Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a deep-ocean
exploration pioneer engaged in the discovery, development and
extraction of deep-ocean minerals, reported results for the first
quarter ended March 31, 2020, and provided an update on
current company operations and projects.
“While the Covid-19 pandemic has affected
businesses around the globe, Odyssey has continued to make
significant progress towards achieving our key objectives while
temporarily transitioning our corporate office to a virtual
environment,” said Mark Gordon, Odyssey Marine Exploration’s Chief
Executive Officer and Chairman of the Board of Directors.
“Our Exploraciones Oceanicas (ExO) phosphate
project remains a prime focus.This project could significantly help
Mexico gain fertilizer independence and food security, which are
part of President Andrés Manuel López Obrador’s vision for his
country. Odyssey is ready to move this important project forward
for the benefit of both our shareholders and the people of Mexico,”
continued Gordon. “We continue to work in good faith with the
current administration to reach a mutually beneficial outcome for
the project and discussions are ongoing. While we are hopeful an
agreement will be reached, we must continue to pursue our North
American Free Trade Agreement (NAFTA) claim against Mexico to
protect our shareholders’ rights.
“The NAFTA process is progressing well and the
Arbitral Tribunal, consisting of three international arbitrators
well-versed in international investment treaties, has been
constituted. The Tribunal has issued their first procedural order
which includes a deadline in the third quarter 2020 for Odyssey’s
Memorial. This is the first filing that fully lays out our case,
witnesses and evidence for the Tribunal. Our legal team and
scientific staff have been working diligently on this filing for
many months, and I am confident that a strong and compelling case
will be presented to the Tribunal.
“Our confidence in the case has been further
enhanced by a recent multi-million dollar investment that has been
made into the fund that is providing non-recourse financing for our
NAFTA case. Another professional litigation funder invested the
additional capital after more than four months of extensive review
of our NAFTA case that included intense expert legal and scientific
analysis,” added Gordon.
“In addition to existing financing vehicles,
expected cash inflows in 2020 include a multi-million dollar
payment to Odyssey from completion of an agreement recently
executed in relation to a shipwreck project.
“We continue to reduce expenses and carefully
manage cash. Although expenses look higher year to year for first
quarter, the cash required was actually reduced. Almost $1.4
million of expenses in first quarter were NAFTA legal expenses that
have been funded through our $10.0 million litigation funding
agreement. An additional $0.3 million included non-cash charges for
share-based compensation and a change in a fair value of a debt
instrument.”
“In addition to managing the ExO project, we
continue to move forward and advance the value creation on our
other our other seafloor mineral projects that contain critical and
high-demand resources including cobalt, nickel, copper, rare earths
and gold,” John Longley, Odyssey President and COO added.
First Quarter 2020 Financial
Results
Total revenue in the current quarter was $1.0
million, a $0.2 million increase compared to the same period a year
ago. The revenue generated in each period was a result of
performing marine research, project administration and search and
recovery operations for our customers and related parties.
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 increased
$0.1 million to $1.4 million for the three-month period ended March
31, 2020, compared to $1.3 million from the same period in the
prior year. The key item contributing to this increase was a
non-cash increase in share-based compensation of $0.1 million.
Operations and research expenses primarily include
all costs within Archaeology, Conservation, Exhibits, Research, and
Marine operations, which includes all vessel and charter
operations. Operations and research expenses increased by
$0.7 million from 2019 to 2020 primarily as a result of the
following items: (i) a $0.8 million increase in financed
professional fees, including legal, and other expenses directly
associated with our NAFTA litigation pursuit, (ii) a $0.1 million
decrease in marine asset depreciation, (iii) a $0.1 million
increase in our concession permit fees for our Mexican subsidiary
and (iv) a $0.1 million decrease in our marine services contracted
labor.
The net loss for the quarter was $2.9 million or
$0.30 per share.
Consolidated financial statements as well as
Odyssey's Quarterly Report on Form 10-Q for the period
ended March 30, 2020, are available on the company's website
at www.odysseymarine.com as well as
at www.sec.gov.
About Odyssey Marine Exploration
Odyssey Marine Exploration, Inc. (Nasdaq:OMEX) is engaged in
deep-ocean exploration using innovative methods and
state-of-the-art technology to provide access to critical resources
worldwide. Our core focus is the discovery, development and
extraction of deep-ocean minerals. Odyssey also provides marine
services for private clients and governments. For additional
details, please visit www.odysseymarine.com.
Forward Looking InformationOdyssey
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, 2019,
which was filed with the Securities and Exchange Commission on
March 30, 2020. 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.
Cautionary Note to U.S.
InvestorsThe U.S. Securities and Exchange Commission (SEC)
permits mining companies, in their filings with the SEC, to
disclose only those mineral deposits that a company can
economically and legally extract or produce. We use certain terms
in this press release, such as "measured", "indicated," "inferred"
and "resources," which the SEC guidelines strictly prohibit us from
including in our filings with the SEC. "Inferred mineral resources"
have a great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an inferred mineral resource
will ever be upgraded to a higher category. U.S. investors are
cautioned not to assume that part or all of the inferred mineral
resource exists, or is economically or legally mineable, and are
urged to consider closely the disclosures in our Form 10-K which
may be secured from us or from the SEC's website at
http://www.sec.gov/edgar.shtml.
CONTACT: Laura Barton Odyssey Marine Exploration,
Inc. (813) 876-1776 x 2562laura@odysseymarine.com
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