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Item 5. Market for Registrant’s Common Equity

2022-03-31 compared with 2021-03-31 · 4 added, 683 removed, 19 unchanged (97% of the section changed)

1 unchanged sentence

Price Range of Common Stock

stock is listed on the NASDAQ Capital Market under the symbol OMEX.

Our common stock is listed on the NASDAQ Capital Market under the symbol OMEX.

The following table sets forth the high and low sale prices for our common stock during each quarter presented.

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Approximate Number of Holders of Common Stock

The number of record holders of our common stock at February 11, 2021 was approximately 150.

This does not include approximately 7,300

stockholders that hold their stock in accounts included in street name with broker/dealers.

The number of record holders of our common stock at January 18, 2022 was approximately 150.

This does not include approximately 7,100 stockholders that hold their stock in accounts included in street name with broker/dealers.

Holders of our common stock are entitled to receive such dividends as may be declared by our Board of Directors.

No dividends have been

declared with respect to our common stock and none are anticipated in the foreseeable future.

No dividends have been declared with respect to our common stock and none are anticipated in the foreseeable future.

Unregistered Sales of Equity Securities

2 unchanged sentences

There were no repurchases of shares of the Company’s common stock during the year ended December 31, 2021.

SELECTED FINANCIAL DATA

The following table sets forth selected financial data, which should be read in conjunction with the Companys Consolidated Financial

Statements and the related notes to those statements included in Item 8.

Financial Statements and Supplementary Data and with Item 7.

Managements Discussion and Analysis of Financial Condition and Results of Operations

appearing elsewhere in this Form 10-K.

The selected financial data have been derived from the Companys audited financial statements.

Years Ended December 31,

Dollars in thousands except per share amounts

Results of Operations

Net income (loss)

Earnings (loss) per share basic

Earnings (loss) per share diluted

Cash dividends per share

Years Ended December 31,

Dollars in thousands except per share amounts

Financial Position

Long-term obligations

Shareholders equity (deficit)

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

The following discussion and analysis is intended to provide a narrative of our financial results and an evaluation of our

financial condition and results of operations.

The discussion should be read in conjunction with our consolidated financial statements and notes thereto.

A description of our business is discussed in Item 1 of this report which contains an

overview of our business as well as the status of our ongoing project operations.

Results of Operations

The dollar values discussed in the following tables, except as otherwise indicated, are approximations to the nearest $1,000,000 and therefore

do not necessarily sum in columns or rows.

For more detail refer to the Financial Statements and Supplementary Data in Item 8.

The tables identify years 2020, 2019 and 2018, all of which included a twelve-month period ended December 31.

2020 Compared to 2019

Increase/(Decrease)

(Dollars in millions)

Total revenue

Operations and research

Marketing, general and administrative

Total operating expenses

Total other income (expense)

Income tax benefit (provision)

Non-controlling interest

Net income (loss)

The revenue generated in each period was a result of performing oceanic research, project administration and search and recovery operations for

our customers and related parties.

Total revenue decreased by $1.0 million in 2020 as compared to 2019.

The $1.0 million decrease is comprised of a $1.4 million reduction resulting from the long-term project we were engaged on since

2018 having reached its life expectancy during this period offset in part by an increase of $0.4 million increase in marine exploration services.

Cost and Expenses

Marketing, general and

administrative expenses primarily include all costs within the following departments:

Executive, Finance & Accounting, Legal, Information Technology, Human Resources, Marketing & Communications, Sales and Business Development.

Marketing, general and administrative expense decreased $1.7 million to $3.6 million in 2020 compared to $5.5 million in 2019.

The key items contributing to this $1.7 million decrease was

a non-cash decrease of share-based compensation of $0.2 million and a net reduction of $1.2 in employee incentives and employee and director related compensation.

The $1.2 million reduction

was primarily due to the reduction of the discretionary incentive reserve resulting from managements decision to not pay discretionary incentives until appropriate.

We also had a $0.4 million reduction in professional corporate services

which includes a reduction of approximately $0.3 million in maritime legal services associated with the HMS Victory as well as fees related to legal and in our annual audit function.

These decreases were offset in part by a

$0.1 million increase split between governmental fees and our corporate liability insurance.

Operations and research expenses are primarily focused

around deep-sea mineral exploration which includes minerals research, scientific services, marine operations and project management.

Operations and research expenses increased by $3.0 million

from 2019 to 2020 primarily as a result of the following items:

(i) a $4.3 million increase in financed professional fees, legal fees, and other expenses directly associated with our NAFTA litigation pursuit, (ii) a $1.3 million

decrease in marine services operating technical labor costs, (iii) a $0.4 million increase in our concession permit fees for our Mexican subsidiary and (iv) a $0.4 million decrease in our general operational overhead which

includes items such as travel related, insurances, depreciation and rent.

Other Income or Expense

Other income and expense was $8.5 and $5.2 million in net expenses for 2020 and 2019, respectively, resulting in a net expense increase of

$3.3 million.

This variance was primarily attributable to an increase in interest expense of $3.5 million primarily from our litigation financing agreement (NOTE H), a reduction in debt discount accretion in the amount of

$1.0 million, a $0.4 million incremental expense due to the fair value accounting of our hybrid debt instrument (NOTE H), the prior year included an expense of $0.9 million related to the fair value accounting for a warrant inducement

related to debt refinancing, a $0.5 million current year expense related to debt extinguishment accounting related to a loan extension, and $0.8 million of other income in 2019 attributable to the extinguishment of deferred revenue that

was caused by the 2019 cancelation of the HMS Sussex contract.

Income Taxes and

Non-Controlling Interest

We did not incur any taxes in 2020, 2019 or 2018.

Starting in 2013, we became the controlling shareholder of Oceanica.

Our financial statements thus include the financial results of Oceanica

and its subsidiary.

Except for intercompany transactions that are eliminated upon consolidation, Oceanicas revenues and expenses, in their entirety, are shown in our consolidated financial statements.

The share of Oceanicas net losses

corresponding to the equity of Oceanica not owned by us is subsequently shown as the Non-Controlling Interest in the consolidated statements of operations.

non-controlling interest adjustment for 2020 was $6.3 million as compared to $5.1 million for 2019.

The administrative support has been ongoing in support of the legal process in obtaining the

environmental application for our Mexican subsidiary.

This increase was mainly attributable to the compounding debt interest on our Mexican subsidiarys balance sheet.

Liquidity and Capital Resources

(Dollars in thousands)

Summary of Cash Flows:

Net cash (used) by operating activities

Net cash provided by investing activities

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Beginning cash and cash equivalents

Ending cash and cash equivalents

Discussion of Cash Flows

Net cash used by operating activities for 2020 was $9.3 million.

This represents a $3.8 million increase in use of funds when

compared to the use of $5.4 million in the same period of 2019.

The net cash used by operating activities reflected a net loss before non-controlling interest of $21.1 million offset in

part by non-cash items of $1.0 million which primarily includes loss on debt extinguishment of $0.8 million, investment in unconsolidated entity of $0.9 million, the fair-value of

hybrid-debt accounting of $0.7 million and other which includes items such as depreciation and debt discount accretion for $0.4 million.

Other operating activities resulted in an increase in working capital of $2.4 million compared to

Changes to accrued expenses, accounts receivable, accounts payable and other assets in 2020 comprised the $2.4 million.

The December 31, 2020 accounts payable balance of $4.1 million is comprised of:

1) $3.3 million which

pertains to four accounts.

These accounts are not related to current operations and are not expected to be settled with cash, 2) $0.5 million for our NAFTA litigation and will be funded from our litigation financing facility and 3)

$0.3 million of standard operating payables that will be settled in the normal course of business.

Net cash used by operating activities for 2019 was $5.4 million, an increase of

$1.0 million compared to the same period in 2018.

Net cash used by operating activities reflected a net loss before non-controlling interest of $(15.5) million offset in part by non-cash items of $1.7 million which primarily included depreciation and amortization of $0.1 million, note payable interest accretion of $0.8 million, equity based compensation of $0.8 million

and deferred income amortization of $(0.8) million as well as a noncash use of $(0.7) million for an investment in an unconsolidated entity, loss on debt extinguishment of $0.3 million, a loss of $0.3 million on the debt fair value option

and a $0.9 million loss due to a debt modification inducement.

Other operating activities resulted in an increase in working capital of $8.4 million.

Changes to accrued expenses, accounts receivable, accounts payable and other assets in

2019 comprised the $8.4 million.

There were no cash flows from investing activities in 2020.

Cash flows used by investing activities for 2019 were $0.01 million compared to $1.0 million provided by for in 2018.

period during 2018 includes a payment of $1.0 million from Magellan for the purchase of certain marine assets, see NOTE E.

flows provided by financing activities for 2020 were $15.2 million, which represented a $12.3 million increase over the same period in 2019 of $2.9 million.

The current period $15.

2 million was comprised of funds received from

our NAFTA litigation financing and funds received from the 37 North agreement (NOTE H).

We also participated and received funds from the Small Business Administration (SBA) programs for the Payroll Protection Program (PPP) and the Emergency Injury

Disaster Loan (EIDL) (NOTE H).

These debt proceeds of $3.6 million were offset by $0.2 million of repayments of financed obligations.

In August 2020 we sold 2.5 million of our common shares

for net-proceeds of $11.3 million (see NOTE L).

During December 2020, we sold $800,000 of new equity in one of our controlled subsidiaries to an existing shareholder of that subsidiary.

Cash flows provided by financing activities for 2019 were $2.9 million which represented $2.8 million of funds received from our

NAFTA litigation financing, and $0.5 million debt financing offset by $0.3 million of repayments of financed obligations.

For the same period in 2018, we borrowed the final tranche of $0.4 million from MINOSA, increased our note

payable to SMOM by $0.5 and received $0.8 million toward our last promissory note.

We also received a net advance of $1.0 million from Monaco in January 2018 which was eventually converted to a promissory note.

This cash inflow was

partially offset by repayment of debt obligations of $0.2 million.

During the fourth quarter of 2018, we issued new equity in an equity offering netting the Company $4.6 million.

General Discussion 2020

December 31, 2020, we had cash and cash equivalents of $6.2 million, an increase of $5.9 million from the December 31, 2019 balance of $0.2 million.

The operating cash used of $9.3 million was supported by debt proceeds

from 37North, the NAFTA litigation financing and the SBAs programs for the PPP and EIDL as well as the August 2020 capital raise of $11.3 million noted below.

The $9.3 million of cash used from operations was partially offset by non-cash items totaling $1.0 million which include share-based compensation, loss on debt extinguishment accounting and the results of the hybrid-debt agreement fair value accounting.

Financial debt of the company, excluding any derivative, hybrid-debt fair value accounting or beneficial conversion feature components of

such, was $43.2 million at December 31, 2020 and $33.9 million at December 31, 2019.

On August 21, 2020, we sold

an aggregate of 2,553,314 shares of our common stock and warrants to purchase up to 1,901,989 shares of our common stock.

The net proceeds received from sale, after offering expenses of $0.3 million, were $11.3 million (See NOTE L).

Since SEMARNAT initially declined to approve the environmental permit application of our Mexican subsidiary in April 2016 and again in October

2018, notwithstanding that the Superior Court of the Federal Court of Administrative Justice (TFJA) in Mexico nullified SEMARNATs initial denial, we continue to support the efforts of our subsidiaries and partners to work through the

administrative, legal and political process necessary to have the decision reviewed and overturned in the court of the TFJA.

On January 4, 2019, we initiated the process to submit a claim against Mexico to arbitration under the investment

protection chapter of the North American Free Trade Agreement (NAFTA).

On September 4, 2020, we filed our First Memorial with the Tribunal.

The First Memorial is the filing that fully lays out our case, witnesses and evidence for the Tribunal.

We continue to work diligently and in good faith with Mexicos current administration to achieve an equitable resolution of this dispute, but we are prepared to proceed with the full NAFTA arbitration process if necessary, see ITEM 1.

OVERVIEW for further detail.

2019 Compared to 2018

Increase/(Decrease)

(Dollars in millions)

Total revenue

Operations and research

Marketing, general and administrative

Total operating expenses

Total other income (expense)

Income tax benefit (provision)

Non-controlling interest

Net income (loss)

Total revenue decreased by $0.2 million in 2019 as compared to 2018.

The $0.2 million decrease is comprised of a $0.3 million

increase in increased marine mineral support services for CIC and an increase in other marine services offset by a $0.5 million reduction related to Magellans offshore marine services.

See NOTE J for further CIC related party information.

Cost and Expenses

general and administrative expenses decreased $0.2 million from $5.7 million in 2018 to $5.5 million in 2019.

This net decrease of $0.2 million was primarily due to (i) a net decrease of $0.8 million in personnel

expenses attributable to regular, incentive and share-based compensation, (ii) an increase of $0.9 million of director compensation at the corporate and subsidiary level (the corporate directors did not receive any cash compensation in

2018), (iii) a $0.1 million decrease in corporate legal support and professional services and (iv) a $0.2 million allocated reduction of corporate overhead support.

For 2019, Operations and research expenses were $7.9 million compared to $3.7 million for the same period in 2018.

The variance of

$4.2 million was primarily due to (i) a $3.7 million increase in legal related support of our NAFTA arbitration with the government of Mexico to assure the fair treatment of our foreign investment, see ITEM 1:

BUSINESS for more

information, (ii) reductions of $0.1 million and $0.3 million in operational support services and depreciation, respectively, and (iii) a $0.9 million gain on sale of marine equipment that occurred in 2018, but not in 2019.

Other Income or Expense

income and expense was $5.2 and $3.0 million in net expenses for 2019 and 2018, respectively, resulting in a net expense increase of $2.1 million.

This variance was primarily attributable to an increase in interest expense of

$0.8 million from the beneficial conversion feature tied to a promissory note, a warrant inducement of $0.9 million, a debt extinguishment loss of $0.3 million from a debt modification, new 2019 interest of $0.6 million, a fair

valuation loss of $0.3 million on new debt assumed during the three months ended December 31, 2019, and an increase of other income of $0.8 million, which related to the reclassification of our Revenue Participation Rights for our

Cambridge project, see NOTE K for further information.

See NOTE H for other debt information.

Income Taxes and

Non-Controlling Interest

We did not incur any taxes in 2019, 2018 or 2017.

Starting in 2013, we became the controlling shareholder of Oceanica.

Our financial statements thus include the financial results of Oceanica

and its subsidiary.

Except for intercompany transactions that are eliminated upon consolidation, Oceanicas revenues and expenses, in their entirety, are shown in our consolidated financial statements.

Oceanicas net losses corresponding to the equity of Oceanica not owned by us is subsequently shown as the Non-Controlling Interest in the

consolidated statements of operations.

The non-controlling interest adjustment for 2019 was $5.1 million as compared to $3.9 million for 2018.

The administrative support has been ongoing in support

of the legal process in obtaining the environmental application for our Mexican subsidiary.

This increase was mainly attributable to the compounding debt interest on our Mexican subsidiarys balance sheet.

Liquidity and Capital Resources

(Dollars in thousands)

Summary of Cash Flows:

Net (used) by operating activities

Net cash provided by investing activities

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Beginning cash and cash equivalents

Ending cash and cash equivalents

Discussion of Cash Flows

Net cash used by operating activities in 2019 was $5.4 million, an increase of $1.0 million compared to the same period in 2018.

cash used by operating activities reflected a net loss before non-controlling interest of $(15.5) million offset in part by non-cash items of $1.7 million, which

primarily included depreciation and amortization of $0.1 million, note payable interest accretion of $0.8 million, equity based compensation of $0.8 million and deferred income amortization of $(0.8) million as well as a noncash use

of $(0.7) million for an investment in an unconsolidated entity, loss on debt extinguishment of $0.3 million, a loss of $0.3 million on the debt fair value option and a $0.9 million loss due to a debt modification inducement.

operating activities resulted in an increase in working capital of $8.4 million.

Changes to accrued expenses, accounts receivable, accounts payable and other assets in 2019 comprised the $8.4 million.

Cash flows used by investing activities for 2019 were $0.01 million compared to $1.0 million provided by for in 2018.

period during 2018 includes a payment of $1.0 million from Magellan for the purchase of certain marine assets.

Cash flows provided

by financing activities for 2019 were $2.9 million, which represented $2.8 million of funds received from our NAFTA litigation financing, and $0.5 million debt financing offset by $0.3 million of repayments of financed

For the same period in 2018, we borrowed the final tranche of $0.4 million from MINOSA, increased our note payable to SMOM by $0.5 and received $0.8 million toward our last promissory note.

We also received a net advance of

$1.0 million from Monaco in January 2018 which was eventually converted to a promissory note.

This cash inflow was partially offset by repayment of debt obligations of $0.2 million.

During the fourth quarter of 2018, we issued new equity

in an equity offering netting the Company $4.6 million.

General Discussion 2019

At December 31, 2019, we had cash and cash equivalents of $0.2 million, a decrease of $2.6 million from the December 31,

2018 balance of $2.8 million.

This decrease was mainly attributable to the $5.4 million used for operations offset in part by $3.3 million of financing attributable to the $2.8 million received for the NAFTA arbitration

litigation and $0.5 million received from new indebtedness.

Financial debt of the company, excluding the derivative or beneficial

conversion feature components of such debt, increased by $3.5 million in 2019, from a balance of $30.4 million at December 31, 2018 to a balance of $33.9 million at December 31, 2019.

This increase was due to the NAFTA

litigation financing of $3.0 million and the first tranche of the 37North funding of $0.5 million, both of which are discussed above in the Discussion of Cash Flows (see NOTE H).

Since SEMARNAT initially declined to approve the environmental permit application of our Mexican subsidiary in April 2016 and again in October

2018, notwithstanding that the Superior Court of the Federal Court of Administrative Justice in Mexico nullified SEMARNATs initial denial, we continue to support the efforts of our subsidiaries and partners to work through the administrative,

legal and political process necessary to have the decision reviewed and overturned.

Stock Purchase Agreement

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 Purchase Agreement provides for us to issue and sell to the Investor shares of our preferred

stock in the amounts and at the prices set forth below (the numbers set forth below have been adjusted to reflect the 1-for-12 reverse stock split of February 19,

Price per Share

The closing of the sale and issuance of shares of the Companys preferred stock to the Investor is

subject to certain conditions, including the Companys receipt of required approvals from the Companys stockholders (received on June 9, 2015), the receipt of regulatory approval, performance by the Company of its obligations under

the Purchase Agreement, receipt of certain third party consents, the listing of the underlying common stock on the NASDAQ Stock Market and the Investors satisfaction, in its sole discretion, with the viability of certain undersea mining

projects of the Company.

Completion of the transaction requires amending the Companys articles of incorporation to (a) effect a reverse stock split, which was done on February 19, 2016, (b) adjusting the Companys

authorized capitalization, which was also done on February 19, 2016, and (c) establishing a classified board of directors (collectively, the Amendments).

The Amendments have been or will be set forth in certificates of

amendment to the Companys articles of incorporation filed or to be filed with the Nevada Secretary of State.

The purchase and sale

of 2,916,667 shares of Series AA-1 Preferred Stock at an initial closing and for the purchase and sale of the remaining 5,510,337 shares of Series AA-1

Preferred Stock according to the following schedule, is subject to the satisfaction or waiver of specified conditions set forth in the Purchase Agreement:

Total Purchase

March 1, 2016

September 1, 2016

March 1, 2017

March 1, 2018

The Investor may elect to purchase all or a portion of the

Series AA-1 Preferred Stock before the other dates set forth above.

The initial closing and the closing scheduled for March 1, 2016, have not yet occurred because certain conditions to closing have

not yet been satisfied or waived.

After completing the purchase of all AA-1 Preferred Stock, the Investor has the right, but not the obligation, to purchase all or a portion the 7,223,145 shares of Series AA-2 Preferred Stock at any time after the closing price of the Common Stock on the NASDAQ Stock Market has been $15.12 or more for 20 consecutive trading days.

The Investors right to purchase the shares

of Series AA-2 Preferred Stock will terminate on the fifth anniversary of the initial closing under the Purchase Agreement.

The Purchase Agreement contains certain restrictions, subject to certain exceptions described below, on the Companys ability to

initiate, solicit or knowingly encourage or facilitate an alternative acquisition proposal, to participate in any discussions or negotiations regarding an alternative acquisition proposal, or to enter into any acquisition agreement, merger agreement

or similar definitive agreement, or any letter of intent, memorandum of understanding or agreement in principle, or any other agreement relating to an alternative acquisition proposal.

These restrictions will continue until the earlier to occur of

the termination of the Purchase Agreement pursuant to its terms and the time at which the initial closing occurs.

The Purchase Agreement

also includes customary termination rights for both the Company and the Investor and provides that, in connection with the termination of the Purchase Agreement under specified circumstances, including in the event of a termination by the Company in

order to accept a Superior Proposal, the Company will be required to pay to the Investor a termination fee of $4.0 million.

The Purchase Agreement contains representations, warranties and covenants of the parties

customary for a transaction of this type.

Subject to the terms set forth in the Purchase Agreement, the Lender provided the Company,

through a subsidiary of the Company, with loans of $14.75 million, the outstanding amount of which, plus accrued interest, will be repaid from the proceeds from the sale of the shares of Series AA-1

Preferred Stock at the initial closing.

The outstanding principal balance of the loan at December 31, 2019 was $14.75 million.

The obligation to repay the loans is evidenced by a promissory note (the Note) in the amount of up to $14.75 million and

bears interest at the rate of 8.0% per annum, and, pursuant to a pledge agreement (the Pledge Agreement) between the Lender and Odyssey Marine Enterprises Ltd., an indirect, wholly owned subsidiary of the Company (OME),

is secured by a pledge of 54.0 million shares of Oceanica Resources S.

de R.L., a Panamanian limitada (Oceanica), held by OME.

In addition, OME and the Lender entered into a call option agreement (the Oceanica Call),

pursuant to which OME granted the Lender an option to purchase the 54.0 million shares of Oceanica held by OME for an exercise price of $40.0 million at any time during the one-year period after the

Oceanica Call was executed and delivered by the parties.

The Oceanica Call option expired on March 11, 2016 without being executed or extended.

On December 15, 2015, the Promissory Note was amended to provide that, unless otherwise

converted as provided in the Note, the adjusted principal balance shall be due and payable in full upon written demand by MINOSA;

provided that MINOSA agrees that it shall not demand payment of the adjusted principal balance earlier than the first

(i) 30 days after the date on which (x) SEMARNAT makes a determination with respect to the current application for the Manifestacion de Impacto Ambiental relating to our phosphate deposit project, which determination is other

than an approval or (y) Enterprises or any of its affiliates withdraws such application without MINOSAs prior written consent;

(ii) termination by Odyssey of the Stock Purchase Agreement, dated March 11, 2015 (the Purchase

Agreement), among Odyssey, MINOSA, and Penelope Mining, LLC (the Investor);

(iii) the occurrence of an event of default under the Promissory Note;

(iv) March 30, 2016;

or (v) if and only if the Investor shall

have terminated the Purchase Agreement pursuant to Section 8.1(d)(iii) thereof, March 30, 2016.

On March 18, 2016 the agreements with MINOSA and Penelope were further amended and extended the maturity date of the loan to

March 18, 2017(see NOTE H).

The August 10, 2017 Minosa Purchase Agreement amended the due date of this note to a due date which may be no earlier than December 31, 2017, and that is at least 60 days subsequent to written notice that

Minosa intends to demand payment.

We have not received any notice the creditor intends to demand payment.

See the August 10, 2017 Minosa Purchase Agreement disclosure below.

During December 2017 MINOSA transferred this debt to its parent

On March 18, 2016, Odyssey entered into a $3.0 million Note Purchase Agreement with Epsilon Acquisitions LLC (see

below and NOTE H).

Epsilon is an investment vehicle of Mr.

Alonso Ancira who is Chairman of the Board of AHMSA, an entity that

controls MINOSA.

Class AA Convertible Preferred Stock

Pursuant to a certificate of designation (the Designation) to be filed with the Nevada Secretary of State, each share of Series AA-1 Convertible Preferred Stock and Series AA-2 Convertible Preferred Stock (collectively, the Class AA Preferred Stock) will be convertible into

one share of Common Stock at any time and from time to time at the election of the holder.

Each share of Class AA Preferred Stock will rank pari passu with all other shares of Class AA Preferred Stock and senior to shares of Common Stock

and all other classes and series of junior stock.

If the Company declares a dividend or makes a distribution to the holders of Common Stock, the holders of the Class AA Preferred Stock will be entitled to participate in the dividend or

distribution on an as-converted basis.

Each share of Class AA Preferred Stock shall entitle the holder thereof to vote, in person or by proxy, at any special or annual meeting of stockholders, on all

matters voted on by holders of Common Stock, voting together as a single class with other shares entitled to vote thereon.

So long as a majority of the shares of the Class AA Preferred Stock are outstanding, the Company will be prohibited from

taking specified extraordinary actions without the approval of the holders of a majority of the outstanding shares of Class AA Preferred Stock.

In the event of the liquidation of the Company, each holder of shares of Class AA Preferred

Stock then outstanding shall be entitled to be paid, out of the assets of the Corporation available for distribution to its stockholders, an amount in cash equal to the greater of (a) the amount paid to the Company for such holders shares

of Class AA Preferred Stock, plus an accretion thereon of 8.0% per annum, compounded annually, and (b) the amount such holder would be entitled to receive had such holder converted such shares of Class AA Preferred into Common

Stock immediately prior to such time at which payment will be made or any assets distributed.

Stockholder Agreement

The Purchase Agreement provides that, at the initial closing, the Company and the Investor will enter into a stockholder agreement (the

Stockholder Agreement).

The Stockholder Agreement will provide that (a) in connection with each meeting of the Companys stockholders at which directors are to be elected, the Company will (i) nominate for election as

members of the Companys board of directors a number of individuals designated by the Investor (Investor Designees) equivalent to the Investors proportionate ownership of the Companys voting securities (rounded up to the

next highest integer) less the number of Investor Designees who are members of the board of directors and not subject to election at such meeting, and (ii) use its reasonable best efforts to cause such nominees to be elected to the board of

(b) the Company will cause one of the Investor Designees to serve as a member of (or at such Investor Designees election, as an observer to) each committee of the Companys board of directors;

and (c) each Investor

Designee shall have the right to enter into an indemnification agreement with the Company (an Indemnification Agreement) pursuant to which such Investor Designee is indemnified by the Company to the fullest extent allowed by Nevada law

if, by reason of his or her serving as a director of the Company, such Investor Designee is a party or is threatened to be made a party to any proceeding or by reason of anything done or not done by such Investor Designee in his or her capacity as a

director of the Company.

The Stockholder Agreement will provide the Investor with pre-emptive

rights with respect to certain equity offerings of the Company and restricts the Company from selling equity securities until the Investor has purchased all the Class AA Preferred Stock or no longer has the right or obligation to purchase any

of the Class AA Preferred Stock.

The Stockholder Agreement will also provide the Investor with certain first look rights with respect to certain mineral deposits discovered by the Company or its subsidiaries.

Pursuant to the

Stockholder Agreement, the Company will grant the Investor certain demand and piggy-back registration rights, including for shelf registrations, with respect to the resale of the shares of Common Stock issuable upon conversion of the Class AA

Preferred Stock.

Litigation Financing

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 Claimholders 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 Funders sole discretion.

Under the terms of the Agreement, the Funder agreed to make

Claims Payments in an aggregate amount not to exceed $6,500,000 (the Maximum Investment Amount).

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

a first phase, in which the Funder shall make Claims Payments in an aggregate amount no greater than $1,500,000

for the payment of antecedent and ongoing costs (Phase I Investment Amount);

a second phase, in which the Funder shall make Claims Payments in an aggregate amount no greater than

$5,000,000 for the purposes of pursuing the Subject Claim to a final award (Phase II Investment Amount).

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).

The Claimholder must exercise its option to receive the Tranche A Committed Amount in writing, no less than thirty

days before submitting a Funding Request to the Funder under Tranche A.

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

Committed Amount.

Pursuant to the Agreement, the Claimholder agreed that, upon exercising the Claimholders option to receive funds under Phase I, Tranche A of Phase II, or Tranche B of Phase II, the Funder will be the

sole source of third-party funding for the specified fees and expenses of the Subject Claim under each respective phase and tranche covered by the option exercised, and the Claimholder will obtain funding for such fees and expenses only as set forth

in the Agreement.

The Funder was due closing fee of $80,000 for the Phase I Investment Amount, and $80,000 for the Phase II Investment Amount to pay third parties in connection with due diligence and other administrative and transaction

costs incurred by the Funder prior to and in furtherance of execution of the Agreement.

Upon the Funder making Claims Payments to the Claimholder or its designees in an aggregate

amount equal to the Maximum Investment Amount, the Funder has the option to continue funding the specified fees and expenses in relation to the Subject Claim on the same terms and conditions provided in the Agreement.

The Funder must exercise its

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

If the Funder exercises its option to continue funding, the parties agreed to attempt

in good faith to amend the Agreement to provide the Funder with the right to provide at the Funders discretion funding in excess of the Maximum Investment Amount, in an amount up to the greatest amount that may then be reasonably expected to

be committed for investment in Subject Claim.

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

rights under the Agreement.

The Agreement provides that the Claimholder may at any time without the consent of the Funder either settle

or refuse to settle the Subject Claim for any amount;

provided, however, that if the Claimholder settles the Subject Claim without the Funders consent, which consent shall not be unreasonably withheld, conditioned, or delayed, the value of the

Recovery Percentage (as defined below) will be deemed to be the greater of (a) the Recovery Percentage (under Phase I or Phase II, as applicable), or (b) the total amount of all Claims Payments made in connection with such

Subject Claim multiplied by three (3).

If the Claimholder ceases the Subject Claim for any reason other than (a) a full and final

arbitral award against the Claimholder or (b) a full and final monetary settlement of the claims, including in particular, for a grant of an environmental permit to the Claimholder allowing it to proceed with the Project (with or without a

monetary component), all Claims Payments under Phase I and, if Claimholder has exercised the corresponding option, the Tranche A Committed Amount and Tranche B Committed Amount, shall immediately convert to a senior secured liability

of the Claimholder.

This sum shall incur an annualized internal rate of return (IRR) of 50.0% retroactive to the date each Funding Request was paid by the Funder (under Phase I), or, to the conversion date for the Tranche A Committed

Amount and Tranche B Committed Amount of Phase II if the Claimholder has exercised the respective option (collectively, the Conversion Amount).

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

(the Penalty Interest Amount).

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

obligation to pay the Conversion Amount to the Funder.

If the Claimholder ceases the Subject Claim due to the grant of an environmental permit (with or without a monetary component), all Claims Payments under Phase 1 and, if the Claimholder has

exercised the corresponding option, the Tranche A Committed Amount and Tranche B Committed Amount shall immediately convert to a senior secured liability of the Claimholder and shall incur an annualized an IRR of 50.0% on the Conversion Amount,

noted above, from the conversion date.

Management has estimated it is more likely than not the Subject Claim will result in the issuance of the environmental permit requiring us to record interest under Generally Accepted Accounting Principles.

Reliance should not be placed on this estimate in determining the likely outcome of the Subject Claim.

If, at any time after exercising

its option to receive funds under either Tranche A or Tranche B of Phase II, the Claimholder wishes to fund the Subject Claim with its own capital (Self-Funding) (which excludes any Claims Payments made, either directly or

indirectly, by any other third party), the Claimholder shall immediately pay to the Funder the Conversion Amount, provided that this requirement shall not apply if, after the Funder has made Claims Payments in an aggregate amount equal to the

Maximum Investment Amount, the Funder does not exercise its option to provide Follow-On Funding.

In the event of any receipt of proceeds resulting from the Subject Claim (Proceeds), the Funder shall be entitled to

any additional sums above the Conversion Amount to which the Funder is entitled as described below.

Should the Claimholder cease the Subject Claim as described above after Self-Funding the Claim, accrued IRR and Penalty Interest shall be calculated

and paid to the Funder as set forth above.

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

The parties acknowledge this Agreement constitutes a sale of the right

to a portion of the Proceeds (if any) arising from the Subject Claim as set forth in this Agreement.

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

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

On each Distribution Date, distributions of the Proceeds shall be made to the Claimholder

and the Funder in accordance with subparagraph (a) or (b) below (the Recovery Percentage), as applicable:

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

distributed as follows:

first, 100.0% to the Funder, until the cumulative amount distributed to the Funder equals the total Claims

Payments paid by the Funder under Phase I;

second, 100.0% to the Funder until the cumulative amount distributed to the Funder equals an IRR of 20% of

Claims Payments paid by the Funder under Phase I (Phase I Compensation), per annum;

thereafter, 100.0% to the Claimholder.

If the Claimholder exercises its options to receive Tranche A or both Tranche A and Tranche B of the Phase II

Investment Amount, the first Proceeds shall be distributed as follows:

first, 100.0% to the Funder until the cumulative amount distributed to the Funder equals the total Claims

Payments paid by the Funder under Phases I and II;

second, 100.0% to the Funder until the cumulative amount distributed to the Funder equals an additional 300.0%

of Phase I Investment Amount;

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

300.0% of $3.5 million), less any amounts remaining of the Tranche A Committed Amount that the Funder did not pay as Claims Payments;

plus an additional

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

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

third, for each $10,000 in specified fees and expenses paid by the Funder under Phase I and Phase II and any

amounts over each $10,000 of the Tranche A Committed Amount and the Tranche B Committed Amount (if the Claimholder exercises the Tranche B funding option), 0.01% of the total Proceeds from any recoveries after repayment of (i) and

(ii) above, to the Funder;

thereafter, 100% to the Claimholder.

The Agreement provides that if no Proceeds are ever paid to or received by the Claimholder or its representatives and if the environmental

permit is not issued, the Funder shall have no right of recourse or right of action against the Claimholder or its representatives, or any of their respective property, assets, or undertakings, except as otherwise specifically contemplated by the

If (a) Proceeds are paid to or received by the Claimholder or its representatives;

(b) such Proceeds are promptly applied and/or distributed by the Claimholder or on behalf of the Claimholder in accordance with the terms of the

and (c) the amount received by the Funder as a result thereof is not sufficient to pay all of the Recovery Percentage and all of the amounts due to the Funder under the Agreement, then (provided that all of the Proceeds which the

Funder will ever be entitled to have been paid to or received by the Funder), the Funder shall have no right of recourse or action against the Claimholder or its Representatives, or any of their property, assets, or undertakings, except as otherwise

specifically contemplated by the Agreement.

Pursuant to the Agreement, the Claimholder acknowledged the Funders priority right, title, and interest in any Proceeds, including against any available collateral to secure its obligations under the

Agreement, which security interest shall be first in priority as against all other security interests in the Proceeds.

The Claimholder also acknowledged and agreed to execute and authorize the filing of a financing statement or similar and to take

such other actions in such jurisdictions as the Funder, in its sole discretion, deems necessary and appropriate to perfect such security interest.

The Agreement also includes representations and warranties, covenants, conditions, termination and

indemnification provisions, and other provisions customary for comparable arrangements.

Amendment and Restatement (January 31,

On January 31, 2020, the Claimholder and the Funder entered into an Amended and Restated International Claims

Enforcement Agreement (the Restated Agreement).

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

The Funder agreed to provide up to $2.2 million in Arbitration Support Funds for the purpose of paying the

Claimholders litigation support costs in connection with Subject Claim;

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

costs incurred by the Funder;

A warrant was issued to purchase our common stock which is exercisable for a period of five years beginning on

the earlier of (a) the date on which the Claimholder ceases the Subject Claim for any reason other than a full and final arbitral award against the Claimholder or a full and final monetary settlement of the claims or (b) the date on which

Proceeds are received and deposited into escrow.

The exercise price per share is $3.99, and the Funder can exercise the warrant to purchase the number of shares of our common stock equal to the dollar amount of Arbitration Support Funds provided to

us pursuant to the Restated Agreement divided by the exercise price per share (subject to customary adjustments and limitations);

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.

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.

Although the warrants only become exercisable upon the occurrence of future events, they are considered issued for accounting purposes and

were valued using a binomial lattice model.

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

The expected life assumption was primarily based on managements expectations of when the Warrants will

become exercisable and the risk-free interest rate for the expected term of the warrant is based on the U.S.

Treasury yield curve in effect at the time of measurement.

Second Amendment and Restatement (December 12, 2020)

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).

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

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

The Second Restated Agreement includes the same representations and warranties, covenants, conditions, termination and indemnification provisions,

and other provisions as in the original agreement.

The December 31, 2020 carrying value of the note is $10,968,729 and is net of

unamortized debt fees of $347,786 as well as the net unamortized debt discount of $890,962 associated with the fair value of the warrants.

For the year ended December 31, 2020, the expense related to debt discount and fee amortization was

$172,849 and $52,214, respectively.

The total face value of this obligation at December 31, 2020 and 2019 was $12,207,477 and $2,957,097, respectively.

Promissory Note

On December 6,

2019, we entered into a Note Purchase Agreement (the Purchase Agreement) with 37North Capital SPV 11, LLC (the Investor) pursuant to which the Investor agreed to lend, in one or more transactions (each, a Loan),

up to an aggregate of $2.0 million to us, subject to the terms and conditions of the Purchase Agreement.

On December 10, 2019, the Investor made a Loan to us in the amount of $539,000 pursuant to the Purchase Agreement.

An additional Loan

of $490,000 was made in the first quarter of 2020.

Each Loan is evidenced by a separate convertible promissory note (each, a Note).

Unless otherwise converted as described below, the entire outstanding amount of all Loans was originally

due and payable on June 6, 2020.

As described in additional detail below, the maturity date was subsequently extended to November 6, 2020, and on December 8, 2020, the Company waived the maturity date extension causing the maturity

date to revert back to June 6, 2020 (the Maturity Date).

At any time and from time to time until the three-month

anniversary of the Maturity Date, all or any portion of the outstanding amount of each Note may, at the Investors election, be converted into shares of our common stock, par value $0.0001 per share (Conversion Shares).

of Conversion Shares to be issued upon any conversion shall be equal

to the quotient obtained by dividing the Applicable Conversion Amount (as defined below) by the Applicable Conversion Rate (as defined below).

As defined in the Purchase Agreement, the

Applicable Conversion Amount means, on the date of determination and with respect to each Note, (a) for the period beginning on the date of issuance and ending on the day immediately preceding the Maturity Date, an amount equal to

100.0% of the amount of the Loan evidenced by such Note then outstanding;

(b) on the Maturity Date, 136.0% of the amount of the Loan evidenced by such Note then outstanding (such amount, the Enhanced Conversion Amount);

the period beginning on the day immediately following the Maturity Date and for a period of three months thereafter (such three-month period, the Accrual Period), an amount equal to (i) the Enhanced Conversion Amount then

outstanding plus (ii) an additional amount equal to 3.0% per month (prorated for any period of less than a full month) accrued on the amount described in clause (i);

and (d) on any date after the Accrual Period, the amount then outstanding

after giving effect to the accrual described in clause (c) during the Accrual Period (it being understood that no additional amount shall accrue after the expiration of the Accrual Period);

and Applicable Conversion Rate means

(x) with respect to any conversion on or prior to the Maturity Date, $5.00, and (y) with respect to any conversion after the Maturity Date, the lower of (i) $5.00 and (ii) 80.0% of

the ten-day volume-weighted average price of Odysseys common stock.

Notwithstanding anything in the Purchase Agreement to the contrary, we are prohibited from issuing any Conversion Shares, to

the extent such shares, after giving effect to such issuance after conversion and when added to the number of Conversion Shares previously issued upon conversion of any of the Notes sold pursuant to the Purchase Agreement, would represent in excess

of 19.9% of (A) the number of shares of our common stock outstanding immediately after giving effect to such issuances or (B) the total voting power of our securities outstanding immediately after giving effect to such issuances that are

entitled to vote on a matter being voted on by holders of our common stock.

On May 6, 2020, Odyssey and the Investor agreed to amend

the Purchase Agreement to additionally provide that, notwithstanding anything in the Purchase Agreement to the contrary, Odyssey is prohibited from issuing any Conversion Shares, to the extent such shares, after giving effect to such issuance after

conversion and when added to the number of Conversion Shares previously issued upon conversion of any of the Notes sold pursuant to the Purchase Agreement, would represent in excess of 19.9% of the number of shares of Common Stock outstanding as of

December 6, 2019.

Due to a reference to the effective date of the amendment in the definition of the maturity date, the maturity date of the Note was inadvertently revised from June 6, 2020 to November 6, 2020.

December 8, 2020 the Company amended the Notes to adjust the maturity date back to the original date of June 6, 2020 and to extend the option to convert to December 31, 2020.

The modifications were evaluated under FASB ASC Topic 470-50-40, Debt Modification and Extinguishments but the instruments were determined not to be substantially different and extinguishment accounting did not apply.

During the year ended December 31, 2020, the Investor converted the entire loan balance into 329,498 shares of our common stock at

conversion rates ranging from $3.71 to $5.00 per share.

If, at any time prior to the Maturity Date, (a) we receive cash proceeds

(the Shipwreck Proceeds) arising out of our salvage agreement relating to cargo recovered from a specified shipwreck, and (ii) the amount of the Shipwreck Proceeds equals at least 155.0% of the then-unpaid amount of all Loans, then

we must repay in full the indebtedness outstanding under all the Notes by delivery of an amount equal to 155.0% of the then-unpaid amount of all Loans.

In addition, at any time prior to the Maturity Date, we may repay all (but not less than all) of

the then-unpaid amount of all Loans by delivery of an amount equal to 155.0% of the then-unpaid amount of all Loans;

provided, that we must provide the Investor at least ten days notice of our intention to repay the indebtedness.

The Purchase Agreement and the Notes issued by Odyssey on December 10, 2019 and January 29, 2020, include representations and

warranties and other covenants, conditions, and other provisions customary for comparable transactions.

We evaluated the Notes in

accordance with ASC Topic 815, Derivatives and Hedging, and determined that they contain certain embedded derivatives whose economic risks and characteristics were not clearly and closely related to the risks of the host contract.

embedded derivative features consisted of the embedded conversion option and contingent redemption provisions.

We elected to initially and subsequently measure the Notes in their entirety at fair value, with changes in fair value recognized in

FASB ASC 825-10-25 allows us to elect the fair value option for recording financial instruments when they are initially recognized or if there is an

event that requires re-measurement of the instruments at fair value, such as a significant modification of the debt.

Because the Notes are carried in their entirety at fair value, the value of the compound embedded conversion feature is embodied in that fair

The Company estimates the fair value of the hybrid instrument based on a probability weighted analysis which considers the present value of the cash flows using a credit risk adjusted rate enhanced by the redemption feature and the value of

the conversion option valued using a Monte Carlo model.

This method was considered by management to be the most appropriate method of encompassing the credit risk and exercise behavior that a market participant would consider when valuing the hybrid

financial instrument.

Inputs used to value the hybrid instrument during the year ended December 31, 2020

(i) present value of future cash flows using a credit risk adjusted rate ranging from 18%-24% due solely to changes in benchmark interest rates, (ii) remaining term to maturity,

(iii) volatility ranging from 35%-87%, (iv) closing stock price on the valuation date, and (v) the conversion price based on the lesser of $5.00 or 80% of the

Material changes due to instrument-specific credit risk are recorded in Other Comprehensive Income with all other changes in value being recorded in net income.

The fair value of the hybrid instrument was $861,485 as of December 31, 2019.

During the year ended December 31, 2020, we received

additional proceeds of $490,000, recorded a change in the fair value of the hybrid instrument of $732,958 and fully converted the Notes into 329,498 shares of our Common Stock.

Payroll protection program

We applied to

Fifth Third Bancorp (Fifth Third) under the Small Business Administration (the SBA) Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the CARES Act) for a loan of

$370,400 (the Loan), and the Loan was made on April 16, 2020.

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

The Loan, which is evidenced by promissory note issued by us (the Promissory Note), has

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

Monthly principal and interest payments, less the amount of any potential forgiveness (discussed

below), will commence seven months from the month this Note is dated.

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

The Promissory Note provides for customary events of default,

including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects.

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

The Loan may 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 in the future.

Emergency Injury Disaster Loan

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

The principal amount of the

EIDL Loan is $149,900, with proceeds to be used for working capital purposes.

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

months from the date of the EIDL Loan.

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.

Going Concern Consideration

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, and completing the MINOSA/Penelope equity financing transaction approved by our stockholders on June 9, 2015.

Our 2020 business plan required 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.

If cash inflow becomes insufficient to meet our desired projected

business plan requirements, we would be required to follow a contingency business plan which is based on curtailed expenses and fewer cash requirements.

On August 21, 2020, we sold an aggregate of 2,553,314 shares of our common stock and

warrants to purchase up to 1,901,989 shares of our common stock.

The net proceeds received from this sale, after offering expenses of $0.3 million, were $11.2 million (See NOTE J).

These proceeds, coupled with the 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

(MINOSA) and Penelope Mining LLC (Penelope), an affiliate of MINOSA, pursuant to which (a) MINOSA agreed to extend short-term, debt financing to Odyssey of up to $14.75 million, and (b) Penelope

agreed to invest up to $101 million over three years in convertible preferred stock of Odyssey.

The equity financing is subject to the satisfaction of certain conditions, including the approval of our stockholders which occurred on June 9,

2015, and MINOSA and Penelope are currently under no obligation to make the preferred share equity investments.

Our consolidated non-restricted cash balance at December 31, 2020 was $6.2 million.

We have a working capital deficit at December 31, 2020 of $47.0 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 H 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 $11.8 million at December 31, 2020, which includes cash of $6.2 million, and the fair market value of

these assets may differ from their net carrying book value.

Even though we executed the above noted financing arrangement with Penelope, Penelope must purchase the shares for us to be able to complete the equity component of the transaction.

Penelope equity transaction is heavily dependent on the outcome of our subsidiarys application approval process for an environmental permit (EIA) to commercially develop a mineralized phosphate deposit off the coast of Mexico.

noted above raise doubt about our ability to continue as a going concern.

These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to

continue as a going concern.

Off Balance Sheet Arrangements

We do not engage in off-balance sheet financing arrangements.

In particular, we do not have any

interest in so-called limited purpose entities, which include special purpose entities (SPEs) and structured finance entities.

Indemnification Provisions

bylaws and certain consulting agreements, we have agreed to indemnify our officers and directors for certain events arising as a result of the officers or directors serving in such capacity.

Separate agreements may provide

indemnification after term of service.

The term of the indemnification agreement is as long as the officer or director remains in the employment of the company.

The maximum potential amount of future payments we could be required to make under these

indemnification agreements is unlimited.

However, our director and officer liability insurance policy limits its exposure and enables us to recover a portion of any future amounts paid.

As a result of our insurance policy coverage, we believe the

estimated fair value of these indemnification agreements is minimal and no liabilities are recorded for these agreements as of December 31, 2020.

Critical Accounting Estimates

discussion and analysis of our financial position and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of these

financial statements requires us to make estimates and judgments that affect our financial position and results of operations.

See NOTE A to the Consolidated Financial Statements for a description of our significant accounting policies.

accounting estimates are defined as those that are reflective of significant judgment and uncertainties, and potentially result in materially different results under different assumptions and conditions.

We have identified the following critical

accounting estimates.

We have discussed the development, selection and disclosure of these policies with our audit committee.

Long-Lived Assets

As of December 31, 2020, we had approximately $0.6 million of net property and equipment, right to use operating lease and

related assets.

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

Impairment decisions are based on several factors, including, but not limited to,

managements plans for future operations, recent operating results and projected cash flows.

Realizability of Deferred Tax Assets

We have recorded a net deferred tax asset of $0 at December 31, 2020.

As required by the ASC topic for Accounting for Income Taxes,

we have evaluated whether it is more likely than not that the deferred tax assets will be realized.

Based on the available evidence, we have concluded that 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 the monetization of our mineral exploration stakes and thus a valuation allowance of $71.9 million has been recorded as of December 31, 2020.

Allowance for Doubtful Accounts

In determining the collectability of our accounts receivable, we need to make certain assumptions and estimates.

Specifically, we may examine

accounts and assess the likelihood of collection of particular accounts.

Management has elected to record bad debts using the direct write-off method.

Generally accepted accounting principles state an estimate

is to be made for an allowance for doubtful accounts.

The effect of using the direct write-off method, however, is not materially different from the results that would have been obtained had the allowance

method been followed.

If we were to have a recorded allowance, the accounts receivable would be stated net the recorded allowance.

Derivative Financial Instruments

From time to time, we may enter into a financial instrument that may contain a derivative.

In evaluating fair value of derivative financial

instruments, there are numerous assumptions which management must make that may influence the valuation of the derivatives that would be included in the financial statements.

Exploration License

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

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

This assessment is based on the historical success of renewing the license since 2006, and the fact that management believes there are no legal, regulatory, or

contractual provisions that would limit the useful life of the asset.

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

In the future, the

recoverability of the license will be tested whenever circumstances indicate that its carrying amount may not be recoverable per the guidance of ASU 360, Subsequent Measurement.

Contractual Obligations

December 31, 2020, except as disclosed in NOTE O regarding our office lease, the Company did not have any other contractual obligations that extended beyond 12 months.

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-K

Item 5. Market for Registrant’s Common Equity