Odyssey Marine Exploration Reports Full Year 2023 and First Quarter 2024 Results and Provides Company Update
Odyssey Marine Exploration (NASDAQ: OMEX) released its 2023 full-year and 2024 first-quarter financials, including a restatement of 2022 figures. The restatement, driven by technical accounting issues, reclassifies litigation financing as a derivative liability. Despite the restatement, CEO Mark Gordon emphasized the company's focus on building a portfolio of critical mineral resource projects.
The company received a $9.4 million payment from a shipwreck project, which will support ongoing operations. Odyssey focuses on polymetallic nodule projects for renewable energy and phosphate deposits for food security, leveraging its Global Prospectivity Process. The company is also seeking over $2 billion in damages from Mexico under NAFTA for the ExO Phosphate Project.
Additionally, Odyssey supports the Responsible Use of Seafloor Resources Act and has achieved significant milestones in polymetallic nodule exploration in the Cook Islands, including mapping and sample analysis.
- Received a payment of approximately $9.4 million from a shipwreck project.
- Focus on critical mineral resource projects like polymetallic nodules and phosphate deposits.
- Significant milestones achieved in Cook Islands polymetallic nodule exploration, including mapping and sample analysis.
- Endorsement of the Responsible Use of Seafloor Resources Act.
- Completion of multiple expeditions and mapping surveys in the Cook Islands, enhancing resource understanding.
- Restatement of 2022 financial statements due to technical accounting issues.
- Reclassification of litigation financing as a derivative liability.
- The outcome of the $2 billion NAFTA claim against Mexico is uncertain.
Insights
Odyssey Marine Exploration has reported its full-year 2023 and first-quarter 2024 results, which included restated financial statements for 2022. These financial restatements, although seemingly a technical matter, could indicate deeper issues in accounting practices that investors should be cautious about. The reclassification of litigation financing as a derivative liability under GAAP reflects a significant change in how the company manages and reports its financial obligations.
The company also disclosed a
Overall, the restatement and the one-time revenue inflow do not show substantial changes to the core business performance. Investors should be aware of the potential implications of these restatements on the company's financial health and the need for close scrutiny of future reports.
Odyssey Marine's legal dispute with Mexico under NAFTA for the ExO Phosphate Project is a notable point. The company seeks over
Such arbitration cases are complex and protracted, often involving intricate legal arguments around treaty obligations and environmental regulations. Investors should be aware that even a favorable ruling will likely be followed by appeals, prolonging the final resolution and possibly delaying any financial benefit.
Odyssey Marine's focus on polymetallic nodule projects and phosphate deposits is aligned with the growing demand for critical minerals necessary for renewable energy and food security. The company's strategic initiatives to develop these resources could position it well within these expanding markets. However, these projects are still in exploratory and development phases, carrying inherent risks and long lead times for realizing tangible financial returns.
The endorsement of the Responsible Use of Seafloor Resources Act also indicates the company's commitment to sustainable practices, which could enhance its reputation among stakeholders and align with the increasing ESG (Environmental, Social and Governance) focus. However, the actual implementation and impact of this act on operational practices remain to be seen.
Investors should weigh the long-term potential of these projects against their current speculative nature and the significant upfront investments required.
"The comprehensive audit and restatement of our financials serves as a critical step towards further ensuring transparency, accuracy, and accountability within our company. Although a technical accounting matter led to the restatement of our financial statements, we anticipate this to be a one-time event that will not impede our future filings," stated Mark Gordon, Odyssey’s Chief Executive Officer and Chairman of the Board of Directors. "The restatement has had no adverse effect on our business where we remain focused on building a portfolio of projects that will have a net positive impact by providing critical mineral resources in demand by society."
As previously disclosed in a Form 8-K filed with the Securities and Exchange Commission (SEC) on February 26, 2024, the company’s Audit Committee of the Board of Directors concluded that certain previously issued consolidated financial statements could not be relied upon and that certain financial statements would be restated. The restatement addresses the correction of accounting treatments for certain transactions, including the company’s litigation financing, which has been reclassified as a derivative liability under GAAP. The company's unaudited consolidated financial statements for the quarter ended September 30, 2023, are included in the Comprehensive Form 10-K, along with restated audited consolidated financial statements for the year ended December 31, 2022, and restated unaudited consolidated financial statements for interim periods ended March 31, 2022, and 2023, June 30, 2022, and 2023, and September 30, 2022. With this filing, Odyssey has now filed all previously delinquent SEC periodic reports.
Odyssey recently announced that it received a payment of approximately
The company’s consolidated financial statements and Comprehensive Form 10-K for the year ended December 31, 2023, and the company’s consolidated financial statements and Form 10-Q for the period ended March 31, 2024, are available on the company's web site at www.odysseymarine.com as well as at www.sec.gov.
Company Updates
Odyssey grows its portfolio by focusing on polymetallic nodule projects, which could provide the metals necessary to transition to renewable energy sources, thereby reducing carbon, emissions and by developing phosphate deposits, a vital component of fertilizer essential for addressing the food security requirements of a growing global population. Leveraging its distinctive Global Prospectivity Process, the company identifies projects that align geologically and geopolitically, strategically advancing them along its value curve model.
ExO Phosphate Project - NAFTA Case
Odyssey initiated a claim under Chapter XI of the North American Free Trade Agreement (NAFTA) in 2019, alleging that
On March 8, 2024, Odyssey received a letter from the International Centre for Settlement of Investment Disputes (ICSID) relating to the claim of Odyssey and Exploraciones Oceánicas S. de R.L. de C.V. (a subsidiary of Odyssey) against the United Mexican States under Chapter Eleven of the North American Free Trade Agreement. The letter advised the Claimant that the Tribunal “has continued to make progress in finalizing its determinations” and that it “expects to render the Award in the second quarter of this year.”
Odyssey cannot predict the outcome of the arbitration, but the company remains confident in the merits of its case.
Responsible Use of Seafloor Resources Act (RUSRA)
Odyssey and several industry peers endorsed the Responsible Use of Seafloor Resources Act (RUSRA) in March 2024. This act underscores
Cook Islands Polymetallic Nodule Exploration Milestones
The Cook Islands Seabed Minerals Authority (SBMA) granted three exploration licenses in 2022. Odyssey is invested in and provides services to two license holders that have undertaken exploration efforts and achieved several milestones while advancing understanding of the resources in their respective areas.
Ocean Minerals LLC (OML), one of the companies in which Odyssey has invested, completed multiple expeditions during the last year, resulting in a comprehensive mapping survey of the entire license area as well as collecting environmental, sediment, and resource samples. These samples, supported by the extensive ROV-captured video recordings, have been analyzed by independent laboratories and scientists, with results being reported to the Cook Islands Seabed Minerals Authority with an updated resource report being imminent. Using a benthic sled, a five-tonne bulk nodule sample to enable our ongoing metallurgical process development was recovered. This work accrues to expanding the amount of measured and indicated resources reported in their initial JORC resource report.
“We have been very pleased with the performance of our turnkey research vessel, the Anuanua Moana, in the
About Odyssey Marine Exploration
Odyssey Marine Exploration, Inc. (Nasdaq: OMEX) is a deep-ocean exploration pioneer engaged in the discovery, validation and development of subsea mineral deposits in a socially and environmentally responsible manner. Odyssey provides marine services for private clients and governments interested in exploring their Exclusive Economic Zones (EEZ) to survey, map and identify any potential mineral resources present. The company focuses on the exploration of polymetallic nodules (battery metals to power the future) and subsea phosphate deposits (fertilizer to feed the future) which the company believes will provide a benefit to society now and in the future, For additional details, please visit www.odysseymarine.com. An investor presentation is available in the Investors section of the website.
Forward Looking Information
Odyssey Marine Exploration believes the information set forth in this Press Release may include "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission on March 31, 2022. The financial and operating projections as well as estimates of mining assets are based solely on the assumptions developed by Odyssey that it believes are reasonable based upon information available to Odyssey as of the date of this release. All projections and estimates are subject to material uncertainties and should not be viewed as a prediction or an assurance of actual future performance. The validity and accuracy of Odyssey's projections will depend upon unpredictable future events, many of which are beyond Odyssey's control and, accordingly, no assurance can be given that Odyssey's assumptions will prove true or that its projected results will be achieved.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240515151676/en/
Liz Shows
Odyssey Marine Exploration, Inc.
(813) 876-1776
lshows@odysseymarine.com
Source: Odyssey Marine Exploration, Inc.
FAQ
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