TAMPA, Fla., May 18, 2020 (GLOBE NEWSWIRE) — 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.
