second Amended and Restated Waiver and Consent and Amendment No.

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2 to Stock Purchase Agreement (the "Second AR Waiver").

Pursuant to the Second AR Waiver, Minosa and Penelope consented to the transactions contemplated by the Minosa Purchase Agreement and waived any breach of any representation or warranty and violation of any covenant in the Stock Purchase Agreement, dated as of March 11, 2015, as amended April 10, 2015 (the “SPA”), by and among us, Minosa, and Penelope, arising out of the Company’s execution and delivery of the Minosa Purchase Agreement and the consummation of the transactions contemplated thereby.

Pursuant to the Second AR Waiver, Minosa and Penelope consented to the transactions contemplated by the Minosa Purchase Agreement and waived any breach of any representation or warranty and violation of any covenant in the Stock Purchase Agreement, dated as of March 11, 2015, as amended April 10, 2015 (the "SPA"), by and among us, Minosa, and Penelope, arising out of the Company’s execution and delivery of the Minosa Purchase Agreement and the consummation of the transactions contemplated thereby.

Pursuant to the Second AR Waiver, we also waived, and agreed not to exercise our right to terminate the SPA pursuant to Section 8.1(c)(ii) thereto, both (a) until after the earlier of (i) July 1, 2018, (ii) the date that MINOSA fails, refuses, or declines to fund (or otherwise does not fund) any subsequent loan under the Minosa Purchase Agreement and (iii) demand is made for repayment of all or any part of the indebtedness outstanding under the Minosa Note, the Second AR Epsilon Note, or the Promissory Note, dated as of March 11, 2015, as amended (the "SPA Note"), in the principal amount of $ 14.75 million that was issued by us to MINOSA under the SPA, and (b) unless on or prior to such termination, the Notes are paid in full.

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The obligations under the Minosa Note may be accelerated upon the occurrence of specified events of default including (a) our failure to pay any amount payable under the Minosa Note on the date due and payable;

(b) our failure to perform or observe any term, covenant, or agreement in the Minosa Note or the related documents, subject to a five-day

(b) our failure to perform or observe any term, covenant, or agreement in the Minosa Note or the related documents, subject to a five-day cure period;

(c) the occurrence and expiration of all applicable grace periods, if any, of an event of default or material breach by us under any of the other loan documents;

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In connection with the execution and delivery of the Minosa Purchase Agreement, Odyssey and MINOSA entered into a second amended and restated registration rights agreement (the "Second AR Registration Rights Agreement") pursuant to which Odyssey agreed to register the offer and sale of the shares (the "Conversion Shares") of our common stock issuable upon the conversion of the indebtedness evidenced by the Minosa Note.

Subject to specified limitations set forth in the Second AR Registration Rights Agreement, including that we are eligible to use Form S-3,

the holder of the Minosa Note can require us to register the offer and sale of the Conversion Shares if the aggregate offering price thereof (before any underwriting discounts and commissions) is not less than $ 3.0 million.

Subject to specified limitations set forth in the Second AR Registration Rights Agreement, including that we are eligible to use Form S-3, the holder of the Minosa Note can require us to register the offer and sale of the Conversion Shares if the aggregate offering price thereof (before any underwriting discounts and commissions) is not less than $ 3.0 million.

In addition, we agreed to file a registration statement relating to the offer and sale of the Conversion Shares on a continuous basis promptly (but in no event later than 60 days after) after the conversion of the Minosa Note into the Conversion Shares and to thereafter use its reasonable best efforts to have such registration statement declared effective by the Securities and Exchange Commission.

Note 7 – Monaco 2018

During the period ended March 31, 2018, Monaco advanced us $ 1.0 million that was included in a loan agreement that was executed on April 20, 2018.

Monaco also agreed to treat $ 99,366 of back rent owed by us to Monaco as part of this loan resulting in an aggregate principal amount of $ 1,099,366 at December 31, 2020.

The indebtedness bears interest at 10.0 % percent per year.

During January 2021, this loan agreement was amended by increasing the interest rate to 18 %, effective January 1, 2021.

All principal and any unpaid interest are payable on the first anniversary of this agreement, April 20, 2019.

This debt is secured by cash proceeds, if any, from our future shipwreck projects we have contracted with Magellan.

As additional consideration, their share purchase option expiration date, as discussed in Note 1 – Monaco 2014 and Note 2 – Monaco 2016 above, has been extended from 30 days to seven months after the note becomes paid in full For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 209,229 and $ 138,333 , respectively, was recorded.

On October 4, 2021 we entered into a Termination and Settlement agreement with Monaco that cancelled the entire indebtedness of approximately $ 1.6 million of principal and accrued interest related to this arrangement.

This agreement also terminated all conversion options.

As a result, the principal amount is zero at December 31, 2021.

See Note 13 below.

Note 8 – Promissory note

On July 12, 2018, we entered into a Note and Warrant Purchase Agreement (the “Purchase Agreement”) with

two individuals (the “Lenders”), one of whom holds in excess of

5.0 % of our outstanding common stock.

Pursuant to the Purchase Agreement, the Lenders agreed to lend an aggregate of $

1,050,000 to us, which was advanced in three tranches on July 12, 2018, $

500,000 , August 17, 2018, $

300,000 and October 4, 2018, $

The indebtedness is evidenced by secured convertible promissory notes (the “Notes”) and bears interest at a rate equal to

Unless otherwise converted as described below, the entire outstanding principal balance under the Notes and all accrued interest and fees are due and payable on July 12, 2019.

See “Term Extension (July 8, 2019)” below.

At any time after to the first to occur of (a) a sale by us of additional Notes or (b) September 12, 2018, the Lenders have the right to convert all amounts outstanding under the Notes into either (x) shares of our common stock at the conversion rate of $

8.00 per share, (y) $

500,000 of the indebtedness owed by Exploraciones Oceanicas S.

(“ExO”) to Oceanica Marine Operations, S.R.L.

(“OMO”), or (z) a

7.5 % interest in Aldama Mining Company, S.

We indirectly hold a controlling interest in ExO;

OMO and Aldama are indirect, wholly owned subsidiaries of ours.

In connection with the issuance and sale of the Notes, we issued warrants to purchase common stock (the “Warrants”) to the Lenders.

The Lenders may exercise the Warrants to purchase an aggregate of

65,625 shares of our common stock at an exercise price of $

12.00 per share.

The Warrants are exercisable during the period commencing on the date on which the Notes are converted into shares of our common stock and ending on July 12, 2021.

Pursuant to a Pledge Agreement, dated as of July 12, 2018 (the “Pledge Agreement”), our obligations under the Notes are secured by a pledge of a portion of Odyssey’s ownership interest in Aldama and another entity.

Pursuant to a Registration Rights Agreement (the “Rights Agreement”) among us and the Lenders, we granted the Lenders “piggy-back” registration rights with respect to the shares of our common stock issuable upon conversion of the Notes and the exercise of the Warrants.

The Purchase Agreement, the Notes, the Warrants, the Pledge Agreement, and the Rights Agreement include representations and warranties and other covenants, conditions, and other provisions customary for comparable transactions.

We have accounted for this transaction as a financing transaction, wherein the net proceeds received were allocated to the financial instruments issued.

Prior to making the accounting allocation, we evaluated the transaction for proper classification under ASC 480 Distinguishing Liabilities from Equity (“ASC 480”), ASC 815 Derivatives and Hedging (“ASC 815”).

We determined that the debt achieved conventional convertible status and that the equity conversion option was in the money at inception which required the calculation of a beneficial conversion feature (“BCF”).

The fair value of the warrants

and BCF component exceeded the amount of proceeds, therefore, they were limited to the cash proceeds of $ 1,050,000 at December 31, 2018.

As a result, there was no value allocated to the debt at inception.

The debt was being accreted to face value over its term using the effective interest method.

The face value of this debt was zero at December 31 2021 and $ 1.05 million at December 31, 2020.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 54,734 and $ 97,652 , respectively, was recorded.

Term Extension (July 8, 2019)

On July 8, 2019, Odyssey and the Lenders entered into a Second Amendment to Note and Warrant Purchase Agreement and Note and Warrant Modification Agreement (the “Second Amendment”) pursuant to which certain terms and provisions of the Notes and Warrants were amended or otherwise modified.

The material terms and provisions that were amended or otherwise modified are as follows:

the maturity date of the Notes was extended by one year, to July 12, 2020 (the parties are currently in discussions to further extend the maturity date of the Notes);

the conversion rate of the Notes and the exercise price of the Warrants were modified to $ 5.756 , which represented the “market price” of Odyssey’s common stock as of July 7, 2019, the day before the Second Amendment was signed;

the Notes are unsecured;

the Notes are convertible only into shares of Odyssey common stock;

the modified Warrants are exercisable at any time until July 8, 2024 to purchase an aggregate of 196,135 shares of our common stock.

We evaluated the amendment’s impact on the accounting for the Note in accordance with ASC 470-50-40-6

through 12 to determine whether extinguishment accounting was appropriate.

The modification had a cash flow effect on a present value basis of less than 10 %.

However, the reduction in the conversion price resulted in a change in the fair value of the embedded conversion option that was more than 10 % of the carrying value of the Note immediately prior to the modification.

Because the amendment resulted in a substantial modification, extinguishment accounting was required, and we recorded a loss on the extinguishment of debt of $ 290,024 .

The extinguishment accounting resulted in a fair value reacquisition price of this debt of $ 1,340,024 .

The premium of $ 290,024 was being amortized over the remaining life of the debt.

The warrant modification was treated as an inducement to extend the debt therefore the fair value of the warrants of $ 868,878 was a period expense and charged to interest expense with an offset to equity.

Term Extension (August 14, 2020)

On August 14, 2020, we entered into a Third Amendment to Note and Warrant Purchase Agreement and Note and Warrant Modification Agreement (the “Third Amendment”) with the Lenders.

Certain terms and provisions of the Notes were modified, and we issued a new warrant to purchase common stock to each of the Lenders as consideration for them entering into the Third Amendment.

The warrants have an exercise price of $ 4.67 and are exercisable any time until August 14, 2023 .

Material terms and provisions that were amended or otherwise modified are as follows:

the maturity date of the Notes was extended by one year, to July 12, 2021 and

the conversion rate of the Notes was modified to $ 4.67 .

As of August 14, 2020, the aggregate amount of indebtedness outstanding under the Notes was $ 1,232,846 .

As amended by the Third Amendment, the Notes are convertible into an aggregate of 263,993 shares of our common stock, and the new Warrants are exercisable to purchase an aggregate of 131,996 shares of our common stock for $ 4.67 per share.

The modification of the Notes and the issuance of the warrants, were evaluated under ASC 470-50-40,

“Debt Modification and Extinguishments.” By applying the guidance, the Notes were determined to be substantially different and the transaction qualified for extinguishment accounting.

As a result, we recorded a loss on extinguishment of approximately $ 777,500 , which included the fair value of the warrants given as consideration for the modification.

The premium of $ 358,497 was amortized over the remaining life of the debt.

The related amortization for the years ended December 31, 2021 and

was $ 195,863 and $ 323,171 , respectively.

The unamortized premium at December 31, 2021 was zero and at December 31, 2020 it was $ 195,863 .

Upon maturity of this indebtedness on July 12, 2021, the Lenders converted the Note and interest totaling $ 1,325,582 into 283,850 shares of our common stock.

The conversion price was $ 4.67 per share of common stock.

Note 9 – Litigation Financing

On June 14, 2019, Odyssey and Exploraciones Oceánicas S.

de C.V., our Mexican subsidiary (“ExO” and, together with Odyssey, the “Claimholder”), and Poplar Falls LLC (the “Funder”) entered into an International Claims Enforcement Agreement (the “Agreement”), pursuant to which the Funder agreed to provide financial assistance to the Claimholder to facilitate the prosecution and recovery of the claim by the Claimholder against the United Mexican States under Chapter Eleven of the North American Free Trade Agreement (“NAFTA”) for violations of the Claimholder’s rights under NAFTA related to the development of an undersea phosphate deposit off the coast of Baja Sur, Mexico (the “Project”), on our own behalf and on behalf of ExO and United Mexican States (the “Subject Claim”).

Pursuant to the Agreement, the Funder agreed to specified fees and expenses regarding the Subject Claim (the “Claims Payments”) incrementally and at the Funder’s sole discretion.

Settlement, Release and Termination Agreement of the MINOSA 1 and MINOSA 2

On March 3, 2023, Odyssey, Altos Hornos de México, S.A.B.

(“AHMSA”), MINOSA and Phosphate One LLC (f/k/a Penelope Mining LLC, “Phosphate One”

and together with AHMSA and MINOSA, the “AHMSA Parties”) entered into Settlement, Release and Termination Agreement (the “Termination Agreement”).

Pursuant to the Termination Agreement:

Odyssey paid AHMSA $ 9.0 million (the “Termination Payment”) in cash on March 6, 2023;

the parties agreed that, concurrently with the payment of the Termination Payment, a portion of the MINOSA Notes would be deemed automatically converted into 304,879 shares of Odyssey’s common stock;

the MINOSA Notes, the Purchase Agreement, and the Pledge Agreements were terminated;

each of the AHMSA Parties, on the one hand, and Odyssey, on the other, agreed to release the other parties and their respective affiliates, equity holders, beneficiaries, successors and assigns (the “Released Parties”) from any and all claims, demands, damages, actions, causes of action or liabilities of any kind or nature whatsoever under the SPA, the MINOSA Notes, the Minosa Purchase Agreement, or the Pledge Agreements (the “Released Matters”);

each of the AHMSA Parties, on the one hand, and Odyssey, on the other, agreed not to make any claims against any of the Released Parties related to the Released Matters.

The transactions contemplated by the Termination Agreement were completed on March 6, 2023 .

On March 6, 2023, Odyssey entered into a Release and Termination Agreement with a director of the Company, James S.

Pignatelli, to terminate and release a portion of the MINOSA 2 Note assigned to Mr.

Pignatelli in 2021, the related Note Purchase Agreement (“NPA”) and the Pledge Agreement.

On March 6, 2023, Odyssey issued a new Unsecured Convertible Promissory Note in the principal amount of $ 500,000 to Mr.

Pignatelli that bears interest at the rate of 10.0 % per annum convertible into common stock of Odyssey at a conversion price of $ 3.78 per share.

Pursuant to the Release and Termination Agreement with Mr.

Pignatelli noted above, he agreed, in exchange for the issuance of this Unsecured Convertible Promissory Note by Odyssey, to release the assigned portion of the MINOSA 2 note issued by Odyssey Marine Exploration, Inc., a wholly owned subsidiary of the Company, to Mr.

Pignatelli in the principal amount of $ 404,634 and convertible at a conversion price of $ 4.35 per share, pursuant to which the outstanding aggregate obligation with accrued interest was $ 630,231 .

Litigation Financing

On June 14, 2019, Odyssey and Exploraciones Oceánicas S.

de C.V., our Mexican subsidiary ("ExO" and, together with Odyssey, the "Claimholder"), and Poplar Falls LLC (the "Funder") entered into an International Claims Enforcement Agreement (the "Agreement"), pursuant to which the Funder agreed to provide financial assistance to the Claimholder to facilitate the prosecution and recovery of the claim by the Claimholder against the United Mexican States under Chapter Eleven of the North American Free Trade Agreement ("NAFTA") for violations of the Claimholder’s rights under NAFTA related to the development of an undersea phosphate deposit off the coast of Baja Sur, Mexico (the "Project"), on our own behalf and on behalf of ExO and United Mexican States (the "Subject Claim").

Pursuant to the Agreement, the Funder agreed to specified fees and expenses regarding the Subject Claim (the "Claims Payments") incrementally and at the Funder’s sole discretion.

Under the terms of the Agreement, the Funder agreed to make Claims Payments in an aggregate amount not to exceed $ 6,500,000 (the "Maximum Investment Amount").

The Maximum Investment Amount will be made available to the Claimholder in two phases, as set forth below:

a first phase, in which the Funder shall make Claims Payments in an aggregate amount no greater than $ 1,500,000 for the payment of antecedent and ongoing costs (“Phase I Investment Amount”);

a second phase, in which the Funder shall make Claims Payments in an aggregate amount no greater than $ 5,000,000 for the purposes of pursuing the Subject Claim to a final award (“Phase II Investment Amount”).

(c) a first phase, in which the Funder shall make Claims Payments in an aggregate amount no greater than $ 1,500,000 for the payment of antecedent and ongoing costs ("Phase I Investment Amount");

(d) a second phase, in which the Funder shall make Claims Payments in an aggregate amount no greater than $ 5,000,000 for the purposes of pursuing the Subject Claim to a final award ("Phase II Investment Amount").

Upon exhaustion of the Phase I Investment Amount, the Claimholder will have the option to request Tranche A of the Phase II Investment Amount, consisting of funding up to $ 3.5 million ("Tranche A Committed Amount").

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The Claimholder must exercise its option to receive the Tranche B Committed Amount in writing within forty-five days after the exhaustion of the Tranche A Committed Amount.

Pursuant to the Agreement, the Claimholder agreed that, upon exercising the Claimholder’s option to receive funds under Phase I, Tranche A of Phase II, or Tranche B of Phase II, the Funder will be the sole source of third-party funding for the specified fees and expenses of the Subject Claim under each respective phase and tranche covered by the option exercised, and the Claimholder will obtain funding for such fees and expenses, only as set forth in the Agreement.

The Funder was due closing fee of $ 80,000 for the Phase I Investment Amount, and $ 80,000 for the Phase II Investment Amount to pay third parties in connection with due diligence and other administrative and transaction costs incurred by the Funder prior to and in furtherance of execution of the Agreement.

The Funder was due closing fee of $ 80,000 for the

Phase I Investment Amount, and $ 80,000 for the Phase II Investment Amount to pay third parties in connection with due diligence and other administrative and transaction costs incurred by the Funder prior to and in furtherance of execution of the Agreement.

Upon the Funder making Claims Payments to the Claimholder or its designees in an aggregate amount equal to the Maximum Investment Amount, the Funder has the option to continue funding the specified fees and expenses in relation to the Subject Claim on the same terms and conditions provided in the Agreement.

The Funder must exercise its option to continue funding in writing, within thirty days after the Funder has made Claims Payments in an aggregate amount equal to the Maximum Investment Amount.

If the Funder exercises its option to continue funding, the parties agreed to attempt in good faith to amend the Agreement to provide the Funder with the right to provide at the Funder’s discretion funding in excess of the Maximum Investment Amount, in an amount up to the greatest amount that may then be reasonably expected to be committed for investment in Subject Claim.

If the Funder declines to exercise its option, the Claimholder may negotiate and enter into agreements with one or more third parties to provide funding, which shall be subordinate to the Funder’s rights under the Agreement.

The Agreement provides that the Claimholder may at any time without the consent of the Funder either settle or refuse to settle the Subject Claim for any amount;

provided, however, that if the Claimholder settles the Subject Claim without the Funder’s consent, which consent shall not be unreasonably withheld, conditioned, or delayed, the value of the Recovery Percentage (as defined below) will be deemed to be the greater of (a) the Recovery Percentage (under Phase I or Phase II, as applicable), or (b) the total amount of all Claims Payments made in connection with such Subject Claim multiplied by three (3).

If the Claimholder ceases the Subject Claim for any reason other than (a) a full and final arbitral award against the Claimholder or (b) a full and final monetary settlement of the claims, including in particular, for a grant of an environmental permit to the Claimholder allowing it to proceed with the Project (with or without a monetary component), all Claims Payments under Phase I and, if Claimholder has exercised the corresponding option, the Tranche A Committed Amount and Tranche B Committed Amount, shall immediately convert to a senior secured liability of the Claimholder.

This sum shall incur an annualized internal rate of return ("IRR") of 50.0% retroactive to the date each Funding Request was paid by the Funder (under Phase I), or, to the conversion date for the Tranche A Committed Amount and Tranche B Committed Amount of Phase II if the Claimholder has exercised the respective option (collectively, the "Conversion Amount").

Such Conversion Amount and any and all accrued IRR shall be payable in-full by

the Claimholder within 24 months of the date of such conversion, after which time any outstanding Conversion Amounts, shall accrue an (IRR) of 100.0%, retroactive to the conversion date (the “Penalty Interest Amount”).

Such Conversion Amount and any and all accrued IRR shall be payable in-full by the Claimholder within 24 months of the date of such conversion, after which time any outstanding Conversion Amounts, shall accrue an ("IRR") of 100.0%, retroactive to the conversion date (the "Penalty Interest Amount").

The Claimholder will execute such documents and take other actions as necessary to grant the Funder a senior security interest on and over all sums due and owing by the Claimholder in order to secure its obligation to pay the Conversion Amount to the Funder.

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Should the Claimholder cease the Subject Claim as described above after Self-Funding the Claim, accrued IRR and Penalty Interest shall be calculated and paid to the Funder as set forth above.

The Funder’s rights to the Recovery Percentage as defined below shall survive any decision by Claimholder to utilize Self-Funding.

The parties acknowledge this Agreement constitutes a sale of the right to a portion of the Proceeds (if any) arising from the Subject Claim as set forth in this Agreement.

The Claimholder has relinquished its right to the portion of the proceeds, if any, that the Funder would have the right to as described below.

This sale of proceeds is being accounted for under the guidance of ASC 470-10-25

Recognition (Sales of Future Revenues)

This sale of proceeds is being accounted for under the guidance of ASC 470-10-25 Recognition (Sales of Future Revenues)

On each Distribution Date, distributions of the Proceeds shall be made to the Claimholder and the Funder in accordance with subparagraph (a) or (b) below (the "Recovery Percentage"), as applicable:

If the Claimholder receives only the Phase I Investment Amount from the Funder, the first Proceeds shall be distributed as follows:

first, 100.0% to the Funder, until the cumulative amount distributed to the Funder equals the total Claims Payments paid by the Funder under Phase I;

second, 100.0% to the Funder until the cumulative amount distributed to the Funder equals an IRR of 20% of Claims Payments paid by the Funder under Phase I (“Phase I Compensation”), per annum;

thereafter, 100.0% to the Claimholder.

If the Claimholder exercises its options to receive Tranche A or both Tranche A and Tranche B of the Phase II Investment Amount, the first Proceeds shall be distributed as follows:

first, 100.0% to the Funder until the cumulative amount distributed to the Funder equals the total Claims Payments paid by the Funder under Phases I and II;

second, 100.0% to the Funder until the cumulative amount distributed to the Funder equals an additional 300.0% of Phase I Investment Amount;

(a) If the Claimholder receives only the Phase I Investment Amount from the Funder, the first Proceeds shall be distributed as follows:

(i) first, 100.0% to the Funder, until the cumulative amount distributed to the Funder equals the total Claims Payments paid by the Funder under Phase I;

(ii) second, 100.0% to the Funder until the cumulative amount distributed to the Funder equals an IRR of 20% of Claims Payments paid by the Funder under Phase I ("Phase I Compensation"), per annum;

(iii) thereafter, 100.0% to the Claimholder.

(b) If the Claimholder exercises its options to receive Tranche A or both Tranche A and Tranche B of the Phase II Investment Amount, the first Proceeds shall be distributed as follows:

(i) first, 100.0% to the Funder until the cumulative amount distributed to the Funder equals the total Claims Payments paid by the Funder under Phases I and II;

(ii) second, 100.0% to the Funder until the cumulative amount distributed to the Funder equals an additional 300.0% of Phase I Investment Amount;

plus an additional 300% of the Tranche A Committed Amount (i.e.

300.0% of $3.5 million), less any amounts remaining of the Tranche A Committed Amount that

Funder did not pay as Claims Payments;

300.0% of $3.5 million), less any amounts remaining of the Tranche A Committed Amount that

the Funder did not pay as Claims Payments;

plus an additional 300.0% of the Tranche B Committed Amount (i.e.

300.0% of $1.5 million), if the Claimholder exercises the Tranche B funding option, less any amounts remaining of the Tranche B Committed Amount that the Funder did not pay as Claims Payments;

third, for each $10,000 in specified fees and expenses paid by the Funder under Phase I and Phase II and any amounts over each $10,000 of the Tranche A Committed Amount and the Tranche B Committed Amount (if the Claimholder exercises the Tranche B funding option), 0.01% of the total Proceeds from any recoveries after repayment of (i) and (ii) above, to the Funder;

thereafter, 100% to the Claimholder.

(iii) third, for each $10,000 in specified fees and expenses paid by the Funder under Phase I and Phase II and any amounts over each $10,000 of the Tranche A Committed Amount and the Tranche B Committed Amount (if the Claimholder exercises the Tranche B funding option), 0.01% of the total Proceeds from any recoveries after repayment of (i) and (ii) above, to the Funder;

(iv) thereafter, 100% to the Claimholder.

The Agreement provides that if no Proceeds are ever paid to or received by the Claimholder or its representatives and if the environmental permit is not issued, the Funder shall have no right of recourse or right of action against the Claimholder or its representatives, or any of their respective property, assets, or undertakings, except as otherwise specifically contemplated by the Agreement.

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and (c) the amount received by the Funder as a result thereof is not sufficient to pay all of the Recovery Percentage and all of the amounts due to the Funder under the Agreement, then (provided that all of the Proceeds which the Funder will ever be entitled to have been paid to or received by the Funder), the Funder shall have no right of recourse or action against the Claimholder or its Representatives, or any of their property, assets, or undertakings, except as otherwise specifically contemplated by the Agreement.

Pursuant to the Agreement, the Claimholder acknowledged the Funder’s priority right, title, and interest in any Proceeds, including against any available collateral to secure its obligations under the Agreement, which security interest shall be first in priority as against all other security interests in the Proceeds.

The Claimholder also acknowledged and agreed to execute and authorize the filing of a financing statement or similar and to take such other actions in such jurisdictions as the Funder, in its sole discretion, deems necessary and appropriate to perfect such security interest.

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The material terms and provisions that were amended or otherwise modified are as follows:

The Funder agreed to provide up to $ 2.2 million in Arbitration Support Funds for the purpose of paying the Claimholder’s litigation support costs in connection with Subject Claim;

A closing fee of $ 200,000 has been retained by the Funder in connection with due diligence and other transaction costs incurred by the Funder;

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Although the warrants only become exercisable upon the occurrence of future events, they are considered issued for accounting purposes and were valued using a binomial lattice model.

The expected volatility assumption was based on the

historical volatility of our common stock.

The expected life assumption was primarily based on management’s expectations of when the Warrants will become exercisable and the risk-free interest rate for the expected term of the warrant is based on the U.S.

The expected volatility assumption was based on the historical volatility of our common stock.

Treasury yield curve in effect at the time of measurement.

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Under the terms of the Second Restated Agreement, the Funder has made and agreed to make Claims Payments in an aggregate amount not to exceed $ 20,000,000 (the "Maximum Investment Amount").

The Second Restated Agreement requires the Funder to make Claims Payments in an aggregate amount no greater than $ 10,000,000 for the purposes of pursuing the Subject Claim to a final award (“Phase III Investment Amount”).

The Second Restated Agreement required the Funder to make Claims Payments in an aggregate amount no greater than $ 10,000,000 for the purposes of pursuing the Subject Claim to a final award ("Phase III Investment Amount").

We also incurred $ 200,000 in related fees which were treated as an additional advance.

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We also incurred $ 80,000 in related fees which were treated as an additional advance.

Restated Agreement includes the same representations and warranties, covenants, conditions, termination and indemnification provisions, and other provisions as in the original agreement.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 7,354,940 and $ 3,668,242 , respectively, was recorded.

This Third Restated Agreement includes the same representations and warranties, covenants, conditions, termination and indemnification provisions, and other provisions as in the original agreement.

Waiver and Consent (March 6, 2023)

On March 6, 2023, the Claimholder and the Funder under the agreement entered into a Waiver and Consent Agreement, pursuant to which, among other things, the Funder consented (i) to consent to allow the Claimholder to fund certain costs and expenses arising from the Subject Claim from the Claimholder’s own capital in an aggregate amount not to exceed $ 5,000,000 , and (ii) Odyssey paid a $ 1,000,000 nonrefundable waiver fee to the Funder.

For the years ended December 31, 2022, 2021 and 2020, we recorded $ 295,932 , $ 241,034 and $ 172,849 , respectively, of interest expense from the amortization of the debt discount and $ 146,896 , $ 133,993 and $ 52,214 interest from the fee amortization, respectively.

The December 31, 2021 and December 31, 2020 carrying value of the debt is $ 18,323,097 and $ 10,968,729 , respectively, and is net of unamortized debt fees of $ 293,793 and $ 347,786 , respectively, as well as the net unamortized debt discount of $ 649,928 and $ 890,962 , respectively, associated with the fair value of the warrant.

The total face value of this obligation at December 31, 2021 and December 31, 2020 was $ 19,266,818 and 12,207,477 , respectively.

Note 10 – Payroll protection program

We applied to Fifth Third Bancorp (“Fifth Third”) under the Small Business Administration (the “SBA”) Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”) for a loan of $ 370,400 (the “Loan”), and the Loan was made on April 16, 2020.

The proceeds of the Loan were used to cover payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act.

The Loan, which is evidenced by promissory note issued by us (the “Promissory Note”), has a two-year term,

matures on April 16, 2022 , and bears interest at a rate of 0.98 % per annum.

Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), will commence seven months from the month this Note is dated.

We did not provide any collateral or guarantees for the Loan, nor did we pay any facility charge to obtain the Loan.

The Promissory Note provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects.

Odyssey may prepay the principal of the Loan at any time without incurring any prepayment charges.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 1,788 and $ 936 , respectively, was recorded.

At December 31, 2021, the outstanding principal was zero and at December 31, 2020, was $ 370,400 .

We applied for 100 % forgiveness with Fifth Third Bank during March 2021.

In July 2021, we received communication from Fifth Third Bank and the SBA confirming 100 % of this Loan was forgiven and paid in full effective July 1, 2021.

The forgiven amount was included in Other income in our Consolidated Statements of Operations .

Note 11 – Emergency Injury Disaster Loan

The December 31, 2022 and 2021 carrying value of the debt is $ 24,347,513 and $ 18,323,097 , respectively, and is net of unamortized debt fees of $ $ 146,897 and $ 293,793 , respectively, as well as the net unamortized debt discount of $ 353,996 and $ 649,928 , respectively, associated with the fair value of the warrant.

The total face value of this obligation at December 31, 2022 and 2021 was $ 24,848,406 and $ 19,266,818 , respectively.

Emergency Injury Disaster Loan

On June 26, 2020, we executed the standard loan documents required for securing an Economic Injury Disaster Loan (the "EIDL Loan") from the United States Small Business Administration (the "SBA").

The principal amount of the EIDL Loan is $ 149,900 , with proceeds to be used for working capital purposes.

Interest on the EIDL Loan accrues at the rate of

3.75 % per annum and installment payments, including principal and interest of $ 731 , are due monthly beginning 12 months from the date of the EIDL Loan.

In early 2021, the SBA extended this 12 month period to 24 months setting the first payment due date in May 2022.

Interest on the EIDL Loan accrues at the rate of 3.75 % per annum and installment payments, including principal and interest of $ 731 , are due monthly beginning 12 months from the date of the EIDL Loan.

In 2021, the SBA extended this 12 month period, setting the first payment due date in December 2022.

The balance of principal and interest is payable thirty years from the date of the promissory note.

In connection with the EIDL Loan, the Company executed the EIDL Loan documents, which include the SBA Secured Disaster Loan Note, dated May 16, 2020, the Loan Authorization and Agreement, dated May 16, 2020, and the Security Agreement, dated May 16, 2020, each between the SBA and the Company.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 10,102 and $ 0 , respectively, was recorded.

At December 31, 2021 and 2020, the outstanding principal balance was $ 149,900 .

Note 12 – Vendor note payable

Vendor Note Payable

We currently owe a vendor $ 484,009 as an interest-bearing trade payable.

This trade payable bears simple annual interest at a rate of 12 %.

The balance due was $ 484,009 at December 31, 2021 and 2020.

As collateral, we granted the vendor a primary lien on certain of our equipment.

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This agreement matured in August 2018 .

During the period ended June 30, 2018, we sold various marine equipment to Magellan for $ 1.0 million and the assumption of this vendor’s trade payable and accrued interest, however, we remain as guarantor on this trade payable.

Included in this equipment is the equipment noted above the vendor has a primary lien on.

The vendor consented to Magellan’s assumption of this debt but did not release us from our obligations.

If Magellan defaults and the vendor forecloses on this equipment currently in Magellan’s possession, we would then have a contingent liability to Magellan in the amount of $ 0.5 million for two of the key assets.

The vendor consented to Magellan’s assumption of this debt but did not release us from our obligations.

The Company subsequently received back one of the two key assets thus reducing the contingent liability to $ 0.3 million.

For the twelve months ended December 31, 2021 and 2020, interest expense in the amount of $ 58,083 and $ 58,240 , respectively, was recorded.

Note 13 – Monaco

On October 4, 2021, we and Monaco Financial, LLC and certain associated entities (collectively with Monaco, the "Monaco Parties") entered into a Termination and Settlement Agreement (the "Termination Agreement").

We were parties to various loan arrangements and other commercial contractual relationships, and the purposes of the Termination Agreement were to terminate the loan agreements and contractual relationships and to settle the outstanding obligations thereunder between us and the Monaco Parties.

As for loan arrangements that relate to this transaction, see above notes:

Note 1 Monaco – 2014, Note 2 Monaco – 2016, Note 5 SMOM and Note 7 Monaco – 2018.

Pursuant to the Termination Agreement, the loan agreements and contractual relationships were terminated, and we agreed to (a) issue 984,848 shares of our common stock (the "Settlement Shares") to Monaco and (b) pay Monaco an aggregate amount of $ 3.0 million (the "Settlement Cash") no later than December 1, 2021.

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We delivered $ 500,000 of the Settlement Cash to Monaco upon execution and delivery of the Termination Agreement.

At Monaco’s option, Monaco has the right, but not the obligation, to receive the remaining $ 2.5 million in shares of our common stock rather than in cash.

This amount was to be settled December 1, 2021 but remain ed

outstanding at December 31, 2021.

At Monaco’s option, Monaco has the right, but not the obligation, to receive the remaining $ 2.5 million in shares of our common stock rather than in cash.

This amount was to be settled December 1, 2021 but remained outstanding at December 1, 2021.

This indebtedness does not carry an interest rate.

If Monaco exercises the right, Odyssey will issue to Monaco the number of shares determined by dividing $ 2.5 million by the greater of $ 4.95 or 90 % of the then-applicable five-day volume-weighted

average price per share of common stock.

Under the terms of the Termination Agreement, (a) the Monaco Parties agreed that approximately $ 14.5 million of indebtedness, which includes accrued interest, owed by us to the Monaco Parties was satisfied in full and (b) certain of the Monaco Parties assigned to us all of their right, title, and interest in a portion of the proceeds from a specified shipwreck project.

If received by us, these proceeds will be applied to the $ 2.5 million obligation.

As a result of the termination of the loan agreements and contractual relationships, (x) our right to receive a percentage of the proceeds derived by the Monaco Parties from certain shipwreck projects was terminated, and (y) Monaco’s option to convert certain indebtedness held by it into shares of Oceanica Resources, S.

Under the terms of the Termination Agreement, (a) the Monaco Parties agreed that approximately $ 14.5 million of indebtedness, which included accrued interest, owed by us to the Monaco Parties was satisfied in full and (b) certain of the Monaco Parties assigned to us all of their right, title, and interest in a portion of the proceeds from a specified shipwreck project.

held indirectly by us was terminated.

The Termination Agreement also sets forth mutual releases and other customary representations, warranties, and covenants of the parties.

The Termination Agreement also set forth mutual releases and other customary representations, warranties, and covenants of the parties.

The Company determined that the embedded conversion feature was clearly and closely related to the host contract and met the scope exception under FASB ASC 815-40.

it did not require derivative liability classification under ASC 815.

The Company then evaluated the conversion feature under FASB ASC 470-20,

“Debt with conversion and other options” for consideration of any beneficial conversion features (“BCF”).

Based on the market price of the common stock on the date of the agreement as compared to the conversion price, they determined there was a BCF of 232,175 which was recorded in additional paid-in

Thus, it did not require derivative liability classification under ASC 815.

The Company then evaluated the conversion feature under FASB ASC 470-20,"Debt with conversion and other options" for consideration of any beneficial conversion features ("BCF").

Based on the market price of the common stock on the date of the agreement as compared to the conversion price, they determined there was a BCF of 232,175 which was recorded in additional paid-in capital.

A BCF results in a debt discount which should be amortized over the stated maturity of the convertible instrument, or the earliest potential conversion date.

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As a result of the Termination Agreement, we recognized a gain on debt settlement of approximately $ 5.2 million, which represented the difference between the loan principal, accrued interest and accounts payable forgiven of approximately $ 14.7 million and total consideration given of approximately $ 9.5 million.

The shares of common stock issuable under the Termination Agreement were offered and sold pursuant to a base prospectus and a prospectus supplement, both filed pursuant to Odyssey’s shelf registration statement on Form S-3

0333-227666).

On June 14, 2022, the Company paid $ 2,500,000 of the outstanding amounts payable under the Termination Agreement with Monaco.

Seller Note Payable

On December 2, 2022, we executed an Amended and Restated Purchase and Sale Agreement ("Purchase and Sale Agreement") with the seller of certain marine equipment ("Seller").

Pursuant to the Purchase and Sale Agreement, Seller agreed to sell us the marine equipment, related tooling items and spares for $ 2.5 million.

On or before the closing date, Odyssey paid the Seller $ 1.1 million for the acquisition of the assets.

Pursuant to the Purchase and Sale Agreement, we paid the Seller the $ 1.4 million balance of the purchase price as a fully amortizing loan, bearing interest at a rate of 20 % per annum, maturing on June 5, 2024 (the "Seller Note").

D&O Insurance Note Payable

On November 1, 2022, we executed the Premium Finance Agreement with AFCO Credit Corporation ("AFCO").

Pursuant to the Premium Finance Agreement, AFCO agreed to finance the D&O Insurance premiums evidenced by the promissory note, bearing interest at a rate of 4.95 % per annum, maturing on October 31, 2023 .

On December 1, 2021, we executed the Premium Finance Agreement with AFCO Credit Corporation ("AFCO").

Pursuant to the Premium Finance Agreement, AFCO agreed to finance the D&O Insurance premiums evidenced by the promissory note, bearing interest at a rate of 2 % per annum, that matured on November 30, 2022 .

On March 7, 2022, we entered into a Note Purchase Agreement (“Note Agreement”) with 37North SPV 11, LLC (“37N”) in which 37N agreed to loan us up to $ 2,000,000 .

These loan proceeds were received in full on March 25, 2022.

Pursuant to the Note Agreement, the indebtedness was non-interest bearing and matured on June 25, 2022.

Anytime from 30 days after the maturity date, 37N had the option to convert all or a portion of the outstanding amount of the indebtedness into conversion shares equal to the quotient obtained by dividing (A) 125% of the amount of the indebtedness, by (B) the lower of $5.94 and 70% of the 10-day VWAP.

The aggregate maximum number of shares of Common Stock to be issued in connection with conversion of the indebtedness was not to exceed (i) 19.9 % of the outstanding shares of Common Stock prior to the date of the Note Agreement, (ii) 19.9 % of the combined voting power of the outstanding voting securities, or iii) exceed the applicable listing rules of the Principal Market if the stockholders did not approve the issuance of Common Stock upon conversion of the indebtedness.

Any time prior to maturity, we had the option to prepay the indebtedness at an amount of 110 % of the unpaid principal.

From the maturity date to 29 days after the maturity date (July 24, 2022), we were permitted to prepay all (but not less than) an amount equal to 115 % of the unpaid amount of the indebtedness.

Anytime, after the 30 th day after the maturity date (July 25, 2022), we were permitted to prepay all (but not less than) an amount equal to 125 % of the unpaid amount of the indebtedness , however, we were required to provide 37N a prepayment notice at least 10 days prior to repayment.

If 37N delivered an exercise notice during this 10-day period, the Note would be converted, rather than prepaid.

If 37N delivered an exercise notice and the number of shares issuable is limited by the 19.9 % limitation outlined above, then we were permitted to prepay all (but not less than all) an amount equal to 130 % of the remaining unpaid amount.

On June 29, 2022, the Company paid $ 2,200,000 of the outstanding amounts payable under the Note Agreement with 37N.

On July 6, 2022, the Company paid the remaining $ 100,000 of the outstanding amounts payable under the Note Agreement with 37N.

Accounting considerations

We evaluated the indebtedness and determined the shares issuable pursuant to the conversion option were determinate due to the cap on the number of issuable shares, and, as such, met the requirements for a derivative scope exception for instruments that are both indexed to an entity’s own stock and classified in stockholders’

The optional and contingent prepayment options provide the right to accelerate the settlement of debt;

however, the prepayment options can only be exercised by the Company.

As such, they are considered clearly and closely related to the debt host instrument and bifurcation was not necessary.

We early adopted ASC 2020-06, so we were not required to analyze the instrument for a beneficial conversion feature, and the instrument was recorded wholly as debt.

Although the indebtedness did not bear interest, it was required to be repaid at amounts greater than the face value.

According to ASC 470-10-35-2, if a debt instrument has a contractual maturity date that can be extended at the issuer’s option, at an increasing rate, the debt discounts and issuance costs must be amortized over the period in which the debt is estimated to be outstanding, even if that period extends beyond the debt’s original contractual maturity date.

The difference between the proceeds received and the repayment

amount are generally amortized over the expected life of the indebtedness using the effective interest method.

Management estimated the expected life to be very limited, so the entire expected repayment amount of $ 2.2 million, representing 110 % of the indebtedness, was recorded upon issuance of the Note Agreement.

Certain default put provisions were not considered to be clearly and closely related to the debt host, but management concluded that the value of these default put provisions was de minimis.

On February 28, 2023, Odyssey issued a $ 300,000 11.0 % Promissory Note to Galileo NCC Inc ("Galileo").

The Promissory Note was payable on April 1, 2023 .

On March 6, 2023, Odyssey repaid this note payable in full with proceeds from the issuance of the Note (as defined below).

On March 6, 2023, Odyssey entered into a Note and Warrant Purchase Agreement (the “Purchase Agreement”) with an institutional investor pursuant to which Odyssey issued and sold to the investor (a) a promissory note (the “Note”) in the principal amount of up to $ 14.0 million and (b) a warrant (the “Warrant”

and, together with the Note, the “Securities”) to purchase shares of Odyssey’s common stock.

The principal amount outstanding under the Note bears interest at the rate of 11.0 % per annum, and interest is payable in cash on a quarterly basis, except that, (a) at Odyssey’s option and upon notice to the holder of the Note, any quarterly interest payment may be satisfied, in lieu of paying such cash interest, by adding an equivalent amount to the principal amount of the Note (“PIK Interest”), and (b) the first quarterly interest payment due under the Note will be satisfied with PIK Interest.

The Note provides Odyssey with the right, but not the obligation, upon notice to the holder of the Note to redeem (x) at any time before the first anniversary of the issuance of the Note, all or any portion of the indebtedness outstanding under the Note (together with all accrued and unpaid interest, including PIK Interest) for an amount equal to one hundred twenty percent ( 120 %) of the outstanding principal amount so being redeemed, and (y) at any time on or after the first anniversary of the issuance of the Note, all or any portion of the indebtedness outstanding under the Note (together with all accrued and unpaid interest, including PIK Interest).

Unless the Note is sooner redeemed at Odyssey’s option, all indebtedness under the Note is due and payable on September 6, 2024.

Under the terms of the Purchase Agreement, Odyssey agreed to use the proceeds of the sale of the Securities to fund Odyssey’s obligations under the Termination Agreement (as defined below), to pay legal fees and costs related to Odyssey’s NAFTA arbitration against the United Mexican States, to pay fees and expenses related to the transactions contemplated by the Purchase Agreement, and for working capital and other general corporate expenditures.

Odyssey’s obligations under Note are secured by a security interest in substantially all of Odyssey’s assets (subject to limited stated exclusions).

Under the terms of the Warrant, the holder has the right for a period of three years after issuance to purchase up to 3,703,704 shares of Odyssey’s common stock at an exercise price of $ 3.78 per share, which represents 120.0 % of the official closing price of Odyssey’s common stock on the NASDAQ Capital Market immediately preceding the signing of the Purchase Agreement, upon delivery of a notice of exercise to Odyssey.

Upon exercise of the Warrant, Odyssey has the option to either (a) deliver the shares of common stock issuable upon exercise or (b) pay to the holder an amount equal to the difference between (i) the aggregate exercise price payable under the notice of exercise and (ii) the product of (A) the number of shares of common stock indicated in the notice of exercise multiplied by (B) the arithmetic average of the daily volume-weighted average price of the common stock on the NASDAQ Capital Market for the five consecutive trading days ending on, and including, the trading day immediately prior to the date of the notice of exercise.

The warrant provides for customary adjustments to the exercise price and the number of shares of common stock issuable upon exercise in the event of a stock split, recapitalization, reclassification, combination or exchange of shares, separation, reorganization, liquidation, or the like.

In connection with the execution and delivery of the Purchase Agreement, Odyssey entered into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which Odyssey agreed to register the offer and sale of the shares (the “Exercise Shares”) of Odyssey common stock issuable upon exercise of the Warrant.

Pursuant to the Registration Rights Agreement, Odyssey agreed to prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement covering the resale of the Exercise Shares and to use its reasonable best efforts to have the registration statement declared effective by the SEC as soon as practicable thereafter, subject to stated deadlines.

Accrued interest

Total accrued interest associated with our financings was $ 21,875,753 and $ 18,002,386 as of December 31, 2021 and December 31, 2020, respectively.

Total accrued interest associated with our financings was $ 35,131,587 and $ 21,875,753 as of December 31, 2022 and 2021, respectively.

Long-Term Obligation Maturities:

We have two obligations that span greater than twelve months.

For our lease obligations, see Lease commitment in NOTE O – Commitments and Contingencies for further information on our operating lease obligations.

See NOTE H – LOANS PAYABLE, Note 9 – Litigation Financing and Note 1 1

– Emergency Injury Disaster Loan for further detail regarding the repayment and maturity on the December 31, 2021 debt balances totaling $ 18,472,997 .

NOTE I – ACCRUED EXPENSES

We have three obligations that span greater than twelve months.

For our lease obligations, see Lease commitment in Note 16 Commitments and Contingencies for further information on our operating lease obligations.

See Note 10 Loans Payable –

Litigation Financing, Emergency Injury Disaster Loan and Seller Note Payable for further detail regarding the repayment and maturity on the December 31, 2022 debt balances totaling $ 25,011,049 .

NOTE 11 –

ACCRUED EXPENSES

Accrued expenses consist of the following:

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Professional services

Accrued insurance obligations

Other operating

Accrued exploration license fees

Total accrued expenses

Professional fees are mainly attributable to legal fees and other professional services in support of operations and the NAFTA litigation.

Compensation and incentives at December 31, 2021 includes $ 0.9 million accrued incentive awards for the company employees at December 31, 2020 and prior and $ 0.7 million additional for 2021.

Payment of the incentives is subject to Board approval.

Other operating at December 31, 2021 contains general expense items resulting from general operations.

The primary expense in Other operating is

$ 1.8 million for exploration permits.

Accrued interest is due to several lenders per debt agreements described in NOTE H.

During the quarter ended September 30, 2019, we received an earnest money deposit of $ 450,000 from a company controlled by Greg Stemm, our past Chairman of the Board (see NOTE J for further information).

Deposits is primarily comprised of an earnest money deposit of $ 450,000 from CIC.

The earnest money deposit relates to a draft agreement related to potential sale of a stake of our equity in CIC.

This transaction has not yet been consummated.

Accrued insurance obligations for the years ended December 31, 2021 and 2020 primarily consisted of directors and officers insurance obligations.

NOTE J – RELATED PARTY TRANSACTIONS

We currently provide services to a deep-sea

mineral exploration company, CIC, which was organized and is majority owned and controlled by Greg Stemm, Odyssey’s past Chairman of the Board.

Stemm’s involvement with this company was disclosed to, and approved by, the Odyssey Board of Directors and legal counsel pursuant to the terms of Mr.

Stemm’s consulting agreement in eff ect

at that time.

We are providing these services pursuant to a Master Services Agreement that provides for back-office services in exchange for a recurring monthly fee as well as other deep-sea

mineral related services on a cost-plus profit basis and will be compensated for these services with a combination of cash and equity in CIC.

For 2021, we invoiced CIC a total of $ 921,238 , which was for technical and support services.

We have the option to accept equity in payment of the amounts due from CIC.

See NOTE C for related accounts receivable at December 31, 2021 and 2020 and NOTE G for our investment in an unconsolidated entity.

The above terms and amounts are not necessarily indicative of the terms and amounts that would have been incurred had comparable transactions been entered into with independent parties.

On July 15, 2021, MINOSA assigned $ 404,633 of its indebtedness with accumulated accrued interest of

$ 159,082 to a director of the Company under the same terms as the original agreement, and that indebtedness continues to be convertible at a conversion price of $ 4.35 .

This transaction was reviewed and approved by the independent members of the Company’s board of directors

, see NOTE H – LOANS PAYABLE (Note 6 – MINOSA 2) for detail.

NOTE K – DEFERRED INCOME AND REVENUE PARTICIPATION RIGHTS

The Company’s participating revenue rights and deferred revenue consisted of the following for the respective year end:

Galt Resources, LLC (HMS Victory

Total revenue participation rights

In a private placement that closed in September 2000, we sold “units” consisting of “ Republic”

NOTE 12 –

DEFERRED INCOME AND REVENUE PARTICIPATION RIGHTS

Seattle ”

In a private placement that closed in September 2000, we sold “units”

consisting of “Republic”

Revenue Participation Certificates and Common Stock.

Each $ 50,000 “unit” entitled the holder to 1 % of the gross revenue generated by the now named “ Seattle

” project (formerly referred to as the “ Republic

Each $ 50,000 “unit”

entitled the holder to 1 % of the gross revenue generated by the “Seattle”

project (formerly referred to as the “Republic”

project), and 100,000 shares of Common Stock.

Gross revenue is defined as all cash proceeds payable to us as a result of the “ Seattle

” project, excluding funds received by us to finance the project.

The participation rights balance was to be amortized under the units of revenue method once management was able to reasonably estimate potential revenue for this project.

The RPCs for the “ Seattle

project do not have a termination date;

therefore, these liabilities were to be carried on the books until revenue is recognized from the project or we permanently abandon the project, which was confirmed by management in June 2021.

Therefore, the amount was written off and is included in Other income (expense) in our Consolidated Statements of Operations.

The “Seattle”

was permanently abandoned in June 2021.

During the year ended December 31, 2021, the carrying amount of the previously recorded deferred revenue participation right of $ 62,500 was written off to Other income (expense) in our consolidated statements of operations.

Galt Resources, LLC

In February 2011, we entered into a project syndication deal with Galt Resources LLC (“Galt”) for which they invested $ 7,512,500 representing rights to future revenues of any one project Galt selected prior to December 31, 2011.

If the project is successful and generates sufficient proceeds, Galt will recoup their investment plus three times the investment.

Galt’s investment return will be paid out of project proceeds.

Galt will receive 50 % of project proceeds until this amount is recouped.

Thereafter, they will share in additional net proceeds of the project at the rate of 1 % for every million invested.

Subsequent to the original syndication deal, we reached an agreement permitting Galt to bifurcate their selection between two projects, the SS Gairsoppa

and HMS Victory

with the residual 1% on additional net proceeds assigned to the HMS Victory

project only.

The bifurcation resulted in $3,756,250 being allocated to each of the two projects.

Therefore, Galt was entitled to receive 7.5125 % of net proceeds from the HMS Victory

project after they recoup their investment of $3,756,250 plus three times the investment.

Galt has been paid in full for their share of the Gairsoppa

project investment.

There are no future payments remaining due to Galt for the Gairsoppa

Based on the timing of the proceeds earmarked for Galt, the relative corresponding amount of Galt’s revenue participation right of $ 3,756,250 was amortized into revenue in 2012 based upon the percent of Galt-related proceeds from the sale of silver as a percentage of total proceeds that Galt earned under the revenue participation agreement ($ 15.0 million).

There was no expiration date on the Galt deal for the HMS Victory

If the archaeological excavation of the shipwreck is performed and insufficient proceeds obtained, then the deferred income balance would be recognized as other income.

If the archaeological excavation of the shipwreck was performed and sufficient proceeds obtained, then the deferred income balance would be recognized as revenue.

In February 2011, we entered into a project syndication deal with Galt Resources LLC (“Galt”) for which they invested funds representing rights to future revenues for the HMS Victory project.

This project syndication agreement was mutually terminated in June 2021.

Therefore, the carrying amount was written off to Other income (expense) in our Consolidated Statements of Operations.

NOTE L – STOCKHOLDERS’ EQUITY/(DEFICIT)

Therefore, the carrying amount of the previously recorded deferred revenue participation right of $ 3,756,250 was written off to Other income (expense) in our consolidated statements of operations.

NOTE 13 –

STOCKHOLDERS' EQUITY/(DEFICIT)

On July 10, 2022, we sold an aggregate of 4,939,515 shares of our common stock and warrants to purchase up to 4,939,515 shares of our common stock.

The net proceeds received from 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 per share of common stock.

Each unit was sold at a negotiated price of $ 3.35 per unit.

The warrants are exercisable at any time beginning on December 10, 2022 , and ending on the close of business on June 10, 2027 .

On August 21, 2020, we sold an aggregate of 2,553,314 shares of our common stock and warrants to purchase up to 1,901,985 shares of our common stock.

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The shares of common stock and warrants were sold in units, with each unit consisting of one share of common stock and a warrant to purchase up to 0.6 shares of common stock.

The purchase price for each unit was $ 4.543 .

The purchase price for each unit

was $ 4.543 .

The warrants have an exercise price of $ 4.75 per share of common stock and are exercisable at any time during the three-year period commencing six months after issuance.

In conjunction with the Note and Warrant Purchase Agreement related to Note 8 – Promissory note 2018 in NOTE H, we originally issued warrants to purchase an aggregate of 65,625 shares of common stock in connection with the notes that were issued.

In conjunction with our sale of shares common stock and warrants on July 10, 2022, as described above, we issued warrants to purchase up to 4,939,515 shares of our common stock.

The warrants have an exercise price of $ 3.35 per share and are exercisable at any time beginning on December 10, 2022 , and ending on the close of business on June 10, 2027 .

In conjunction with our sale of shares common stock and warrants on August 21, 2020 as described above, we issued warrants to purchase up to 1,901,985 shares of our common stock.

The warrants have an exercise price of $ 4.75 per share and are exercisable at any time during the three-year period commencing six months after the August 21, 2020 sale of our common stock, which is February 21, 2021.

Included in the Restated Agreement as described in Note 10 Loans Payable –

Litigation Financing , during 2019, we issued a warrant allowing the lender to purchase up to 551,378 shares of our common stock at $ 3.99 .

The warrant is contingently exercisable and will become exercisable on the date on which we cease the Subject Claim for any reason other than (i) a full and final arbitral award against the Claimholder or (ii) a full and final monetary settlement of the claims or the date on which Proceeds are deposited into the Escrow Account.

The warrant has a five-year life that commences on the date it becomes exercisable.

On July 12, 2018, in conjunction with a previous Note and Warrant Purchase Agreement we issued warrants to purchase an aggregate of 65,625 shares of common stock in connection with the notes that were issued.

These warrants had an expiration date of July 21, 2021 , an exercise price of $ 12.00 , and were exercisable to purchase 65,625 shares of our common stock.

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These warrants expire on August 14, 2023 .

Included in the Restated Agreement as described in NOTE H, Note 9 – Litigation financing, during 2019, we issued a warrant allowing the lender to purchase up to 551,378 shares of our common stock at $ 3.99 .

The warrant has a five-year life that commences on the date it becomes exercisable.

In conjunction with our sale of shares common stock and warrants on August 21, 2020 as described above, we issued warrants to purchase up to 1,901,985 shares of our common stock.

Convertible Preferred Stock

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(the "Lender").

The Purchase Agreement provides for the Company to issue and sell to the Investor shares of the Company’s preferred stock in the amounts set forth in the following table (numbers have been adjusted for the February 2016 reverse stock split):

Convertible Preferred Stock

Price Per Share

The Investor’s option to purchase the Series AA-2

shares is subject to the closing price of the Common Stock on the NASDAQ market having been greater than or equal to $ 15.12 per share for a period of twenty ( 20 ) consecutive business days on which the NASDAQ market is open.

The closing of the sale and issuance of shares of the Company’s preferred stock to the Investor is subject to certain conditions, including the Company’s receipt of required approvals from the Company’s stockholders, the receipt of regulatory approval, performance by the Company of its obligations under the Stock Purchase Agreement, the listing of the underlying common stock on the NASDAQ Stock Market and the Investor’s satisfaction, in its sole discretion, with the viability of certain undersea mining projects of the Company.

This transaction received stockholders’ approval on June 9, 2015.

Completion of the transaction requires amending the Company’s articles of incorporation to (a) effect a reverse stock split, which was done on February 19, 2016, (b) adjusting the Company’s authorized capitalization, which was also done on February 19, 2016, and (c) establishing a classified board of directors (collectively, the “Amendments”).

The Amendments have been or will be set forth in certificates of amendment to the Company’s articles of incorporation filed or to be filed with the Nevada Secretary of State.

Series AA Convertible Preferred Stock Designation

The Purchase Agreement provides for the issuance of up to 8,427,004 shares of Series AA-1

Convertible Preferred Stock, par value $ 0.0001 per share (the “Series AA-1

Preferred”) and 7,223,145 shares of Series AA-2

Convertible Preferred Stock, par value $ 0.0001 per share (the “Series AA-2

Preferred”), subject to stockholder approval which was received on June 9, 2015 and satisfaction of other conditions.

Significant terms and conditions of the Series AA Preferred are as follows:

If and when the Company declares a dividend and any other distribution (including, without limitation, in cash, in capital stock (which shall include, without limitation, any options, warrants or other rights to acquire capital stock) of the Company, then the holders of each share of Series AA Preferred Stock are entitled to receive, a dividend or distribution in an amount equal to the amount of dividend or distribution received by the holders of common stock for which such share of Series AA Preferred Stock is convertible.

Liquidation Preference

The Liquidation Preference on each share of Series AA Preferred Stock is its Stated Value plus accretion at the rate of 8 % per annum compounded on each December 31 from the date of issue of such share until the date such share is converted.

For any accretion period which is less than a full year, the Liquidation Preference shall accrete in an amount to be computed on the basis of a 360-day

year of twelve 30-day

months and the actual number of days elapsed.

Voting Rights

The holders of Series AA Preferred will be entitled to one vote for each share of common stock into which the Series AA Preferred is convertible and will be entitled to notice of meetings of stockholders.

Conversion Rights

At any time after the Preferred Shares have been issued, any holder of shares of Series AA Preferred may convert any or all of the shares of preferred stock into one fully paid and non-assessable

share of Common Stock.

Adjustments to Conversion Rights

If Odyssey pays a dividend or makes a distribution on its common stock in shares of common stock, subdivides its outstanding common stock into a greater number of shares, or combines its outstanding common stock into a smaller number of shares, or if there is a reorganization, or a merger or consolidation of Odyssey with or into any other entity which results in a conversion, exchange, or cancellation of the common stock, or a sale of all or substantially all of Odyssey’s assets, then the conversion rights described above will be adjusted appropriately so that each holder of Series AA Preferred will receive the securities or other consideration the holder would have received if the holder’s Series AA Preferred had been converted before the happening of the event.

The conversion price in effect from time to time is also subject to downward adjustment if we issue or sell shares of common stock for a purchase price less than the conversion price or if we issue or sell shares convertible into or exercisable for shares of common stock with a conversion price or exercise price less than the conversion price for the Series AA Preferred.

Accounting considerations

As stated above the issuance of the Series AA Convertible Preferred Stock is based on certain contingencies.

No accounting treatment determination is required until these contingencies are met and the Series AA Convertible Preferred Stock has been issued.

However, we have analyzed the instrument to determine the proper accounting treatment that will be necessary once the instruments have been issued.

ASC 480 generally requires liability classification for financial instruments that are certain to be redeemed, represent obligations to purchase shares of stock or represent obligations to issue a variable number of common shares.

We concluded that the Series AA Preferred was not within the scope of ASC 480 because none of the three conditions for liability classification was present.

However, in order to perform this analysis, we were first required to evaluate the economic risks and characteristics of the Series AA Convertible Preferred Stock in its entirety as being either akin to equity or akin to debt.

Our evaluation concluded that the Series AA Convertible Preferred Stock was more akin to an equity-like contract largely due to the fact that most of its features were participatory in nature.

As a result, we concluded that the embedded conversion feature is clearly and closely related to the host equity contract and will not require bifurcation and liability classification.

The option to purchase the Series AA-2

Convertible Preferred Stock was analyzed as a freestanding financial instrument and has terms and features of derivative financial instruments.

However, in analyzing this instrument under applicable guidance it was determined that it is both (i) indexed to the Company’s stock and (ii) meet the conditions for equity classification.

The Investor’s option to purchase the Series AA-2 shares is subject to the closing price of the Common Stock on the NASDAQ market having been greater than or equal to $ 15.12 per share for a period of twenty ( 20 ) consecutive business days on which the NASDAQ market is open.

This transaction received stockholders’

approval on June 9, 2015.

The Purchase Agreement was terminated pursuant to an agreement dated March 3, 2023 (see further details at Note 10 Loans Payable –

Minosa 1 and 2).

Stock-Based Compensation

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The Plan expires on the tenth anniversary of the effective date.

The Plan provides for the grant of incentive stock options, non-qualified

stock options, restricted stock awards, restricted stock units and stock appreciation rights.

The Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights.

This plan was initially capitalized with 450,000 shares that may be granted.

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With respect to each grant of an ISO to a participant who is a ten percent stockholder, the exercise price shall not be less than one hundred ten percent ( 110 %) of the fair market value of a share on the date the ISO is granted.

If an award is a non-qualified

stock option (“NQSO”), the exercise price for each share shall be no less than (1) the minimum price required by applicable state law, or (2) the fair market value of a share on the date the NQSO is granted, whichever price is greatest.

If an award is a non-qualified stock option ("NQSO"), the exercise price for each share shall be no less than (1) the minimum price required by applicable state law, or (2) the fair market value of a share on the date the NQSO is granted, whichever price is greatest.

Any award intended to meet the performance-based exception must be granted with an exercise price not less than the fair market value of a share determined as of the date of such grant.

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The 2019 Plan expires on June 3, 2029.

The 2019 Plan provides for the grant of incentive stock options, non-qualified

stock options, restricted stock awards, restricted stock units and stock appreciation rights.

The 2019 Plan is capitalized with 800,000 shares that may be granted.

No awards were made from the Plan prior to the effective date.

The 2019 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights.

The 2019 Plan is capitalized with 1.6 million shares that may be granted.

During our June 2022 stockholders' meeting, the stockholders approved the addition of 2,400,000 incremental shares to the 2019 Plan.

As of December 31, 2022 966,222 options were available to be issued under the 2019 Plan.

The 2019 Plan includes the following features:

no “evergreen” share reserve, prohibits liberal share recycling, no repricing permitted without stockholder approval, no stock option reload features, no transfers of awards for value and dividends and dividends equivalent shall accrue and be paid only if and to the extent the common stock underlying the award become vested or payable.

no "evergreen" share reserve, prohibition on liberal share recycling, no repricing permitted without stockholder approval, no stock option reload features, no transfers of awards for value and dividends and dividends equivalent shall accrue and be paid only if and to the extent the common stock underlying the award become vested or payable.

Share-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest.

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The ASC topic Stock Compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The share-based compensation charged against income for the periods ended December 31, 2021, 2020 and 2019 was $ 1,330,078 , $ 471,121 and $ 756,599 , respectively.

The 2019 amount includes $ 675,000 of equity-based compensation issued from a subsidiary for director fees.

The share-based compensation charged against income for the years ended December 31, 2022, 2021 and 2020 was $ 1,811,551 , $ 1,250,585 and $ 420,648 , respectively.

We granted 604,243 stock options to employees on December 9, 2022.

We did no t grant stock options to employees or outside directors in 2021 or 2020 .

If options were granted, their values would be determined using the Black-Scholes-Merton option-pricing model, 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.

The value of the stock options granted was determined using the Black-Scholes-Merton option-pricing model, 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.

The options were valued with the following assumptions used for grants issued in the table below.

Expected volatilities are based on 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.

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.

Risk free interest rate

Expected life

Expected volatility

Expected dividend yield

Grant-date fair value

Additionally, on December 8, 2022, we granted 17,105 stock options to a third-party consultant for services rendered.

We did no t grant stock options to any third parties in 2021 or 2020 .

The fair value of each option grant to the third-party consultant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants issued in the table below.

Risk free interest rate

Expected life

Expected volatility

Expected dividend yield

Grant-date fair value

The Black-Scholes-Merton option pricing model was developed for estimating the fair value of traded options that have no vesting restrictions and are fully transferable.

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Additional information with respect to both plans stock option activity is as follows:

Number of Shares

Weighted Average

Exercise Price

Weighted Average Life

Outstanding at December 31, 2019

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Options exercisable at December 31, 2022

The aggregate intrinsic values of options exercisable for the fiscal years ended December 31, 2021, 2020 and 2019 were $ 55,392 , $ 98,129 and $ 15,564 , respectively.

The aggregate intrinsic values of options outstanding for the fiscal years ended December 31, 2021, 2020 and 2019 were $ 55,392 , $ 98,129 and $ 15,564 , respectively.

The aggregate intrinsic values of options exercised during the fiscal years ended December 31, 2021, 2020 and 2019 are $ 0 , $ 0 and $ 0 , respectively, determined as of the date of the option exercise.

The aggregate intrinsic values of options exercisable for the years ended December 31, 2022, 2021 and 2020 were $ 127,605 , $ 55,392 and $ 98,129 , respectively.

The aggregate intrinsic values of options outstanding for the years ended December 31, 2022, 2021 and 2020 were $ 202,587 , $ 55,392 and $ 98,129 , respectively.

The aggregate intrinsic values of options exercised during the years ended December 31, 2022, 2021 and 2020 are $ 0 , $ 0 and $ 0 , respectively, determined as of the date of the option exercise.

Aggregate intrinsic value represents the positive difference between our closing stock price at the end of a respective period and the exercise price multiplied by the number of relative options.

The total fair value of options vested during the fiscal years ended December 31, 2021, 2020 and 2019 was $ 0 , $ 0 and $ 0 , respectively.

As of December 31, 2021, there was no remaining amount of unrecognized compensation cost related to unvested share-based compensation awards granted to employees related to granted stock options.

The total fair value of options vested during the years ended December 31, 2022, 2021 and 2020 was $ 1,412,087 , $ 0 and $ 0 , respectively.

As of December 31, 2022, there was $ 628,767 of unrecognized compensation cost related to unvested share-based compensation awards granted to employees related to granted stock options, which have an expected remaining life of 2.06 years.

The following table summarizes information about stock options outstanding at December 31, 2022:

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The fair value of restricted stock units vested during the years ended December 31, 2022, 2021 and 2020 was $ 2,310,598 , $ 1,213,525 and $ 653,653 , respectively.

The fair value of unvested restricted stock units remaining at the periods ended December 31, 2021, 2020 and 2019 is $ 1,438,887 , $ 1,770,676 and $ 132,917 , respectively.

The weighted-average grant date fair value of restricted stock units granted during the periods ended December 31, 2021, 2020 and 2019 were $ 7.05 , $ 4.0 and $ 0 , respectively.

The weighted-average remaining contractual term of these restricted stock units at the periods ended December 31, 2021, 2020 and 2019 are 1.1 , 2.0 and 0.8 years, respectively.

The fair value of unvested restricted stock units remaining at the years ended December 31, 2022, 2021 and 2020 is $ 176,998 , $ 1,438,887 and $ 1,770,676 , respectively.

The weighted-average grant date fair value of restricted stock units granted during the years ended December 31, 2022, 2021 and 2020 were $ 3.27 , $ 7.05 and $ 4.00 , respectively.

The weighted-average remaining contractual term of these restricted stock units at the years ended December 31, 2022, 2021 and 2020 are 2.3 , 1.1 and 2.0 years, respectively.

As of December 31, 2022, there was a total of $ 203,481 unrecognized compensation cost related to unvested restricted stock awards.

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** A five-year term commences upon the earliest occurrence of either Trigger Date A or Trigger Date B.

Trigger Date A is the date on which the Claimholder ceases the Subject Claim for any reason other than (i) a full and final arbitral award against the Claimholder or (ii) a full and final monetary settlement of the claim, see NOTE H – Note 9 – Litigation financing.

Litigation Financing .

Cuota Appreciation Rights

On August 4, 2017, the Company’s board of directors (the “Board”) adopted the Odyssey Marine Exploration, Inc.

On August 4, 2017, the Company’s board of directors (the "Board") adopted the Odyssey Marine Exploration, Inc.

Key Employee Cuota Appreciation Rights (the "Key Employee Plan") and the Odyssey Marine Exploration, Inc.

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The terms of any CARs awarded under the Cuota Plans will be set forth in an award agreement between the Company and each participant, and the award agreement will set forth a vesting schedule for the CARs.

In general, unvested CARs will be forfeited upon a participant’s separation of service from the Company, and all vested and unvested CARs will be forfeited upon a participant’s separation of service from the Company for “cause” (as defined in the Cuota Plans).

Each participant in the Cuota Plans will be entitled to be paid the value of such participant’s CARs upon the occurrence of a “payment event.” As used in the Cuota Plans, payment events consist of a change in control of the Company or the date specified in the applicable award agreement and, in the case of the Key Employee Plan, a separation of service without cause and the participant’s continuous employment with the Company until the date specified in the applicable award agreement.

The value of CARs liability will be based upon the difference between the basis in the cuotas of Oceanica on the date of the award of the CARs, which is $ 3.00 , and the fair value of the cuotas on the date used for the payment event, in each case as determined by the Board in accordance with the provisions of the Cuota Plans.

Each participant in the Cuota Plans will be entitled to be paid the value of such participant’s CARs upon the occurrence of a "payment event." As used in the Cuota Plans, payment events consist of a change in control of the Company or the date specified in the applicable award agreement and, in the case of the Key Employee Plan, a separation of service without cause and the participant’s continuous employment with the Company until the date specified in the applicable award agreement.

of the Cuota Plans.

The fair value of the cuota as of August 31, 2019 was $ 1.00 .

There is no active market for Oceanica’s securities, and there was no activity that would have materially changed the valuation at December 31, 2021.

There is no active market for Oceanica’s securities, and there was no activity that would have materially changed the valuation at December 31, 2022.

During the year ended December 31, 2022 the 385,580 CARs in the Key Employee Plan expired.

At December 31, 2022, there were no vested CARs outstanding and there were no exercisable CARs outstanding related to the Key Employee Plan.

At December 31, 2022, there was no liability or associated compensation cost associated with these CARs.

At December 31, 2021, there were 385,580 vested CARs outstanding and there were no excercisable CARs outstanding related to the Key Employee Plan.

The CARs in the Nonemployee Director Plan are utilized as compensation for services, therefore these CARs vest upon grant.

At December 31, 2021, the Nonemployee Director Plan had 292,663 CARs vested and outstanding.

NOTE M – INCOME TAXES

As of December 31, 2021, the Company had consolidated income tax net operating loss (“NOL”) carryforwards for federal tax purposes of approximately $ 208,889,722 and net operating loss carryforwards for foreign income tax purposes of approximately $ 74,888,328 .

The federal NOL carryforwards from 2005 and

forward will expire in various years beginning 2025 and ending through the year 2035 .

During the year ended December 31, 2022 the 292,663 CARs in the Nonemployee Director Plan had expired and, as such, the associated $ 315,235 liability was written-off and is included as a gain on Cuota Appreciation Rights extinguishment in our consolidated statements of operations.

At December 31, 2022 there were no vested and outstanding and there were no exercisable CARs outstanding related to the Nonemployee Director Plan.

At December 31, 2022 , there was no liability with these CARs.

NOTE 14 –

As of December 31, 2022, the Company had consolidated income tax net operating loss ("NOL") carryforwards for federal tax purposes of approximately $ 230.0 million and net operating loss carryforwards for foreign income tax purposes of approximately $ 83.5 million .

The federal NOL carryforwards from 2005 and forward will expire in various years beginning 2025 and ending through the year 2035 .

From 2025 through 2027, approximately $ 47.0 million of the NOL will expire, and from 2028 through 2037, approximately $ 128.0 million of the NOL will expire.

The NOL generated in 2018 through 2021 of approximately $ 34 M will be carried forward indefinitely.

The NOL generated in 2018 through 2021 of approximately $ 55.0 million will be carried forward indefinitely.

The components of the provision for income tax (benefits) are attributable to continuing operations as follows:

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Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities are as follows:

December 31, 2022

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Accrued expenses

Start-up costs

Excess of book over tax depreciation

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valuation allowance

( 85,268,067 )

( 74,138,667 )

Deferred tax liability:

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Debt Extinguishment

Loan Proceeds

Funder Loan Proceeds

Change in valuation allowance

Foreign Rate Differential

The Company’s effective

income tax rate is lower than what would be expected if the federal statutory rate were applied to income before income taxes primarily because of certain expenses deductible for financial reporting purposes that are not deductible for tax purposes, research and development tax credits, operating loss carryforwards, and adjustments to previously-recorded deferred tax assets and liabilities due to the enactment of the Tax Cuts and Jobs Act.

The Company’s effective income tax rate is lower than what would be expected if the federal statutory rate were applied to income before income taxes primarily because of certain expenses deductible for financial reporting purposes that are not deductible for tax purposes, research and development tax credits, operating loss carryforwards, and adjustments to previously-recorded deferred tax assets and liabilities due to the enactment of the Tax Cuts and Jobs Act.

We have not recognized a material adjustment in the liability for unrecognized tax benefits and have not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

The earliest tax year still subject to examination by a major taxing jurisdiction is 2018 .

NOTE N – MAJOR CUSTOMERS

For the fiscal year ended December 31, 2021, we had one

customer, CIC, which is a related party (See NOTE J), that accounted for

100.0 % of our total revenue.

During the fiscal year ended December 31, 2020, we had two

customers, one of which was CIC, that accounted for

71.0 % of our total revenue.

NOTE O – COMMITMENTS AND CONTINGENCIES

Rights to Future Revenues, If Any

We previously sold the rights to share in future revenues, if any, with respect to the “ Seattle

” project and previously recorded $ 62,500 as Deferred Income from Revenue Participation Rights (See NOTE K).

We were contingently liable to share the future revenue of this project only if revenue is derived from this specific project but, during 2021 management permanently abandoned this project.

In February 2011, we entered into a project syndication deal with Galt Resources LLC (“Galt”) for which they invested $ 7,512,500 representing rights to future revenues of any project of Galt’s choosing.

This amount was previously bifurcated equally between the SS Gairsoppa

and HMS Victory

The SS Gairsoppa

has been paid in full.

This project syndication agreement was mutually terminated in June 2021.

See NOTE K for further detail.

NOTE 15 –

MAJOR CUSTOMERS

For the years ended December 31, 2022 and 2021 , we had one customer, CIC, which is a related party (see Note 6 Related Party Transactions ), that accounted for 100 % of our total revenue in both years.

NOTE 16 –

COMMITMENTS AND CONTINGENCIES

Legal Proceedings

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We are not a party to any litigation as a defendant where a loss contingency is required to be reflected in our consolidated financial statements.

During March 2016, our Board of Directors approved the grant and issuance of 3.0 million new equity shares of Oceanica Resources, S.R.L.

(“Oceanica”) to two attorneys for their future services.

This equity would only be issuable upon the Mexican’s government approval and issuance of the Environmental Impact Assessment (“EIA”) for our Mexican subsidiary.

All possible grants of new equity shares were approved by the Administrators of Oceanica.

We also owe consultants contingent success fees of up to $ 700,000 upon the approval and issuance of the EIA.

We also owe consultants contingent success fees of up to $ 700,000 upon the approval and issuance of the ExO Project Environmental Impact Assessment ("EIA") .

The EIA has not been approved as of the date of this report.

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We have experienced several years of net losses and may continue to do so.

Our ability to generate net income or positive cash flows for the following twelve months is dependent upon financings, our success in developing and monetizing our interests in mineral exploration entities, generating income from exploration charters, collecting on amounts owed to us, or completing the MINOSA/Penelope equity financing transaction approved by our stockholders on June 9, 2015.

Our 2023 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects.

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If cash inflow ever becomes insufficient to meet our desired projected business plan requirements, we would be required to follow a contingency business plan that is based on curtailed expenses and fewer cash requirements.

On August 21, 2020, we sold an aggregate of 2,553,314 shares of our common stock and warrants to purchase up to 1,901,985 shares of our common stock.

The net proceeds received from this sale, after offering expenses of $ 0.3 million, were $ 11.2 million (See NOTE L).

On June 10, 2022, we sold an aggregate of 4,939,515 shares of our common stock and warrants to purchase up to 4,939,515 shares of our common stock.

The net proceeds received from this sale, after offering expenses of $ 1.8 million , were $ 14.7 million (see Note 13 Stockholders' Equity/(Deficit)).

These proceeds, coupled with other anticipated cash inflows, provided operating funds through early 2023.

On March 11, 2015, we entered into a Stock Purchase Agreement with Minera del Norte S.A.

(“MINOSA”) and Penelope Mining LLC (“Penelope”), an affiliate of MINOSA, pursuant to which (a) MINOSA agreed to extend short-term, debt financing to Odyssey of up to $ 14.75 million, and (b) Penelope agreed to invest up to $ 101 million over three years in convertible preferred stock of Odyssey.

The equity financing is subject to the satisfaction of certain conditions, including the approval of our stockholders which occurred on June 9, 2015, and MINOSA and Penelope are currently under no obligation to make the preferred share equity investments.

Our consolidated non-restricted

cash balance at December, 2021 was $ 2.3 million.

Our consolidated non-restricted cash balance at December 31, 2022 was $ 1,443,421 .

We have a working capital deficit at December 31, 2022 of $ 60.7 million .

In the fourth quarter of 2021, we executed a Termination and Settlement Agreement with Monaco and SMOM that removed approximately $ 14.5 million of indebtedness from our balance sheet (see NOTE H).

Our largest loan of $ 14.75 million from MINOSA had a due date of December 31, 2017 which is now linked to other stipulations, see NOTE H for further detail.

The majority of our remaining assets have been pledged to MINOSA, leaving us with few opportunities to raise additional funds from our balance sheet.

The total consolidated book value of our assets was approximately $ 8.9 million at December 31, 2021, which includes cash of $ 2.3 million.

The total consolidated book value of our assets was approximately $ 13.3 million at December 31, 2022, which includes cash of $ 1,443,421 .

The fair market value of these assets may differ from their net carrying book value.

Even though we executed the above noted financing arrangement with Penelope, Penelope must purchase the shares for us to be able to complete the equity component of the transaction.

The Penelope equity transaction is heavily dependent on the outcome of our subsidiary’s application approval process for an environmental permit (EIA), as well as the current NAFTA litigation, to commercially develop a mineralized phosphate deposit off the coast of Mexico.

The factors noted above raise doubt about our ability to continue as a going concern.

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Lease commitment

In August 2019, we entered into an operating lease for our corporate office space under a non-cancellable

lease through August 2024 with monthly payments ranging from $ 11,789 to $ 13,269 , not including sales tax.

In August 2019, we entered into an operating lease for our corporate office space under a non-cancellable lease through August 2024 with monthly payments ranging from $ 11,789 to $ 13,269 , not including sales tax.

The lease provides for annual increases of base rent of 3 % until the expiration date.

Pursuant to ASC 842, an operating lease right of usage (ROU) asset and

liability were recognized in the amount of $ 590,612 at inception of the lease based on the present value of lease payments over the remaining lease term.

The ROU asset represents the Company’s right to use the underlying office space asset for the lease term, and the lease liability represents the Company’s obligation to make lease payments arising from the lease.

Pursuant to ASC 842, an operating lease right of usage ("ROU") asset and liability were recognized in the amount of $ 590,612 at inception of the lease based on the present value of lease payments over the remaining lease term.

Since the implicit rate of interest in the arrangement was not readily determinable, we utilized our incremental borrowing rate of 10 % in determining the present value of lease payments.

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We have recognized approximately $ 218,000 , $ 216,000 and $ 194,000 in rent expense associated with these leases for the years ended December 31, 2022, 2021 and 2020 , respectively.

NOTE P – QUARTERLY FINANCIAL DATA – UNAUDITED

NOTE 17 –

QUARTERLY FINANCIAL DATA –

The following tables present certain unaudited consolidated quarterly financial information for each of the past eight quarters ended December 31, 2022 and 2021.

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Quarter Ending

Revenue - net

Revenue –

Net income (loss)

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Quarter Ending

Revenue - net

Revenue –

Net income (loss)

Basic and diluted net income per share

SCHEDULE II – VALUATION and QUALIFYING ACCOUNTS

NOTE 18 –

SUBSEQUENT EVENTS

We have evaluated subsequent events for recognition or disclosure through the date this Form 10-K is filed with the Securities and Exchange Commission.

On February 28, 2023, Odyssey issued a $ 300,000 11.0 % Promissory Note to Galileo NCC Inc ("Galileo").

The Promissory Note was payable on April 1, 2023 .

On March 6, 2023, Odyssey repaid this note payable in full with proceeds from the issuance of the Note (as defined below).

DP SPV I LLC Note

and, together with the Note, the “Securities”) to purchase shares of Odyssey’s common stock.

and (b) the first quarterly interest payment due under the Note will be satisfied with PIK Interest.

Unless the Note is sooner redeemed at Odyssey’s option, all indebtedness under the Note is due and payable on September 6, 2024.

Odyssey’s obligations under Note are secured by a security interest in substantially all of Odyssey’s assets (subject to limited stated exclusions).

Purchase Agreement, MINOSA 1 and MINOSA 2 Notes