What changed in this filing

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Item 1. Financial Statements

2021-11-15 compared with 2021-08-13 · 347 added, 419 removed, 911 unchanged (46% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2021

September 30,

CURRENT ASSETS

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24,984,166 shares authorized;

no ne outstanding

none outstanding

Common stock – $ 0.0001 par value;

14 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Service revenue and other

7 unchanged sentences

Interest expense

Gain (loss) on debt extinguishment

Loss in hybrid-instrument fair value

11 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY / (DEFICIT) - Unaudited

Ended June 30, 2021

Three Months Ended September 30, 2021

Non-controlling

March 31, 2021

June 30, 2021

( 271,082,179

Share-based compensation

June 30, 2021

Common stock issued for converted convertible debt

September 30, 2021

( 275,167,476

Ended June 30, 2020

Three Months Ended September 30, 2020

Non-controlling

March 31, 2020

June 30, 2020

( 257,318,905

1 unchanged sentence

Fair value of warrants issued

June 30, 2020

Common stock issued

Debt modification

September 30, 2020

( 262,766,951

Ended June 30, 2021

Nine Months Ended September 30, 2021

Non-controlling

5 unchanged sentences

Sale of subsidiary equity

June 30, 2021

September 30, 2021

( 275,167,476

Ended June 30, 2020

Nine Months Ended September 30, 2020

Non-controlling

3 unchanged sentences

Fair value of warrants issue

June 30, 2020

Common stock issued

Debt modification

September 30, 2020

( 262,766,951

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS - Unaudited

Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

7 unchanged sentences

Share-based compensation

Loss (gain) on debt forgiveness

Change in hybrid-instrument fair value

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Operating lease liability reduction

Offering costs paid on sale of common stock

Common stock sale net proceeds

Sale of subsidiary equity

Payment of debt

Payment of debt obligation

NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES

7 unchanged sentences

Director compensation settled with equity

Accrued interest settled with common stock

During the six-months

ended June 30, 2020, we received

$ 1,823,519 in non-cash

Convertible debt exchanged for equity

Gain on debt forgiveness

During the nine

months ended September 30, 2020, we received $ 3,281,461 in non-cash

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

1 unchanged sentence

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

$ 1,080,260 and a corresponding increase to additional paid in capital for the fair value of certain warrants that were issued to the funder.

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 $ 200,000 of funder financed debt fees with this financing.

During the six months ended June 30, 2021, we received

During the nine months ended September 30, 2021, we received $ 3,146,896 in non-cash

financing associated with our litigation financing as described in Note I:

– Litigation financing.

Note 9 – Litigation financing.

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

During March 2021, Epsilon Acquisitions LLC converted indebtedness

1,448,697 at an exercise price of $

411,562 shares of our common stock.

On March 30, 2021, Epsilon Acquisitions LLC converted indebtedness of $ 1,448,697 at an exercise price of $ 3.52 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 ratio of $ 4.67 per share.

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

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for the year ended December 31, 2020.

In the opinion of management, these financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position as of June 30, 2021 and the results of operations and cash flows for the interim periods presented.

Operating results for the three and six-month

periods ended June 30, 2021, are not necessarily indicative of the results that may be expected for the full year.

In the opinion of management, these financial statements reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial position as of September 30, 2021 and the results of operations and cash flows for the interim periods presented.

Operating results for the three and nine-month periods ended September 30, 2021, are not necessarily indicative of the results that may be expected for the full year.

Accounting standards not yet applied

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

Although early voluntary compliance with the New Final Rule is permitted, the Company has not elected early adoption of the New Final Rule at this time.

Although early voluntary compliance with the New Final Rule was permitted, the Company did not elect early adoption of the New Final Rule.

The Company is in the process of implementing the New Final Rule.

The FASB recently issued ASU 2021-04

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The guidance in the ASU requires the issuer to treat a modification of an equity-classified warrant that does not cause the warrant to become liability-classified as an exchange of the original warrant for a new warrant.

This guidance applies whether the modification is structured as an amendment to the terms and conditions of the warrant or as termination of the original warrant and issuance of a new warrant.

The guidance is effective for fiscal years beginning after Dec.

15, 2021, including interim periods within those fiscal years.

This guidance applies whether the modification is structured as an amendment to the terms and conditions of the original warrant or as a termination of the original warrant and issuance of a new warrant.

The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early application is permitted, including in an interim period as of the beginning of the fiscal year that includes that interim period.

43 unchanged sentences

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and cash

We also consider all highly liquid investments with a maturity of

three months or less when purchased to be cash equivalents.

Cash and cash equivalents include cash on hand and cash in banks.

We also consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Exploration License

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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

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.

18 unchanged sentences

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.

For the six months ended J

une 30, 2021 and 2020, the weighted average common shares outstanding

12,818,266 and

9,530,056 , respectively.

For the nine months ended September 30, 2021 and 2020, the weighted average common shares outstanding year-to-date

were 12,971,591 and 9,894,707 , respectively.

For the periods 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.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Average market price during the period

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

exercise price

September 30,

Out of the money options excluded:

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Potential common shares from unvested restricted stock awards excluded from EPS

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income (loss)

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

At June 30, 2021 and December 31, 2020, the Company did no t have any financial instruments measured on a recurring basis.

At September 30, 2021 and December 31, 2020, 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-Q

is filed with the Securities and Exchange Commission.

is filed with the Securities and Exchange Commission (See Note M).

NOTE C – ACCOUNTS RECEIVABLE AND OTHER

Our accounts receivable consists of the following:

June 30, 2021

Our accounts receivable consist of the following:

September 30, 2021

December 31, 2020

Related party

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We perform services for a deep-sea

mineral exploration company

in which our past Chairman of the Board, Greg Stemm, has a controlling ownership interest (See NOTE D).

At June 30, 2021 and December 31, 2020, the company owed us $ 257,721 and $ 134,452 , respectively.

mineral exploration company in which our past Chairman of the Board, Greg Stemm, has a controlling ownership interest (See NOTE D).

At September 30, 2021 and December 31, 2020, the company owed us $ 252,563 and $ 134,452 , respectively.

NOTE D – 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.

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 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

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.

2021 year to date, we invoiced CIC a total of $

474,010 , which was for technical and support services.

For the 2021 year to date, we invoiced CIC a total of $ 671,061 , 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 June

2021 and December

2020 and NOTE F for our investment in an unconsolidated entity.

See NOTE C for related accounts receivable at September 30, 2021 and December 31, 2020 and NOTE F 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.

NOTE E – 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.

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

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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 six-month

period ended June 30, 2021.

Management did not identify any triggering events thus there is no impairment for the nine-month period ended September 30, 2021.

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

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The consideration was allocated as follows:

Intangible asset-

exploration license rights

Intangible asset- exploration license rights

Current assets

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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.

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.

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.

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Neptune Minerals, Inc.

Our current investment

in NMI consists of

3,092,488 Class B Common

2,612 Series A Preferred

These preferred shares are convertible into an aggregate of

261,200 shares of Class B

common stock.

Our holdings now constitute an approximate

14 % ownership in NMI.

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.

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

shares and 2,612 Series A Preferred non-voting

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

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

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.

Our investment has a carrying value of zero as a result of the recognition of our share of prior losses incurred by NMI under the equity method of accounting.

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 because the losses occurred when they were an equity-method investment.

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 because 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.

4 unchanged sentences

Accordingly, we are not the primary beneficiary of NMI.

2021 , the net carrying value of our investment in NMI was

zero in our consolidated financial statements.

As of September 30, 2021, the net carrying value of our investment in NMI

was zero in our consolidated financial statements.

Chatham Rock Phosphate, Limited.

During 2012, we performed

During 2012, we performed deep-sea

mining exploratory services for Chatham Rock Phosphate, Ltd.

8 unchanged sentences

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 LLC (see NOTE D).

In 2018, we began providing services to CIC LTD

(see NOTE D).

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 June 30, 2021 and December 31, 2020, the accumulated investment in the entity was

2,809,450 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 LLC’s composition.

At September 30, 2021 and December 31, 2020, the accumulated investment in the entity was $ 3,005,867 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 LTD’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.

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NOTE G - INCOME TAXES

During the six-month

ended June 30, 2021, we generated a federal net operating loss (“NOL”) carryforward of $ 5.9 million.

As of June 30, 2021, we had consolidated income tax NOL carryforwards for federal tax purposes of approximately $ 204.0 million and net operating loss carryforwards for foreign income tax purposes of approximately $ 64.8 million.

The federal NOL carryforwards from 2005 forward will expire in various years beginning in 2025 and ending through the year 2038 .

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement

carrying amounts of existing assets and liabilities and their respective tax bases.

During the nine-month period ended September 30, 2021, we generated a federal net operating loss (“NOL”) carryforward of $ 11.6 million.

As of September 30, 2021, we had consolidated income tax NOL carryforwards for federal tax purposes of approximately $ 208 million and net operating loss carryforwards for foreign income tax purposes of approximately $ 66.8 million.

The federal NOL carryforwards from 2005 - 2017

will expire in various years beginning in 2025 and ending through the year 2038 .

Losses generated in 2018 and forward will not expire.

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred income tax assets and liabilities are measured using enacted tax rates expected to be recovered or settled.

We have recorded a net deferred tax asset of $ 0 at June 30, 2021.

We have recorded a net deferred tax asset of $ 0 at September 30, 2021.

As required by the Accounting for Income Taxes

topic in the ASC, we have concluded it is more likely than not that those assets would not be realizable without the recovery and rights of ownership or salvage rights of high value shipwrecks or substantial profits from our mining operations and thus a valuation allowance has been recorded as of June 30, 2021.

There was no U.S.

income tax expense for the six months ended June 30, 2021 due to the generation of net operating losses.

The increase in the valuation allowance as of

June 30, 2021 is due to the generation of approximately $ 5.9 million in net operating loss year-to-date.

income tax expense for the nine

months ended September 30, 2021 due to the generation of net operating losses.

The increase in the valuation allowance as of September 30, 2021 is due to the generation of approximately $ 11.6 million in net operating loss year-to-date.

The change in the valuation allowance is as follows:

June 30, 2021

September 30,

December 31, 2020

Change in valuation allowance

Our estimated annual effective

tax rate before the valuation allowance as of June 30, 2021 is 5.265 % while our June 30, 2021 effective tax rate is 0.0 % because of the full valuation allowance.

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.

Our estimated annual effective tax rate before the valuation allowance as of September 30, 2021 is 7.976 % while our September 30, 2021 effective tax rate is 0.0 % because of the full valuation allowance.

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 2017.

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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.

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.

1 unchanged sentence

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 EIA.

The EIA has not been approved as of the date of this report.

The Company is due a payment upon settlement of a related legal case regarding a previously completed shipwreck recovery.

A final settlement is expected in 2021 and the Company estimates the proceeds that would be retained by Odyssey would exceed $ 3.0 million.

The Company expects to receive a payment upon the settlement of a legal matter related to a previously completed shipwreck recovery.

A final settlement is expected in 2021 and the Company estimates the net proceeds retained by Odyssey would exceed

$ 3.0 million.

ASC 450 Contingencies

states gain contingencies are recorded when the underlying uncertainty has been settled and the asset has been realized.

Accordingly, no amount has been recorded for the six-month

period ended June 30, 2021.

Accordingly, no amount has been recorded for the nine-month period ended September 30, 2021.

Although the Company expects the settlement in 2021, no assurances can be provided as to the timing and amount of the proceeds.

Going Concern Consideration

Going Concern

Consideration

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 2021 business

plan requires us to generate new cash inflows to effectively allow us to perform our planned projects.

Our 2021 business plan requires us to generate new cash inflows to effectively allow us to perform our planned projects.

We continually plan to generate new cash inflows through the monetization of our receivables and equity stakes in seabed mineral companies, financings, syndications or other partnership opportunities.

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These proceeds, coupled with other anticipated cash inflows, are expected to provide operating funds through early 2022.

On March 11, 2015, we entered into

a Stock Purchase Agreement with Minera del Norte S.A.

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.

1 unchanged sentence

Our consolidated non-restricted

cash balance at June 30, 2021 was $

We have a working capital deficit at June 30, 2021 of $

54.8 million.

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 I for further detail.

cash balance at September 30, 2021 was $ 3.5 million.

We have a working capital deficit at September 30, 2021 of $ 57.2 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 M).

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 I for further detail.

The majority of our remaining assets have been pledged to MINOSA, and its affiliates, and to Monaco Financial LLC, leaving us with few opportunities to raise additional funds from our balance sheet.

The total consolidated book value of our assets was approximately $

10.6 million at June 30, 2021, which includes cash of $

The total consolidated book value of our assets was approximately $ 9.4 million at September 30, 2021, which includes cash of $ 3.5 million.

The fair market value of these assets may differ from their net carrying book value.

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Lease commitment

In August 2019, we entered into

an operating lease for our corporate office space under a non-cancellable

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.

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The operating lease ROU asset includes any lease payments made and excludes lease incentives.

At June 30, 2021, the ROU

asset and lease obligation were, $ 394,457 and $ 407,331 , respectively.

At September 30, 2021, the ROU asset and lease obligation were, $ 366,862 and $ 380,134 , respectively.

The remaining lease payment obligations are as follows:

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Annual payment

During the third

quarter of 2019, we entered into a five-year lease at the location of our corporate office space in Tampa, Florida to support our marine operations.

During the third quarter of 2019, we entered into a five-year lease at the location of our corporate office space in Tampa, Florida to support our marine operations.

The lease was effective October 1, 2019 and has monthly lease payments ranging from $ 4,040 to $ 4,547 , not including sales tax, over the five-year term.

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The discount used in determining the right of use asset was 10 %.

At June 30, 2021, the ROU

asset and lease obligation were, $ 141,375 and $ 145,530 , respectively.

At September 30, 2021, the ROU asset and lease obligation were, $ 132,068 and $ 136,609 , respectively.

The remaining lease payment obligations are as follows:

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Annual payment

We have recognized

approximately $ 41,000 and $ 54,000 in rent expense associated with these leases for the three-month periods ended June 30, 2021 and 2020, respectively and approximately $ 81,000 and $ 108,000 in rent expense for the six

ended June 30, 2021 and 2020, respectively.

We have recognized approximately $ 41,000 and $ 54,000 in rent expense associated with these leases for the three-month periods ended September 30, 2021 and 2020, respectively and approximately $ 122,000 and $ 162,000 in rent expense for the nine-month periods ended September 30, 2021 and 2020, respectively.

NOTE I –LOANS PAYABLE

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

September 30,

Note 1 – Monaco 2014

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Note 1 – Monaco 2014

On August 14, 2014, we entered

into a Loan Agreement with Monaco Financial, LLC (“Monaco”), a strategic marketing partner, pursuant to which Monaco agreed to lend us up to $ 10.0 million.

The loan was issued in three tranches:

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

n was issued in three tranches:

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

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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

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).

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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

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 are in negotiations with Monaco.

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See “Loan Modification (March 2016)” below.

For the three months ended June 30, 2021 and 2020 interest expense in the amount of $ 142,886 and $ 142,885 , respectively, was recorded.

ended June 30, 2021 and 2020 interest expense in the amount of $ 284,201 and $ 285,770 , respectively, was recorded.

The outstanding interest-bearing balance of these Notes was $ 2.8 million at June 30, 2021 and December 31, 2020, respectively.

For the three months ended September 30, 2021 and 2020 interest expense in the amount of $ 144,455 and $ 144,455 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 428,656 and $ 430,225 , respectively, was recorded.

The outstanding interest-bearing balance of these Notes was $ 2.8 million at September 30, 2021 and 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

million of principal and accrued interest related to this arrangement.

See NOTE – M SUBSEQUENT EVENT below.

Note 2 – Monaco 2016

In March 2016, Monaco

agreed to lend us an additional $ 1,825,000 .

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.

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

The current outstanding balance as of June 30, 2021 and December 31, 2020 was $ 1,175,000 .

The current outstanding balance as of September 30, 2021 and December 31, 2020 was $ 1,175,000 .

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

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The Option is 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 of 2018, both parties executed a Forbearance Agreement that extended the Option’s 30 day period following a loan payoff to seven (7) months.

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 .

1 unchanged sentence

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.

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.

2 unchanged sentences

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.

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 three

months ended June 30, 2021 and 2020 interest expense in the amount of $

66,721 , respectively, was recorded.

ended June 30, 2021 and 2020 interest expense in the amount of $

132,709 and $

133,442 , respectively, was recorded.

For the three months ended September 30, 2021 and 2020 interest expense in the amount of $ 67,454 and $ 67,454 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 200,163 and $ 200,896 , 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 .

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

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 $

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

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.

, 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

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

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.

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.

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

million of principal and accrued interest related to this arrangement.

See NOTE – M SUBSEQUENT EVENT below.

Note 3 – MINOSA

On March 11, 2015, in

connection with a Stock Purchase Agreement, Minera del Norte, S.A.

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

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

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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 June 30, 2021 and December 31, 2020, respectively.

The outstanding principal balance of this debt was $ 14.75 million at September 30, 2021 and December 31, 2020, respectively.

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

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

For the three

months ended June 30, 2021 and, 2020, interest expense in the amount of $ 294,191 and $ 294,191 , respectively, was recorded.

For the six months ended June 30, 2021 and 2020 interest expense in the amount of

$ 585,150 and $ 588,382 , respectively, was recorded.

For the three months ended September 30, 2021 and, 2020, interest expense in the amount of $ 297,424 and $ 297,424 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 882,574 and $ 885,806 , respectively, was recorded.

Accounting considerations

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

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

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.

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.

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

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

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:

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.

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, 2017 .

We were also responsible for $

50,000 of the lender’s out of pocket costs.

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, 2017 .

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.

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

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.

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.

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;

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(“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.

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.

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.

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”).

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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 an exercise 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

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.

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Accounting considerations for additional tranches

for proper classification under ASC 480 Distinguishing Liabilities from Equity

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

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

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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 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 three

months ended June 30, 2021 and 2020 interest expense in the amount of $ 0 and $ 24,931 , respectively, was recorded.

For the six months ended June 30, 2021 and 2020 interest expense in the amount of

$ 34,520 and $ 49,862 , respectively, was recorded.

For the three months ended September 30, 2021 and 2020 interest expense in the amount of $ 0 and $ 25,205 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 34,520 and $ 75,067 , 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.

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 are classified as short-term.

However, because Epsilon converted the first $ 3.0 million into 670,455 of our common shares and assigned $ 2.0 million to MINOSA, the principal indebtedness at June 30, 2021 was zero and at December 31, 2020 was $ 1.0

However, because Epsilon converted the first $ 3.0 million into 670,455 of our common shares and assigned $ 2.0 million to MINOSA, the principal indebtedness at September 30, 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.

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.

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

The loan balance at June 30, 2021 and December 31, 2020 was $ 3.5 million.

The loan balance at September 30, 2021 and December 31, 2020 was $ 3.5 million.

The holder has 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.

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

For the three

months ended June 30, 2021 and 2020, interest expense in the amount of $ 157,069 and $ 87,260 , respectively, was recorded.

ended June 30, 2021 and 2020 interest expense in the amount of $ 312,421 and $ 174,520 , respectively, was recorded.

For the three months ended September 30, 2021 and 2020, interest expense in the amount of $ 158,795 and $ 88,219 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 471,207 and $ 262,739 , respectively, was recorded.

Accounting considerations

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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

million of principal and accrued interest related to this arrangement.

See NOTE – M SUBSEQUENT EVENT below.

Note 6 – MINOSA 2

On August 10, 2017, we

entered into a Note Purchase Agreement (the “Minosa Purchase Agreement”) with MINOSA.

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 June 30, 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 assigned $ 2.0 million of its debt to MINOSA.

At September 30, 2021 and December 31, 2020, the outstanding principal balance, including the Epsilon assignment, was $ 5.05 million.

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.

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

On July 15, 2021, $ 404,633 of this debt with accumulated interest of $ 159,082

was transferred to a director of the Company.

This indebtedness includes the conversion price of $ 4.35 .

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 in

to its parent company.

On July 15, 2021, $ 404,633 of this in

with accumulated interest of $ 159,082

was transferred to a director of the Company, and that indebtedness continues to be convertible at a conversion price

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.

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”).

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

For the three months ended June 30, 2021 and 2020, interest expense in the amount of $ 125,904 and $ 125,904 , respectively, was recorded.

ended June 30, 2021 and 2020 interest expense in the amount of $ 250,424 and $ 251,807 , 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”).

For the three months ended September 30, 2021 and 2020, interest expense in the amount of $ 127,287 and $ 127,287 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 377,711 and $ 379,094 , 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.

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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.

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.

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.

5 to Promissory Note and Amendment No.

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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.

The Second AR Waiver

(x) further provides that following any conversion of the indebtedness evidenced by the Minosa Note, Penelope may elect to reduce its commitment to purchase our preferred stock under the SPA by the amount of indebtedness converted by MINOSA and (y) amends the SPA Note to provide that the outstanding principal balance under the SPA Note and all accrued interest and fees are due and payable upon written demand by MINOSA;

provided, that Minosa agreed not make a demand for payment prior to the earlier of (a) an event of default (as defined in the Minosa 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.

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;

The Second AR Waiver (x) further provides that following any conversion of the indebtedness evidenced by the Minosa Note, Penelope may elect to reduce its commitment to purchase our preferred stock under the SPA by the amount of indebtedness converted by MINOSA and (y) amends the SPA Note to provide that the outstanding principal balance under the SPA Note and all accrued interest and fees are due and payable upon written demand by MINOSA;

provided, that Minosa agreed not make a demand for payment prior to the earlier of (a) an event of default (as defined in the Minosa 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.

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

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and (g) the occurrence of a change in control (as defined in the Minosa Note).

second amended and restated pledge agreements (the “Second AR Pledge Agreements”) entered into by us in favor of MINOSA, we pledged and granted security interests to MINOSA in (a) the 54 million cuotas (a unit of ownership under Panamanian law) of Oceanica held by us, (b) all notes and other receivables from Oceanica and its subsidiary owed to us, and (c) all of the outstanding equity in our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd.

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.

Pursuant to second amended and restated pledge agreements (the “Second AR Pledge Agreements”) entered into by us in favor of MINOSA, we pledged and granted security interests to MINOSA in (a) the 54 million cuotas (a unit of ownership under Panamanian law) of Oceanica held by us, (b) all notes and other receivables from Oceanica and its subsidiary owed to us, and (c) all of the outstanding equity in our wholly owned subsidiary, Odyssey Marine Enterprises, Ltd.

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,

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Note 7 – Monaco 2018

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 June 30, 2021 and December 31, 2020.

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 September 30, 2021 and December 31, 2020.

The indebtedness bears interest at 10.0 % percent per year.

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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 three

months ended June 30, 2021 and 2020, interest expense in the amount of $ 68,583 and $ 35,018 , respectively, was recorded.

For the six months ended June 30, 2021 and 2020 interest expense in the amount of $ 133,476 and $ 67,794 , respectively, was recorded.

For the three months ended September 30, 2021 and 2020, interest expense in the amount of $ 72,505 and $ 34,827 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 205,981 and $ 102,621 , respectively, was recorded.

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

million of principal and accrued interest related to this arrangement.

See NOTE – M SUBSEQUENT EVENT 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.

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, $ 250,000 .

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Term Extension (July 8, 2019)” below.

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.

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.

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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.

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.

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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”).

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.

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

The face value of this debt was $ 1.05 million at June 30, 2021 and December 31, 2020.

For the three

months ended June 30, 2021 and 2020, interest expense in the amount of $ 26,250 and $ 24,029 , respectively, was recorded.

ended June 30, 2021 and 2020 interest expense in the amount of $ 51,484 and $ 47,584 , respectively, was recorded.

The face value of this debt was zero at September 30, 2021 and $ 1.05 million December 31, 2020.

For the three months ended September 30, 2021 and 2020, interest expense in the amount of $ 3,250 and $ 24,782 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 54,734 and $ 72,366 , respectively, was recorded.

Term Extension (July 8, 2019)

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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

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.

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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.

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.

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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 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,

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.

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

The related amortization for the three

months ended June 30, 2021 and 2020 was $ 89,316 and $ 67,372 , respectively and $ 184,999 and $ 138,978 for the six

ended June 30, 2021 and 2020, respectively.

The unamortized premium at June 30, 2021 and December 31, 2020 was $ 10,864 and $ 195,862 , respectively.

Upon maturity of this indebtedness during July 2021, the Lenders converted the Note and interest totaling $ 1,325,581 into 283,850 shares of our common stock.

The related amortization for the three months ended September 30, 2021 and 2020 was $ 10,864 and $ 78,050 , respectively and $ 195,863 and $ 217,028 for the nine months ended September 30, 2021 and 2020, respectively.

The unamortized premium at September 30, 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.

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”).

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:

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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”).

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”).

Upon exhaustion of the Tranche A Committed Amount, the Claimholder will have the option to request Tranche B of the Phase II Investment Amount, consisting of funding of up to $ 1.5 million (“Tranche B Committed Amount”).

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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.

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.

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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

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”).

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All other terms in the Restated Agreement are substantially the same as in the original Agreement.

During 2020, the

Funder provided us with $ 2.0 million of the Arbitration Support Funds, and we incurred $ 200,000 in related fees that were treated as an additional advance.

During 2020, the Funder provided us with $ 2.0 million of the Arbitration Support Funds, and we incurred $ 200,000 in related fees that were treated as an additional advance.

Upon each funding, the proceeds were allocated between debt and equity for the warrants based on the relative fair value of the two instruments.

As a result, there was a debt discount of $ 1,063,811 which is being amortized over the expected remaining term of the agreement using the effective interest method which is charged to interest expense.

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.

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.

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Second Amendment and Restatement (December 12, 2020)

December 12, 2020, the Claimholder and the Funder entered into a Second Amended and Restated International Claims Enforcement Agreement (the “Second Restated Agreement”) relating to the Subject Claim.

On December 12, 2020, the Claimholder and the Funder entered into a Second Amended and Restated International Claims Enforcement Agreement (the “Second Restated Agreement”) relating to the Subject Claim.

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”).

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Third Amendment and Restatement (June 14, 2021)

14, 2021, the Claimholder and the Funder entered into a Third Amended and Restated International Claims Enforcement Agreement (the “Third Restated Agreement”) relating to the Subject Claim.

Under the terms of the Third Restated Agreement, the Funder has made and agreed to make Claims Payments in an aggregate amount not to exceed $ 25,000,000 , an increas

e of $ 5.0 million (the “Incremental Amount”).

On June 14, 2021, the Claimholder and the Funder entered into a Third Amended and Restated International Claims Enforcement Agreement (the “Third Restated Agreement”) relating to the Subject Claim.

Under the terms of the Third Restated

Agreement, the Funder has made and agreed to make Claims Payments in an aggregate amount not to exceed $ 25,000,000 , an

increase of $ 5.0 million (the “Incremental Amount”).

The Third Restated Agreement requires the Claimholder to request $2.5 million of the Incremental Amount (the “First $2.5 Million”).

Within 15 days after exhaustion of the First $2.5 Million, the Claimholder may either (a) request the remaining $2.5 Million (the “Second $2.5 Million”) of the Incremental Amount or (b) notify the Funder that the Claimholder has decided to self-fund the Second $ 2.5

Within 15 days after exhaustion of the First $2.5 Million, the Claimholder may either (a) request the remaining $2.5 million (the “Second $2.5 Million”) of the Incremental Amount or (b) notify the Funder that the Claimholder has decided to self-fund the Second $2.5 Million.

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

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

For the three

months ended June 30, 2021 and 2020, interest expense in the amount of $ 1,754,970 and $ 771,273 , respectively, was recorded.

ended June 30, 2021 and 2020 interest expense in the amount of $ 3,259,492 and $ 1,346,428 , respectively, was recorded.

For the three

months ended June 30, 2021 and 2020, we recorded $ 60,252 and $ 40,553 , respectively, of interest expense from the amortization of the debt discount and $ 31,563 and $ 18,171 interest from the fee amortization, respectively.

ended June 30, 2021 and 2020, we recorded $ 110,731 and $ 57,269 , respectively, of interest expense from the amortization of the debt discount and $ 60,545 and $ 26,682 interest from the fee amortization, respectively.

The June 30, 2021 and December 31,2020 carrying value of the debt is $ 13,493,055 and $ 10,968,729 , respectively, and is net of unamortized debt fees of $ 367,241 and $ 347,786 , respectively, as well as the net unamortized debt discount of $ 780,231 and $ 890,962 , respectively, associated with the fair value of the warrant.

The total face value of this obligation at June 30, 2021 and December 31, 2020 was $ 14,640,757 and 12,207,477 , respectively.

For the three months ended September 30, 2021 and 2020, interest expense in the amount of $ 1,927,179 and $ 1,052,726 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 5,187,181 and $ 2,399,154 , respectively, was recorded.

For the three months ended September 30, 2021 and 2020, we recorded $ 63,689 and $ 52,688 , respectively, of interest expense from the amortization of the debt discount and $ 36,724 and $ 12,766 interest from the fee amortization, respectively.

For the nine months ended September 30, 2021 and 2020, we recorded $ 174,420 and $ 109,957 , respectively, of interest expense from the amortization of the debt discount and $ 97,269 and $ 34,043 interest from the fee amortization, respectively.

The September 30, 2021 and December 31,

2020 carrying value of the debt is $ 15,665,532 and $ 10,968,729 , respectively, and is net of unamortized debt fees of $ 330,517 and $ 347,786 , respectively, as well as the net unamortized debt discount of $ 716,542 and $ 890,962 , respectively, associated with the fair value of the warrant.

The total face value of this obligation at September 30, 2021 and December 31, 2020 was $ 16,712,591 and 12,207,477 , respectively.

Note 10 – Payroll protection program

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

The Loan, which

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

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

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

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

For the three

months ended June 30, 2021 and 2020, interest expense in the amount of $ 941 and $ 772 , respectively, was recorded.

ended June 30, 2021 and 2020 interest expense in the amount of $ 1,864 and $ 772 , respectively, was recorded.

At June 30, 2021 and December 31, 2020, the outstanding principal balance was $ 370,400 .

be forgiven partially or fully if the Loan proceeds are used for covered payroll costs, rent and utilities, provided that such amounts are incurred during the eight-week period that commenced on April 16, 2020, and at least 75 % of any forgiven amount has been used for covered payroll costs.

During June 2020, the 75 % requirement was reduced to 60 %

and the eight-week period was amended to a 24 week period.

Any forgiveness of the Loan will be subject to approval by the SBA and Fifth Third and will require us to apply for such treatment.

For the three months ended September 30, 2021 and 2020, interest expense in the amount of $ 0 and $ 936 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 1,788 and $ 1,708 , respectively, was recorded.

At September 30, 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

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”).

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.

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

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

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 three

months ended June 30, 2021 and 2020, interest expense in the amount of $ 6,449 and $ 0 , respectively, was recorded.

For the six months ended June 30, 2021 and 2020 interest expense in the amount

of $ 6,449 and $ 0 , respectively, was recorded.

At June 30, 2021 and December 31, 2020, the outstanding principal balance was $ 149,900 .

For the three months ended September 30, 2021 and 2020, interest expense in the amount of $ 2,192 and $ 0 , respectively, was recorded.

For the nine months ended September 30, 2021 and 2020 interest expense in the amount of $ 8,641 and $ 0 , respectively, was recorded.

At September 30, 2021 and December 31, 2020, the outstanding principal balance was $ 149,900 .

Note 12 – Vendor note payable

owe a vendor $ 484,009 as an interest-bearing trade 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 June 30, 2021 and December 31, 2020 .

The balance due was $ 484,009 at September 30, 2021 and December 31, 2020.

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

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This agreement matured in August

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.

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.

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0.5 million for two of the key assets.

The Company subsequently received back one of the two key assets thus reducing the contingent liability

to $ 0.3 million.

For the three months ended June 30, 2021 and 2020, we recorded interest expense in the amount of

$ 14,322 and $ 14,480 , respectively.

For the six months ended June 30, 2021 and 2020, we recorded interest expense in the amount

of $ 28,803 and $ 28,961 , respectively.

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

For the three months ended September

2020 , we recorded interest expense in the amount of $

14,640 , respectively.

For the nine months ended September

2020 , we recorded interest expense in the amount of $

43,601 , respectively.

Accrued interest

Total accrued interest associated with our financings was $ 22,634,452 and $ 15,800,317 as of June 30, 2021 and December 31, 2020, respectively.

Total accrued interest associated with our financings was $ 25,169,541 and $ 17,763,848 as of September 30, 2021 and December 31, 2020, respectively.

NOTE J – STOCKHOLDERS’ EQUITY (DEFICIT)

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.

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 sale, after offering expenses of $ 0.3 million, of which $ 0.2 million were withheld to cover fees, were $ 11.3 million.

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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.

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.

Convertible Preferred Stock

On March 11, 2015, we

entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Penelope Mining LLC (the “Investor”), and, solely with respect to certain provisions of the Purchase Agreement, Minera del Norte, S.A.

On March 11, 2015, we entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Penelope Mining LLC (the “Investor”), and, solely with respect to certain provisions of the Purchase Agreement, Minera del Norte, S.A.

(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

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.

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.

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.

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Series AA Convertible Preferred Stock Designation

Agreement provides for the issuance of up to 8,427,004 shares of Series AA-1

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

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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.

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

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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.

In conjunction with the Note and Warrant Purchase Agreement related to Note 8 – Promissory note 2018 in NOTE I, 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 the Note and Warrant Purchase Agreement related to Note 8 – Promissory note 2018 in NOTE I, we originally 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 I, 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 .

Included in the Restated Agreement as described in NOTE I, 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 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.

In conjunction

with our sale of shares common stock and warrants on August 21, 2020 as described above in Note J, we issued warrants to purchase up to 1,901,985 shares of our common stock.

In conjunction with our sale of shares common stock and warrants on August 21, 2020 as described above in Note J, 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 issuance which is February 25, 2024.

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After the expiration of this plan, equity instruments cannot be granted but this plan will continue in effect until all outstanding awards have been exercised in full or are no longer exercisable and all equity instruments have vested or been forfeited.

On June 9, 2015, our

stockholders approved our 2015 Stock Incentive Plan (the “Plan”) that was adopted by our Board of Directors (the “Board”) on January 2, 2015, which is the effective date.

On June 9, 2015, our stockholders approved our 2015 Stock Incentive Plan (the “Plan”) that was adopted by our Board of Directors (the “Board”) on January 2, 2015, which is the effective date.

The plan expires on the tenth anniversary of the effective date.

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During our June 2016 stockholders meeting, the stockholders approved the addition of 200,000 incremental shares to the Plan.

With respect to each grant of an ISO to a participant who is not a ten

percent stockholder, the exercise price shall not be less than the fair market value of a share on the date the ISO is granted.

With respect to each grant of an ISO to a participant who is not a ten percent stockholder, the exercise price shall not be less than the fair market value of a share on the date the ISO is granted.

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.

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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.

On March 26, 2019, our

Board of Directors adopted and approved the 2019 Stock Incentive Plan (the “2019 Plan”), which was approved by our stockholders on June 3, 2019.

On March 26, 2019, our Board of Directors adopted and approved the 2019 Stock Incentive Plan (the “2019 Plan”), which was approved by our stockholders on June 3, 2019.

The 2019 Plan expires on June 3, 2029.

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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 three month periods ended June 30, 2021 and 2020, was

$ 343,605 and $ 105,162 , respectively.

The share-based compensation charged against income for the six-month periods ended June 30, 2021 and 2020 was

$ 625,293 and $ 210,324 , respectively.

grant stock options to employees or outside directors in the three and six months ended June 30, 2021 or 2020.

The share-based compensation charged against income for the three month periods ended September 30, 2021 and 2020, was $ 312,646 and $ 105,162 , respectively.

The share-based compensation charged against income for the nine-month periods ended September 30, 2021 and 2020 was $ 937,939 and $ 315,486 , respectively.

We did no t grant stock options to employees or outside directors in the three and nine months ended September 30, 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.

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NOTE K – CONCENTRATION OF CREDIT RISK

do no t currently have any debt obligations with variable interest rates.

no t currently have any debt obligations with variable interest rates.

NOTE L – REVENUE PARTICIPATION RIGHTS

The Company’s participating revenue rights consisted of the following at:

“Seattle” project

September 30, 2021

December 31, 2020

Galt Resources, LLC (HMS Victory

Total revenue participation rights

private placement that closed in September 2000, we sold “units” consisting of “ Republic”

In a private placement that closed in September 2000, we sold “units” consisting of “ Republic”

Revenue Participation Certificates and Common Stock.

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” project, excluding funds received by us to finance the project.

The participation rights balance were to be amortized under the units of revenue method once management was able to reasonably estimate potential revenue for this 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

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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.

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.

7 unchanged sentences

The bifurcation resulted in $ 3,756,250 being allocated to each of the two projects.

Therefore, Galt will receive 7.5125 % of net proceeds from the HMS Victory

Therefore, Galt was en titled to re c

7.5125 % of net proceeds from the HMS Victory

project after they recoup their investment of $3,756,250 plus three times the investment.

3 unchanged sentences

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 is no expiration date on the Galt deal for the HMS Victory

If the archaeological excavation of the shipwreck is performed and insufficient proceeds are obtained, then the deferred income balance will be recognized as other income.

If the archaeological excavation of the shipwreck is performed and sufficient proceeds are obtained, then the deferred income balance will be recognized as revenue.

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.

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 M – SUBSEQUENT EVENT

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.

The Settlement Shares were issued at a price equal to $ 6.60 per share, totaling $ 6.5 million, which was negotiated by the parties with reference to the recent market prices of our common stock and the other terms of the Termination Agreement.

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.

If Monaco exercises the right, Odyssey will issue to Monaco the number of shares determined by dividing

2.5 million by the greater of $

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 $

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.

held indirectly by us was terminated.

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

We are in the process of determining the accounting for this transaction.

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).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements