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Odyssey Marine Exploration Reports Second Quarter 2013 Results

Odyssey Marine Exploration Reports Second Quarter 2013 Results

August 8, 2013


TAMPA, Fla., Aug. 8, 2013 (GLOBE NEWSWIRE) -- Odyssey Marine Exploration (Nasdaq:OMEX), pioneers in the field of deep-ocean exploration, reported results for the second quarter ended June 30, 2013.

Second Quarter 2013 Highlights

  • Received $10 million in cash from the early exercise of options to purchase shares of one of its subsidiaries active in subsea minerals (Oceanica Resources, S. de R.L.). This transaction bolstered Odyssey's balance sheet with no incremental shareholder dilution. Since February 2013, Odyssey has received a total of $25 million in cash from the sale of a 23% interest in Oceanica.
  • Continued to invest in activities intended to increase the value of Odyssey's assets in the subsea minerals business by undertaking further coring and validation work.
  • Commenced operations on the SS Gairsoppa shipwreck site, which subsequently led to Odyssey recovering 61 tons or 1.8 million troy ounces of silver bullion from the Gairsoppa, setting a new world record for the deepest and largest recovery of precious metals from a shipwreck.
  • Published a new series of scientific papers on the 1990-1991 "Tortugas" shipwreck excavation, which had paved the way for innovative advances in methodology and robotic technology used in the industry today.
  • Celebrated the grand opening of Odyssey's SHIPWRECK! exhibit at Discovery Times Square in New York City featuring the first public display of silver recovered from the Gairsoppa shipwreck and more than 500 authentic artifacts recovered from Odyssey's shipwreck projects.

Management Commentary

"During the second quarter, we made strong progress across the board, from our traditional shipwreck recovery operations to monetizing our newer seabed mineral assets," said Greg Stemm, Odyssey's chief executive officer. "The funds we netted from transactions involving the exercise of Oceanica stock options bolstered our balance sheet as we began our 2013 North Atlantic Expedition that included returning to the Gairsoppa."

"In addition to the significant financial impact of recovering 61 tons of silver bullion from the Gairsoppa, recovering more than 99% of the insured silver cargo from difficult to access areas in a steel ship at record depths of nearly three miles demonstrated the extraordinary expertise of our offshore team and the unique capabilities of the specialized deep-ocean equipment utilized. We'll be applying this expertise and these technological capabilities to other high-value shipwrecks and natural resource projects."

"We're also continuing to develop our portfolio of mineral exploration projects. The hundreds of core samples taken from the seabed and analyzed to date continue to suggest that the Oceanica deposit is a world-class mineral resource in terms of size and market value. Further core samples gathered in the concession area are currently being processed and we look forward to sharing more information about Oceanica when sufficient data is collected and analyzed to provide a clear picture of the potential value and commercial viability of the deposit."

"For the second half of 2013, in addition to potential new recoveries and discoveries, the stage is set for further asset monetization. We anticipate further conversion of existing options in Oceanica which could total up to $17.5million. Additionally, analysis and processing of the 1.8 million ounces of silver recovered from the Gairsoppa has begun and we expect monetization to begin by September."

Subsea Mineral Mining Exploration Project Update

Oceanica Resources: Oceanica is in the business of mineral exploration and controls exclusive permits for offshore mineral deposits in an area which is believed to feature valuable mineral resources based on exploratory activities undertaken by Odyssey.

Preliminary resource assessment based on extensive coring and laboratory work suggests that the mining concession, which has been granted for a 50-year period to a subsidiary of Oceanica, is a world-class resource with significant commercial and strategic value. Coring sample assay results and preliminary sample beneficiation tests indicate that the resource can be feasibly and economically mined and processed. A draft Technical Report featuring a formal resource assessment is currently in process and one of the world's leading investment banks is advising the company on options for development of the deposit and maximizing the value of this asset.

Additional Project Updates

Gairsoppa: From September 2012 through January 2013, Odyssey monetized silver bullion recovered from the Gairsoppa. The company received more than $41 million in proceeds from the sale of the 1,218 Gairsoppa silver bars recovered in 2012, with $1.8 million received in the first quarter of 2013.

Odyssey began 2013 Gairsoppa operations in June, and on July 22, the company announced the recovery of an additional 1,574 silver ingots weighing about 1,100 ounces each or almost 1.8 million troy ounces in total. This recovery set a new world record for the deepest and largest precious metal recovery from a shipwreck. The recovery from the Gairsoppa (2012 and 2013 operations) totals 2,792 silver ingots or more than 99% of the insured silver reported to be aboard the Gairsoppa when it sank. None of the indicated uninsured silver has been located.

Analysis and processing of the 1.8 million ounces of silver recovered from the Gairsoppa in 2013 has begun and we expect monetization to begin by September 2013

The recovery operations were conducted from the 291-foot Seabed Worker mobilized with 5,000 meter depth-rated remotely operated vehicles (ROVs), and heavy launch and recovery systems.

Mantola: The Seabed Worker has returned to sea to continue Odyssey's 2013 North Atlantic Expedition, which includes the SS Mantola, a 450 foot British-flagged steamer lost in 1917 and found in 2011 by Odyssey. The Mantola reportedly carried approximately 600,000 troy ounces of silver insured under the UK War Risk insurance program. Operations on the Mantola are presently underway.

HMS Victory: Odyssey provided a revised archaeological project design, developed as a result of the impact report, to the Maritime Heritage Foundation. This revised project design has been approved by the Foundation's Scientific Advisory Committee, chaired by marine archaeologist Dr. Margaret Rule, and was submitted to the UK MOD by the Maritime Heritage Foundation.

On January 31, 2013, the Maritime Heritage Foundation received a response from the MOD that acknowledged there is an identified threat to the Victory site. The letter also sets forth a set of 'Key Management Principles' to be agreed upon prior to undertaking additional work on the site. The company has reached an agreement on these principles with the Maritime Heritage Foundation, which would allow the company to move forward on the project while providing comfort to the government and the MOD Advisory Group that proper archaeological principles will be adhered to through the course of the project. The Foundation submitted these management principles as well as a report detailing the non-disturbance survey work on the site to the MOD. While awaiting instructions from the Maritime Heritage Foundation to move forward on the Victory project, the Odyssey Explorer is conducting survey operations on other projects.

Second Quarter 2013 Financial Results

Total revenue in the second quarter of 2013 was $0.3 million, as compared to $1.4 million in the same year-ago quarter. The decrease in total revenue is primarily attributed to lower revenue from expedition charter services, offset in part by a $0.1 million increase in artifact and other sales. Net income does not include the $10 million from the exercise of options Odyssey granted for a portion of its shares in Oceanica Resources. The cash received from the sale of our Oceanica shares has been recognized as a financing arrangement and accordingly recorded as an equity change in our subsidiary thereby having no impact on our consolidated statement of operations.

Marketing, general and administrative expenses in the second quarter of 2013 were $2.9 million, as compared to $2.5 million in the same year-ago quarter. The increase was primarily due to an increase in the company's professional fees and services, and an increase in other employee-related expenses.

Operations and research expenses in the second quarter of 2013 were $9.5 million, as compared to $9.6 million in the same year-ago quarter, primarily due to decreased ship operations and research expense.

Net loss for the second quarter of 2013 was $10.9 million or $(0.14) per share, as compared to a net loss of $15.6 million or $(0.21) per share in the same year-ago quarter. The net loss decreased primarily as a result of changes in the valuation of derivative instruments issued by the company in 2011 and 2012. These derivative valuation changes had no impact on the cash flows of the company.

Cash and cash equivalents totaled $10.3 million at June 30, 2013, as compared to $11.0 million at March 31, 2013.

Consolidated financial statements as well as the full filing are available on the company's website at as well as at

About Odyssey Marine Exploration, Inc.

Odyssey Marine Exploration, Inc. (Nasdaq:OMEX) is engaged in deep-ocean exploration using innovative methods and state-of-the-art technology for historic shipwreck projects, modern commodity shipwreck projects and subsea mineral exploration. Odyssey offers various ways to share in the excitement of deep-ocean exploration by making shipwreck treasures and artifacts available to the general public, students, and collectors through its webstore, exhibits, books, television, merchandise, educational programs and virtual museum located at The company also maintains a Facebook page at and a Twitter feed @OdysseyMarine.

For additional details on Odyssey Marine Exploration, please visit

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, 2012, which has been filed with the Securities and Exchange Commission.

June 30,

December 31,
Cash and cash equivalents $ 10,337,619 $ 10,096,414
Restricted cash  185,217  276,906
Accounts receivable, net  300,580  2,101,941
Inventory  326,265  418,926
Other current assets  2,483,221  874,115
Total current assets  13,632,902  13,768,302
Equipment and office fixtures  20,156,634  16,781,671
Building and land  4,718,863  4,708,091
Accumulated depreciation  (15,941,818 )  (15,038,811 )
Total property and equipment  8,933,679  6,450,951
Inventory  5,362,999  5,574,841
Other non-current assets  1,269,387  1,102,730
Total other assets  6,632,386  6,677,571
Total assets $ 29,198,967 $ 26,896,824
Accounts payable $ 5,319,451 $ 1,948,555
Accrued expenses and other  2,774,944  14,050,840
Deferred revenue  2,835,522  2,835,522
Derivative liabilities  4,020,014  5,356,203
Mortgage and loans payable  14,667,705  14,809,737
Total current liabilities  29,617,636  39,000,857
Mortgage and loans payable  555,386  4,010,946
Deferred income from revenue participation rights  4,643,750  4,643,750
Total long-term liabilities  5,199,136  8,654,696
Total liabilities  34,816,772  47,655,553
Commitments and contingencies (Note G)    
Redeemable Series G Convertible Preferred stock  —   —
Preferred stock -- $.0001 par value; 9,675,200 and 9,361,200 shares authorized, respectively; none outstanding  —   — 
Preferred stock series D convertible -- $.0001 par value; 134,800 and 448,800 shares authorized, respectively; 32,400 and 206,400 issued and outstanding, respectively  3  21
Common stock — $.0001 par value; 150,000,000 shares authorized; 79,625,966 and 75,416,203 issued and outstanding, respectively  7,963  7,542
Additional paid-in capital  180,401,952  144,446,574
Accumulated deficit  (185,774,223 )  (165,212,866 )
Total stockholders' deficit before non-controlling interest  (5,364,305 )  (20,758,729 )
Non-controlling interest  (253,500 )  — 
Total stockholders' deficit  (5,617,805 )  (20,758,729 )
Total liabilities and stockholders' deficit $ 29,198,967 $ 26,896,824


  Three Months Ended Six Months Ended
  June 30,
June 30,
June 30,
June 30,
Artifact sales and other $ 227,574 $ 133,259 $ 1,030,646  $ 187,407
Exhibit  20,691  75,000  80,691  100,000
Expedition  5,480  1,218,372  5,480  4,038,977
Total revenue   253,745   1,426,631   1,116,817   4,326,384
Cost of sales — artifacts and other  95,084  89,892  240,785  124,081
Marketing, general and administrative  2,928,570  2,483,000  5,719,891  4,839,918
Operations and research  9,511,112  9,554,692  15,244,345  14,706,398
Total operating expenses  12,534,766  12,127,584  21,205,021  19,670,397
INCOME (LOSS) FROM OPERATIONS  (12,281,021)  (10,700,953)  (20,088,204 )  (15,344,013)
Interest income  56  698  2,755  23,138
Interest expense  (918,486 )  (1,679,871 )  (1,989,541 )  (2,665,200)
Change in derivative liabilities fair value  1,998,599  (3,212,901 )  1,336,189  (3,089,832)
Other  1,376  2,677  24,687  3,759
Total other income (expense)  1,081,545  (4,889,397 )  (625,910 )  (5,728,135)
INCOME (LOSS) BEFORE INCOME TAXES  (11,199,476 )  (15,590,350 )  (20,714,114 )  (21,072,148)
Income tax benefit (provision)  50,000  —   (100,742 )  — 
NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST  (11,149,476 )  (15,590,350 )  (20,814,856 )  (21,072,148)
Non-controlling interest  253,500  —   253,500  — 
NET INCOME (LOSS) $ (10,895,976 ) $ (15,590,350 ) $ (20,561,356 ) $ (21,072,148 )
Basic and diluted (See NOTE B) $ (.14) $ (.21) $ (.26) $ (.29)
Weighted average number of common shares outstanding        
Basic and diluted  79,345,030  73,234,692  78,350,236  73,199,914

         Liz Shows

         Odyssey Marine Exploration, Inc

         (813) 876-1776 x 2335



         Ron Both

         Liolios Group, Inc.